LAWS 2204 Property Law
2009 1st semester
End of Semester Exam Question 1(75)
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Mark: 75
Question 1(i)
Henderson (H) may continue to use Freddy (F)’s fields if he can prove he has a
proprietary interest in them. H does not have a registered proprietary interest, but
unregistered proprietary interests may also be created in Torrens land. √
First, H may have an equitable interest over the land, arising under a partly performed
specifically enforceable contract (SEC). (Bunny Industries; Lysaght v Edwards). First,
there must be a contract between F and H. Due to their relationship – old school friend
– the intention to create legal relations may be lacking √ (Ogilvie). Moreover, it
appears that H has not given any consideration √√ to F for his use of the fields.
Therefore, there may be no contract.
If there is, we must decide whether it is specifically enforceable. On the fact, H has
‘clean hands’, has accepted F’s title, there are no condition precedents and no
adequate remedy. The contract, if it exists, is not in writing (s. 54A(1) Conveyancing
Act (CA)) and so we must determine if it is partly performed (s. 54A(2) CA). As the
test adopted in McBride v Sandland, √ the Maddison v Alderson √ test is to be
followed – the acts relied on must be ‘unequivocally referable’ to performance of the
alleged contract. √ Due to their friendship, H may be said to be growing vegetables
out of natural affection for F (Ogilvie). Nevertheless, H has taken possession of the
land and this is generally enough to satisfy the test (Regent v Millet). Note that Ogilvie
and Widin point to the Steadman √ test being adopted by the H.C. at the next
opportunity, which is less √ stringent and thus easier for H to prove. Either way, H
could probably show part performance, due to planting the field with seeds and
vegetables. [Markers comment: consider if this discussion (while correct) is a good
use of time given likely lack of contract]
If the apparent lack of a contract means that H cannot show he has a SEC with F, H
may be able to prove he has an estoppel √√, created by F encouraging or generating
an expectation of an interest in land in H, to H’s detriment (Inwards v Baker, modified
by Crabbe). F’s statement: “H, we’re old friends, etc…” does create / encourage an
expectation in H that he can plant on F’s land and this is to H’s detriment, due to the
time and money H has spent showing and tending to the field. Therefore, H could
probably argue he had an estoppel and as a remedy may well receive proprietary
interest in the land. [Markers comment: consider if the detriment is enough, cf Crabbe
and Inward facts]
Question 1(ii)
H would like to maintain his interest in the land, determined above. To do so, he must
prove an exception to Maggie (M)’s indefeasible title. Under s. 42 of the RPA and
following Frazer v Walker and Breskvar v Wall, the registered proprietor of land – M
– has immediate title on registration √. H can only challenge this by proving a
specified exception applies. H should be noted here that M is a volunteer. Does a
volunteer take the same indefeasible title as a for-value purchaser? In NSW – where
our problem takes place – volunteers do enjoy the same indefeasible title
(Bogdanovic) √. In Victoria, the volunteer’s title is only as good as that which he
inherited and therefore, M would be bound by all unregistered interests which affected
F’s title (Rasmussen). Although the High Court has not decided this issue and could
follow either decision. In Farah v Say-Dee, they indicated they would follow the
NSW position. Therefore, I will continue as if M had indefeasible title. One exception
open to M to defeat M’s title is fraud. Fraud is personal dishonesty or moral turpitude
on the part of the RP (Butler v Fairclough) √ or collusion in personal dishonesty and
moral turpitude with a third party (Efstratiou v Glantschnig). √ M being delighted at
the thought of kicking H off the land and moreover, her deliberate misrepresentation
to him that “everything will be OK” point to M being fraudulent (Loke Yew).
Although mere notice √ is not fraud, (Wicks v Bennett) this case can be distinguished
from Wicks since here M deliberately set out to cheat H out of his interest in the land
[perhaps, can she argue otherwise at all?]. Therefore, H would most probably be able
to prove M was fraudulent and her title would become defeasible, allowing H to
continue farming the land, perhaps. [OK].
If not fraud, possibly an action in personam, arising out of a Bahr v Nicolay trust √.
Potentially M saying she was sure everything would be OK is an acknowledgement of
H’s interest such that M has undertaken to recognise H’s rights. However, M’s
statement is very vague, “everything” does not relate specifically to M’s agreement
with F √√ - unlike the specific reference in Bahr – and moreover, it is an oral
representation, not written as in Bahr. Therefore, it is very unlikely to be a Bahr v
Nicolay constructive trust. [Good].
Therefore, H could probably defeat M’s indefeasible title by proving she was
fraudulent. In that case, H may be able to assert his equitable right or mere equity over
the land over M.
Question 1(iii)
H here would like to continue leasing the land for the remainder of the 25 years and
therefore must win a priority dispute with Gary (G). Both H and G have unregistered
√ interests arising from a lack of registration. √ H – first in time – has an unregistered
lease. Either the lease is an equitable lease √, arising out of part performance of a
contract (Bunny Industries) or an implied legal lease. [Markers comment: but written
document and no G suggests this is unnecessary].
To show his lease is a SEC, H must show there is a valid contract – appears OK –
which is specifically enforceable. There is no adequate remedy at common law since
damages are never adequate, we can assume H is √ ready, willing and able to perform
his obligations – paying $25 a week – although we need more information, and H
seems to have clean hands and to have accepted F’s title. The lease is in writing, so s.
54A(1) CA is met. Therefore, H probably has an equitable lease, arising out of a SEC.
√
Otherwise, H may have an implied legal lease, if we assume he is in possession and
paying rent, and F receiving it. In this case, however, F would merely need to give H
1 month’s notice before evicting him. [Yes]. The lease is longer than a year and so
will be held to be an implied yearly lease (Moore v Dimond) √ and s. 127(1) CA states
that 1 month’s notice need be given. √ Therefore, for H, it would be better √√ for him
to show he has an equitable SEC, √ which equity would enforce in full. G has an
unregistered (fee simple). To determine which interest takes priority, we must apply
the first in time rule √ (Heid). However, if applicable s. 43A RPA may be able to
protect G’s interest. s. 43A RPA is applicable because settlement occurred
simultaneously [not necessarily] with H caveating. To gain the protection of s. 43A,
G must meet three requirements. First, has there been a registrable dealing? Assuming
√ the certificate of title is available to G and there are no errors in the registration
documents, then yes √. Perhaps F is being difficult with the certificate of title, with G
too, in which case, no registrable dealing. G is dealing with the RP √ - F. Finally, is
there a legal estate, that is, was G a BFPVWN before settlement occurred (IAC
Finance, Taylor J). G had no actual notice of H’s lease (s. 164(1)(a) CA), but may be
fixed with constructive notice √ √ (s. 164(1)(a) CA) of H’s lease if G would have
discovered the lease had he investigated the folio – no, not registered lease, so
wouldn’t be on the folio – or if he had inspected the land. If G had inspected, he may
well have noticed that H had planted things √, etc and if so, would have been required
to inquire √ from H what his interest in the land was. [good!] Due to a lack of
information, not sure if H has begun planting, so G may or may not be fixed with
constructive notice. If so, he doesn’t get the protection of s. 43A RPA and we must go
through the first in time rule to determine who has priority √ (Heid). The first in time
will prevail, unless the equities are unequal. First, did G know of H’s interest?
According to Moffet v Dillon, this knowledge definitely includes √ actual knowledge,
but unclear if it also includes constructive. See above.
Assuming no knowledge by G of H’s lease, is there a causal connection between H’s
conduct and G getting his interest? H did not caveat his interest immediately on
finding out about F’s delay (J&H Just and Butler v Fairclough). √ [Consider Person
as well]. This may be postponing conduct if H was unable to protect himself in
another way. As he did not have the C. o. T., this is not so and therefore H did cause
G’s interest to be made, such that G’s interest should prevail. [Good discussion –
maybe a little more analysis based on what misleading conduct and security of
possession (if any).] There appear no mitigating circumstances in “justice and
fairness” (Heid) and therefore G is probably either protected by s. 43A, unless he had
constructive notice, or alternately, H’s interest will probably be delayed to G’s interest,
due to his postponing conduct. √