Property exam 2003 Q 2
Mark 78 scaled
Marker comments in []
2 a)
X seeks information over his right to the land
As X is not registered he doesn’t have indefeasible title and as the caveats are lodged
before settlement he is not protected by s 43A. []
U’s interest
Whether the mortgage is binding.
If the mortgage is invalid, U will still have title.
As the mortgage is registered it is indefeasible s 42, Frazer v Walker.
The mortgage has priority unless there is an exception to indefeasibility eg fraud or
action in personam. []
Fraud
There are no clear facts here, but if the bank has committed fraud its mortgage is
defeasible.
The bank may have committed fraud similar to De Jager [] – that is the bank signed
as a witness to Mrs U’s signature when she didn’t sign.
If Mr U bought in an impostor, as in Grige this might not be fraud. []
However, this would depend on the facts, if there was enough to make a reasonable
person want to make further enquiries (ie the bank was wilfully blind Efstatiou) rather
than not being vigilant (Assets Co) the mortgage would be defeasible. []
Factors would include the signature, identification [Mrs U … there]
If the bank wasn’t fraudulent or wilfully blind the mortgage stays [] VB is not
affected by Mr U’s fraud Breskvar v Wall, (unless the courts go back to deferred
indefeasibility). []
There may be an action in personam if Mrs U stored the titled deeds at the bank and
VB used them for the mortgage. This would be based on Gosper (though this was a
variation of mortgage). If there was a contract between Mrs U and the bank to store
title deeds, an action in personam may occur against VB [] for misusing Mrs U’s
title deeds without her consent
However the facts would need to be specific, ie Mr U couldn’t have come with forged
instructions for this to be an action in personam. []
It would depend on the facts whether VB’s mortgage is valid. If it isn’t Mrs U still
has title and the bank can’t pass what it doesn’t have as there is no registration [X]
[Torrens]
If the mortgage was invalid there is no poer to sell (websdale)
X is not protected by s 43A as on notice.
It would be a dispute between a reg title mre U and X registered title is indefeasible so
X would lose.
If the mortgage is valid U can’t caveat as she does not have interest unless the sale
was improper. []
Improper sale
If the mortgage was valid – there was express agreement for power of sale therefore
VB can sell.
The formalities were carried out, however Mrs U claimed she did not receive notice.
There is an onus on the bank to serve notice to the mortgagor. The courts are more
lenient to the mortgagor and strict on banks [?].
Posting the notice may not be enough, and serving a husband a wife requires both to
be notified to fulfil natural justice (laurie v Carrol) [}]
Therefore the sale is defective
However this may be to harsh for mortgagors [?]
If the sale is defective, X may become the mortgagee defending on 1st in time rule.
X is not protected by 43! (notice)
1st in time rule applies between 2 unregistered interests.
X’s specifically enforceable contract
Mrs U’s right to redemption. []
Mrs U came 1st as she didn’t receive notice [of sale]
She didn’t caveat immediately, which might lose her priority if there was nothing else
she could do [explain] – she was in possession, but as a mortgagor, this wouldn’t
protect her.
She didn’t receive notice, but she would have found out before the sale by auction or
at least at the auction giving her time to caveat (IAC)
As she didn’t caveat the contributed to X acquiring his interest.
More info is required whether X inspected registry before entering the contract. If he
did – he wont have notice. []
The 1st in time is tested when the second contract is specifically enforceable. []
X wont have notice for caveats after contract is specifically enforceable. []
If this is the case, the sale may have been defective, but unless X had notice of this
(he’s not required to research formalities s 58) he may get the land unencumbered of
Mrs U’s claim. [a bit laboured]
Woden
Assuming the right to install water pipes to allow flow is an easement (not a licence)
W would have a spec enforceable contract for easement against Mrs U. []
This occurred before the auction so W is 1st in time against X.
This is a dispute between 2 unregistereed interests.
S 43A don’t apply
W’s lease does not fall under the exceptions in 42 1 a 1
W was 1st in time but did’t caveat. The issue will be over whether there was anything
else to protect him. [}]
This would depend on the noticeability of the pipes, if they were obvious and could be
seen to be going to W’s land, this may act as a protection for W, as a purchaser would
inspect the land would see them and enquire with W. []
[s 42(1)(a)
if they were not obvious, would need to caveat. As he didn’t this would contribute to
X acquiring his interest [}]. []
1st in time is judged at the time contracts are specifically enforceable. []
X’s contract was specifically enforceable at the time he was ready to proceed
(Bunney), this would be before settlement – as he had no notice (unless the pipes were
obvious and he didn’t ask) he would get priority.
If the mortgage is invalid W’s interest would be binding.
[ok – could be more succinct – you spend a lot of time going in circles] [For this and
U, need to explain how priority rule works]
b) Mrs U may sever [] the joint tenancy by declaring herself trustee for her daughter
[] (needs writing and formalities (23C (1)b) conveyancing act)
she may transfer her title to her daughter by gift, Corin v Patton, she would need to
make all formalities complete. []
May transfer joint tenancy to tenancy in common under the torens Act [}]
Joint tenancies go to the survivor, principle of survivorship. []
Mrs U would want to have a tenancy in common.
She may also sell to her daughter [] and leave the money to her in the will
[Time ? OK practicability ?]