Real Property
4/11/2011 4:24:00 AM
Received:
 Subject Outline
 Guide to tutorial quizzes
 Reading Guide (T1, 2, 3)
Enroll for UPASS
 Ups1
 Ssu.uts.edu.au/peerlearning
Set Texts
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CN #4172
Real Property – Geoff Moore
Property Law in New South Wales - Grey
Land Law – Peter Butts
Course Outline:
 Tutorial outline
 Assessments:
o mid-semester exam
 open book
 35%
 2 hrs
 Sat 9 April
 Disciplinary knowledge
o In-tutorial Quizzes
 Best 2/any count
 Must do at least 3 Quizzes
 Must be to at least 5 tutorials
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o Final
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=20%
First Quiz at second tutorial
exam
Open book
45%
Exam period
2.5 hours
disciplinary knowledge + critical thinking
Reading Guide
1
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Topics (numbering issue (T2-T5, should be T3)
Summary
Key Concepts (glossary)
Required reading
o Topic 1, not in Tbook etc.
o Case w * is important (read whole case)
Tutorial
o Skill questions
2
Topic 1: Tenure and Estates (and Native Title)4/11/2011 4:24:00
This is meant to be very difficult
Questions:
 Therefore do other European countries (especially old republics,
e.g. France) have allodial?
 Aboriginal Law
 Can reservation rights be excercised?
o Via “just terms”
Definition: Real Property
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Land and interests in land
Consists of:
o Corporeal hereditaments (tangible); and,
o Incorporeal hereditaments (intangible: e.g. easement).
Tenure
 No one owns land absolutely (our system is not allodial, but
tenurial)
o We hold land “of” the crown
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The crown holds it (we have it via grants)
The thing we hold “of” the crown is an “estate”
History
 Roman Empire
o Big, dramatic fall
o With end, chaos ensued
o Those without protection asked a leader to protect them
(birth of feudal system)
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o Land transferred to stronger, people kept use and
occupation rights (often in exchange for military service)
Came to Britain in 1066 (Battle of Hastings) (William the
Conqueror)
o Creates legal fiction (e.g. “all land is held of the crown”)
o When William conquered England, he legally owned all of
the land in England
 In that moment, he regranted land to those who
originally owned it (vests rights in original owners)
Big change, legal fiction of crown owning all land
1

o Therefore, no-one owns land (since behind our rights are
crown’s rights)
o King is “Paramount Lord”
 Then grants downwards to people who “own” land in
colloquial terms
Did we get this system when NSW settled?
o In England at the time, knew it was a bad idea
 Now only 1 level (estate of the crown)
 Many different ways of holding (tenure) (of the
crown)
 Most abolished by NSW times
 Now 1 form: “free and common socage”
o Laws imported into Australia (settled because of Terra
Nullius)
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An Englishman brings as much of the common law
with them as is relevant to the circumstances of the
colony (settled) (Cooper v Stuart)
we imported feudal law (Attorney-General v Brown)
Attorney-General v Brown (1847)
 Facts
o Case about 60 acres of land at Newcastle
o Finds coal, starts digging for it
o Crown says coal was not his (was Crown’)
o When granted land, it has a reservation clause (where
something is reserves out; here, granting land but not
giving away mineral rights)
 Brown argued reservation clause was true, but all land law for

England didn’t apply and that the crown did not own his land
Court said:
o (same argument as Mabo, opposite result)
o His argument
 England had sovereignty (= Paramount Lordship over
Australia)
 But, there is no correlation between sovereignty and
ownership of all the land, therefore crown could not
reserve
o But
2
Brown admitted sovereignty, and then could do
whatever it wanted, including creating reservation
clauses
o Court said
 Crown owned land since 1788
 And, tenure is a fiction (not true in Britain, etc.)
 But, even though it isn’t true in England, it is true
here, because of Terra Nullius
 Therefore Tenure is more entrenched in Australia
 Crown owns land and has a fictional interest in the

land
 Vests it
 And can reserve rights
Mabo
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Same as Brown’s argument, not what the court found in Brown
o Not the first attempt at native title (1971 there Gove land
rights case which failed (spiritual not economic relationship
with the land))
o Then High Court found native title for PNG
Plaintiffs
o Their rights to traditional country survived crown coming to
Australia and should be recognized as Native Title
To argue this they had to overcome Tenure as in AG v Brown
o How can aboriginal peoples and the crown OWN the same
piece of land
o Therefore when land was vested in the crown, native title
was extinguished (this was the crown’s position)
Was
o
o
o
o
the court going to overrule AG v Brown?
Most of the court chose to rethink Tenure
Not that activist a moment, just brought Australia in line
Made in light of international agreements on discrimination
Brennan
 Tenure might not have been the best ideal in 1788
 But it is too late to change it
 “to abolish tenure would fracture the skeleton of the
common law”
3

so what are we going to do? How can it fit into
modern society?
 We have tenure
 Where no one owns land absolutely
 Therefore crown has a “notional” interest in
every piece of land. What is the crown’s
interest?
 Radical title
Radical Title (Mabo (No. 2))

What is the notional (or conceptual) interest in land?
o “Radical title is the concomitant of sovereignty” – Brennan
 sovereignty  independence and right to rule
 as in Brown’s plaintiff argument
o Links private ownership and sovereignty
 Radical title is sovereignty in land-law (looking in)
 Power to create interest in land, and manage them
o Crown has a beneficial interest in all land
 “beneficial”  contrasted with notional interest

 owns (ish) the land
o like a governmental power, rather than actual title to a
specific land parcel
Power to grant land, but not instant ownership of land
Estate
Estates are property
 It is inherently alienable  no restrictions on selling
o Giving, sale, mortgage/lease
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This is the interest that we hold “of” the land
o A slice of time
Gives you rights with respect to the physical land (rather than
ownership of the actual land)
Different estates based on endurance (i.e. how long it lasts)
Types of estates
 Created by gov’t
o Inherited, sold, etc
o Or created by people (subdivision, re-estate)
4
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Freehold (uncertain duration)
o Fee simple
 Passed on
 Most rights out of any estate
 “fee”  inheritability
 “simple”  no restrictions on inheritance
 fees simple
o Life estate
 Embedded in trusts, often
 Familial situations
 i.e. make children comfortable
 use of the property for life
 cannot “waste” it (significant change)
o Abolished  fee tail
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Inheritability
Estate is “entailed”  “cut” fee simple
Fee tail you could specify descendants
For “landed” families, to be within families  couldn’t
easily be sold
What does it tell us about society? Land and
society?
 Pastoral leases
Leasehold (certain duration)
Remainders and reversion
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More detailed
 Fee simple
o Inheritable
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o At common law “to Bob and his heirs.” Now can be “to Bob
forever” “To Bob in fee simple” Conveyancing Act s47(1),
(2).
o Also created by default if trying to create a fee tail ss(19),
(19A).
Life Estate or Life estate pur autre vie (for the life of another)
o To Yochi for the life of Danny Hahah playing with peoples’
brains
o Cannot waste
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o To create it  show an intention to create a life estate. It
happens by default if fails to make fee simple s 47(2) “for
life.”
o Can be sold until, have estate until death of person for the
life of which the estate is created.
o WATCH IT! ONLY CHANGES WITH DEATH, NOT IF
SOMETHING HAPPENS TO THE OTHER ESTATE
o Form of notification see slides, not too important
Can do it about random things
Leasehold  later
“intestate”  without will … bona vacantia or ethsheat
Simultaneous estates
 Reversion
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o To Bob for life (reversion to grantor)
o A fee simple in reversion
o After Bob dies, I get the land again
Remainder
o To Bob for life remainder to Alfred in fee simple
Possession: who actually has the land at a moment in time
Alienable-ish
o Can only sell what you have (if in reversion, can sell
estate, but not possession)
o If you die whilst in reversion, life estate keeps until they
die, and your heirs receive the fee simple
Giving property
 Inter vivos  in life
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Testamentary  in will
Estates as a bundle of rights
 Inter-subjective rights exercisable against the whole world with
respect to a particular thing (in rem)
o In personam right (exerciseable against someone in
particular)
 Shares  not a “thing” but a right to ownership
 Therefore property is rights not things
o 11 rights
6
o important
 alienable
 possession
o possession  exclusion (everyone and no-one in
particular)
Carbon
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Tax  price on tax  carbon trading
Intangible
Right with respect to it
How do you own it?
Answer
o Rather than purchasing the carbon itself – you purchase
the right to emit carbone.
o Measured either by estimates or with meters
o These rights are allocated and then traded on a
secondhand market
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Native Title
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How does it interact with Tenure? Can it exist where there is
tenure
What does it tell us about indigenous relationship to country? Not
much, really
o It is a western legal concept, not an indigenous concept 
thus it reflects western concepts of land, not indigenous
ones.
Mabo =/ the first attempt
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(e.g. Gove land rights case in NT  aboriginal title in Canada 
1823 Johnson v Macintosh in US)
Gove =/ have succeeded because relationship was seen as
spiritual, rather than economic (1971)
Dao v Gerber (PNG), there was native title, heard in High Court
of Australia
In the ‘80’s
o Mabo (1 of 7 plaintiffs) (he died, and the court case
continued because of the other plaintiffs)
 Clear cut case (if the law existed)
7
Economic use
Clear heritage
As close to western land ownership as
aboriginal land ownership could have been
 Heritage is Melanesian (=/ aborigine, different
land use, now difficult to prove with aborigines
in the light of Mabo)
Evidence that was found
 In Queensland Supreme Court (evidence
heard)
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Judge went to the Island rather than requiring
plaintiffs to come to court (now a common
practice with Native Title)
There was market gardening
 Gardening and trade
 Required plots of land
Land divided into “single unit lots” with
boundaries
 There was exclusion
Thus land ownership was found “appropriate”:
that is, productively (see adverse possession,
below)
Why does common law love productivity?
 Locke  he wrote when king and parliament
were struggling for power
 Parliament was keen on property rights
 Not the first or last philosopher on the
topic
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Came up with “Locke’s labor theory”
(1600’s)
o Why is everything not in commons?
 We have private property
because of our labor, the
mixing of our labor with
something that lets us take it
out of the commons
 As much as a man can
improve, it is his property,
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and he can remove it from
the commons
o E.g. Mr. Moore
 Facts
 Liver disease, goes to
hospital
 Has some immunity,
cells extracted, and cell
line patented
 Mr. Moore does not get
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a cent
Do you own your body?
 No (there are limited
exceptions: e.g. you
can own the product of
your body)
Thus there was an issue of
autonomy, slavery etc.
UC, however, did have a
property right
 Because of the work
they had done (mixed
the work, with
something that cannot
be owner) it was
extracted from the
commons
o The working skills exception to
non-ownership
o Locke was a secretary to the board
of plantation
 Like colonies
o Why were Britons able to colonize
where there are people living
places?
 Because of “improvement” 
labor

Vattell
9
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Natural law  requiring to cultivate its
land
 Cannot expand until they require more,
and have cultivated their land to the best
of their ability)
 Those who pursue non-agrarian land
ownership should not be allowed to own
land
In 1600’s, they counted aborigines, and then stopped
 To justify taking of new colonies, they required
that natives be “civilized”
 If not civilized, they legally did not exist
squatting | adverse possession | rewarding productivity (an
historical leftover that hasn’t been abolished, even though it has
been
o
o
o
o
considered)
if you move onto land
openly and peacefully
and you use land in a certain way
so that it amounts to possession
o after 12 years, you are owner, and don’t need to
compensate
o not commonly
o law does not like “land lying fallow”
o in deciding, appropriateness and exclusion considered
Questions
 Did aborigines record their laws?
 Didn’t aborigines have adverse possession rights?
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o They had “possessory title” appropriately  ownership
 You have the “best” title, unless someone else shows
a “better” right to it
 Then they would have gotten an estate in fee simple
 Rather, they got native title, which is not equivalent,
and is much more delicate
o Thus too far
 And the court did not allow it
o Nomadic difficult to quantify as appropriate
Isn’t there only crappy land left?
10
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o extinguishment
Haven’t all of the native title claims happened?
o Most aren’t, now, litigated
What is native title?
 Origins in traditional law of aboriginal law (normative approach)
 uniquely Australian (different from Canada, etc.) (Yorta Yorta)
o Thus aboriginal custom is central  specific to the
aboriginals of the specific land (i.e. the customs of the
plaintiffs)
o Every claim has different laws based on custom
o How do we find out the customs and traditions?
 Combination of oral tradition (elders) and writings
about the people (i.e. Yorta Yorta, oral evidence
contradicted by a diary of a “gentlemen
ethnographer”)
 Problematic form of evidence because of
hearsay
 Anthropology, archaeology
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Very expensive (about a decade, lots of expert witnesses, lots of
Barristers, Solicitors, etc.)
o Private culture (e.g. Women/Men only information)
o Culture shock
o Moral/symbolic importance
There needs to be:
o Ongoing, “substantially uninterrupted” connection to the
land
o Customs and traditions (Yanner v Eaton) custom must
maintain its traditional nature
Issue:
o Dispossession (e.g. being sent to Missions)
o Evolution of culture
 Courts fairly unwilling to allow for evolution of culture
(difficult because of change of culture  e.g. white
Australia changing aboriginal culture)
 Yanner v Eaton
 Committed by flora and fauna legislation
because he hunted a crocodile
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He argued he was exercising a native title right
Justice Callahan was concern, because Yanner
had used a spear gun and a boat with a motor
(different from traditional hunting methods)
 Native title right to fish (etc.) cannot include
commercial rights
So: Brennan in Mabo
o What are native title rights?
 Hunting and fishing (subsistence)
 Ceremonial use of land (and access)
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 Exclusion? Ish
 Resources  ochre for face-painting (not for sale)
 Right to live on the land (and maybe build shelters)
o All physical use of land (i.e. white), right to speak for

country  does not translate into government?
Bullan Bullan
o Plaintiff unhappy because traditional art reproduced on
tea-towels
o They could not claim breach of copyright (who owned the
copyright?)
o They claimed native title (ability to paint was an obligation
that flowed from responsibility to land  central to
ownership of land)
o Court said this was not a native title right (Brennan quoted
“intellectual property” as native title would fracture the
skeleton of the common law)
Then what?  Proof (has it been extinguished?)

You have to prove that the rights have not been extinguished
o Fejo – Effect of an estate in Fee Simple
 Key right is right to exclude others (exclusive
possession)
 Thus the granting of an estate in fee simple
extinguishes the native title
 Read a case note
 native title is extinguished (because it is legally
inconsistent) when fee simple is created, even if
given back (because there are inconsistent rights)
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native title “yields” to estate in fee simple
(extinguishment happens once, and forever)
o Wik – soon after Mabo (straight to high court)
 Pastoral lease
 Crown lease
 State land acts
 Giant
 Designed for cattle/sheep to be run over
enormous areas of land
 Created because people farmed outside of
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settlement, gov’t wanted to regulate
So, does a pastoral lease extinguish native title?
 Gov’t argued that pastoral lease was normal
 Lease extinguished native title in Mabo
Brennan (Minority)
 Pastoral lease is a lease, confers exclusive
possession
 This extinguishes native title
Toohey (Majority)
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Label is insufficient (substance not form)
What determines a real lease? Is exclusive
possession conferred?
Thus it must be interpreted in light of purpose
of the lease (light footprint on the land). Was
there an intention to confer exclusive
possession?
Probably not
 There were conditions
As such, no exclusive possession, thus is does
not totally extinguish possession.
Effect:
 List A:
o What are all of the rights that
native title rights are able to show?
 Hunting, living, etc.
 List B:
o What rights does the pastoralist
have?
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 Run cattle
 Build runway
 Etc.
 Slam them together, see where they are
inconsistent. If a native title right cannot
coexist with a pastoralist right, it is
extinguished
Both Pastoralists and Native Title holders were not
happy: they have to coexist
 No new rights?
 Maybe
Rights that have not yet been exercised? Difficult
question
Thus consent determination is preferred to litigation
Native title:
 Inalienable (cannot be sold)
o Cannot mortgage or sell or economically develop
 It is communal (vested in a group that are the native title

holders)
o It is up to group to determine who is within it
o Usually vested in a body corporate
It is a bundle of rights (different to 11 right of ownership), not
fixed like ours, but moveable depending on culture
Native title act:
 Is it a property right? (compare above with definition of property
right)
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Validates  1975 (racial discrimination act) titles
Provides a claim mechanism
Future acts regime (to government: if you want to change native
title, you have to do it in the way set out) (affecting future
grants of land)
Defines native title
o S223
 Rights and interests as part of definition (ss1)
 HC narrowed definition to be ss1(a)(b) (only interest
in land or water)
14
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Questions on last slide of PP. DO!
Questions:
 Where to purchase legislation?
15
Land and the Doctrine of Fixtures
4/11/2011 4:24:00 AM
Was in the exam last year
What is Land?
 Check out the “memorandum of transfer”
Definition?
 As per the definition section of the relevant act
o Different acts have different definitions
As per “conveyancing act”

Tenements, hereditaments, etc.
Land …
 Lateral boundaries (fences?)
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Subsurface rights (minerals?)
Upper boundaries (airspace trespass?)
What is included (fixtures?)
NB: it is 3D, not 2D.
Lateral boundaries
 Dividing Fences Act 1991
 Fencing and trees are common complaints
o Fences  mutual requirement to pay (½ and ½ of the cost
of a “sufficient” fence)
 Includes repair, etc.
o Need to negotiate, then can go to a local court
 Common law obligation of support
o Not allowed to change something that will make your

neighbor’s land be unsupported
o Only required for “natural” state of land
o Either nuisance in common law or negligence via
Conveyancing Act s117
Overhanging land  nuisance (requires damage)
o Replaced by Trees (Disputes Between Neighbors) Act
o ^ for hedges
o apply to land of environment court (for thinking actual
damage or injury will occur)
1
Subsurface
 Cuius est solum (maxim)  centre of the earth to the reaches of
the heaven: 3 exceptions
o ownership of minerals? Yes, ish:
 Crown’s prerogative (authority) to own things (Cadia
Holdings HCA 2010) and (Case of Mines) as a start
 And owns: King owns everything that is “the
most excellent”
 Gold/silver
 Copper (intermingled with Gold)
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Whale
Sturgeon
Swans
Unicorn? Hahahah

Crown reservation
 Crown reserved rights in giving estates (when
creating new fees simple)
 Patchy
Vesting legislation

Petroleum act
Mining legislation
 “you can’t mine without a licence”
so we don’t own many minerals

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
Trespass
 “intentional unauthorized entry”
 direct/intentional tort
 no damage necessary


NB: torts often protect property rights
Tort of trespass prevents interference to right of possession
o As does nuisance
o And conversion
Upwards boundaries (airspace)
 Again, cuis est solum
 Trespass occurs where “reasonable enjoyment of the land” is
interfered with
2
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Holder of an estate in fee simple can bring an action or “actual
possession”
o Exception: holder of estate in fee simple does not have
possession, but can bring an action if there may be
permanent damage to their reversionary interest
types of damage:
o permanent trespass (encroachment)
 e.g. structure of neighbor goes onto your land
 nb: you can sell airspace
 Encroachment of Building Act 1922


“substantial building … of permanent character”
 cannot easily be removed
Land and environment court
 Compensation

Grant an easement (an incorporeal
hereditament)
o You pay for it (/it is not free)
 Etc.
o Transient damage


See cases on slide
Including
 Skyviews ( privacy)
 Height that does not affect the ordinary
user (/the ordinary use or enjoyment) of
the land
 LJP Investments
 facts
o 2 lots of land adjacent
1 is developing
there is a boundary wall erected
wanted scaffolding
neighbors say $30k
developers build scaffolding w/o
payment
o though it is above the ground
(4.5m), protruding into land
o there is a crane (allowed to move
freely with the wind)
o
o
o
o
o
3
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o was not impeding access
o enhanced safety of workers
 P argued that it is trespass
o Court agreed
o Judge did not quantify “magic
height”
Mirvac
 Facts
o Scaffolding on high-rise with mesh
o Protrudes onto neighbors
o Scaffolding grows higher, there was
a weather-veining crane
o Crane at 7 stories
Was still trespass
 Height not quantified either
S2(1) damage by aircraft act
 Cannot bring “trespass” unless it is outside of
“normal operating parameters”
 If something falls out and lands on your
property, they are liable
S7 access to neighboring land act
 For repairs (small scale cases)
 so what is reasonable use?
 Extrapolated from common law analogies
 So above is usually trespass
 Weather-veining is not, usually, trespass
What about remedies?
 Usually (prima facie remedy): injunction
(stopping the trespass)
 Factors:
o Hardship to other party
o Extent of trespass (e.g. minimal 
capable of being estimated in
money)
o If it is reckless  court will not care
about hardship to party
trespassing)
4
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
Preferred because damages may be seen
as a necessarily “licensing” cost
S88K of conveyancing act
 Apply for an easement for trespass
 (e.g. 9-5 on weekdays)  flexible
because it is statutory
Fixtures
 Quicquid plantatur solo, solo cedit
o (whatever is affixed to the land becomes part of the land)



Chattels which have become part of the realty
o Most common in sale of land
 “included chattels” section
 not limiting
o also in life estates
o and mortgage defaults
o tenant fixtures (e.g. life tenants and lessees)
Do tutorial Question
is it a fixture? (3 stage test)
o Degree of annexation; and,
 If it is resting on its own weight (presumed to be
chattel)
 If fixed, at all (however lightly) (presumed to be a
fixture)
 Still can be rebutted (sets up burden of proof)
o Object/purpose of annexation
 Can rebut presumptions
 This is not a subjective test
It asks:
 Did you affix it:
 for the better use of the item itself; or,
 for the benefit of the realty
 e.g. Flat screens bolted into the wall
o Though Dunn and NAB, widened to included circumstances
and facts surrounding
o Erricson v Dunn
 Facts
 Erricson are owners

5
Leased to x
X installed PABX system (phone routing
system)
 X hired PABX from Dunn (10 year contract
where Dunn retained ownership)
 It was nailed to the wall, channels were cut,
etc.
 Presumptively a fixture
What was the purpose of annexation?
 Better use of the item





 Made steady
Better use of the realty
 Improve value/enjoyment of land? (e.g.
a stove)
Facts and circumstances (and position of third
party (Dunn: owns PABX)
 There was a higher purchase contract
(Dunn still owns the PABX according to
PABX lease)

No right or wrong, just good or bad
arguments
 It was a chattel, balance of test
o NAB v Blacker
 Facts: Blacker have a mortgage
 They have a mortgage
 Blacker defaults
 There is a large irrigation system
 Blacker thinks it is a chattel and offers to

sell it to the bank
 Bank thinks they own it
 Blacker doesn’t take irrigation system, but
does take valves, pumps etc. ($30k worth)
 Bank thinks they are fixtures
 Pumps are mounted and towable
 Valves aren’t special
Degree of annexation
 Low degree (presumptively a fixture
 BUT interchangeable
6
 They could be removed without damage
 What was the result?
o Facts and circumstances (Very important to getting good
marks)
 Damage on removal?
 Social/architectural practices:
 Dishwashers (mid ‘90’s, not fixture, since social
practice was to take it)
 Now, it is considered a fixture (for the
benefit of the realty)
Microwave?
 Silver fitted, fixture
 Crappy bench one, probably chattel
Who is annexing/subjective intention?


NAB and Dunn, loosened purely objective test
Now, is subjectivity part of the
facts/circumstances?
o Tenants’ fixtures
 Fittings by tenants may be taken, sometimes




(retail/tenants’ lease act)
NB cases on this area
7
Torrens Title, rules and exceptions to indefeasibility4/11/2011 4
The aurora program
Torrens title seminar question 1 for Wednesday
Intro








Biggest topic in the course, central to the rest of course
(Torrens title/system, or Real Property Act land)
Australian creation (SA began it, 1850’sish became widely
accepted nationally) 99% of land is Torrens Title land
=/ from “old system title” (brought to Australia from England –
e.g. tenure, estates, etc.)
o there are still “old system” properties that exist
it is statutory
o Real Property Act (1900) replacing (1862 Act) ss 41-43
o Named after Robert Torrens
o Now implemented in NZ, Malaysia, Russia, Israel, etc.
It benefits from the computerization of land ownership recording
Documents available online:
o Historic Title Search (=s $12)
o Transfer from Vendor to current owner
o Mortgage
o Contract for sale of land
Torrens has a certificate of title for each specific property, this
registers interests in land
o First Schedule
 Who is registered owner?
 Vendor; then/or,
 Purchaser
o Second Schedule
 Mortgages
 Borrowing against the property
 Leases
 Easements
 Swapped rights on land commonly used (e.g.
right of way, right of support)
 Restrictive covenants
 Subject to restriction (e.g. height restriction)
1
o Person in First Schedule is subject to conditions in second
schedule
o Many interests in land are unregistered (not in Torrens
system)
Timeline for Torrens Title
 Exchange of contracts (C/S)
o Land  in writing (statue of Fraud, etc.), therefore
“Handshake” is not enough
o Conveyancing acts, requiring many attachments to
contract
o 2 identical contracts, vendor and purchaser sign, binding
when swapped.
o Purchaser may pay a deposit at this moment (this is not



binding, the exchange is central)
Settlement/Completion (Tfr)
o Approximately 6 weeks after exchange
 Blocks of units are sold off the plan
 Therefore settled after building is completed
o Where vendor signs/hands over a “transfer” transferring
property from Vendor to Purchaser
o Sensible vendors don’t hand over transfer until payment,
though these are not necessarily required to transfer
 Vendor, if unpaid, has a vendor’s “lien” (a continuing
equitable interest in the land they used to own with
respect to the unpaid purchase price)
Lodgment
o Lodged on the same day as settlement (best practice)
Registration  application of s41-43 of RPA
o Registered by the next day
o Used to take months before computers (3-12 months)
Tanbar Enterprises v Couchie
 HC Held that purchaser on exchange gets an equitable interest,
they have a right to go to a court of equity and get specific
performance for the contract
2
Here, common law and equity are modified by statute: eg s41-43 (totally
changes common law and equitable law)
 Breskvar v Waugh (Qld)
o Barwick CJ
 Torrens title is a system of “title by registration”
 He was talking about equivalent of s41 of NSW act
 “you get title by registration”
 differed from old system title where you can register
your title (though you don’t need to, you don’t get
title by registration, but you can register the title you



have already acquired)
Commonwealth v NSW
o Isaac
 It is the State of NSW giving you title
Forgery, old system does not count
o In Torrens, if it is registered, it does count
Mayer v Co
o Ms Mayer is an owner
o She left title with solicitor
o He was a thief
 And represents to a Mr Co that Ms Meyer wanted a
mortgage from Mr Co
o Co lends money
 Takes mortgage
o Co gets registered (in the second schedule)
o Co then got an undefeatable title when he registered
o Again
 With old system



 Didn’t count
 With Torrens
 When registered
 You get titled
S41 is title by registration
S42 “title” is undefeatable, except for exceptions (e.g. fraud
exception, but Co was not fraudulent, Solicitor was)
Barwick in Breskvar
o Title by registration
o Before registration, old system law prevails
3



o On the moment of registration, Torrens applies
S43, you don’t need to track purchase, you can deal with the
register directly
Thus, registering is very important
Rules of indefeasibility
o person registered in the first schedule is subject to
whatever is registered in the second schedule
o order of registration is central for persons claiming in the
second schedule s36(9)
o registered interests prevail over unregistered interests
Exceptions are important and many (several lectures), and they apply
where at least one of the competing interests are registered in the
Torrens system.
Priorities under Torrens Title
 Registered v Registered
o Exceptions to indefeasibility
 Registrated v unregistered


o Exceptions to indefeasibility
Unregistered v Registered
o Exceptions to indefeasibility
Unregistered v Unregistered
o OST principles
Seminar problems
 Usually seminars devoted to subjects
 Here, we will do seminar problems in Lectures

o They are central to mid-semester exams
Do these in the next week or two
o A tool for self-assessment
The Register
 Bursill Enterprises
o 2 adjoining properties
o front on George St
o there was a boundary between them (e.g. common wall)
o early Torrens property
4
o in 1860 something
 There was an easement for the benefit of the
neighbor (right of way) for passage
 Fine-print of easement gave exclusive rights to
building above right of way (12 ft and up) to
neighbor
 This easement was registered
o Now
 Neighbors find out about this fine-print in easement
 Owner said easement should be limited to right of
way, since it could not give exclusive indefeasible
right
 Neighbor said that it did create this indefeasible right
o HC agreed with neighbor: the weird right was registered

and thus indefeasible
Fells and Knowles (NZ)
o Landlord and tenant
 Landlord is a trustee holding land on trust for
benificiaries
o Trustee is governed by trust deed
 Trust deed said trustee could lease but not sell
 Trustee entered into a long lease, which is registered
 This contained an offer to purchase property within a
time-frame
o Lease with option to sell was registered
 Owners said he didn’t have right
 Lessee said it was registered
o HC said tough luck, it was registered

Koteff v Bogdanovic
o There is property in annondale
o Koteff snr lives in the place
 Got old
o Koteff Snr was in helping relationship with a chick
 Take care of me
 Get a life estate
 Koteff promised this life estate
o In will, everything was left to his son Koteff Jnr
 He registers as recipient of gift
5

o Old-system principle
 He has no greater gift than the giver (who had
transferred the right)
 Here, dad was subject to chick, thus gift would be
subject to helper chick
o But it is Torrens
 Since he registered
 His title was indefeasible against the woman
Berowra Waters Holdings v State Bank of NSW
o BWH owns property

o BWH


Subject to Bank in second schedule
wants to pay out banks second schedule interest
Bank says this much
BWH pays
o BWH registers discharge of mortgage
o Bank checks figures
 BWH owes more money, apparently
 BWH doesn’t want to pay
o Needham in HC
 Mortgage is GONE, it was discharged
o There might be a right in debt, but it is no longer an
interest in land
o Where in old system it could be rectified, now you can’t
Rules of



indefeasibility
First > second
Higher > lower in second
Registered > Unregistered
Exceptions to indefeasibility (to determine priorities of competing
interests of the same property, this applies to R v R, R v U and U v R [i.e.
at least 1 party must be registeres])
 Sometimes, where, under the rules of indefeasibility, they would
lose: they may succeed if they find a case in any exception
below
 Prior Folios (42(1(a))
o Comes from 42(1)a)
6

o Premised on Land Titles Office making an administrative
error
 2 different CT’s for same piece of land, with different
owners listed
o Older CT prevails
o Where there is a mistake, you can recover moneys
Ommitted Easements 41(1)a1)
o 42(1)a1) there is an exception where easements are
omitted or mis-described
o Why? Pro



Townhouses, built ages ago, with enforceable
easements that didn’t have writing
Shared walls, guttering, support, etc.
Not documented because in old-system, express
easements as well as easements created by
implication, prescription and necessity
 These weren’t written, but still enforceable
o If easement is created when land is old-system, it became
subject to s41(1)a1), as a continuingly enforceable
easement
o James v Stevenson (NSW to Privy Council)
 Implied easement created by old-system
 Privy Council held, where burdened land was old
system, it is an omitted easement within 42(1)a1)
o James v Registrar General
 Easement implied
 Registered
 Forgotten
Even though it was in writing, it became omitted and
was still enforceable
o Three cases (NSWCA)
 Beck v Awerbach
 Doby v Davinson
 Australian HIFI v GHL (or Gail)
 No implication in Torrens, ok if old system.
 If made in old-system, ok if property changes
to torrens
o Say

7
You can create an implied easement under oldsystem title
 You cannot create an implied easement under
Torrens (which is the servient tenement, what
system is it under at the time of creation of the
easement?)
 If an implied easement is created when servient is
old-system, it remains enforceable when servient
tenement becomes Torrens
o Delowry


20 years of continuous use creates a proscriptive
easement (in old-system)
o NB easement in Torrens must be in writing
Profits A Prandre (profits to be taken from the land) (42(1)b)

o Relevant to harvests
o A landowner may be in first schedule, but, because of A
Prandre, someone else may be able to harvest even if it is
not in schedule
Mis-described parcels of land (42(1)c)


o Change by registrar general to allow for:
 When surveyor says it is different
 To fix this error
Short Tennancies (42(1)d) (usually for UvR)
o Only available when the tenant can show that:
 Period of lease and any option to renew is three
years or less; AND,
 The unregistered tenant can show that the registered
person took their interest with notice of the
unregistered lease (i.e. the purchaser knew of the
unregistered lease)
o What is notice?
 Actual notice
 Purchaser actually knew about the lease
 Constructive notice (Marsden v Campbell)
 Didn’t actually know, but should have known if
I had made the inquiries that a prudent person
in my position should have made
 Marsden v Campbell
8
o Facts
 Old system case (but is same
for Torrens)
 There was an owner
with a mortgage
 And a lease (in favor of
the mortgagee)
 Owner sells
 He knows of mortgage
 Purchaser didn’t know

of tenant (didn’t have
actual knowledge)
But saw animals
grazing
o Held
 He had constructive notice
 Because he should
have asked “why is
there grazing?”


Mills v Renwick (1904) (enshrined in s164 in
Conveyancing Act)
 You have constructive notice of what you would
know if you searched the register
 Not all things on the register is a registered
interest (e.g. Caveat)
Impudent notice
 Actual/constructive knowledge of agent
 This is “imputed” onto the principle
o Dr Peter Clyne (Rent Fixing and short tenancies)
 Who?
 Entertaining/tragic man
 Jew from Austria
 Escaped from Nazi’s
 Law student/grad  went to the bar 
subsequently stuck off
 Devoted his life to “fighting the establishment”
 E.g. how not to pay your taxes in a book
 He had a spiel with RP in the ‘60’s
9




In ‘40’s –‘60’s there was labor
Gov’t “LL and Tenant amendment act”
LL could not raise the rent
o No incentive to improve land
 Clyne was to use indefeasibility to get rid of
bad tenants
In Clyne v Lowe
 Facts
 Did not find protected tenant on purpose
 Registered


 Tried to kick out other guy
But:
 Had notice
 Was week to week
USBaket v Clyne
 Facts
 Buys house from Build
 Defaults on purpose
 So mortgagee would sell land without
tenant

 Held
 Building Soc had constructive notice
Fraud Exception (42-43)
o What is fraud?
 Mayer v Co (Who’s fraud?)
 Facts
 Ms Mayer is victim of fraud by solicitor,
not by Co



Wix


If facts were to change, and Co was solicitor
and did the fraud, Co would not have prevailed
because they have their own fraud
i.e. it must be fraud by person on registere
v Bennet
Authority that notice of itself is not fraud
Facts
 LL subject to unregistered Lease
o 42(1)d) was not yet in force (i.e.
no short tenancy exception)
10




LL sold to a purchaser
o Purchaser, settles
o With actual notice of the lease
o Registers
Tries to evict tenant
o Arg. Was: actual knowledge was
fraud where there was trying to
manouvre around it
Held
 Not subject to lease just by notice
What is Fraud? Stuart v Kingston
 Fraud is personal dishonesty or moral turpitude
 E.g. Loke Yew v Port Swetnam Rubber
o Facts





Here, Yosope in Loke
 Owned land in Malaysia
 In Commonwealth
 With Torrens
 Used in Rubber
Plantations
Yosope sells land to Loke Yew
Loke Yew did not register
Rubber Co went to Yosope
and said “we want to buy
land”
 Yosope gave notice of
Loke
There was a transfer
For “all land” including
bit sold to Loke
 Yesope doesn’t want to
 Rubber says “don’t
worry, we’ll look after
Yew”
 Rubber Registeresed
 Tries to evict Loke
o Loke goes to Privy council and wins
on fraud exception

11
Because rubber said they
would preserve Loke’s
interest
o Affirmed in AUS HC in Bar v Nicolay
Breskvar (Authority of imputability of Fraud)
 Intro
 “title by registration”
 now re fraud
 is Queensland (NB: Queensland has no
equivalent of s43A of NSW RP act)



Facts
 Breskvar registered as owners
 Registered as owners
 Borrow money from Petrie, who was
dishonest
o Sign transfer in blank instead of
mortgage
o Gave Petrie Certificate of Title
o Also gave him a Blank, Signed






transfer as “security”, since he
asked
Petrie puts his grandson’s name in blank
transfer
o He registered
On who’s behalf was Petrie acting?
o He was acting on behalf of his
grandson (wall) (via gift)
Grandson is in first schedule as owner
Wall entered into a contract to sell to
Auburn
o Who buys from Wall
In delay before Auborn’s register,
Breskvar finds out
HC

Issues:
o If Wall was registered, could he
rely on indefeasibility to defeat
Breskvar (who was unregistered)?
12


Held
o Fraud of Petrie imputed to Wall
 If a person’s agent is
fraudulent, the Principal is
liable
o Breskvar has a fraud exception
o NB: Breskvar failed against Auburn
 Because Auburn is more
innocent (postponing
conduct)
Contrast with Schultz v Corwill Properties
 SC decision
 Facts
 C owns many properties

C is controlled by woman
o Has a son who is a solicitor
o Used as a conveyance
o Had custody of CT and company
seal

Son is a gambler
o Fixed seal on fake mortgage in
favor of Schultz (gets money from
Schultz), regarding CT
o Corwill never knew about mortgage
On registered
o Schultz in 2nd register
Woman says “where are title deads?”
o Son forges discharge of Schultz’



mortgage
o Without paying Schult
o And registers Schultz out of the
second schedule
o Son Jailed
 When Schultz knows, cries “fraud”
o On behalf of Corwill
Was on behalf of Corwill?
 “frolic all of his own” so not an agent
13
different from Breskvar, since didn’t benefit
Corwill
Assets Company Case (NZ) v Mere
 Facts
 NZ native title legislation precluded
certain types of sales without certain
steps being taken
o In breach of this legislation
 Maori sold to Assets in breach
o Assets registered




RP Act NZ overruled Native Title
Legislation
o Was there fraud?
Fraud?



Assets should have know the transaction
was in breach of Native title legislation,
therefore are fraudulent?
Held (Privy Council
 Fraud requires Actual Appreciation of
Dishonesty
 Actual Fraud
 Actual knowledge of a dishonest act
Bahr v Nicolai (Fraud as bigger, Equitable)
 Facts
 B  transfer  Nicolai for $32 grand
o Nicolai  leased  B lease (3
years)
o
 B Repurchase option for


$45k
o Nicolai  sells  Thomson for $40k
What about unregistered lease and
option to Bar?
o Tomson acknowledges Thomson’s
option to repurchase
o HC
 I acknowledge = “I agree to
be subject to”
Tomson registers
14



o There was a property boom
o Property worth $80k
Toms had told Bar that option was OK
o Bar borrows $45 from Bank
SC

Thomson was registered and
indefeasible? No Bar rights


No, Bar had right
2 judges found fraud


Others find personal equity
Mason/Dawson (minority) (no real
difference, since Personal equity would
stopgap for post-registration fraud)
HC
o Mentioned most cases
o View:
 Fraud is not just actual, but
also equitable “anything that
is against conscience”
here, agreement to be
subject to Bar and then
renege of agreement
 Wilson/Brennan/Toohey (majority
Therefore preferred)
o Only fraud if it before registration
o Others found personal equity
exception
Leros v Torara (Wix v Bennet ish)



Facts
 Comemrcial property subject to 5 year
lease
o With a 7 year option to renew
(could renew for 7 years)
o In WA (only required for 5+ year
lease to registered)
o Was not registered
 LL as puts property on market
15
o Tenant exercises option to extra 7
years
o Asks for purchaser to subject to
lease
o Purchaser says no
o Vendor says no sale
 Purchaser says GTFO
o Vendor says sell without lease
o Purchaser buys
 Registers
o There is the 7 year unregistered
leas
 Purchaser writes
 Hahah knowledge of


lease, are subject to it
Vendor says not subject
because indefeasible
Held
 Was knowledge?


NO, not subject to lease, no agreement
to agree to be subject
Different type questions (NB fraud on Registrar
General, fraud third party)
 National Bank v Headly
 Facts
o Husban and wife (headly’s)
o Mr Headly, goes to NB and
negotiates a loan, which is secured
by mortgage with him and wife
 Bank officer approves loan
 Prepares documents to be
signed
 Rings Mr Headly, and gives
him the papers for wife to
sign
 Headly forges wife’s
signature
16
o Officer purports to witness their
signatures
 He did not know about the
forgery
 He said he witnessed the
wife’s signature, which he
didn’t
o The mortgage, seemingly signed by
both
 Passed on to bank



It is registered in the second
schedule
They had indefeasible title by
registration, but:
Held:
o Procured by fraud
o Different kind (the bank did not do
something dishonest for gain)
o Mr Hedly was the evil man
o Thus bank is a victim
 But, false witness
o The bank’s mortgage was set aside
as fraudulent
 It was fraud on the registrar
general (pretending witness)
o Mrs hedley was not subject to the
mortgage
o Mr hedly?
Evil
Did sign
Although mortgage set aside
In equity, Mr Hedly still
subject to the mortgage over
his half of the property
o Bank could only be repaid under
his half:
 They could sue him in
damages, too




17
If he has the money, not
secured by her half of the
property
 NB: co-owners (1 can force a sale of the
property 66F Conveyancing Act)
Bank of SA v Ferguson (HC held no fraud)
 Facts
o Ferguson borrows money
 Told them his financial
position accurately




Bank Officer says he cannot
approve a loan
Officer fudges his forms to
get the loan (unbeknown to
Ferguson)
 To get the loan through
o Ferguson always knew the exact
amount he was borrowing
 Thus, he did not at all know

of the fudgery
o He is lent the money
 Bank wants to reposess
o Fergosun’s lawyers discover Bank
Officer’s fudgery
 Alledge fraud
Held
o SA Agreed fraud
o HC



18
There is fraud between Bank
Officer and Bank
But no from Bank to
Ferguson
 He knew exactly how
much he was borrowing
Ability to repay?
 Afford to repay =/
approval for loan

Implied financial
advice?
o summary
 IF you agree to be subject
 You will be bound
 If there is a short tenancy
 You will be bound
 If there is more than 3 years, and no agreement to
lease
 You will not be bound

Personal Equity Exception
o Aka:
 A right in personam
 A right in person





A personal right
Equitable right
Personal Equity
Personal Obligation
Equitable Obligation
o Where there is an agreement to be subjected, there is an
unregistered, enforceable, equitable exception
 E.g. Bar (v Nicolai) has an unregistered personal
equitable interest in the land enforceable against
Tomson
 Where it is “against conscience to give indefeasbility
to the registers interest"
o All other are in RP act, Personal Equity Exception is not in
Act
o However, it exists because of case law
 Fraser v Walker (Privy)
 Barry v Hider (HC)
 Facts
 Barry is registered
 Borrows from Schmidt
o Schmidt, dishonestly gets a
transfer, rather then a mortgage,
signed
19




Barry gave Schmidt the CT (though this
is normal)
o Between Barry and Schmidt, it
could be regularized (by a court),
except for transfer
Schmidt mortgages house in favor of
Heider
o Heider is not aware of wrongness
of transfer
Heider lodges the transfer and the
mortgage
During wait, Barry finds out, and
challenges mortgage to heider
o Barry claims registration, and says
he did not mortgage, and that
Heider is yet unregistered

Held
 HC rejects Barry, and finds a right “in
personam” for Heider


Although Barry was registered, there is
an exception
o Enforcing personal right on behalf
of unregistered interest
Why should Heider prevail? 2 stage Test
[authority]
o if Barry created Heider (with a
mortgage, etc), he would not have
prevailed if Heider had not yet
finished registering the interest
 i.e. you have a personal
equity where a registered
person creates an
unregistered interest
o But barry didn’t create Heider
 But he armed Schmidt with
the ability to pretend that he
had bought from Barry
20


Thus Heider had a personal
equity since Barry’s conduct
contributed to creation of
Heider’s interest
Bar v Nicolai (HC)
 3 judges found for Bar via personal equity
 Wilson, Brennan and Toohey
 Thomson did not intend to be subject
before he was registered
o (only fraud if it is before

registration)
But Thomson was subject to a personal
equity exception
o He agreed that a second person to
be subject the third?
o A registered person (Thomson)
agrees with a second (Nicolai) for
purchase, subject to the third
person (Bar)
o Thus three exceptions:
 Registered guy creates an unregistered interest
 Where R contributes to u. interest
 Where R agrees with 2nd person to be subject to U
o This are of law is not closed
 MML v Gosper
 Controversial, but still authority
 Facts
 Gospar (chick) owns land and is


registered in 1st sched.
o In the past, she borrowed money
from MML (now ING)
o Recorded in the second schedule as
having a mortgage
Subseqiuently, unbeknown to Ms Gospar
o Husband goes to MM
o To double loan
o House was worth enough to secure
MMI agreed to double debt
21


o By getting Ms Gospar to sign a
variation of Mortgage
o This was registered
Mr Gospar died
o He had forged her signature
o She did not know about doubling
Held
 Dissenting
o Meagher
 Saw on the lines of Mayer




and Co
MM was not aware of
huband’s dishonesty
 Or the forgery
And thus MM had mortgage
over full amount
Said:
 If Kirby was right,
wasn’t Maher and Co
wrong?
 Agency?
 Why does the preexisting obligation
matter?
Maj. Marney and Kirby
o Kirby (Wrong?)
 If someone lends money to a
woman, they must make

22
inquiries of her, not her
husband, of agreement to the
loan
 Special wive’s
 kinda (Garcia, Kirby
though of it as part of
Garcia)
Thus, because MM had not
made inquiries, there was a
personal equity

Why wrong?
 This was the position
under old system,
 But Torrens title is a
system under
registration
 There are exceptions,
but is there an
exception just because
of lack of knowledge of
forgery
 Doesn’t this contradict
Mayer and Co
o Marney [auth]

A pre-existing obligation
owed
 MM was already the
first mortgagee and
had custody of the title



deed
Thus, they were owing
an breaching an
equitable, fiduciary
obligation not to use
the title deed without
her authority
Different because there
was a pre-existing
relationship
Windeyer (Judge) was a solicitor, not a barrister,
before being a judge (On Gospar)
 He said
 When I was a solicitor, he registered
mortgages and variations
 Problem with gospar (although was
bound)
23
o Whenever he varied, he never saw
consent to use CT, just the signed
variation
o Thus, as a matter of conveyancing
practice, there is something unreal
about Marney’s judgement
o But he was/is bound by Marney
approach

Grichich v ANZ
 Facts


G was registered
Wife and son negotiate loan with ANZ
o ANZ says “I would like to meet G”
o Bring G in please?

They found a random to act as G
o Bank manager witnessed impostor
signing mortgage
Mortgage was registered
o First few repayments borrowed




o Then they stopped
G didn’t know
o Wife/Son confess
G said to court:
o Bank, although indefeasible, should
be subject to personal equity
because did not prove ID of
impostor
Held


Distinguished from Gospar
o Because in G, there is no preexisting relationship
o Thus this is pure Mayer and Co
o True ID does not defeat the bank,
because the bank does not need to
prove ID of witness
o Bank did think it was a true
signature
Their mortgage survives
24


S56C enacted
 Requirement for a lender to satisfy themselves
of the true identity for the person signing the
mortgage
 And must keep a record of documents sighted
 With 56C, there would have been a different
result for G
 i.e. there would have been a personal
equity
 Not yet gazzetted
 NB: 56C would affect G, Mayer and Gospar
Storey and Advanced Bank
 Facts
 S negotiates loan w Advanced bank

o Was loan for C
o S is a director, though requires
approval of board
 Advanced bank registered
Should have checked directors approval?


If prima facie the seal has been fixed,
there is no requirement for Bank to check
Snowlong and Choewy
 Facts
 LL subject to unreg. 5 year lease
 Purchaser agrees to buy subject to lease
 Purchaser registers
o Seeks to kick out lesee since
tenancy < 3 years, and it should


have been registered
Problem: Purchaser had agreed to be
subject to the lease
Wood
 Applied Bar v Nicolai
o If either fraud or personal equity
o They had intention of kicking out
tenant, even before sale
o Thus, they are subject to
unregistered lease
25

Other exceptions
o Overriding statutes
 Subsequent statute prevails
 Recognized in Pratton v Waringah Shire Council
 Drainage easemtns
 Also in Hilpar
 Environmental planning and assessment
act … Overrode indefeasibility
 Local government is given power by state: thus
State v State (old v new)

Fed v state?
 Family or Bankrupcy legn
 Commonwealth overrides state legislation (e.g.
RP act)
Thus exception to ind. If there is
commonwealth legislation
o Possessory title
 Definition:
 If I am registered in first schedule




And I allow a trespasser to live unchallenged
for 12 years
 native title?
The trespasser has better title than me
 Derives from “limitation act NSW ’69”
o 12 years or lose right to enforce
o Unless disabled or defrauded, you
are limited
 And 6A of RP act
o After 12 years is empowered to
register title
o NB: must be for whole block of
land
o How show?
 Graze animals
 Pay rates
 Live
Kirby v Cowedery
 Paying rates  adverse possession
26

Mulcahy
 Principles
 Court looked at old-system way “adverse
possession”
 Didn’t exist in RP act ‘till 6A In ‘79
 Authority: you have possession where:
 Open, not secret possession
 Peaceful, not by force
 Adverse and not with consent (i.e. not
“allowed” to live there)

Does not have to be same person for
whole 12 years (though there is a
requirement for continuity of adverse
poseesion)

Dependant
o ABC
o Person there on the 12th
anniversary gets title
Independent


Easy



o B is there, adversely to A, rather
than by agreement, and C and D
etc.
o A gets title
to title search, shouldn’t squatter check?
Addison v Billion
Sometimes “reality” is more real than the
register
E.g. there are good reasons
We can now answer any issue where there are at least 1 registered
interest

27
2 unregistered parties
4/11/2011 4:24:00 AM
Now, we are going to talk about where there are two unregistered
interests.
 Common law or equitable interest
o LvL
o LvE
o EvL
o EvE
o Most interests are equitable
 Postponing conduct For earlier person
o Earlier people might be guilty of “postponing conduct”

E.g.



Failure to take possession of title deeds
Failure to retain “
Prematurely releasing title deeds
Mortgagees saying they have been paid when
they haven’t
 Failure to hold out sale
Notice For later person
o Actual, constructive or imputed






Priority?
o Where the equities are equal, priority goes to bold (legal,
or, where there is no legal, the earlier equitable prevails)
If later takes with notice, they lose
If there is postponement, first loses
You can protect your interest by lodging your “caveat”
o Claim an unregistered interest
o RG does not “vet” caveats
o It is only a claim, it is not actual/checked
INJUNCTION
Caveats
 Beware/be warned
o Warning that unregistered interest claims an interest
o Registrar general does not vet a caveat
 Why are some interests not registered?
o Unregisterable:
o Purchasor who exchanges contract
1
o Cannot register contract for sale of land (you have
unregistered/able (Couchie v Tanbar) interest)
o Can only register on settlement
o Beneficiaries under a trust (RPA s82)
o Mortgages
o (Coonie v Burns)
o can have equitable mortgage with no writing
o mortgage via conduct via handing over title deeds
o Loan agreement  mortgage
o “lend x”


o
o
They
o
I give you mortgage
Leases, etc
just sit there on the register until challenged
A caveat blocks subsequent deals from registration (s 74H)
o Thus there is a motivation to get rid of Caveats
Challenge Caveats
o Lapsing notices (s74J, I)
 Inexpensive means to bringing to ahead whether
Caveat is proper



 Approx. $97
If caveat is reported, serve a Lapsing Notice under
s74J
 Challenging caveat
 If anyone else has interest, s74I
This says you have 3 weeks to go lodge in supreme
court and get extension of caveat
 It is expensive to do this, so they would only
do this if they really care/have an interest
o This is a harsh one (74M Caveator consent, MA Court
order)
 They have to pay all the things (expensive)
 20 days
 MA  extremely urgent
Who can caveat?
o Anyone with an unregistered interest
o But, this is not vetted
o Formal Requirements 74 F
 Caveat  what is the nature of the interest
2



o Can

 Purchasor, etc.
Date of the interest
 “xx/xx/xxxx”
Quantam of the interest
 $
v Daley
 Bad in form
you caveat yourself?
Sinclaire v Hope
 Meedhan J

Facts
 Registered in Sch 1 as owner
o Subject to mortgage in Sch 2
o Default, sale





Mortgagor sale improper
Puts a caveat on own
property “my interest as a
mortgagor victim to improper
sale”
Was a fine caveat, since different interests
NB cannot in Victoria (Swanson Mortgage)
Effect
o 74 H stops future deals
o Re Rush (retrospectivity)
 Facts
 Caveator puts in Caveat A (Bad in form)
 Mortgagee lodged mortgagee for registration
 Caveat A blocks Morgtage registration
Proprietor serves lapsing notice
Caveator gets advice from a crazy
 Lodge a new one
 Mortgage is before, therefore it does not
block
 Not retrospecitively
o Godfrey Constructions (Vendor’s obligation to get rid of
caveats)
 Facts
 Vendor exchanges contract to sell with P1


3





What

What







Gefazzle
Vendor terminates
P1 doesn’t accepts, and puts on a caveat
should Vendor have done?
Sort out caveat first
did he do?
Vendor sells to P2
Exchange, about to settle
P2 says there is a caveat, you better get
rid of it
Vendor tries to terminate
HC
 Vendor’s responsibility to get rid of caveat
S82, cannot register a trust:
o Though you can ask Registrar General
o To register trust as a caveat
o Or trust can register themselves
Caveat without reasonable cause?
o Hilparm v Wilson

Facts
 C owned by a woman
 In relationship with Wilson
 Fallout, litigation that continued
 Wilson puts on 13 lapsed caveats
 One of them that caused a sale to fail
o Then price fell ($140 000 loss in
differential)
 Sued under 74P

Wilson acknowledged it was frivolous
caveats
74O
 once it has lapsed, you need court’s
permission to make a new one
 this didn’t happen
Damages for loss of property


Priorities under unregistered interests (subject to postponing and notice)
4


Where both are unregistered, the parties are either legal or
equitable
o Legal > equitable
Assume no postponing, assume no notice “the equities are
equal”, then earlier and legal has priority
o Why?
 Nemo Dat
 “cannot give what you do not have”
 w/out postponing, legal prevails
o Earlier legal has priorities
 Whipp
o Later legal > earlier equitable
 Spooner
 A “bona fide purchaser of legal estate without
notice” you prevail
o Earlier equity
 Qui prior est tempore
Equal equity based on:
 Did earlier have postponing conduct?
 Did later have notice?
If neither occurred, equities are “equal”, and priorities as above
Postponing conduct
 postponing conduct means:
o postponing conduct that causes or contributes to the
creation of the later interest/person (i.e. postponing and
notice cannot occur)

o NB: if notice, there cannot be postponing conduct
Conveyancing practice
o When V sells to P, they exchange then settle/complete
 At settlement/completion, V hands over the title
deeds to P
 If not, they are liable to be found to have postponing
conduct
o With a mortgage (conveyancing practice)
 Title deeds pass from Mortgagor to Mortgagee at
settlement
5



 Retained by mortgagee until paid out
o With no mortgage, owner has title deed
 P’s mortgagee will take title deed, takes it when
paid, gives to next P
o There is postponing conduct if this is not followed
Title deed is an old system term (can also describe CT in
Torrens)
o Torrens, 1 sheet with first and second schedule
o Old system, title is a collection of deeds (Crown to P1, to
P2, to P3 etc.)
Torrens?
o Old system law for when 2 unregistered
Types:
o Failure to take possession of title deeds


Either failure of Purchaser, at settlement
 Or Mortgagee, at settlement to take possession
Walker v Linom
 Facts
 Husband/father establishes family trust



o Properties put in trust
o Governed by deed
o Trustee is Solicitor, holding on trust
for daughter wife
H/F held back deeds to one property
o Trustee did not pick them up
After conveyance of land from H to Trust
c/o S
H/F conveyed land to X (with deeds)
o Thus X and S believed they owned
Who prevails?


Held
 X has no common law rights
 Equity, X has an interests
 Since S didn’t take possession of Deeds,
failure allowed H/F to convey property
o They didn’t have notice
6



Therefore, it is postponing conduct for
conveyance without taking possession of
deeds
S postponed for failing title deeds, as well as
 Beneficiaries under trust also postponed
because of S’s conduct
Sometimes, B will not be postponed
 E.g. when T is defrauding B (Shropshire
Union Railways v R)
o Here, T was just being slack, so
there was postponing (This case)
 Or when T is acting outside of Trust
Power (Cave2)
o Fail to retain possession of title deeds by an act of
gross negligence
 What is gross negligence?
 Gross negligence is an equitable property
concept
 (not tort)


E.g.

If Mortgagee doesn’t keep them in safe,
but on a desk that is unattended
Fire Insurance v Whipp
 Facts
 Employee of an insurance Co
o Borrows from employer (common
practice)
o Signs a mortgage (I keeps


mortgage)
Employee was a rogue
o He stole the title deeds
o Conveyed the property to someone
else
 They were not aware that the
deeds should have been
controlling deeds
Challenged that I should be postponed
since they failed to retain
7
Held
 No, requires gross negligence
o When should vendor hand over title? When should
Mortgagee hand back title? (applies to Vendor and
Mortgagee)
 When all money has been paid
 Handing over is conduct that implies full payment
 Reliance Finance v Heid (2 people claiming moneys
against Connel, who gets the money first?)
 Facts





Torrens case
Hyde owner
o Connell to buy
 $15k deposit (usually paid to
stakeholder, not V)
Connel controlled by Mr McCai
o He owned a group of companies
Deal: 15K to Heid
o Goes to travel agent, buys eurotrip
o Arrangement was, at settlement,
Heid would lend 50K to P
 Would be paid balance
(100k)
o Heid decided they would save by
using legal services internally
(Gibby, pretended to be a solicitor)
 Heid knew that Gibby was an
employee of McCai (owner of

Connel)
o You are going overseas, so bring
your deeds and transfer
 Fine-print “I aknowledge that
I have received full purchase
price”
 But had only received 15K
 Gives to Gibby CT
While he is away
o Connel and Mcai are evil
8


o Conell goes to reliance, please lend
me 80K
o They lend, on belief that Connell
has settled
o NB: Reliance decided not to
register mortgage
Reliance did not bother to register
o At time when Conell borrowed from
Reliance, Connell was not yet
registered
o NB: since he was not registered 
there is no s43A protection
borrowed more
o he borrowed 12K for stormar
o he borrowed 40k from Alexander
 20k from reliance, again
 45k from Irving
o 50K heid vendors finance
o 100k heid (vendors lien)

 2 equitable (heid v reliance)
Held:
 Reliance won (but should have
registered, would have been easier)
 2 equitable, (heid should have prevailed,
earlier)
 Should Heid be postponed?
o Trial judge  no, normal practice
to give solicitor title before
completion, in prep for settlement
o CofA
 Wrong for Heid to assert that
Gibby was a solicitor
 Since Gibby was a Connel
solicitor
 And represented the other
side
o HC
 Forget about Solicitor
9




More important, Gibby was
an employee of Connell, and
Heid knew
And gave document to the
other side before full
payment
Mason and Dean  who has
a better equity
Gibbs and Murphy  estoppel
(Heid signed a transfer
saying he was paid, hands
over CT representing paid,
hadn’t, Relience acted at
their detriment on that


Lloyds Bank v Bullock
 Facts






representation, Heid is
estopped.
Possible brownies
Old system
Owner was H
o Mortgage conveys property to a
building Society
 Subject to entitlement to
reconveyance if fully paid
(equity of redemption)
H dies
o In will, left to S (son, in trust of all
kids, Bullock sister)
Solicitor dishonest (C)
o Solicitor for H, S, and Building
Society
C says to S, I’ll buy it off you
o C to draw up solicitor
o S conveys to C
 Receipt clause
 No receipt of cash
C goes to Build Soc
10



o H dies, S selling
o C says, I have drafted a deed of
reconveyance in expectation of
conveyance to third party (actually
C)
o Not paid out in full
o Solicitor has a deed of
reconveyance and deed
C goes to Lloyds bank
o Everyone’s paid, give me a
mortgage
o He is lent money
Build Soc, S and Lloyds are all awed
money
Who has the best equity?
o Build Soc has a first mortgage by
deed and the legal estate (legal)
o Bullock is beneficiary of estate,
under redemption, whould get
(equity)
o Lloyds thought they were getting a
first mortgage, did not know that
Build Soc had not been paid out
(equity)
 Who still had legal title

Held:
 Was the build Soc guilty of postponing
conduct with signing of reconveyance

o BSOC not guilty of postponing 
when they signed it to C, they did
so “In Escrow”  on condition that
the deed was only to operate when
the money was paid
 therefore better than Lloyds
and Bullock
Bullock v Lloyds?
o Did Bullock do postponing conduct?
11
Was beneficiary of estate,
executor signed conveyance
 Was C the family’s socilitor or
third party?
 Yes, worked for
Building Society
 Knowledge
imperative
o Building Soc had no notion that C
was buying from family (then they

should have gotten different
lawyers). Thus BSOC did nothing
wrong
o S knows sell to C, and wrote he

was fully paid, thus postponed
against Lloyds
o BSOC  Lloyds  Bullock
The trustee, S, was guilty of postponing
conduct, thus beneficiaries were also
postponed
o Holding Out
 Breskvar v Wall
 Facts
 See fraud
 S tfr to Wall is questioned
o B has equitable right to register
 Wall sells to Alban
o Qld (No s43A)


o Equitable
Before registration of Alban, breskvar
finds out
Held:
 Earlier Equitable (B) v Later equitable (A)
 Breskvar is postponed because they have
held out that they have sold when they
have not (though they would have won
agains Wall)
12

Alban Prevails, since more innocent
(estoppel?)
o Failure to Caveat
 NB: Caveat are paJ&rt of RP act (thus only under
Torrens)
 Unregistered person must caveat, or else they will
be postponed
 Butler (2nd M)
 Facts
 A man (G) registered as owner (vic, no




43A)
o G was registered in sch 1
o M1 in sch 2
G entered into 2nd mortgage with Butler
(B) (unregistered)
o Took 7 days to Caveat
2 days after mortgage
o G sells to Fairclough
o Subject to M1, not 2
Held:
 Butler (earlier E) v Fairclough (later E)
o B> unless postponed
o HC, B should have
registered/caveat,
 Made it impossible for Fair to
know,
 Therefore B is postponed
 Though Fair didn’t even look (this didn’t
matter)
 When Fair lodged, (12) Butler had
already Caveated (7)
o Not changing priority, but merely
stops registration
o Lawyers thinks it defeats title, it
doesn’t just require court
Lappen v Abigail
 Dixon
o Caveat to protect?
13

o Now creates an obligation
 Black v Garnock
J&H v Bank of NSW (1st M)
 Facts
 Josephson owned Property
o Borrows from BoNSW
 They have deeds
 Bank did not register or
caveat
 Why didn’t first mortgagee register?

o Time to register could be less than
payment time
J borrows money from J&H
o They say  where are deeds?
o “with BoNSW for safekeeping”
o lend money first
 then contact BoNSW
 “We are now M1, give me
deeds”


Held?
 J&H (later) v Bank (earlier)
o Didn’t bank fail to caveat? (Butler)
 Differentiated
o 1st not 2nd mortgagee
o Had CT
o No one else may register where
you have the CT


BoNSW  FUCKOFF
NB CoA
o If you (J&H) knew bank had title
deeds, there was constructive
notice of M1
o Should have asked first
Other kinds of unreg. Interest
 P who exchanges contract, before pay? Should
caveat?
 Osmanowski
14




o If P exchanges w/o caveat, there is
postponing
Jacobs
o P not postponed because family of
companys
Fishman
o No, P doesn’t need to postpone
Different if deposit released (PV)
Purchaser gets equitable charge over the
property, and that property is charged
with their rights to get the money back
(must caveat as per Butler)
Black v Garnock (Obiter)
 P should caveat
After this, it is now good practice to caveat on
exchange (in fear of Garnock)
Suspect that Benificiary of Trust, you should
postpone if you don’t caveat
 Butler  mortgage to caveat





Torrens, s43, deals with guy on register
 Thus, benificiaries are exposed, since you
don’t have to check if they exist (only
Trustee is on sch 1)
74F  benificiaries can caveat (82)
Thus, should caveat
Can’t a vendor’s lien only come out of postponing conduct?



Settlement, no paid, then equitable lien
Is postponing, but can still claim
Handing over transfer is completion, CT only to be when paid
Timeline
How does notice matter?
Wednesday (Legal v Equitable)
 Q2
15
What is an unregistered legal interest?
 Lease (unreg.) 23D Conveyancing Act
o Statute of FRAUDS (writing)
o Exceptions (23D)
 If a lease satisfies below, then it is enforceable, even
if oral & it is a LEGAL (rather than equitable) interest
(even without writing)
 3 years or less (not lease +option)
 if 5 year lease, binding in equity between
landlord and tenant (Chan v Creston)
(Leatz Leeholme Stud) (still needs to be
in writing)
o i.e. unregistered but still in writing



o 23C

o
o
o
o
Best rent reasonably obtainable (market rate)
(e.g. not family rates)
Immediate right to possession
 Even if haven’t moved in, have a right to
move in (i.e. lease period has already
started)
If any are missing, it needs to be in writing
Benificiaries under certain interest may have an
equitable interest without writing
42(1)D (short tenancy exception)
obligation to register (53)
23D (exception to writing)
Snowlong v Choe
Personal equity exception (where purchaser agrees
to be subject to lease)
o Walsh v Lonsdale
 Equitable lease  READ
 As agreement to grant a lease
43A RP Act (not in Vic or Qld)
o (mirrors old system idea)
o protects purchasers and first mortgagees


16
o Dealing registerable (8 elements),  you are deemed to be
taking the legal estate (legal, later legal v later equitable,
would make them win against earlier equitable)
 36(6) RPA  dealing must be accompanied by CT
 or you lodge a direction to RGeneral to use CT
if RGeneral already has it
 used to only have 2 CT’s (one with RGen and
one with owner)
 with computers, now only owner has hard-copy
of the CT (compy generates both)

 this section is regarding community CT
Who has it?
 Purchaser or first Mortgagee (once settled)
Post settlement and pre-registration (dealing, thus,


registerable)
 i.e. after settlement (has CT) and before
registration
Dealing must be stamped (Stamp Duties Act)
No formal defect: (e.g.)




Different name of vendor
 (Register name must be the same as
transfer lodged name) (if names
different, you have to cure defect before
it is “registerable”; or,
Error re prior encumbrances
 Look at a transfer
o There is Transferor
o Transferee
o And “subject to prior
encumbrances”
 What registered interests is
this transfer to be subject to?
 Either get rid of the encumbrance, or
remedy the transfer
Not void: Mayer v Coe; Jonray v Partridge Bros
(affirmed Mayer)
 Upon registration, forged mortgage got title
17






Next

Pre-registration, did Coe have a dealing
register able? NO, he has NO interest
It is an ineffective void dealing
43(a) DOES NOT extend to void dealings
dealing to be registered (IAC V Courtenay)
E.g.
 Transfer before mortgage
o (mortgagee does not have dealing
registereable, only purchaser does)
 Discharge before transfer before
mortgage
 Transfer1 before transfer2
No notice at settlement (IAC v Courtenay)
 When they took the interest, they must have

IAC


no notice  of an inconsistent third party
“In the absence of notice”
Purchasor’s mortgagee tried to get 43A
protection
Facts
 Ms Austin is regd owner of land
o suitable for subdivision
o sold to Courtenay
 and lent him most of the
money
o thus Ms Austin had the Mortgage
(Lodged, 12 months later, had not
yet been registered)



Courtenay sells back to Austin (not
completed
o Austin’s solicitor a crook, contract
of sale not completed
o Austin thought she had bought it
back
Solicitor
o Try to cancel original sale
o In reality, she was subject
Sells to Denton S/D
18


Held
 Courtney (Early Equitable)
 Hermes/IAC (registerable?)
o NO  not next
 Courtney wins (no postponed because it




o Mortgages
 1  Hermes (U/R
 2  IAC U/R
Courtney now want to keep house
(equitable, but first in time
was Austin’s responsibility.
Go through 8
They tried to cancel “7” a dealing which
can be registered, not next though
o HC said ONLY THE PERSON TAKING
THE NEXT MORTGAGE
Denton had notice of Courtenay
 Before settlement, Austin’s solicitor and
Denton’s Solicitor (before Her and IAC’s
came)
 Thus, Denton got constructive notice
If Denton did get 43A?
 The successive effect doctrine (Wilson v
Spooner(UK) ; Jonray v Partridge;
Meriton v … Tate)
o If Denton got 43A, they can pass it
on
Can you register a short lease? yes
19
The Equine Problem
4/11/2011 4:24:00 AM
Equine is the registered proprietor in fee simple under the Real Property
Act of Brownacre, which is situated in a country town. Upon Brownacre is
erected an old four-bedroom house and a stable to the side, part of which
is erected 4 metres above a 3 metre wide easement, benefiting the
adjoining property and giving access to the back portion of the property.
Equine is a veterinary surgeon, who holds the land on trust for himself
and his two partners, although of course this is not disclosed on the
certificate of title.
The property was purchased some time ago with a view to the veterinary
practice being moved to the property. Unfortunately there has been a
falling out between Equine and his two partners over the splitting of
profits and the fact that one of the partners is paying undue attention to
Equine's wife.
Unbeknown to the other two partners, Equine on 1 December leases
Brownacre to Dr Fixit for a period of two and a half years. Dr Fixit intends
trying to establish a medical practice there but is delayed in taking
possession as he is waiting on certain equipment.
Equine then sells the property to Oats, a hay dealer, for $760,000. Oats
inspects the property prior to exchange and finds it vacant. After
exchange of contracts and prior to settlement, Oats meets one of Equine's
partners in the street. The partner tells Oats that the partners may be
dissolving their partnership with Equine but that, in any event, they will
shortly be moving their practice to Brownacre. Oats instructs his solicitor
to immediately settle the contract. Settlement takes place on 2 February.
The transfer is registered.
After settlement Oats, while inspecting Brownacre, discovers Dr Fixit on
the property, about to take possession of it for his surgery. Dr Fixit
shows Oats the lease and insists on staying for the full two and a half
years.
It is also discovered that the adjoining owner claims the part of the stable
erected over the easement. The easement is simply recorded on the title
as "right of way created by transfer no 12345 dated 20-1-1917". An
1
examination of the transfer shows that the dealing not only gives a right
of way but also operates as a transfer of the buildings over the right of
way, as it gives the adjoining owner the building plus the right to pull
down or re-erect any other buildings over the right of way provided that
such buildings be erected at least four metres from the ground.
Equine's partners now give notice to Oats that they intend to claim
rectification of the register or alternatively that Oats holds as trustee for
them on the basis that he was fraudulent in settling the purchase of
Brownacre, having had notice of their interest in the land.
Advise Oats.
Issues



Equine’s easement with Neighbour
o With building rights above
o Bursill Enterprises
Equine’s trust (RP s82)
o Partner’s have an unregistered interest
Equine leases property to Mr Fixit (unregistered  not told he is
registered)
o He is not yet in possession
 Equine sells to Oats
o Oats finds it vacant
o Oats finds partner in street (Fraud)
 Partner tells him about moving in
 Oats rushes solicitor
NB: Advise Oats =/ Advise Oats
 Oats v Neighbour (R v R)

o Oats is registered in Sch. 1
o Neighbour’s easement in Sch. 2
o Torrens  title by registration, indefeasible (RP s41, 42)
unless excepted
 Indefeasibility (Sch 1 subject to Sch 2)
 Thus, Oats is subject to neighbors easement
o Easements should not give exclusive right (but here, HC
said above is fine, because it was registered)
Oats v Partners (R v U)
o Oats is registered in Sch 1
2
 Has title s 41 indef s 42
o Because partner is necessarily unreg s82
o Oats is good unless:
 Fraud
 Best:
 Say nothing (Wix)
 Said things that aren’t written
o Stewart
o Loke Yu
o Bahr




o Leros
o Etc.
Notice is not necessary fraud (Wix v Bennet)
Must be moral turpitude (Stewart)
Guilty intention in rushing
 Did he say anything to partners?
NB: here there is constructive notice
 Actually know partnership
 That partners want to move in


Did he know there is a trust?
(constructive)
 If oats said “I just bought property … but don’t
worry” – this would be fraud
 What if “I am sorry to hear, leave it to me”
 Loke and Stewart
 If said nothing:
 Wix
Personal equity

Oats v Fixit
 Short Tenancy (421d
o Less than 3 years :D
o Oats took with notice of fixit (nope)
3
Blackacre
4/11/2011 4:24:00 AM
A is the registered proprietor of Blackacre under the provisions of the Real
Property Act. He leaves the Certificate of Title for safe custody with his
solicitor, S. There are two shops on the property, the first of which is
occupied by A. The following events take place;
 The second shop is leased to T for a period of two years, with an
option to renew for a further one year. S acts for both parties in
preparing an informal lease, which is not in registrable form. S
also advises both parties that this is all that is required, and that
there is no need to go to the expense of registration.
 S also acts for M, who has asked S to invest his money. S forges
A's signature on a mortgage in favour of M. The RegistrarGeneral registers the mortgage. S appropriates the money to his
own use, pays the mortgage instalments out of his own pocket
as they fall due, and later induces M to execute a discharge of

the mortgage in anticipation of its discharge.
Whilst A is overseas. S without authority enters into a contract to
sell the property to P and on settlement of the sale hands to P
the Certificate of Title, the discharge of the mortgage to M, and a
transfer from A to P: the latter purports to contain the signature
of A but it is of course forged by S. These documents are lodged
for registration but before registration is complete A returns from
overseas and S disappears.
“A” seeks advice as to whether he can prevent registration of the
transfer to P, either by way of caveat or injunction, and whether his title
is subject to the mortgage in favour of M.
 Caveat  has a right in equity?
o A v P (R v U) (right in equity on settlement  lien)
 A prevails (registered) unless: equity or fraud
 Can’t see fraud or equity?
o A v M (R v R) (Fraud)
 M prevails (2nd sch, unless fraud)
 Mayer v Co?
“P” seeks advice as to whether he is able to have the discharge of
mortgage and transfer in his favour registered.
 What is discharge?
1


Innocent third party  fraud
As above (PvM  U v R)
“M” seeks advice as to whether he is able to prevent registration of the
discharge of mortgage and maintain his security over the property.
 Induced?
“T” seeks advice as to whether his rights as lessee are likely to be
affected by the outcome of other claims.
 Short tenancy (42(1)D) < 3 years
o Requires notice
 Did have notice?
 Constructive (Marsden v Campbell)
Answer in class
Notes
 NB: informal lease is cannot be registered
 When there are heaps of parties, look at the registered first
(because of indefeasibility)
o unregistered?
 People who assert ownership (if he wins, he wins.)
 Then others in chronological
 Leave unregistered tenants to last (who is owner
before subject to lease)
AT

AM

Informal lease in favor of T
o Personal equity exception
Mayer & Co?
o Except, later induces M in anticipation (postponing conduct
or “in escrow”)
AP

Forged transfer
At now: A and M are registered  lodged (P and M)
2
Advice to A:
 Registered  title (41) indef. (42)
o But A is subject to mortgage in 2 sched.
o Even though forgery, Mayer v Co, upon reg. had title
 AP
o P has lodged a forged transfer awaiting registration
o Caveat
 No, order of lodgment, not registration (74H; Re
Rush)
o Injunction (phone call to registrar general)
 Equity division in supreme court  duty judge
 Talk to legal officer  delay for 24ish hrs. (informal)
 Talk to barrister, urgent summons to restrain


registry
This is URGENT
“Ex Parte”  without other party involved
 Judge will give you 2ish days (not too much
inconvenience if garbage, but long enough to
serve the other party)
 Getting this injunction stops registration
 A has title, indefeasible
 No exception
 Didn’t agree
 Didn’t receive money
o A never agreed to be subject to P, then there is no lien
 If P lodged after he found out fraud, there would be
fraud on the registrar general

AM
o Since registered: Mayer v Coe and “in escrow” (Lloyds)
 M signed?
 Bad if signed discharge to other party’s
employee (Hyde  Personal Equity)
o If discharge is registered
 Schultz
o Fraud must be committed by registered, so not…?
o Not in interest of A (Breskvar)
o Hyde v reliance?
3
Thus for A: whatever register says
M might injunct.
AT A created lease, is bound (Barry) (personal Equity) (NOT SHORT
FOR AT, but TP)
PT 3 years or less (tick)
 Notice:
o If actually know, subject
o Should have known  knew someone was there (Marsden)
o What if P is away when A is shown?
 No notice
DischargeTransfer (transfer on clean title (not subject to mortgage))
4
Old-System title
4/11/2011 4:24:00 AM
Q regarding later legal
 equity of redemption as equitable
NB: from here is the final exam examinable content
Most is already taught (unregistered v unregistered is similar to old
system priorities)
 LvL
 LvE
 EvL


EvE
o If equities are equal (postponing/notice)
Different: Failure to caveat does not exist under old system
What is a legal interest under Old System Title (=/ unregistered
Torrens)
Who has a legal interest?
 A purchaser gets the legal estate at settlement when he takes
the conveyance by deed (passes from vendor to purchaser)



(inspiration for s43A Torrens)
A first mortgage by deed
o Lloyds Bank v Bullock
 Facts
 Build Soc. Had deed
 Held
 They had the estate
Other deeds (deed of easement, deed of lease) are also legal
interests, but less than the legal estate
Other leases with no deed of lease but complying with s23D of
the Conveyancing Act
o 3 years or less
o best rent reasonably obtainable
o immediate right to possession
Who has the legal estate? Ownership
 Either vendor pre settlement
o Deliver the executed deed of conveyance (settlement)
 Sensible doesn’t hand over until payment
1


Vendor post settlement
First mortgagee before completion of payments
o When mortgage is paid out (reconveyance)
 Because in old system, first mortgage by deed is a
conveyance subject to the entitlement for
reconveyance
 When it is paid, the estate goes back to the borrower
What is an equitable interest under old system?
 Person who has exchanged before settlements


Beneficiary under a trust
Mortgagor’s equity of redemption
o Right that the mortgagor
 When paid off debt
 The right to have a reconveyance
o Mortgage debt includes principle + interests + reasonable
legal costs
o Time within which they must exercise right to repay in full?
 Under a mortgage contract, there is a loan period




This is the contractual right to redeem
Common law says, within time you need to pay
(to the day)
Equity allows a further period after the
common law contractual period
Thus, common law period and equitable period
is the time to exercise the “equity of
redemption” (Mortgages: heading 1: last case:
Cregliner (1914))
Equitable right to redeem (time +’d) expires when
the mortgagee forecloses (or sells) (i.e. there must
be foreclosure for this to expire, not mere expiration
of time period) Cregliner
 What is foreclosure?
 When can mortgagee sell (99% of the time)?
Other mortgages (not 1st)
o Cooney v Burns (equitable mortgage by deposit of title
deeds)
o Agreement to grant a mortgage (ANZ v Widen)


2
(not by deed, by agreement)  they are both
mortgages, but this is equitable, not legal (maybe
not money to pay for house?) not a conveyance with
right to reconveyance
o 2nd or subsequent mortgages
A lease which is writing that does not satisfy s 23D Conv. Act
(Chan v Creston)
Restrictive Covenants



S 184G of the Conveyancing Act Enacted in 1984 (used to be s12
registration of deeds act)
 Conceptually, this is very different from indefeasibility and
Torrens


If you do not satisfy all 4, s184 does nothing
If the requirements of 184G are satisfied then 184G gives
priority to the person first registered (different register (the
general register of deeds), same place)
o (a) Instrument is effective (i.e. not void: not procured by
fraud, not forged (Re Cooper))
 instrument means any writing (e.g. under old
system, you can register handwriting =/ approved
form) (e.g. you can register a contract for sale, etc.)
 Re Cooper
 Facts
 Son conveyed property owned by dad
 registered
 Held

Even though registered, void because
dad did not sign
o (b) only applies to sort out priorities where an instrument
is versing another instrument (i.e. not effective against
oral agreements) (s23C trusts, oral leases, oral deposit
mortgages)
o (c) only gives priority where valuable consideration is paid
(not by gift, where the consideration is nominal) “must be
for value”
3
valuable consideration must be substantial (Bullen v
Becket)
o (d) only gets priority if you are bona fide (you took in good
faith)
 Marsden v Campbell
 Bona fide means I took without notice
(actual/constructive/imputed) at the time I
took my interest
 Schoals v Blunt
 Facts





Purchaser exchanged contracts
Got notice of someone else
Purchaser settled
Purchaser registered conveyance they
took at settlement


Held
 The purchaser was not bona fide because
pre-settlement, they got notice, and they
tried to register conveyance at
settlement
Burrows v Crim
 Facts
 Purchaser exchanges
 Purchaser settles
 Purchaser gets notice
 Purchaser registers conveyance they took
at settlement
 Held


That purchaser is bona fide
o Doesn’t matter they got notice
before registration, they had no
notice at settlement
Moon Kim G v Tahos
 Facts
 Purchaser exchanges
 Purchaser gets notice
 (if they settle, Schoals v Blunt says they
will have settled with notice)
4


Held
 Note: can register any instruments
 4 points
o was effective instrument
o instrument (yep) conveyance
o Valuable? 10% and agreement to
pay full payment price (agreement
is valuable consideration)





instead, they register the contract for
sale of land
o Bona fide?
Yes he was: when he exchanged he had
no notice, and it doesn’t matter that he
knew before he registered.
You wouldn’t overcome Schoals if you
settle and try to register contract
o Because, once you settle, the
contract is spent
In court: s184G gave priority, even
though P2 had conveyance
 Awesome advice by P1 (if you settle, you
lose, so just register contract)
 Settles after court finds priority
Darbisher v Darbisher
 If a person has a registered, even equitable
interest
 This can give them the legal estate
Fuller v Goodwin



What happens when a vendor conveys to P1
then P2, and P2’s conveyance gets registered
first?
Can P1 say he has priority since he is not
registered?
Held:
 Registration of subsequent parties is
irrelevant to registration
How to approach a priority question?
5


Is anyone registered? Who is registered first?
o If yes, you ask: do they get priority under s184G (only if
settled 4 parts)
o S184G overrides rule of priority, but only if satisfies all 4
Priority (only if no-one satisfies 184G)
Primary application (not in exam), under Part 4, to convert to Torrens
(Qualified title):
 Qualified title Part 4A of the RPA (enacted in ’67, amended ’84)
o OST  Qualified Title  Torrens


Qualified title is a kind of hybrid
Torrens with a qualification
 What is the qualification?
 Torrens subject to OST subsisting
interest
o Qualified Title works for 6-12 years
o Know s28J and s28M
 S28J
 Cautions


Subject to qualifications/subsisting
interests
S28M
 Lapsing of caution
 Caution lapses between 6-12 years
 If: within the first 6 years, there is a
dealing for value with no fraud 
registered  on the 6th anniversary of
QT, qualification lapses


If: no triggering dealing for 12 years 
qualification/caution lapses
 If: dealing happens between 6-12 years
 caution lapses on day of dealing
Possessory title is not assessable in final: Qualified title is subject
to OST subsisting interest
o If you have an old-system interests: you have 6-12 years
to lodge your interests
o E.g.
 Prior owner signature forged (possessory title)
6

o Until expiration of qualified title, it is subject to these
subsisting interests being ok
For exam: 28J & M, Qualified is a hybrid for 6-12 years
Note: later legal (bona fide no notice with value) rule does exist
Good conveyancing to register every dealing immediately
7
Mortgages
4/11/2011 4:24:00 AM
Ask about sale price>debt
Tacking
 Matsner v Clyde Securities
 Additional cases
o Central Mortgage Registry v Donemore [1984] 2 NSWLR
128
o Westpac v Adelaide Bane [2005] NSWSC 517
Explanation of equity of redemption  foreclosure





Equity of redemption is mortgagor’s right to get a reconveyance
upon full payment of debt
Time is Contractual period + Equitable right
Equitable right finishes at foreclosure/sale
Note: breach of contract if missing payments
o If you miss just one month, this is a breach, the bank can
demand the immediate repayment of the whole debt
(getting out of higher current interest rates?)
o Thus, contractual right to redeem might change with
breach
8 steps to foreclosure (where Bank becomes the owner: give up
right to sue for shortfall) (see sections of reading guide s61, 62
of RPA, s99A and 100 of Conveyancing Act) (For Mortgagee sale
57 RPA, s111 CA)
o there must be a default
 whilst there is no default, the bank can’t touch you
o Notice of default requiring the default to be remedied
within a month
Conveyancing and RP act
 If Torrens land and registered mortgage, the
RP act
 S57(2)(b)
 Old-system or unregistered Torrens mortgage
 S111 of Conveyance act
o Non-compliance with notice
 Bank can exercise mortgagee sale (foreclosure better
if house-prices low?)

1
note: the bank can sell at any moment after noncompliance (1 second, 1 year, etc.)
 note: the bank can take possession after step 1
o Hold an auction (properly conducted)  question of fact?
o Highest bid in auction < debt remaining
 Thus, if they sell, there is still a deficit
 If the mortgagor has lots of money, you can sue in
debt for the rest
 But if they don’t …?
o Apply for foreclosure

 RPA apply to RG
 CA apply to Court
o Further period of 6 months under RPA, discretion of court
in Conveyancing act (usually 6 month)
o Only then is there an order for foreclosure
Note: in US
 When bank sells mortgaged property
 Not allowed to sue for shortfall

GFC because debt>price of house
Equity of redemption:
 When does equity come to an end?
o When there is foreclosure, or mortgagee sale
o Thus, only at the very end
 Expenses of going through foreclosure
Tacking:


Defn:
o Old-system and Torrens
o When a first mortgagee makes further advances
Taylor v russel
o Facts
 House of lords (old system)
 Mortgagor borrows from M1
 Then M2
 Then M3
 When Mr went broke, M3 acquired M1
2

 M1 assigned their first mortgage to M3
Maxim – Tabula in Naufragio: look, M3 takes an
assignment of first mortgage, and, at the time of
original lending, did not know of M2, they can tack
on this later advance to this first mortgage which
they have acquired and prevail over M2
o Held
 If M3 acquires first mortgage
 And, didn’t have notice of M2 at original loan
 M3 can tack onto M1, and prevail over M2



Consider
o Facts
 Mr. borrows from M1, then M2, then more from M1
 In particular, can M1 add their further advance on
initial advance and prevail
Hotkinson v Rott; West v Williams (both England, and Old
System)
o In relation to scenario above, M1 can only add further
advance if M1 had no notice (actual, constructive or
imputed)
o If satisfied, will prevail over M2
o If had knowledge, you were subject to M2, even if the
original loan had a provision for more money to be
subsequently loaned
Rio Burns Estate (Irish)
o Affirmed in Justice White’s HC decision
o Facts
 There was a slight variant in HvRott


If M1, from the outset, was OBLIGED to lend more
money
 E.g. building loans given in stages
o Held
 Only defeated by M2, where there is ACTUAL (not
constructive or imputed) notice of M2
 Reason, shouldn’t have to search for an M2 (as a
constructive notice would allo)
Kredland v Potter
3

o If initial arrangement was that there was to be no further
advance
o Now, actual or constructive notice that will defeat M2
Torrens (Matster)
o For many years, the only case was Matster v Clyde
(Holland J)  outcome is ok, reasoning … too tied to Old
System ?
o Facts
 A property in Kogarah
 Developer buys





 Knocks down house to start building
Borrows from M1
 Building costs more and more, borrows from
M2
When ½ built, Mr goes into liquidation
What would M1 do? Keep building?
 Took advice
 M1 knew of second mortage,
 Decided that: since it is half built, M1 wouldn’t
even get back their initial advance
 M2 would not get a cent
 Thus, M1 decided to pour more $ into project
to finish development, to be able to sell with
enough money to pay off debt
They should have tied M2 up to an agreement,
regarding extra cash from M1 prevailing
 M1 ignored M2
After they finished their development
Had knowledge/notice
And said further advance was subject to
second mortgage
 If M2 would have succeeded, when M1 sold
completed project, allocation of cash would be as
follows:
 1 – M1’s original advance
 2 – M2’s advance
 3 – M1’s subsequent advance
o Argument of M1:


4
Under indefeasibility, since M1 secured all money
including future mortgage, M1’s further payments
were protected
o There was authority (southwall v Roberts)
 If M1 reasonably improved property, value may be
tacked
o Held:
 Old system cases were applicable, thus indefeasibility
did not count
 M1 had notice, and, thus, should be subject to M2,

and indefeasibility was irrelevant
o Matsner exception
 It was against conscience for M2 to prevail over M1’s
further advance because, but for the further


advance, M2 would have got nothing
Central Mortgage Registry v Doneware (Karney J); Westpac v
Adelaide bank (White J)
o Held:
 Under Torrens, it is only actual notice of a further
advance that will cause a first mortgagee to be
subject to M2
 But, personal equity or equitable fraud (barr v
Nicolai) exception might occur with regards to M2
 But will only be defeated with ACTUAL notice
 By M1 making further advices squeezes M2 out of
their priority
Decision in Matsner correct
o Process wrong
o Indefeasibility applies, though personal equity, fraud or
equitable fraud may apply
 In Matnser, M2 would not have a cent if M1 did not
extend, therefore no personal equity exception
o M2 prevails only if M1 has actual notice
o M2, if smart, should get a deed of postponement deed to
subsequent M1 loan
Penalties for early payment
5







What happens if you borrow a mortgage, interest only, repayable
after 20 years:
o Are you allowed to pay off mortgage early?
S93 Conveyancing Act (when IR% were low)
o Good news
 You can pay it off early, regardless of what the
mortgage says
o Bad news
 The price of paying it off early, you have to pay
interest for the balance of the loan period
NB: a lot of mortgages have a prevision that make s93
unnecessary
o Most permit early repayment
o And most Bank mortgages say you can pay it off when
giving 1, 2, or 3 months notice (or paying interest in lieu)
Some say you have to pay interest on full term of loan
o Knightsbridge (English) not pay off early is not
unconscionable
This is good news for high-priced fixed interest, but the bank
may have a high penalty reducing the monetary
Stroad v Parker
o 300 years ago, English Court:
o a penalty clause that Irate will go up if there is a default is
not legal
o Ok to say Irate will be less if paid on time
Wana v Carowana (HC appoved in Oday v All state’s finance)
o Facts
 6 year Mortgage


 Irate fixed @ 9%
Said:
 Had to pay interest on full 6 years even if paid
back early
After 18months, and many missed payments, M1
required immediate payment of loan
o Issue
 If Mortgage said you needed to pay 6 years interest,
and full payment is demanded… what is pay all?
 Just original principle
6


Plus interest for 18months
? plus interest for rest of 6 years
o Held
 The last point, the interest payment for 6 years, was
a penalty, and unenforceable
 Penalty is unenforceable will not allow a clause
that is unconscionable
 Since M1 demanded immediate repayment, it wasn’t
paid back early by choice (where Mr would have had
to pay full amount)
o Oday
 Lease: payments not made, seized goods and
required subsequent payments
 Court applied Wana, only entitled to payments of

interest until the moment where they initiate early
repayment
Seminar problem
o 6 year loan, want to repay
o … what if they defaulted, and Bank demands repayment …
o for Bank, don’t need to force repayment, can sue for last
month’s payment in local court
Mortgagee’s remedies
 Last class, did foreclosure
o Foreclosure is when Mortgagee becomes the owner
 Personal Covenant is a contractual remedy
o You can sue under personal covenant (US does not have
this)




o A Personal, rather than property tied
Posession s60 RPA
o When Borrower is in default, Mee can ask for possession
Appoint a receiver to collect rents
o E.g. shopping centre, 200 shops, Mortgage
 Stops paying mortgage
 Bank can take rents
Mee can spend money to improve property reasonably (Southhall
v Roberts)
Mortgagee Sale
7
o Which act?
 RPA for registered mortgages of Torrens title land
 Conveyancing for old system and unregistered
Torrens
 Both acts have similar types of provisions
o Prerequisites
 Default
 Notice to Mr to remedy the default within a month
 RPA  s57(2)b
 Conveyancing  s111
 There is non-compliance of the notice
o If these have been met (without the default being fixed)
Sale can occur
o See sections in reading guide

S112 C|s58 RPA
 Order of money
 1st paid Realtor and lawyer for Mee
 M1 debt
 Then subsequent M’s


If any money left, Mr gets money left
If no money left, can sue after personal
covenant for remaining cash
o Obligations of Mee when selling (111A would make it clear)
 S111A of Conveyancing, but not proclaimed, so we
don’t know if it will become law
 Farrah v Farrah’s limited
 Got to be a true sale (cannot sell to himelf –
that would be a foreclosure)
Mee can sell to a c which Mee is a major
shareholder
 Can’t sell in a way which makes the sale
attackable – must ensure that is it “a truly
independent bargain”
 Can do it by showing it is a best possible
price … this can be subsequently
attacked
ANZ Banking Group Ltd v Bangadili Pastoral Co
 Facts


8

Mee sold to a company which Mee was a
major shareholding
Held
 Mee had to show it was a true sale
 Couldn’t, because not best price
Belton v Bass Radcliff
 Mee’s call as to whether to sell or not to after
prerequisites met
Palk v Mortgage Services
 Facts





Mr in default
o There was notice
o There was non-vompliance
Mr said
o Mee, please sell now, because of
interest rates
o Mee said “no we don’t want to”


Held
 Mr can require where Mee can sell and
get all the money back
Two theories of how much he needs to work in sale
(cases listed):
 Duty to act in good faith, not in bad faith (Bona
fide, not mala fide)
 Old english
o Warner v Jacob
o Kennedy v De Trafford
 Recent

o SCNSW – Justice Meeden, ‘76
o Burk v Beneficial – Justice Hill
o State Bank v Chia – Einstein
o Gomez v State Bank
Or, duty to take reasonable steps to get a
proper price
 Privy – McHugh
 Cookmere Brecks – via negligence (duty
of care to sell well)
9



o But negligence appeared after RP
and Bona Fide
 HC Cases: see judges in list
o Pendlebry: later refuted, said that
both duties are equal
o Forsyth v Blundell, Mason J the
obligations are different
 But in facts, decision was not
necessary
ANZ v Bangadilly  not at arms length, need
to take reasonable steps to get a proper price
Kager v Nixon  Qld Lgstl says proper price
S111A, obligation to best price  not yet
proclaimed
SO HC has not yet decided this
 Needham, Hill, Conti, etc. Good faith
 Not at arms length, best price
Seminar Q  sale on Christmas eve, random
location, etc. with either duty, it is breached


o Remedy in mortgagee sale
 Before mortgagee sale, only way to stop it is:
 Come up with full amount of money, pay full
debt into court (Engliss v Cth Bank)
 Can ask court to make an interim order pending a
final hearing:
 Question of timing
 Harvey v McWadders
 Brutan inv. V Underwriting

Ulfox v Bank of Melbourne
 Quote in book:
o You cannot stop a sale before it
happens (Engliss)
o Have to ask please do not sell
 Reply, only if you pay
 He says he can’t
 Tell mate to buy it
10
o Sold property for less than worth
(exchange, completion 6 weeks
later)
 In this time, you can claim
o Can go to equity division:
 My client is the victim of an
improper sale (valuation =/
sale price, or improper
advertising)
o Judge hears mortgagor say he is
victim
 Mee says he did all of the
right things
 Hearing in a few months
o Have an order to, in the interim,
pending a final hearing on
properness of sale
o Judge is trying to do justice: since
he isn’t sure, demands something

be put in court (not full sale)
o Court grants injunction
 Mr pays
 Gets injunction
 Urgent hearing in month
 (before completion of sale)
Latec Investments
 Facts
o Property (Hotel Terrigal)
Hotel defaulted
Mortgagee sale
Bought by wholly owned
subsidiary of Bank, for ½
price
o Mortgagee took 5 years to
challenge sale




HC
o Sale improper,
11
o But Purchaser had borrowed from
someone else
o Thus, Mr was too late
 Would be ok if no loan,
because then there is no
third party
o Should challenge before settlement
 Otherwise, the best you can
get is a damages verdict,
which may be good enough
(though, ee’s are usually a
bank, so this is normally fine)
For finals
 Midsem content is not examined


But, priorities under old system requires knowledge of
postponing etc.
Need to know some background on Torrens
12
Restrictive Covenants
4/11/2011 4:24:00 AM
Positive covenants aren’t tested
Definitions:
 Covenant
o A term of contract that relates to the land (there is some
proprietary interest that is in the clause: it is connected to
land, not person)
 Covenantor
o Burdened



Covenantee
o Benefited, grantee
Successor in title
o The next registered proprietor of the property
Assignee
o Takes someone’s interest, as in a sale?
When can a successor in title enforce a covenant (peoples who are not
parties to the original contract, where there is privity, contract law is
sufficient)
Positive v Restrictive?
 Equity will only enforce a restrictive covenant
 Positive
o Requires a covenantor to do something (e.g. maintain a
fence)
 Restrictive
o Stops the covenantor from doing something (e.g. don’t
build too high, only build out of brick, etc.)
Passing the burden a restrictive covenant
 At law
 At equity
When will the covenant run with the land of the covenantee (the benifitor)
Formal requirements
1
Building Schemes
S 88B instruments
Extinguishment
Enforcement of Covenants – General Concepts (see course documents
folder) (eight requirements) When can the burden of a covenant run with
the land of the covenantor?
 If there is a problem q between first two parties, there is privity,

and you can sue in contract.
Equity, here, ameliorates privity, and allows covenants to be
enforces.
When can we enforce a restrictive covenant at law and in equity?
 3 scenarios:
o original parties  contract
o original covenantee v successive covenantors
o successive covenantee v covenantors
Formal requirements:
 Created by way of deed (a contract)
 CA s 70(1)
o Covenant is deemed to be with covenantee’s successors in
title (i.e. benefit runs with the land of the covenantee)
o It can be contracted out of (since it is just an assumption)
 CA s 70A
o Deemed, unless contrary: covenantor and successors


o This, too could be contracted out of
o Otherwise, covenantor cannot bind successors????
 Even if covenantor tries to bind successors, this is
not valid: this provision supplies intention at least to
burden the land of the covenantor
If either is rebutted: this covenant is not enforceable in equity
They must be in writing CA s 23C, 23E
o If it is created on transfer (i.e. with a purchase), the
covenant can piggyback
2

o Recording on a folio =/ registration: thus it is an equitable
interest  it is only to provide notice
Seven requirements:
o It must be restrictive in substance (Tulk v Moxhay)
o The purchaser must have taken with notice of the covenant
(Tulk v Moxhay) (Record under s 88B)
o The covenant must “touch and concern” the land benefited
(Rogers v Housegood; Tulk)
 It must be annexed to land
 And not be personal
o If there are subdivisions, or to be, there must be words
“benefit of X and every part it may be lawfully subdivided”
(Tulk; Ellison v O’Neil)
o Ss 70 and 70A cannot be rebutted
o The covenantee must own the land benefited at the time of
creation (Kerridge v Foley)
 Subdivs
 Each sells
 The coventee can only, where there are subdivisions,
covenant with regards to the land owned at the time
(i.e. not lands already sold)
 Unless you satisfy elements of a building scheme
(Elliston v Reacher)
o There must be compliance with s 88(1) Conveyancing Act;
Re Louis
 What is benefited
 And burdened
 Who talk to for release, etc
Enforcements of covenants at law
 Burden does not run with covenantor (Austerberry v Corporation
of Oldham)
 What about covenantees?
Enforcement in equity:
 Tulk v Moxhay
o The question is not whether the covenant runs with the
land but whether a party shall be permitted to use the land
3




in a manner inconsistent with the contract entered into but
his vendor with notice.
Must be negative
Must benefit covenantee (touch)
Intention that burden run with the land
Assignee must have taken w notice
It must be negative in substance
 Substance not form
o Even if appear positive in form, may still be negative (e.g.

double negatives)
Does it require expenditure of time, money, etc? then positive,
otherwise, probably restrictive
Covenant must benefit the land of the covenantee
 “touch an concern” NB Kerridge v Foley Issue
 there has to be a proprietary interest greater than a personal
interest
 Can the land be reasonably regarded as capable of being



affected by performance/breach of covenant?
Is it aimed at preserving the amenities and character of the
neighbourhood (if subidivided)
o If specific words are used, there cannot be severance?
If land to be benefited is too large, covenant mightn’t be valid
Rogers v Hosegood
o Form: 1 house per parcel, used as a prior residences
o Farwell:
 Kerry v Foley issue.
Ther is a basic presumption that the covenant is for the benefit of the
land as a whole (Ellison v O’Neill) (NSWCOA)
 Facts
o Harbourview
o Ellis buys a subdivision
 Court said
o If want to effect subdivisions, you should say so
Kerridge v Foley (Kerry?)
4



Facts
o Selling lot by lot
o Thus, covenant couldn’t “benefit” the land already sold
Held
o Can only give away covenants benefiting land owned at the
time, unless there is a building scheme
Held, as well as s 88(1)
o MUST comply
Intention

Notice


Presumptions cannot be rebutted
S 88G Notice
Otherwise, notice must be given
S 88(1) and building schemes
 Not unforceable unless the specifics given
 RG writes down (but not registeres)

Both for RT and OST
Building schemes
 This is not a registered interest, so should this exist? (you need
history of sales etc. extrinsic evidence)
 Presumption of not running with subdivision does not apply hwer
there is a scheme of development
 A scheme of development is irrespective of sale dat of lots.
 There are 4 reqs (Elliston v Reacher)
o Both person enforcing, and enforced upon have to derive
their titles through a common vendor
o Before selling, the vendo laid out the plan or part, that the
land which hthe parties now in (e.g. advertised in a
particular way and attached to T&c’s)
o And the restrictions are consistant only with some scheme
of development of the land
o The commen vendor intended the restriction to benefit all
th lots sold
5

o Both the parties purchased their lots from the common
vendor on the basis that this would pass down
How can their be requirement for extrinsic evidence in a system
of Torrens Title?
o Perry and RG (Obiter)
 Windeyer
 You can have build scheme in Torrens as longs
as ok w s 88(1)
 Kiddo
 No not under torren
o Re Martin
 The court says Kiddo is correct and no schemes
under Torrens
o Re Louis

RG can






Helsham
 Re martin is incorrect, in fact, Windeyer is
correct in Perry
 Covenenatn is just an unregd interest
 These are ok
also record an instrument covenant s 88B
After 1964
A registered plan
Map with easements and covenants
This still needs to be fine with s 88(1)
Covenants need to be s 196 conveyancing act
Neets to be otherwise enforceable at equity
Extinguishments
 S 89 of Conveyancing Act (as in easements)
o Usually no longer of any benefit
 Expressly
o Torrens
o OST
o Person who you have to apply to in 88(1) instrument
 S28(2) EPAA
o Any restrictive covenant is suspended for development acts
under this act
6
o Temporary (only for building)
Positive covenants (no test)
 At law, same position, cant bind subsequent covenantors
7
Leases (last topic :D)
4/11/2011 4:24:00 AM
Lecture 1
On UTS online, there is a diagram, download it! And bring to class
Cause of action (right to sue) v remedy (result)
Specific terminology (see last pp) e.g.
 Lessor
o Person who grants the lease
o /landlord
 Lessee





o Tenant
o Person who takes interest
Lease
o A proprietary interest in land
Assignment
o Transfer your interests to your third party
Some old terms which mean the same thing are used in a
different way e.g. DO NOT CONFUSE THESE with the use in
easements and covenants
o Benefit
o Burden
o Touch and concern
o Reversion
Topics reused
o Exclusive possession
Lease can sometimes be called a demise, not to be used now
Leases v licenses (can be functionally similar to other interests too)



Which interest would you want to use and why?
Both lease and license allow use of land
Key difference with license: exclusive possession
What is a bare license?
 A privilege granted to do something which would otherwise be
unlawful
 A personal interest (no interest in land, enforceable by the
original parties, may be revoked at any time)
1

It cannot be transferred to a third party (thus, is not a property
interest: cannot be enforced against the world)
Contractual license
 Requires consideration (e.g. hotel room)
 Cannot be assigned or bind third parties
 Revocable on terms of contract or with reasonable notice
Profit a prendre
 A right to take something capable of ownership of soil, minerals,
produce or ferae naturae


Leases






Is a property interest, so irrevocable (unless court order, etc.)
(incorporeal hereditament)
Can be defeated by indefeasibility in Torrens
Property right (proprietry)
Capable of assignment (either landlord or lessee can assign
(dispose of your interest to a third party) interest)
Can bind third parties
Better than contract because it is protected better, with better
remedies
IMPORTANT  it grants exclusive possession
If there is no exclusive possession, it is not a lease
Regimes
 General law of leasing (informs the other areas; apply to nonretail commercial leases)
o Common law



o Equity
o Conveyancing act
o RPA for registration
Retail (shops selling stuff)
o Retail leases act
Residential
o Residential tenancies act
Lease of crown land (unallocated state land: e.g. pastoral lease
(not actual lease because they did not confer exclusive
possession))
2
o Crown lands act
o Crown land selling stuff?
Essential chars. Of a lease
 Different people have different structures: this is the correct
structure
a. A right of exclusive possession of the premises
i. What is exclusive possession
ii. What is the premises
b. For a definite period (requires certain time for commencement
and ending)
c. In the appropriate form
Exclusive possession (substance not form)



Central to a lease
Without it, there is no lease
How do we find it?
o Fact and circumstances
 Words of the agreement

 What rights are conferred
Radditch v Smith (important: test for license v
leases)
 Facts
 Document described them as license
 License deemed to be a lease (court says
this is not relevant, the words describing
are not important)
 It is a lock-up shop (keys looked after by


the tenant)
Part of a larger building
License
o For sole and exclusive right … for
milk-bar
o Right to passage and toilet
o No poultry etc.
o Requiring to open/close at certain
times
o Gas/electricity/water provided
3
o Stock can be kept on premesis


Held
 Look up on Austlii/TB
o
 how far is her right exclusive? And how
far is this infringed?
 McKiernan
o Substance that matters
 Taylor
o Either a grant in interest or not
o Exclusive possession is determining
factor
Is intention relevant at all? (before, it was)
 Radditch said intention to grant a lease was

irrelevant
Intention to grant exclusive possession may be
one of many relevant factors
Exception (exclusive possession where there is no lease)


Where the primary relationship is not landlord/tenant
E.g. father/son
There is a presumption that if the landlord leases out part of his bedroom,
it is a license not a lease
Certain duration
 Must be able to ascertain starting date and max duration of lease
 If not know it, it must be capable of being rendered certain (you



have to be able to work it out)
Lace v Chandler
o Lease until the end of the war
o Uncertain (how long is the war?)
Penut crop
o No, because is time period rather than exact time
o Exact time necessary
21 years or until A leaves
o certain, ish (could A leave after? No if a lease)
4
Formalities (Torrens)
 A lease of 3 years or more must be registered and in approved
form (s 53)
 Leases of less than 3 years may be registered
o Benefit of indefeasibility s 42
 Exception to indefeasibility
o Short leases (less than 3 years) s 42(1)(d)
 Torrens (unregistered) (important for priorities)
o Legal or equitable
o Legal



READ CA? S 23D(2)
Oral/deed/writing
Must not have Lump sum/premium (i.e. market
value? =/ bond)
Taking effect in possession (i.e. confirms an
immediate right to possession)
 See earlier notes
o Equitable
 Enforceable agreement to lease




 Writing with 54A
 Consideration (will not assist a volunteer)
Or Complies with s23C(1) + consideration
Or equitable estoppel (Walton stores: asking for
lease to be recognized, if it would have been
recognized, the court would have created a legal
interest)
OST
o S 23B(1) deed
 Exception in 23B(2) deed
o Unless it s23D(2) (legal unregistered, in OST, just legal
interest)
o Or equity as in Torrens
Types of leases
 Fixed term
o 99 year leases?  owner’s rights, breach of terms can
kaput the lease
o if not certain time, void ab initio
5



Periodic (express/implied)
o E.g. lease fortnight to fortnight (sometimes by agreement,
sometimes because 6 month lease, and just continued
paying fortnightly)
o It arises by reference to term at which you pay rent
(periodic “n” week tenancy will arise)
o Certain term?
 Term fixed with term for next lease
 Thus ongoing series of leases
o In general law (not residential) arise by rent period
 Then this is also the notice period
Rel between fixed and periodic?
o Fixed and uncertain is void
o Lease may be valid as a period tenancy by period of paying
rent
o So no fixed does not kill the other
Tenancy at sufferance
o Where you “hold over”
o Where the fixed term comes to an end but tenant don’t
leave
o This is called holding over
o It is not really a lease, but is called a lease
 You cannot assign
 Or transfer
o Compensation may be payable to pay for use and
occupation (not rent, because no lease)
 If you pay, and he accepts
 It may become a periodic tenancy

Tenant at will
o This is not a tenancy at all
o This is really a bare license
o You can use my house until I tell you to go away
o No money changing hands periodically
o Can be ended/rather, determined (comes to an end) at the
whim of other party (a lease doesn’t end, it
determines)
Covenants (leasehold covenant =/ restrictive covenant)
6



Obligations in a lease (Heirarchical)
i. Express clauses
ii. Implied by common law (inherent in tenant/landlord
relationship)
iii. Implied by statute
iv. Necessary implication
An express/oral lease is clearly a contract, but then become an
estate
o If it confers exclusive
o Then it is a leasehold estate in land
You can use contractual or real property remedies
In an express lease should have
 Id of parties




Id of premises
The commencement and duration of term (otherwise void for
uncertainty)
The rent/other consideration
Repair (may be a trap)
o A big deal in leasing
o Who has the duty to repairs?
 When on tenant (note, contract term modifies this)
 “to keep and deliver up the premises in a
satisfactory state of repair”
 limitation as to fair wear an tear (this is
allowed) (reasonable use)
 problem with this duty:
 prospective covenant


o looks to the future
to put into repair rather than to repair
o if you didn’t inspect the premises
and they were crappy
o you need to bring them up to
scratch
limitations
o tenant not liable for inherent
defects (e.g. structural)
7
=/ as something worn over
time and requiring repair
 must have been from the
start
o not required to repair to extent
that you are giving the LL
something new
 if repairs so extensive: it is
beyond repair
 this might be a long way

o used to mean with earthquakes,
etc, you had to repair
 now we say that this would
have frustrated the contract
when on LL
 LL must have notice (actual implied or
constructive) to require repair (question of
fact)
In normal lease, implied if not (not express>implied)


o Quiet




enjoyment
Not acoustic necessarily, but could be
LL not interfering with tenant’s right to possession
Does not need, but can include intimidation,
harassment
Martin’s camera corner
 LL upstairs
 Tenant downstairs
 Water leaks from LL to tenant



This was a breach of covenant of quiet
enjoyment
E.gs
 LL need to repair outside
 Puts up scaffolding
 Covers sign of business
 Business reduces
 This is a breach
Not an absolute covenant
 Just has to minimize impact
8

Southwark case
 British council flats (gross)
 Flimsy old
 When tenants move in, whenever flush,
everyone wakes up (bad walls)
 So they have two causes of action:
 Breach of covenant of quite enjoyment
o LL
o What about neighbor’s actions?
 Nuisance
o Against LL or flusher?
o Against flushers.
o Not found to exist, it was normal
use

Prospective
 LL must not breach
 Against the grant that you have
 If you go into a building with crappy
walls


Caveat lessee
Take it in the condition it was in on
inspection
 Cannot do something after that to further
breach
o Non derogation from grant
o If furnished, good enough for habitation
Last time we looked at LL covenants implied into relationship

Quiet enjoyment (protects from interference with rights)

Non-derogation from grant
o Might be broader, usually argue non-derogation and quiet
enjoyment
o If QE protects you from interference, this one is about not
getting in the way of fulfilling the purposes of the lease
 Any act which prejudices the successful fulfillment of
the purpose of the lease is a breach
 Thus, similar QE
New
9
o E.g. Water through pipes
o Material interference?
o LL may not do or permit any activity/state of affairs which
substantially interferes (degree and fact), must be fairly
construed
o E.g. Nordon Case
 Facts
 LL leased 3rd floor
 To PANDA (compies)
 Consented to the assignment of 4th floor



Law






to brothel (was still criminal
complaints
 Unsavoury smells, whips, moaning
 Vomit in the lobby
Breach?
If premises is unfit or materially less fit by the
use of the retained premesis by a landlord
It must be more than interference
Doesn’t need to be impossibility of use
Rather, substantial derogation
Here: stigma
 Illegal business
Both QE and NDOG are covs between LL and
tenant: thus the LL must have breached
 Here, (and in suthuk)
o Not directly actions of LL
o But tenants
o Can LL be liable for breach of covs where the action is by
third parties?
 Still uncertain
o Conc: law will not imply that a tenant’s action are imputed
to LL (auto)
 You can sue tenant for nuisance
 If LL is liable auto, then breached cov, but liable for
nuisance too
o But there are cases where you can:
10
Where LL consented, authorized, adopted, or allowed
the offending activites which breach the covenant
o In Suthuk, no Q: no nuisance and no breach of cov.
o In Norden
 LL consented to assignment of lease to third party
 Originally, X leased
 Lease was transferred to brothel
 With LL’s consent, knowing it is a brothel
 Thus, allowed
o Must be greater than notice, needs consent, authorized


etc.
If you furnish, they must be fit (but higher in Residential
Tenancies Act)
Tenant’s obligations in common law implied
 Use the tenants in a tenant-like manner (common law and CA)
o In tenantable repair (not the same as the covenant to
repair)
o Good tenant (clean furniture after parties, change light

bulb)
Yield up possession
o At end of lease, deliver up vacant possession
o If you subleased, the tenant must be gone by the end
o Anyone who derives rights from you must be finished
Obligation not to commit waste (preserve the reversion)
o LL has estate in fee simple in reversion
o Obl. Not co commit waste also applies to leases
o Tort of voluntary waste may be excluded expressly or
impliedly
o Equitable waste can only be excluded expressly
o BP Oil Case
 Facts
 BP had a refinery on land owned by ports of
auck
 Spilled oil
o Seeped into the ground
 After, they partially remedied oil seep
 Port said was breach of cov of repair
11

And waste (permanent change of char. Of
land) Cool.
Held
 BP oil was under wide duty to repair, it is not
the same as not to commit waste, but it was ok
to sue on both
 And express repair did not knock out waste
 Waste? No, barred by statute of limitations
 Salinity Crown Lease?
Statutory covenants (s 84, 85 CA) READ




Lessee covenants to repair
o Repair covenant on lesee 84(1)(b)
Pay rent at the time specified “(a)
Inspect/repair w 2 days 85(1)(a)



Notice “(b)
Re-enter for forfeit of rent for a month “(d)
Re-enter for breach of other covenants for 2 months “(d)
Other obligations?


Contract law
o Imply a term for business efficacy
o Duty of good faith
Tort law (usually for res.)
o While tenant, those visiting or you have an accident
o Is LL or you liable for negligence?
o Is there a duty of care for LL’s? Scope
 Yes, there is a duty (Northern Sand Blasting; Jones v
Bartlett)

Scope
 Circua v Williams (2005) NSWCA
 Facts
o Respondent brought proceedings
against LL of residential property
o Apartments
 She is ground floor
o Built in ‘50’s
 Applied w ‘50’s standards
12

o No landing, straight to stairs, no
handrails, there was a tree stump
at the bottom of the stairs
o She trips, no handrails, hit the
stump
IS LL liable?
o Duty YEP
o Scope?
 Jones v
 Comes down to:
Issue of defects
Is the LL responsible for
defects? Must it be inherent?
o What they said:




Depended on facts,
differences of law not that
different
Maj (Mason Brownie)
 Lessor owes a duty of



13
care to incoming
tenants
Involves a duty to
repair which does not
go beyond addressing
defect of which he is
aware or ought to be
aware
You do not need an
expert to analyse
house with an eye to
liability
 Lots of basic things
(e.g. stairs) are
dangerous, if you
construe duty too
broadly, too much
liability on LL
Beasley
LL under obligation to
ensure the premises is
reasonably safe for the
purposes for which
they are leased
 Reasonable care to
avoid reasonably
foreseeable injury
Assessed at the day of letting
Defect came down to the



following:
 1 was the defect visible
 2 relevance of building
standards

MAj: Q was stairs visibly
defective at day of letting?
 Were in accordance
with ‘50’s standards
 Not w current






14
standards
Just because standards
change, there is no
duty to upgrade
Could take into account
history
Had there been any
prev. accidents
The maj didn’t think
the stairs were unsafe
Whilst the stairds
departed from good
practice, it was visible
and obvious
Beas
 Didn’t matter about
breach of standards






Q was: were the stairs
reasonably safe at the
time of letting
Design was contrary to
good practice for 20+
years
Didn’t care about
history of accidents
He thought that they
were visibly unsafe
No duty to upgrade to
current standards, but
duty to renovate where
visibly unsafe
Thus
 Don’t need to upgrade
 Don’t need a pro
 If you see something
dangerous, fix it
Assignemnt is different from sublease
 Assignment is for full (you step out of the picture)
 Sublease, you create another lease, out of your lease
o Not disposing of you lease, carve out a lesser estate
o You are now a LL and a tenant
 Tenant of LL1
 LL2 of T2
o At common law, the sublease must last for one day less
than lease, at least
Assignment of leasehold covenant
 Either interest is alienable
 Carving out a lease or a life tenant: original has reversion
o Thus LL has reversion
o Tenant has an interest in leasehold estate
 Both may be assigned (dispose of the whole of our interest)
 Consequential questions:
o What happens to the covenants
15



o Who can eforce them
o Can the assignee of the tenants enforce cov against LL1
 What runs with the land/is part of the leasehold
estate, so that it transfers with the land
 DIFFERENT FROM RESTRICTIVE COVENANTS
A lease may prohibit assigning
o But not often occurring
o Where it happens, it will be strictly construed
 E.g. if it prhobits subletting, it does not prohibit
assigning
May also have a qualified covenant against assigning
o You may assign with consent
o Consent cannot be unreasonably withheld CA ss 133B(1)
132
o See Goof’s books p 236-8
o Would a reasonable person anticipate an adverse effect on
property or future lease ability if you allow assigning
Residential tenancies can never be assigned
Effect of assignment (Privity of contract doesn’t move, estate does)
 Distinguish between privity of contract and privity of estate
o Between original, there is privity, and can sue
 Privity survives disposal by assignment
 Still bound by express but not implied covenants
o Does assignor need to give notice to assignee of
covenants?
o Need to change the register (3 years… etc.) or not…?
Because equity



o OST, need deed or other ways
T remains bound by terms in lease
o Since T enters into covenant with 3rd party (a)
o Does not affect the rights of LL against T
o Thus, LL can enforce against T
IF L assigns reversion against R
o T can enforce covenants against original LL
As well as creating privity, a lease is a dual char. Interes
(contract and estate), it creates privity of estate
o You create a property interest derived from LL tenant rel.
16


o As such, covnenants will be enforceable where they touch
and concern the land (become part of the estate)
Consequence
o Any half decent assignment, there will be an indemnity
clause, indemnifying T against actions by A agains which T
may become liable
o You usually first go to A, then T in suing
Between L1 and A (priv. of estate) between A and ST (priv.) so
there are two leases, no privity of estate because two leases
Benefit v Burden
 Rental
o LL benefit
 Repair clause requiring tenant to repair
o Tenant has burden
Assginee of the benefit has the benefit of the covenant which touch and
concern see slide?
Touch and concern









Effectively, test is similar to covenants
Rogers v Hosegood
Does it effect the land as regards the mode of the occupation
Must affect the land and not be collateral
If it is separated from the land, does it cease to have any use
E.g. personal
Tenant Do touch
o Rent, repair, fire, consent, etc.
LL
o Supply with essential like water
At common law, covenants do not run with reversion (you could
assign tenants, but not landlord’s interest) (Nb: eg. Of assigning
reversion is LL selling the estate in fee simple, but the lease
remaining in place
o CA ss 117 (benefit), 118 (burden) allow assignment of
reversion
o “subject matter of the lease” = “touch and concern”
o RPA ss 51, 52 posisble to assign part of the reversion
o Torrens:
17
If you take benefit of an interest
When you transfer and register
You take everything inherent in the land (s 51)
On reg. the benefit passes
DOMINANT TENEMENT owner has no problem with
indef?
(Spencer’s case) tenant touch ????






Assignable if privity of estate + touch and concern
Implied right of indemnity: who remains liable for past breaches?
 Put this on the diagram
 Continuing breach v complete breach
o Breach is complete at the time (e.g. failure to pay rent)





o Continues until actually make repairs (e.g. repairs)
T complete breach then assigns
o T liable to L (complete breach at the time they held the
leashold estate)
Where T fails to repair (continuing) and then assigns to A?
o There is privity of estate with a
o And it does touch and concern
o T is liable because it commenced prior to assignment, as is
A (privity of contract)
L assigns to R, T breaches
o R sues T (benefit of reversion passes s 117)
L breaches, then assigns to R
o R is not liable for complete breaches
o Is liable if continuing (alongside L in contract)
L breaches, T assigns to A
o T can sue for complete breaches
o A can sue for continuing breaches
Last lecture we finished talking about assignemtn
 Just use the diagram and fill in the blanks
Termination/ending a lease (breach and consequences)
 They have dual chars as proprietary and contractual
18


So question is contract (repudiation and fundamental breach)
but on lease?
Forefeiture by re-entry
o Forfeiting the lease
o Right of forfeiture gives right to remedy of re-entry
o Where a tenant breaches a covenant:
 If there is an express clause “on breach, LL has a
right of re-entry”
 There is an implied statutory right CA s 85(1)(d)
o You must have authority to exercise this right (usually
express)
o Note:
 Express clause may give notice period (reduce but
not get rid of)

If not, CA s 85(1)(d) specifies a notice period
(average period)
 Breach of a rental covenant
 If tenant breaches covenant to pay rent
 They must be 1 month in arrears before
you can serve notice under CA s 129
 Breach of non-rental covenant
 2 months breach before notice under CA
s 129
 You can’t contract out of notice CA s 129(10)
o How to re-enter
 Least appropriate
 You can actually physically re-enter the
property



If the tenant is still there, this is not
recommended
May give rise to civil/crim

Good
 Court order for re-entry
 Breach
 Arrears for amount of time required
 Adequate notice was served (CA s 129)
There is an equitable jurisdiction to give relief
against forfeiture (not just for leases, but any place
19
where you forfeit a proprietary interest) (common
reason: didn’t get requirements right (still in equity))
 See Progressive Mailing House v Tabali
o CA s 130 if you have a headlease and a sublease
 If headlease is forfeited
 Does this kill the sublease? Yep
 CA s 130 gives independent power to the court to
allow the sublessee to continue leasing directly from
the owner
o If you end the lease by re-entry




You are limited in damages
By rent in arrears
(breach of non-rental: damages based on whatever
the breach)
 not much consequential right in damages
o That is why LL began to say contact not lease termination
Repudiation (to increase damages over rp claim)
o Loss of bargain damages
 Not only would you be able to end the lease




And claim rent owed
But you could claim rent that you lost as a result of
the breach (lease being terminated)
 This does not mean rent until end of period
 Because of duty to mitigate
You have to re-let
 You have tried your best
 Not turned down reasonable offers
Some leases cannot be re-let easily
If it takes a year, you can get that year worth of
damages
Contractualisation of leasing gives you more damages
o RP damages is concerned with giving you your property
back
o Contractualisation  not just RP interest, also commercial
contract
When will you have been foud to have repudiated/fundamentally
breached the lease?
o Fundamental breach of essential term



20
 Heart of the contract
 Deprives the other side of all benefit
o Repudiation
 Not abide by contract
 Or abide differently/badly
o Rent is not an “essential term”
 Breach of this alone is neither breach nor repudiation
o What will?
 Different law?
 They are indeed on all fours with eachoter

 (same law)
 the facts work out very differently
Cheville builders
 Facts














what

3 yr lease
incorporated guarantee by 3rd party for
performance by lessee
lessee was often in arrears in rent
got behind, caught up, got behind, etc.
eventually LL got sick of it
attempted to terminate
argued failure to pay rent on regular
basis
fundamental breach
or repudiation
no question that it would allow “re-enter”
about on contract?
Difficult to re-let
 So wanted damages for loss of bargain
Was there a fundamental breach?
 Not at issue: right of re-entry had arisen
 And ahd been excercized
Lease had been terminated
 9 months to re-let the property
 no question that guarantee kicked in
liable for damages
held:
 Gibbs CJ
21
o Fail to pay and was in breach
o But no intention to not perform the
contract
o They had financial difficulties
o Always cought up
o Always paid what they owed
o So no repudiation
o Was failure to pay rent a
fundamental breach? (root of
contact so that it may further the
commercial … impossible)
o Payment of rent does not make
further commercial performance
impossible
o Term was of such importance that
LL wouldn’t have entered into
contract without it? Gib CJ NO IT IS
NOT FUNDAMENTAL
o Could, in writing, stipulate in a




lease that payment of rent is
essential term and failure to pay
would lead to these consequences
Post cheville, a lot of commercial leases
will draft it to make it an essential term
o Careful how to draft
o If you nail it, then you are sweet
o But court construes strictly
Failure to pay is not repudiation, but
could if other conduct goes with it
o Not unimportant
o Just not enough on its own
E.g. in PMH and Tabali
Progressive
 Facts
 Re-entry possible because there were
various breaches
 Q was one of damages (he wanted loss
of bargain damages) (6 months)
22



Rent unpaid for approx. 5 mths
Breaches of other clauses
o Repair
 Roof
 Electrical fittings
 Fire doors
 Staircases
o Breach terms of rental agreement
relating to parking
Whilst appellant didn’t pay rent for 5
months, he argued he didn’t pay because
he said LL was in breach of lease
o Clause said LL would do certain
work on the property
o Tenant argued that this was a
condition precedent to paying rent
o Lease didn’t come into operation
because LL didn’t do work

Held



Court disagreed with appellant: wasn’t
condition precedent and was an equitable
lease
Was possible that LL was in breach (does
this affect Tenant’s liability)?
Tenant’s failure to perform
o Court agreed that
 Brach of clause to pay
without more is not enough


23
for repudiation or
fundamental
Neither for the clause to
repair, by itself
In fact, the fact he didn’t pay
and didn’t repair, and parking
 Altogether would not
be enough for
repudiation or
fundamental breach

 Because not make
Other things happened:
o Appellant hadn’t just failed to
repair
o But actually damaged
 Roof
 Wiring
 Fittings
 Pipes
 Non-compliant with parking
Waste? (not big enough
damage)
o This was careless, not deliberate
o They sublet even though they





shouldn’t have
Mere breaches is not enough
o But this isn’t just some everyday
contract
o Is commercial and also creation of
an estate in land vested in lessee
If you add up breaches, carelessness,
damage, parking, and subletting in
contravention of lease
o This showed intention not to
perform
o Or not to perform according to its
terms
Enough to give repudiation
Thus
 Normal contractual principles apply
 But not just any contract, because of the
creation of a leashold estate
 Fundamental breach is almost impossible
because nothing is an essential term that
makes commercial performance invalid
 Is possible to find repudiation
 Needed more than mere breach (unless it
is worded specifically)
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
Also other shit
o Like damage done
o Disregard of clauses (parking and
subletting without consent)
 Subs. Q in Progressive
 LL breach  tenant entitled not to perform?
 No: one breach does not justify another
o You can also frustrate a lease
 E.g. leased premises with natural disaster (building is
gone, frustration of the lease)
o Waiver
 Where there is a breach in the lease, you can “waive”
the breach
 A waiver is wehre you indicate that you will not do






anythigna as a consqeuinece of a breach
Is either express or implied
Does something that unequivicolly recognizes the
contined existence of the lesase
If they waive, they lose right to forfeit or terminate
E.g. Rent missed
 “its fine, pay me next week”
 accept next week’s rent
 LL loses right to forfeit
Each breach requires a separate waiver
Steps
 Breach:
 Waive for what?
 Continued rent??

Know of breach?
Remedies
 Forfeiture by re-entry (prime remedy for LL because it is easy for
RP)
o Express or implied statutory right (CA s 85(1)(d))
o Rent in arrears or damage at re-entry
 Contractualisation
o Repudiation (or fundamental breach)
o Damages for loss of bargain
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



o Mitigate by re-letting limits
Note CA s 133A
o Amount cannot exceed reversion’s value
Either party can get an injunction to stop breaching
o Or specific performance
One breach does not excuse the other party from breaching
end a lease by surrender (just give up your lease)
o Subject to terms of lease
o If you can surrender
 Formality you used (memo+reg: Torrens +: ost +

deed, etc.) to create
Is equal to
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Exam Discussion
4/11/2011 4:24:00 AM
2 ½ hour with 10m reading
Format similar to last test
3 q’s no choice, may be internally divided
mixture of problems and SAQ’s
Will be on everything since and including Mortgages
Not directly testing indefeasibility (but might be part of a q on the side)
How to






prepare for open book test:
Don’t rely on TB/plagiarize
Make sure to answer the question, and all of it
Structures on each section with authorities
Practice exams on UTS online (but check topics)
Study group? Left over tutorial problems? ANSWER MORE
QUESTIONS
Re-read exam feedback
Availability
 Will talk in office hours
 No Past Exam Q’s
 If you need mortgages, ask Geoff
SFS!
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