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Property 2 – 2009
Cindy
1. Interests
a. C has a sub-lease from B.
b. C’s lease does not need to be registered as it is < 3 yrs (s 53(1) RPA)
c. However, because there is no deed in writing, there is no CL lease (s 23B, C CA)
d. As C’s lease is < 3 yrs, it is an exception to indefeasibility, therefore her title is enforceable against
purchasers without notice (s 42(1)(d) RPA)
e. Since B has sold to F, and even though F has no notice, he is bound by the leases (s 42 RPA)
i. Therefore, as there is a privity of contract between FF and CC through the assignment, FF will be
liable for all requirements and liabilities under the instrument.
ii. Even though privity of estate with BB ends, BB is still liable under contract.
iii. Because CC’s lease is equitable and not by deed, it is not effective at law. As covenants do not
run with the land FF will not be liable.
f. Substantive requirements for a lease has been satisfied; has certain of duration (fixed term of 2 year)
(Lave); and exclusive possession (Radaich)
g. May be able to find an equitable lease – although there is not writing, there is an oral agreement,
supported by part performance, indicated by her possession of the premises (Walsh)
h. Even without a formal document , the agreement will be complete and enforceable if Equity can fill in
omissions (Branca)
i. May also be able to get an implied tenancy @CL. Implied tenancies @CL can incorporate the term of 2
years lease duration (Dockrill)
2. Rights
a. No express terms, apart from the weekly payment of rent
b. Covenants implied by CL
i. Q enjoyment (Markham)
1. LL has duty to ensure that he or anyone that he is responsible for does not cause
disturbance to other tenants (Hudson)
2. C’s disturbance is more than trivial (Leventhal)
ii. LL’s right to ensure premises are fit for ordinary purpose (Aldin)
iii. LL has liability for acts of DD if the interference was reasonable foreseeable at the time that LL
handed over possession (Aussie Traveller)
c. Privity of contract
i. CC and BB have privity of contract. If BB’s conduct amounts to repudiation, CC can get
contractual remedies (Progressive Mailing House)
ii. BB under implied term/covenant to keep premises ‘habitable/fit for purpose’. If BB is found to
breach the covenant by failing to remedy in reasonable time, this may constitute repudiation
(Cicirello)
iii. Contractual remedies that may be awarded if there is repudiation on part of BB.
1. CC can terminate contract and vacate premises
2. CC can get loss of bargain damages (Tall-Bennet)
d. AA may exercise right of forfeiture against BB
i. If head lease is forfeited, sub-leases will also be forfeited.
ii. S 130 CA allows relief to be granted for CC, even if BB is not entitled to relief, if CC can prove
that they did not participate in the breach and acted reasonable.
e. CC may also sue DD in nuisance for DD’s disturbance caused.
3. Liability
a. CC has no liability. 
Debra (DD)
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1. Interests
a. DD has a deed in writing (ss 23B,C CA).
b. As the fixed term lease is < 3 yrs, it is does not need to be registered in order to be enforceable at CL. (s
53(1) RPA)
c. DD has a legal sub-lease, given that she has certainty of duration, exclusive possession.
d. DD’s sub-lease is indefeasible (s 42 RPA), therefore, FF is bound by the lease as the new lessor.
e. Because DD has legal lease, on assignment to FF, the covenants will run with the land as they are legal
(Chronopoulis)
f. FF and DD will have privity of estate following assignment. Therefore, FF is liable for all requirements
and liabilities under the lease.
g. On assignment, BB and DD’s privity of estate terminates, but liability under contract remains.
2. Rights
a. Implied covenants
i. Obligation not to derogate from grant
1. Uneveness of concrete floor probably too immaterial to constitute a derogation from
grant by BB (Carpet Fashion)
2. Unless it can be argued that the uneveness of concrete floor made it unfit for purpose,
there will be no derogation (Aussie Traveller)
ii. Obligation to repair by LL
1. BB had a duty to put premises in a state of repair at commencement of term (Northern
Sandblasting)
b. Same relief against forfeiture as CC.
c. If unevenness of ground leads to repudiation of contract BB/FF, she may be able to get damages
3. Liability
a. Under express covenant
i. Covenant to repair in lease, similar to covenant implied under statute s 84(1)(B) – FF will be able
to enforce this against her, however she may be able to get equitable set-off as the cracks were
caused by the unevenness of the ground (Anzani)
b. Will be sued by BB for breaching express provisions of contract (Shevil)
c. Can also get sued in nuisance by EE and DD
d. Cannot be sued by AA for breach under head-lease as there is not privity of estate. AA may only exercise
right to forfeit, which would affect DD.
Felix
1. Interests
a. With AA’s permission, FF has acquired the leasehold estate.
2. Rights
a. FF will gain all rights under the lease, including the rent
b. Also may get an option to renew, however option to renew may be lost for trivial breach
c. May have a right of forfeiture against DD.
i. Requires notice (s 129(1) CA)
ii. Reasonable time to remedy (129(6)(a) CA)
iii. FF cannot waive the breach in order to exercise right of forfeiture (Cornille)
iv. FF needs to make an unequivocal demand for possession (Billson)
3. Liabilities
a. Implied covenants
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i. Quite enjoyment to CC
1. Tells DD to shut up
ii. Obligation not to derogate from grant to CC and DD
iii. Liability for acts of DD
iv. No liability to EE
v. Possible obligation to repair to DD
vi. Duty of care
1. BB/FF may also be responsible if the ground’s unevenness could give rise to a
foreseeable risk of injury (Cavalier)
2. This duty may include the cracks, even though they did not exist at the beginning of the
tenancy (Northern Sandblasting)
3. BB/FF’s duty will extend to 3rd parties using/entering the premises
e. Express covenants
i. The covenant to repair does not run with the land, therefore it will not run with the land, so FF is
not bound by obligation to repair.
ii. FF must prevent noise or occupations causing nuisance to other people
1. FF is in breach of head-lease if he continues to let DD cause disturbance.
iii. If FF defaults on above express covenants, will get 14 days written notice and AA can get
forfeiture (s 129(1) CA)
1. However, AA must give FF reasonable time to remedy (s 129(6)(a) RPA)
Aaron
1. Interests
a. As the LL of the head-lease, he is the owner of the fee simple estate.
2. Rights
a. AA can enforce his covenants against FF
b. Under AA’s lease with BB, BB cannot sublet or assign without AA’s consent (Qualified prohibition) – BB
has breached this essential term.
c. AA has no rights with respect to sub-tenants, bar the right of forfeiture, as he has no privity of estate or
contract with them.
d. May be able to sue BB for repudiation of contract
3. Liability
a. Is AA liable for sub-lesee’s actions?
i. No.
Bill
1. Interests
a. Following B’s registered assignment of the lease to FF, he no longer has an interest in the land.
2. Rights
a.
3. Liabilities
a. Notwithstanding assignment, BB will be bound by contractual obligations with AA
b. Everyone can sue BB in contract only
c. FF?
Point of caveating
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Caveat may be lodged to prevent registration by another proprietor of an unregistered interest (s 74F-R RPA),
giving notice to the whole world of that interest (re Hitchcock)
Unregistered interested may be defeated by registered dealing by a bona fide purchase, even where person has
no notice of registered interest (Barry vHeider)
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The mortgage is a property right, however, the obligation to pay is contractual, thus indefeasibility is limited to
interests that are created by the registration (Qld Premier Mines)
While the priority of registered mortgages will be determined according to date of registration, priority of
equitable mortgages will be determined by a number of factors, including priority of time, possession of
certificates of title and caveats
Therefore II and JJ were to caveat their equitable mortgage, their interest would be superior to other noncaveated equitable mortgages and other later equitable mortgages.
However, caveating will not give constructive notice to prevent a registered mortgagee from tacking.
(Donemore)
Henry
1. If the sale was proper
a. GF $500  II$300  JJ  $0  EE gets $0
2. If sale was deemed improper:
a. There is an equitable duty regarding conduct of sale (Bangadilly)
b. This equitable duty says that the test is one of bona fides
i. Must have a genuine and primary desire of getting the price and taking sufficient steps to do
that (Southern Goldfields)
c. Proper steps were taken in advertising the auction and obtaining valuation, however the property never
went to auction
d. The court disfavours the sale to related individuals (Tse Kwong Lam)
i. This may signify conscious planning
3. Is HH protected from GF’s improper conduct of sale (Forsyth)
a. GF breached the equitable duty of proper conduct of sale
b. GF has good title to convey
c. If HH has knowledge of GF’s lack of good faith, he does not obtain a better right than the mortgagor (EE)
d. If HH had no knowledge then HH’s title cannot be challenged once sale is complete (Fortsyth)
e. Once sale is complete, if they did not have notice, they will be protected (s 43A RPA)
f. If mortgagor (EE) may seek an injunction to prevent registration (Allfox)
i. EE must do equity by paying outstanding amount into court (Allfox)