Real Property Skeletons
Problem question skeletons, awesome paragraphs and random shit I think
I should remember
1.
Old System Title ....................................................................................................................... 2
1.1 Question on priorities .................................................................................................... 2
1.2 A question on conversion ............................................................................................. 4
2. Mortgages ................................................................................................................................... 5
2.1 There has been default: what can the bank do? ................................................... 5
2.2 What can the borrower do? ......................................................................................... 6
2.3 Early discharge of mortgage ........................................................................................ 6
2.4 Tacking ................................................................................................................................. 7
3. Co-ownership ............................................................................................................................ 8
3.1 At common law, there is a presumption for joint tenancy ............................... 8
3.2 CA s 26(1) expresses an assumption for tenancy in common ........................ 8
3.3 Equity may modify these assumptions .................................................................... 8
3.4 A severance will turn a joint tenancy into a tenancy in common .................. 9
3.5 Rights inter se (before the end of the relationship) ........................................... 9
3.6 Partition (CA s 66G/Environmental planning and assessment act pt 4) ... 9
3.7 Ending co-ownership...................................................................................................... 9
3.8 The taking of accounts: after co-ownership ends............................................. 10
3.9 Profits ................................................................................................................................ 10
4. Easements ............................................................................................................................... 11
4.1 Requirements (Re Ellenborough Park) ................................................................ 11
4.2 Creation............................................................................................................................. 11
4.3 Changing/extending/modifying and easement ................................................ 13
4.4 Extinguishment .............................................................................................................. 13
4.5 Remedies .......................................................................................................................... 14
5. Restrictive Covenants ......................................................................................................... 15
1.1 Requirements for a binding covenant under OST ............................................ 15
1.2 Restrictive covenants on TT land ........................................................................... 16
6. Leases ........................................................................................................................................ 17
6.1 Lease or license .............................................................................................................. 17
6.2 Type .................................................................................................................................... 17
6.3 Requirements ................................................................................................................. 17
6.4 Relationship .................................................................................................................... 17
6.5 Covenants ......................................................................................................................... 18
1. Old System Title
1.1 Question on priorities
1A legal interest is
Classify created by deed
the
interest
Who has the legal
estate?
the vendor pre-settlement
a purchaser post settlement
A first mortgagee by deed in poseession of
the deed (Lloyds Bank v Bullock)
Does anyone else
have a legal
interest?
Other interests created by deed (e.g. leases)
Are there any
equitable
interests?
A purchaser who has exchanged but not
settled
Oral leases taht comply with CA s 23D (<3
years, best rent, immediate right to
posession)
Subsequent mortgagees
etc. (see notes)
2LvL
Apply
the
rules of
LvE
priority
deed delivered earlier has priority - qui prior
est tempore potior est jure
EvL
Later legal prevails, as long as the interest is
bona fide, with no notice and for value.
EvE
Earlier equitable interest prevails - qui prior
est tempore potior est jure
Legal interest has priority - qui prior est
tempore potior est jure
3 - Has
there been
postponing
conduct?
Failure to take posession of
deeds
Failure to retain deeds
Premature release of deeds
etc. (no requirement to
caveat)
4 - Has
registration
affected
priority?
Instruments are registered
under CA s 184G, and the
first registered interest will
have priority iff:
The person first registered
has registered an effective
instrument
it must be in writing
The person first registered
is competing with another
interest created by an
instrument
this section does not grant priority
over oral leases, equitable
mortgagers or beneficiaries
The person first registered
has paid valuable
consideration
the deed is not protected if it was
a gift
The person first registered
was bona fide
not bona fide if with notice of an
earlier interest over which
priority is sought by registration
(Marsden v Campbell).
Remember order is important
it must not be void (Re Cooper)
or if the consideration was not
substantial (Bullen v Becket)
1.2 A question on conversion
1
• Old System Title
• (OST priorities)
2
• Qualified title (6-12 years)
• (limited indefeasibility, except against interests
before conversion)
3
• Torrens Title
• (indefeasibility: OST interests must register or
caveat if they wish their interest to be maintained)
2. Mortgages
2.1 There has been default: what can the bank do?
2.1.1 Mortgagee Sale
1. A default (either failure to make a repayment, or breaking a term of the
mortgage);
2. Serving a statutory notice (RPA s 57(2)(b); Conveyancing act s 111); the
notice must:
a. Call for the default to be rectified;
b. Be in writing, signed by mortgagee or agent; and,
c. Describe the default in particular: if it is a non-payment, the
amount missed should be described, though inaccuracy does not
invalidate it (Clarke v Japan Machine Tools; Network Finance v
Lane)
3. Non-compliance with this notice for <30 days.
Limitations
 The mortgagee cannot sell to himself
 The mortgagee must either take reasonable care or act in good faith
(depending on judicial opinion)
The order of payment of proceeds is as follows (RPA s 58; Conveyancing act s
112C):
1. Realtor/lawyer for mortgagee;
2. M1’s debt;
3. Subsequent mortgagees’ debts; and finally,
4. If any money left, the mortgagor receives, if there is a deficit, the
mortgagees may sue under personal covenants.
2.1.2 Foreclosure
1. The mortgagor must have defaulted (the common law right to redeem is
expired);
a. Where there is no default, the bank cannot touch you.
b. At this point, the bank may take possession.
2. A valid, statutory notice of default, requiring the default to be remedied
within a month, must be given;
a. Torrens (RPA s 57(2)(b)).
b. Old system or unregistered (Conveyancing Act s 111).
3. There must be non-compliance with the notice;
a. At this point, mortgagee sale can occur.
4. There must be a properly conducted auction (Conveyancing Act s 99A)
(RPA s 61);
5. The highest bid must be less than the mortgage debt (Conveyancing Act s
99A; RPA s 61);
6. The Supreme court makes a “decree nisi” where the mortgage debt is
calculated and the mortgagor is given a specific time-frame (usually 6
months) to repay (RPA s 62);
7. The mortgagor must fail to repay;
8. The court must order the foreclosure in absolute (RPA s 62(3)).
2.1.3 Other remedies
 The bank may sue on a personal covenant (covers difference between
mortgagee sale and loan amount CA s 100)
 The bank may take the right to possession (RPA s 60)
 The bank may appoint a receiver to collect rents (CA ss 115A, 109(1)(c))
 The bank may (under OST) lease the property (this remedy is only
available in TT where the lender is in possession)
 The bank may improve the land (Matzner v Clyde)
2.2 What can the borrower do?



Repay within the time of the equity of redemption
Apply for an injunction
Where there is fraud, a sale may be set aside (Latec Investments)
2.3 Early discharge of mortgage



Have a right to early discharge of mortgage
Have to pay interest unless it seems to be a penalty
May default, require Bank to force repayment, and then pay with no
penalty
2.4 Tacking
2.4.1
Iff:
1.
2.
3.
And:


Then:

OST (tabula naufragio)
2.4.2
Iff:
1.
2.
3.
And:

Then:

OST (tacking of further advances)
Iff:
1.
2.
3.
And:

Then:

M1
M2
M3
M3 acquires M1
Without notice of M2
M3 has priority over M1 (Taylor v Russel)
M1 (not considering subsequent advances)
M2
M1 (subsequent advance)
M1 has no notice (actual, constructive or imputed) of M2
M1 can tack advances, with priority (Hopkins v Rolt; West v Williams;
Credland v Potter)
M1 (considering subsequent advances)
M2
M1 (subsequent advance)
M1 has no actual notice of M2
M1 can tack, with priority (Re O’Byrne’s Estate)
2.4.3 TT (tacking of further advances)
Central Mortgage Registry v Doneware; Westpac v Adelaide Bank:
 M1 can tack unless there is actual notice, where the mortgage is
registered
Matzner v Clyde
 In OST, if M1 improves land, cost of improvement may be tacked
(Southwall v Roberts)
 OST cases apply to TT land
o In this case, there was actual notice, so tacking shouldn’t have
worked
 But for Matzner exception
o But for improvement, M2 would not have gotten a cent
o Thus, considered bits are definitely tackable
o Other bits may (arguably) be tacked
3. Co-ownership
3.1 At common law, there is a presumption for joint tenancy
Unless (any):
 The four unities aren’t present;
o Unity of title
o Unity of interest
o Unity of possession
o Unity in time of vesting
 There are words of severance in the document creating the relationship;
or,
 The facts/circumstances express an intention contrary to joint tenancy.
3.2 CA s 26(1) expresses an assumption for tenancy in common
Unless (CA s 26(2)) (both):
 There are clear words to the contrary AND
 The four unities are present
3.3 Equity may modify these assumptions
Iff:
 The position is tenancy in common
Then:
 Equity follows the law (Delehunt v Carmody)
Iff:
 The position is joint tenancy
Then:
 Equity will follow the law
Unless:
 There is an inequality in contribution to purchase price
 There is an inequality to mortgage payments
 There is an inequality in partnership assets
Then:
 The ratio of the above will be the “shares” in equity
3.4 A severance will turn a joint tenancy into a tenancy in common
A severance may happen by:
 Unilateral act
o Transfer
 Severance at equity happens when
 Enforceable contract
 For valuable consideration (e.g. 1/50th share)
 Severance at law occurs when
 A transfer is registered (Wright v Gibbons)
o Mortgage in OST (Re Pollard’s estate)
 But not in TT (Lyons v Lyons: if mortgagor predeceases,
ends mortgagee’s interes)
o Lease severs joint tenancy for the term of the lease (Freize v
Unger)
 Mutual agreement/merger (Williams v Hensman; CA and RPA s 99)
 Court order
o May be unilateral
o Under s 97: RG registers a transfer from one owner to themselves
 Unlawful killing
o Common law
 Unlawful killing doesn’t cause severance
 But the guilty party holds a share on behalf of the deceased
in trust (Rasmanis v Jurewitsch)
o The Forfeiture act
 You cannot benefit from a crime
 Unless you can benefit from a modification under s 5
(Leneghan-Britton v Taylor)
3.5 Rights inter se (before the end of the relationship)
The following may be compensated/distributed:
 Contractual obligations which are enforceable
 Local government rates (s560 Local Government Act)
There is no right for improvement/occupation rent until the relationship ends
3.6 Partition (CA s 66G/Environmental planning and assessment act pt 4)



A partition order splits the property into sections.
There is no right to refuse such an application in common law or equity.
This may also create a trust for sale.
3.7 Ending co-ownership
The following may end a co-ownership:
 Agreement to sell between parties
o Severance only occurs after the proceeds of the sale are allocated
(Re Allingham)
 All shares are bought by one person
 The operation of the right of survivorship in a joint tenancy
o If they die at the same time, the youngest is said to die last (CA s
35)
 A government resumption of land
3.8 The taking of accounts: after co-ownership ends
3.8.1 Improvements
Iff (Brickwood v Young):
 Value > Cost
Compensation:
 Cost
Iff (Ryan v Dries):
 Value < Cost
Compensation:
 Value
3.8.2 Mortgages
 Payments count as improvements since they increase “equity” (Ryan v
Dries
3.8.3 Occupation rent
Iff:
 Possession has been isolated
Then:
 It may set off accounts (e.g. reduce improvement re-allocation)
3.9 Profits
 On behalf of co-ownership? (Question of fact)
If yes
 Profits from property per se? (as apposed to owner’s services) (Squire v
Roges)
If yes allocate profits
4. Easements
4.1 Requirements (Re Ellenborough Park)
1. There is a dominant and servient tenement
2. The easement accommodates the dominant tenement
3. In OST, the dominant and servient tenements cannot be owned by the
same person
4. The easement must be capable of forming the subject matter of the grant
 Note – if it is a negative easement, it must fall into the following categories
to be valid:
o Right to receive light
o Right to receive water through pipes
o Right to receive air through defined channels
o Right to support
4.2 Creation
Creation is via express, implied, statute or proscriptive means.
4.2.1 Express grant or reservation
A legal interest is created if:
 OST: the easement is created by deed (CA s 23B)
 TT: there is a transfer in approved form (RPA s 46) that is recorded on DT
and ST’s folio (RPA s 47(1)
 Where DT is TT: easement must be created by deed (Cowlishaw v
Ponsford)
 Easements must comply with CA s 88(1)
o Specify burdened and benefited land
o Which parties may modify/end
o What is the subject of the easement
An equitable interest is created if:
 The easement is created with a specifically enforceable contract with
consideration (CA s 23C); OR
 There is part performance; OR
 In cases of equitable estoppel (Walton Stores)
4.2.2 Implied grant or reservation
An easement is implied (Wheeldon v Burrows):
1. Continuous and apparent use
2. Necessary for reasonable enjoyment of land
3. Used for the part of the land benefited
It arises where:
1. The easement is not created by instrument
2. This is a legal interest
3. And cannot be defeated by subsequent ST
Types:
 Easement of necessity
o Since CA s 88K, not used much, since it is easier to get a court
order
o The DT must otherwise be completely landlocked (Gibson v
M’George)
o Must be absolutely necessary
 Vendor retains DT
o Any easement (other than one by necessity, s 88K and common
intention) will not be implied in favor of vendor because it could
have been reserved on sale (Wheeldon v Burrows)
 Sale of DT and ST at the same time
o Existing easement remains (Swansborough v Coventry)
 Omitted/misdescribed
o Exception to indefeasibility (RPA s 42(1)(a1)
o Implied easements in OST enforceable when land becomes TT,
even if unregistered (RPA s 42(1)(a1))
o New implied easements cannot be made under TT (Aus Hifi v Gehl;
Beck v Aurbach; Dobbie v Davidson)
4.2.3 Easement by proscription
For prescription, must be 20 years+ (if not, try easement by implication)
 Doctrine of lost modern grant (Delohery v Permanent Trustee)
In order to be enforceable, DT must prove that ST:
1. Had knowledge (Lloyds Bank v Dalton)
2. Power to stop and failure to exercise power (Dalton v Angus)
 Must not be by secrecy, force, license or permission (Gardener v
Hodgson’s Kingston Brewery)
4.2.4 Easement by statute
CA s 88B
 Register/recording of easement under CA 196 of a plan detailing
easements intended to be created
 For the benefit of existing roads, easements in gross (CA s 88A),
easements intended to act (benefit or burden) on the land in the plan
Public Works Act s 4A
 Easement may be resumed by crown over private land
Crown Land Consolidation Act s 279
 Every purchase of crown land entitles road access through other crown
land (if required)
CA s 88K
1. Reasonably effective for effective use and development (sub-s 1)
2. Must be
a. Not inconsistent w public interest
b. Adequately compensateable
c. All reasonable attempts have been made to negotiate an easement
3. Specific
4. Applicant pays compensation for easement
5. Costs payable by applicant (most of the time)
6. Could be modified under s 89
Note: easements are, above all requirements, up to the discretion of the court
(Owner’s strata plan v Ryan)
 May limit when easements apply (sub-s 3)
 May order compensation (sub-s 4)
 May grant ancillary rights (117 York St)
4.3 Changing/extending/modifying and easement
Depends on creation
 Implication
o Cannot extend (Corp of London v Riggs)
 Express
o Easement ‘for all purposes’ NOT limited by original context; use
may change (White v Grand Hotel)
o BUT proposed use limited if use so excessive that it is outside the
reasonable contemplation of the parties (Jelbert v Davis) OR if it
causes wanton, capricious & causeless injury to owner of ST
(Todrick v Western National Omnibus). Injunction may be sought
(British Railways v Glass).
 Proscriptive
o Connot change on extend (Wimbledon v Dixon)
o Limit for what was necessary for DT at time of creation (British
Railways v Glass)
o Intensification is not a change if there is no increase in burden
(British Railways v Class
4.4 Extinguishment
Express release
 OST – deed (CA s 23B)
 TT – registered transfer (RPA s 47(6))
 Equity – in writing for value (CA s 23C(1)(c)
Operation of law
 Same owner (Coke upon littleton) except:
o Easement by recording of a plan under CA s 196 (CA s
88B(3)(c)(iii))
o TT registered land (RPA s 47(7))
Order of Court (CA s 89(1))
 Court can MODIFY or EXTINGUISH where:
o Reason for creation is obsolete and ST is impeded (CA s 89(1)(a))
o DT agrees or implies abandonment (CA s 89(1)(b))
o DT waives or seems reasonably to have waived benefit (CA s
89(b1)(i))
o Proposed modification does not injur DT
o Implies where previous owner agrees to surrender easement, even
if unrecorded (Pieper v Edwards)
o Courts should not restrict this section (CA s 89)
Implied Release
 Within 20 years if there is evidence that DT intended this
 Non-use is not enough (Ward v Ward)
o Unless it is for long (Treweeke v 36 Wolsely Rd)
o Or unless it combines with other circumstances implying intention
(Swan v Sinclair)
Abandonment in TT
 If not used for 20 years (RPA s 49(2)), RG may cancel recording (RPA s
3/4?9(1))
 But RG must consider interested party’s submission during notice period
(RPA s 49(4))
 RG may cancel easement if it has no purpose because separate properties
were consolidated (RPA s 49(5))
4.5 Remedies
Abatement (self-help)
 Not encouraged (Lagan v Lamberg)
 No notice required (Perry v Fitzhowe)
 Mustn’t be excessive, breach peace or injure 3rd parties
Injunction
 Against continuing interference (Andale v Goetjens)
 Not granted if minor or temporary interference (FCA v Moreton)
Damages
 Where substantial interference with enjoyment (Saint v Jenner)
Court Order
 Nuisance for unreasonable interference: need substantial injury (NOT
total destruction; less convenient is fine)
5. Restrictive Covenants
1.1 Requirements for a binding covenant under OST
1. The covenant must be restrictive in substance (Tulk v Moxhay)
2. The purchaser must have taken with notice of the covenant (Tulk v
Moxhay; Wilkes v Spooner for someone claiming through such a purchaser)
3. The covenant must “touch and concern” the land benefited (Rogers v
Housegood; Tulk)
a. The interest must be annexed to land
b. The interest must not be personal (i.e. it must be for the benefit of
the land, not the specific owner)
4. If the land has been subdivided, the covenant is only binding on the
subdivisions (rather than to the block of land as a whole, which is the
assumption) if there are words to the effect of “benefit of the land and
every part of it that may lawfully be subdivided” (Tulk; Ellison v O’Neil)
5. CA ss 70 and 70A may not be rebutted
a. CA s 70 implies that the benefit of the covenant is binding on the
successors of the covenantee
b. CA s 70A implies that the burden of the covenant is binding on the
successors of the covenantor
6. The covenantee must own the land benefited at the time of creation
(Kerridge v Foley – land sold lot by lot, land sold subsequent could not get a
covenant from land already sold since the vendor no longer owned the
land), unless there is a valid scheme of development (Elliston v Reacher)
a. There must be a reciprocity of covenants (each must be burdened
by the others)
b. Others are suggestions (Re Application of Poltava Pty Ltd)
i. Common vendor (may be two or more vendors acting in
concert (Re Dolphin’s Conveyance))
ii. Plan must have been laid out (size may be changed
according to the requirements of each purchaser (Baxter v
Four Oaks)
7. There must be compliance with CA s 88(1).
a. Must be created by an instrument (after 1930)
b. Benefiting and burdened party must be stated (sub-sub-ss (a), (b))
c. The person able to release or change the easement (sub-sub-ss (c),
(d))
1.2 Restrictive covenants on TT land
Similar to OST (except for additional requirements for proving a building scheme
and the application of CA s 88B instruments), a covenant requires the following
to be valid:
1. The covenant must be restrictive/negative in substance (Tulk v Moxhay)
2. The Purchaser must have taken with notice of the covenant (Tulk v
Moxhay)
a. Note, in TT, if the interest is on the register, notice is implied (CA s
88(3))
3. The covenant should be recorded on the register in accordance with CA s
88(3)
4. The covenant must “touch and concern” the land benefited (Rogers v
Hosegood; Tulk v Moxhay)
5. There is a presumption that a covenant does not apply to a subdivision. If
it is to apply to a subdivision, this needs to be expressly stated (Tulk v
Moxhay; Ellison v O’Neill)
6. CA ss 70 and 70A may not be rebutted
a. CA s 70 implies that the benefit of the covenant is binding on the
successors of the covenantee
b. CA s 70A implies that the burden of the covenant is binding on the
successors of the covenantor
7. The covenantee must own the land benefited at the time the covenant is
created (Kerridge v Foley)
7A. UNLESS you satisfy the elements of a building scheme (Elliston v Reacher)
8. There must be compliance with the formal requirements of CA s 88(1) (Re
Louis)
a. Must be created by an instrument (after 1930)
b. Benefiting and burdened party must be stated (sub-sub-ss (a), (b))
c. The person able to release or change the easement (sub-sub-ss (c),
(d))
8A UNLESS there is a CA s 88B instrument (after June 1964) registered
containing a covenant
a. Registered under CA s 196
b. Complies with the requirements of CA s 88(1)
1.2.1 A s 88B instrument
This instrument is a method of subdivision (CA s 196), which if it complies with
CA s88, is enforceable whether or not the other requirements of easements have
been satisfied (e.g. they can both be owned by the same party). It needs to be
valid under CA s 88, therefore, must touch concern, describe benefited etc. The
covenant is to be recorded under each burdened CT, the covenant. Ommited is
still enforceable.
6. Leases
6.1 Lease or license

Test is exclusive possession: facts and circumstances (Radaich v Smitch)
6.2 Type




Fixed term
Periodic (either express or implied [by payment period = notice period])
At will (not tenancy at all, can be determined=ended at any time)
At sufferance (“holding over” where a fixed term comes to an end,
compensation available)
6.3 Requirements




Exclusive Possession
Must be of certain duration
Certainty to parties, property and price
Correct form
o OST
 Deed (CA s 23B(1))
 Unless it complies with ss 23D(2) (oral lease)
 <3 years
 best reasonably obtainable price
 immediate right to possession
 or 23C(1) [in writing] with consideration
 Or there is equitable estoppel (Walton Stores)
o TT
 Valid signed document by lessor/agent 23C/D
 RPA s 53 (need to be registered if more than 3 years, if
unregistered is a valid equitable (Chan))
o TT Unregistered
 Legal
 CA s23D(2) (oral)
 Equitable
 Valid lease less than 3 years (short tenancy
exception)
 Enforceable agreement to lease complying w s 54A
[in writing] with either consideration or part
performance (look to intention)
 Or s 23C(1) [some form of writing signed] with
consideration
 Or equitable estoppel
6.4 Relationship


Is there privity of contract (original signatories to the contract) – all
covenants are enforceable
Or privity of estate – covenants enforceable must “touch and concern”
o CA ss 117 (benefit) and 118 (burden) allows the assignment of the
reversion
6.5 Covenants
Obligations in lease:
1. Express clauses
2. Clauses implied by common law (and inherent in T/LL relationship) (e.g.
non-derogation and quiet enjoyment)
3. Clauses implied by statute
4. Clauses which are a necessary implication
6.5.1



Repair
Prospective duty, put into repair, but not give the guy something new
For natural disasters, the contract is considered frustrated
If on LL, he must have notice to be required to fix
6.5.2



Quiet enjoyment
Not absolute, just have to minimize impact
E.g. water (Martin’s camera corner)
Not where defect is observable (Southwark, flushing)
6.5.3



Non-derogation
Often brought alongside quiet enjoyment claims
Whores upstairs (Nordon Case) was non-derogation
Where third parties, LL is guilty if consented or authorized (Nordon)
6.5.4 Other LL
 Furnished to reasonable standard – fit for purpose
6.5.5



Common law implied on tenant
Us in a tenant-like manner
Yield up possession (don’t sublease after the end)
Not waste
6.5.6 Statutory covenants
 Lessee repair (CA s 84(1)(b)) – keep in repair regarding age/char of the
house (Proudfoot)
 LL required to pay rent on time (CA s 84(1)(a))
 LL may inspect/repair with two days notice (CA s 85(1)(d))
 LL may re-enter if rent forfeit for a month (CA s 85(1)(d)) – two months
for other breach (CA s 85(1)(d))
6.5.7 Obligations in contract
 Good faith or business efficacy (Renard Constructions; Alcatel)
6.5.8 Obligations in tort
 LL may be liable for injury on their property
 If it is within scope (Circua v Williams) [no duty to upgrade, if he sees
something dangerous, he should fix it]
6.6 Assignment/subleasing



Assignment/subleasing may be prohibited
Where there is a qualified covenant that he can only assign with consent
o Consent can not unreasonably be withheld CA ss 133B(1), 132
o Reasonable person
Cannot assign residential tenancies
6.7 Termination

By re-entry
o 1 month rent, 2 month otherwise CA s 85(1)(d)
o notice under CA s 129 (maybe not for rent ss (8) Butts thinks no
need)
o or implied right under s 85(1)(d)
 Contractualisation via repudiation (no fundamental breach) (Progressive)
and get damages for rent until re-leased: duty to mitigate
Note: a breach may be waived