Answer Guide - Adverse Possession, Easements, Estates, Leases, Mortgages and Covenants PDF

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MLL327 Property Answer GuidesTable of ContentsAdverse Possession Answer Guide......................................................................................Easements Answer Guide...................................................................................................Estates Answer G...

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MLL327 Property Answer Guides Table of Contents Adverse Possession Answer Guide......................................................................................2 Easements Answer Guide...................................................................................................5 Estates Answer Guide........................................................................................................8 Leases checklist................................................................................................................10 Mortgages Answer Guide.................................................................................................12 Restrictive Covenants Answer Guide................................................................................15

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Adverse Possession Answer Guide Before the establishment of adverse possession, the AP holds bare possessory title Step one: Determine whether claimant has requisite degree of factual possession  Will depend on the circumstances, particularly the nature and manner in which the land is commonly used o Must deal with land as an owner might have done so (KY Enterprise v Darby)  Possession must have been continuous (not be abandoned, although temporary absence is insufficient abandonment) (Kierford Ridge v Ward)  Must be proven claimant has taken physical control of property which is open, not secret, peaceful, not by force, adverse, not by consent (Mulcahy v Curramore) o Open, not secret – Nec Clam  Possession exercised in a way that a reasonably careful owner would notice the possession  Possession can be established even in cases where documentary title did not know  Fencing generally satisfies this requirement (Petkoy v Lucerne Nominees Pty Ltd)  Mere use of land will fall short of possession and will cause trespass (Whittlesea City Council v Abbatengelo) o Peaceful, not by force – Nec Vi  Possession must have occurred without violence (Shaw v Garbutt) – no reason why owner could not have gone to law to assert his rights  Synonymous with uninterrupted possession o Adverse, not be consent – Nec Precario  Must be established possession is taken without consent of paper (Bridges v Bridges), possession cannot be adverse if it occurs with express or implied permission of the documentary owner  If proven paper title has consented it will no longer be classed as adverse in nature and may revert to a licence or lease  Must be a proper acknowledgement of title by possessor and would require a written offer or arrangement  Possession of squatter need not be inconsistent with documentary owner’s intended use for land (JA Pye (Oxford) Ltd v Graham)  For time it was required that possession had to be inconsistent with purpose for which documentary title holder intended to use land; in absence of inconsistency, a licence was deemed to have been granted (implied licence doctrine) Step two: Determine whether possessor has satisfied requisite intention test (JA Pye (Oxford) Ltd v Graham)  Intention to possess (not to own) – o Can be deduced from physical actions but is a separate element o Will be established where exclusive control can be proved

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o not knowing they are nit the paper title holder is irrelevant Sunny Corporation v Elkayess Nominees Pty Ltd) Requires occupier to, in his own name or on his own behalf, exclude world at large so far as reasonably practicable/processes of law will allow (JA Pye v Graham) o Includes paper owner Must be known to world o Fencing of property o Construction/renovation of dwelling o Payment of rates/taxes Willingness to pay rent is not inconsistent with intention to exclude Pye v Graham if there is an intention to exclude the paper title owner as far as reasonably possible

Step three: has claimant been in control for requisite statutory period?  Limitations of Actions Act 1958 (Vic) s 8 o No action shall be brought by any person to recover land after expiration of fifteen years from date on which right of action accrued to him  Upon expiration of the limitation period the owner’s title is extinguished s 18 LOAA o If paper title owner is under disability or affected by fraud, limitation period may be suspended (see step five) o Must prove control has continued unbroken for entire duration of limitation period (note temporary abandonment does not break possession)  Date of accrual o Date of disposition – where title holder is dispossessed o Date of discontinuance – when title holder abandons property  Must have been no interruption o Assertion of title by owner  By brining action to recover possession or issuance of summons along with intention to obtain order for possession or peaceable but effective entry into land (in regaining possession) o Acknowledgement by AP of superior title holder  Must be in writing and singed  Acknowledgement after expiry is irrelevant  Willingness to pay rent is not or realisation of not holding title is not acknowledgement Pye v Graham o Abandonment of possession by AP  Factual question Step four: have there been multiple possessions?  If one adverse possessor is dispossessed by another, second adverse possessor can add the first period to their own (Kierford Ridge Pty v Ward) o Temporary absence in constant possession will not constitute interruption  The first possessor may have greater title once limitation period has been satisfied (Mulcahy) Step five: defences to adverse possession  Is against paper titleholder, or against future interest?

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o Adverse possession only available against paper title holder vested in possession o Will not run against future interest holder until possession vests and interest becomes full estate  Leasehold: reversionary interest will vest in possession when lease expires and title is re-vested in possession in landlord  Limitations of Actions Act 1958 s 10(2): future interest holder has 15 years from when time of adverse possession starts from preceding life estate holder OR six years from possession vests– whichever is LONGER  If future interest subject to contingency, must be satisfied before title and possession can vest and adverse period commence o Adverse possession against the crown cannot be claimed in Victoria Disability o Limitation of Actions Act s 23(1): cannot be raised against a person until 6 years after person has been ceased to be affected by disability o Needs to be proven:  True owner has ceased to be under that disability  Further six years has passed from the time that the disability has ceased o Persons with disability LAA s 3(2):  Minors  Person of unsound mind Fraud o LAA s 27(1): Where fraud committed by adverse possessor, adverse possession will not begin to run until paper title owner has discovered (or could with reasonable diligence have discovered) it

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Easements Answer Guide Step one: Is it an easement– are these four elements fulfilled? 1. Must be dominant and servient tenement a. Dominant land = benefitted land - Servient land = burdened land b. Easement with absence of dominant tenement is only recognised in statute – known as an ‘easement in gross’ 2. Must accommodate/benefit the dominant tenement a. Must benefit dominant tenement rather than to its’ owner b. TEST: Does the right enhance the value of the dominant land or affect the way the land is used i. Makes the property more convenient ii. Is reasonably necessary for enjoyment of the land 3. Dominant and servient tenement must not be owned and possessed by same person a. If person owns both but not in possession of both, may be an easement b. Upon sale to a TP easement can be created 4. Right must be capable of forming subject matter of grant a. Must be capable of exact description with a precise and clear sphere of operation (Re Ellensborough, Riley v Pentilla) b. May not be vague and wide in character Step two: Has the easement been expressly created? If so, have formality requirements been complied with?  Must be established easement has been created validly or enforceable in equity o Old title land– grant/reservation must be by deed of registration: PLA s 52  Requires written instrument s 52 PLA o Torrents title land– deed not required: TLA s 42(2)(d)  Where not expressly created/failure to comply with formalities, easement may be enforced in equity where it would be unfair/unconscionable to deny validity of right Step three: is easement created by way of grant or reservation?  Where easement conferred to purchaser of dominant tenement, granting them right over land retained by vendor = easement by way of grant o If not express can be implied by continuous and apparent easements which are necessary for reasonable enjoyment Wheeldon v Burrows  Easement reserved by vendor at point of sale, conferring servient tenement upon purchaser which is encumbered with reserved easement = easement by way of reservation o Must be reserved expressly – only exception is if it is an easement of necessity Wheeldon v Burrows Step Four: Is there an implied grant or reservation? Grant Continuous and apparent easement 1. Must be continuous and apparent at the time of sale of the entirety of the benefit o Continuous = rights are ongoing

T1 2019 o Apparent = can be observed a part of the servient tenement wih careful inspection  Clearly established, visible and permanent McGrath v Campbell 2. Be reasonably necessary for the enjoyment of land Common intention (unlikely)  Burden of proof on the party claiming the interest  Easement is implied from the circumstances under which the grant was made  Law will readily imply the grant or reservation of easements as may be necessary to give effect to common intention of the parties Test: 1. A common intention to some definite and particular use has to be established 2. The claimed easement must be necessary to give effect to it Reservation Necessity  Easement may be implied in favour of grantor and grantee where easement is necessary/vital for full enjoyment of dominant tenement 1. Where a dominant or servient tenement is severed and transferred to a third party 2. Easement must be strictly necessary (E.g if there is foot access but there is no road access might not be necessity) o Just being landlocked is not sufficient o Being more convenient for the enjoyment of land is insufficient 3. Necessity must exist at time of transfer o Rationale – the implied intentions of the parties, rather than the general public policy principles North Sydney Printing v Sabemo o Must look at common intentions of the parties Step five: does easement arise from continuous use (prescription)? Requirement:  One person must openly and without consent or force exercise rights against the land of another  Servient tenement holder must be aware that right is being enforced  Servient tenement holder must be able to interfere and prevent exercise of right and failed to do so  Right must be continuously used for 20 years  Rights should be exercised against the fee simple owner of land Step six: has easement been extinguished or modified?  Mere non-use is not sufficient – need to look at intentions Modification  Express agreement  Court, if specific grounds are established – s 73 TLA (Vic)  Registrar empowered in terms of Torrents legislation to cancel notification of an easement where parties have extinguished or modified easement: s 73 TLA (Vic) Extinguishment

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Express agreement (release) o Dominant tenement may expressly agree to give up (release) burden on servient tenement  Old system land– must be by deed to be effective under CL: s 52 PLA, signed in writing to be enforced in equity: s 53 PLA  Torrens title land– execution and registration in prescribed form of surrender Implied conduct (charges in dominant tenement) o Changes in circumstances  Where changes to dominant tenement are so extensive that the purpose of the original easement right and no longer be met and/or burden on servient tenement is substantially increased  E.g. dominant tenement holder constructed own access to property which was previously only accessible by right of way  Considerations  Character and form of dominant and servient tenement  Necessity of right and its significance to altered dominant tenement  Effect of obstacles may have upon proper enforcement of right Unity of ownership o Owned by the same person - easement is automatically extinguished  If unity of ownership but not possession, easement survives  If unity of possession but not ownership, easement suspended for duration of joint possession o Will not be an automatic creation of a new easement upon sale, need to register new easement Abandonment o Be demonstrated by non-user of easement, in addition to an intention to abandon the easement o Mere non-use does not necessarily constitute abandonment (proof of intention is required)  Because an easement is a valuable right, abandonment is not lightly inferred

Estates Answer Guide Two characteristics of estates:

T1 2019  Interests of a defined duration  Confer a right of possession of land either at once or a time in future Step one: determine type of estate or interest  Freehold o Fee simple  Equivalent of full ownership, confers right to exercise over and upon every act of ownership (Fejo v Commonwealth)  Can be inherited, endures indefinitely  Requirements for creation: 1. Clear intention by transferor required 2. Appropriate words of limitation – presumed to be a fee simple where there is no limitation o Unless they did not hold fee simple o Unless they intended to create a different interest 3. Transferor must hold fee simple (nemo dat) o Life estate  Words of limitation must be used to effect interest is to continue for duration of a life  Sa vie – for duration of grantee’s life (will expire when they die)  Pur autre vie – for duration of third person’s life  Was not inheritable at CL, is now able to be passed to rest of estate to those entitled under will thanks to s 4 Wills Act o Need for future interests – what happens with life estate once life ceases  Remainder interest  Expressly created future interest will vest in title but not possession  Possession deferred until expiration of life estate  Is contingent – if contingency not satisfied prior to expiration of preceding estate, will be void under CL (unless validated under statutory provisions)  Reversion interest  Future interest will arise presumptively where surplus is not dealt with, or where contingent remainder does not vest or where determinable limitation has extinguished estate  Reversion automatically arises and mirrors primary estate held by original grantor Step two: does estate or interest comply with the legal formalities for creation  To validly create legal estate in land, interest must be executed by deed: s 52(1) PLA  Or by grant s 51 PLA  Where transfer of land under Torrens system is registered, an estate in land ins crated: s 40(1) PLA  A lease taken in possession for three years or less may be legally created without having to execute a deed because it is specifically exempted from the formality: s 54(2) PLA

T1 2019 Step three: is estate vested in possession? Is the estate vested in title or is it subject to a contingency?  Vested interest is an interest that is vested in title  Contingent interest is an interest that is subject to a condition precedent or a condition subsequent which may either preclude vesting until condition is satisfied or make a vested interest subject to divestiture should the condition not be satisfied o Condition precedent: a requirement of grantor which must be fulfilled before grantee receives an interest o Condition subsequent: a requirement which, if not met in future, will terminate the interest 

Distinguish two forms of contingencies o A determinable limitation/interest: arises where the estate terminates (is to ‘determine’) upon the occurrence or non-occurrence of a specific event  Defines the nature and marks the boundaries of the estate itself  If occurs gift is automatically void o A conditional (subsequent) interest: where the condition is attached to the estate and describes the mode of occupation or use for which the land should be put  If event set upon the condition does occur, grantor has right of reentry  If occurs then there is a conditional invalidity of the grant

Step four: do any of the contingent legal remainder rules apply, giving right to invalidate estate? 1. Remainder interests must vest, if at all, before or at the point of the expiration of the life a. Rationale: if contingency if not satisfied upon expiry of life estate, seisen cannot vest and remainder will be struck down b. Statutory exception: contingent remainder may take effect notwithstanding the destruction of the preceding estate (s 191 Property Law Act (Vic)) i. Expiry of life estate prior to satisfaction of contingent estate will have no effect on continued enforceability of conditional remainder interest 2. Remainder interests cannot be created following a fee simple a. Rationale: the entire title has passed to holder of fee simple, nothing left to pass under remainder 3. Remainder interest cannot reduce a life estate a. Rationale: remainder cannot diminish the scope of a freehold estate 4. Remainder interest can only exist where an existing freehold estate supports them a. Rationale: remainder cannot be created over non-freehold estates (lease) as they only support life estates  Note: these rules affect contingent legal remainders and not vested interests and reversions Step five: does the estate offend the rule against perpetuities  Not examinable 2019

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Leases checklist Step one: Determine if lease or license  If lease, then plaintiff can claim continued use of land until the lease expires and right to remove any fixtures  If licence, exclusive possession not granted and will only have permission to enter and occupy until licence revoked

T1 2019 Step two: essential elements of any lease  Comply with statutory formalities  Exclusive possession (Street v Mountford) o Entitles tenant to private, uninterrupted and full occupation in land for entire duration of the term o Allows for effective control and right to exclude all others (including landlord)  Definable period of time (Lace v Chantler) o A lease must exist for period which is certain in duration, any ambiguity in term will invalidate lease  E.g. lease for duration of war (Lance v Chantler)  Lease is either certain or uncertain, cannot be partly certain because one party can determine it Prudential Assurance Co Ltd Step three: legal lease must be by deed  Musty be by Deed - signed, sealed and delivered s 126 Instruments Act and 52 Property Law Act  Exception – oral lease for three years or less 54(2) PLA, requirements for oral lease are: o Lease is at best rent which can be reasonably obtained o Lease takes effect in possession o Total duration is no more than 3 years (including any option to renew or extension): s 52(2) PLA Step four: is lease equitable?  Equitable jurisdiction enforces a lease where an attempt to create legal lease has been unsuccessful and it would be unfair to deny the validity of agreement  Categories o Walsh v Lonsdale specific performance equitable lease  Agreement to grant lease (in absence of formal lease) valid in equity  Holds under same terms in equity as if lease hand been granted, if a decree of specific performance is available  Lease in equity only enforceable between specific parties Chan v Cresdon o i.e third party guarantee to pay rent not applicable o Tenancy by estoppel  Landlord who represented he will grant exclusive possession for defined period of time will be estopped from denying representation if tenant acted thereupon to his/her detriment  Crown Melbourne Ltd v Cosmopolitan Hotel 1. Must be a representation that is clear, precise and unambiguous. Mut be capable of misleading a reasonable person in the position of the person alleging reliance 2. Representation must have been acted upon to detriment o Part perfor...