Exam 2018, answers PDF

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IPCL: Notes of the Practice Question Question 1:

1. What interests, if any, do each of Anna, Robert, Quickbank, Henry and John hold in Whiteacre as at 23 April 2018? -

Whiteacre is held under Torrens Title, thus s 23B of Conveyancing Act 1919 (NSW) is not relevant/applicable to the analysis.

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Sections 23C and 23D would be relevant.

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Interest in the Whiteacre o Nature and the scope of the interest o Taking into account the relevant statutory formalities o Whether the interest is registered or unregistered? o Indefeasible or defeasible? and why?

a) Anna’s interest -

Nature of her interest in the property o She is the owner of a fee simple estate o As a registered proprietor, according to ss 41 (indicates what statutory legal interest be obtained; also Breskvar v Wall) and 42 (indicates the indefeasibility which was interpreted in Breskvar v Wall) of the Real Property Act 1900 (NSW), she is a legal fee simple owner and has the legal indefeasible interest in the land. Also, she could grant the interest to other people.

b) Robert’s interest -

Notice that the fact did not state what the specific interest Robert has, rather the fact describes an arrangement between Robert and Anna.

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It is necessary to consider: o Whether the arrangement is a licence or a lease? (King & David Allen Case) 

Robert actually living by himself, pay rent to Anna for specified period – interpreted the fact as a lease

o Lack of registration

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Precluded that lease from being a legal lease through the operation of ss 41 and 42 of Real Property Act 1900 (NSW). The issue then become whether Robert could still claim it?

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Section 23D(2) of Conveyancing Act 1919 (NSW) applies o Gave rise to which was described as a general law legal lease o All elements stated in this section should be satisfied 

“Nothing in this section or in sections 23B or 23C shall affect the creation by parol of a lease at the best rent which can reasonably be obtained without taking a fine taking effect in possession for a term not exceeding three years, with or without a right for the lessee to extend the term at the best rent which can reasonably be obtained without taking a fine or any period which with the term would not exceed three years.”

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Market rent – ‘best rent reasonably available’

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Must give lessee an immediate right to possession/ the lessee is about to possession – ‘take effect in possession’

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3 years or less – term plus option not exceed 3 years

If you defined the lease as an equitable lease o You need to show why it is necessary for equity to intervene 

Walsh v Lonsdale: The equity court will regard that as done which ought to be done 

Where equity would decree specific performance of contract (so where damages is an inadequate substitute, as is often the case with land), then the interest contracted for is granted or transferred in equity.

o Executory or executed? (Ciaglia v Ciaglia) 

Executory agreement 

Where there is an agreement which only gives rise to a future interest (like a contract to create or transfer an interest in land in the future)

 

Only s 54A of the Conveyancing Act 1919 (NSW) applies.

Executed agreement 

Where there is an agreement which gives rise to an immediate interest

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

Both ss 23C and 54A of the Conveyancing Act 1919 (NSW) apply

o Here, the agreement between Anna and Robert is an executed agreement, ss 23C and 54A apply 

Section 23C(1)(a) 

Does not allow the creation of an equitable interest in Torrens Title land by an unregistered written and signed instrument (even if in registrable form) without the provision of consideration



Section 54A 

54A(1) – must be in writing – not satisfied

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Then go to 54A(2) – whether there is sufficient part performance

c) Quickbank’s interest -

A registered mortgagee since 2012

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Special operation of a Torrens title mortgage – refer to s 57 o According to s 57(1) of Real Property Act 1900 (NSW), the mortgage of Torrens Title land does not involve the transfer of the mortgagor’s title, but gives the mortgagee a charge over the land.

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According to Figgins v SEAA, the mortgagee’s right to possession does not arise when the mortgage is made, but only when the mortgagor fails to pay the debt secured by the mortgage.

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In the absence of fraud, Quickbank holds equitable interest and it is defeasible interest under ss 41 and 42 of Real Property Act 1900 (NSW), also Fraser v Walker o Indefeasibility of registered interest 

meaning not subject to adverse claims, immunity from attack and priority over unregistered interests

d) Henry’s interest -

A registered mortgagee since 2014 but with possibility of fraud o Section 42: indefeasibility of registered interest o Frazer v Walker: exception is that where the holder of the registered interest is personally guilty of fraud o Possible conclusion would be

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

Given the very limited nature information available in the fact, Henry’s interest might held to be defeasible based on the facts which indicates the possibility of fraud on the part of Henry

e) John’s interest -

The fact did raise the possibility that John might have an equitable interest

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Interest would be under the doctrine of Lysaght v Edwards o Where there is a valid contract for sale of the fee simple, the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser which means the purchaser becomes a beneficial owner o the vendor has lien for unpaid purchase price and has right to retain possession until the balance is paid (unless the contract otherwise provides) o equitable doctrine of conversion – the purchase-money becomes part of the personal estate of the vendor and the land forms part of the real estate of the purchaser

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explain the need in the circumstances to base the argument on a valid enforceable contract which is specifically performable

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Interpreting the telephone conversation between Anna and John, resulting in an executing contract (Ciaglia v Ciaglia) which brought s 54A of Conveyancing Act

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Section 54A o S 54A(1): in writing – was not satisfied on the fact o The issue of part performance then arise – s 54A(2) 

Requirement of part performance (Cooney v Burns) 

Need to check the term of the contract to see when the parties ‘relative position’ (i.e. possession/use/tenure of the land) as to the subject of the contract (the land) will be changed

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Must be something to do with the right of ownership rather than an act preparatory to performance of the contract

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Payment of money alone will not be a sufficient act of part performance as it is ‘an equivocal act and not itself … indicative of a contract concerning land’, but taken into

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account when combined with other acts of part performance 

The act provides in the fact would be insufficient to the part performance on the basis that they did not relate to the possession or use or tenure of the land

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Possible conclusion: John has no interest in Whiteacre. John may have contractual rights but did not amount to an interest in Whiteacre.

2. Will John be entitled to the bronze statute of the dog, which was not on Anna’s list, when he becomes the registered proprietor of Whiteacre? -

There appears to be no provision regards to the status of the statute in the original contract between Anna and John. The absence of any mention of the statute from the list does not matter, the list is not part of the contract.

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Whether is there any presumption in John’s favour that the statute was a fixture? o The test for fixture was determined by the objective intention of the person who fixing it o Degree/mode of annexation 

Belgrave v Barlin: even slight fixing to the land is sufficient to raise the presumption that a chattel is a fixture

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In this scenario, it is sufficient to support such a presumption

o Purpose/object of annexation (court gives more weight) 

Could be argued either way

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The issue is whether the possible fixture was joined to the land for its better use as a chattel or in order to improve the land (NH Dunn Pty Ltd v LM Ericsson Pty Ltd)

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Re Cancer Care:

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Whether the statute might be part of the architectural design (D’Eyncourt v Gregory)

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Is there a valid gift from villagers to Anna’s parents – address briefly o Gift inter vivos by physical transfer

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The statute appears to be separable from the plinth, the plinth itself seems to be attached to the land, the statute could thus be argued could have be separate viability – Re Cancer Care

3. Can Robert, who has learnt this morning about Mary’s discovery of the ceremonial trowel, claim the trowel? -

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Whether the trowel is more likely abandoned or lost?

o Re Jigrose 

In determining whether a thing is abandoned and the ownership transferred to another party, query the intention of the both parties, title remains with the original owner of the property until such an intention to abandon is proven

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Abandonment 

Intention is the critical issue where an issue of abandonment is raised o Manifest intention to exercise control over it

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As a general proposition, if someone throw something away, he/she truly abandoned it and intended no longer to retain possession and have no further interest in ownership

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If someone lost something, he/she has not those intentions

Appropriation 

Title is not however automatically transferred to the purchasers on abandonment, it will pass where there is an act such as appropriation

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Appropriation in this sense simply means taking to oneself as one’s property which would require, in the context of an occupier, a manifest intention to exercise control over it (Parker v British Airways Board). An intention to exclude others is an exercise of control over the chattels.

o Which matters – is there an owner subsequent – in this case, even there is an owner, the identity would be not clear – ‘hidden in the grass’; ‘long time period’ -

Mary as a finder o Rights and obligations of the finder (Parker v British Airways Board) o Taken trowel into her care and control o Self-employed – not acting as an employee or agent o Possibility of trespassing? 

The fact allowed you to raise different arguments

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May argue John would have contacted Robert and make arrangement for her to access

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Or may argue that the paddock was open to the public during only on weekends but Mary was visiting on a day of a week

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Also consider the exist of the low fence and the rusty lock

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The facts were silent on that point

Robert as an occupier o Rights and obligations of the occupier (Parker v British Airways Board) o As an occupier has pre-existing superior right o Owner of the land was not in occupation, Anna lives in Sydney o Trowel not attached to/in the land or building o Robert needs to show a manifest intention to exercise control over the land/ and over the trowel – this is unclear 

Reference could usefully to the impact of the low fence and the rusty lock

o Nothing suggests that Robert controls the access over the loss items -

If Mary is a trespasser, as a matter of policy, Robert as an occupier will win (Parker v British Airways Board)

Question 2 1. What interest if any, do each of the following hold as at 18 May 2018? a) Brian in Whiteacre? -

Whiteacre is held under Torrens title and Brian is the registered proprietor

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Thus he is the legal fee simple owner of Whiteacre (s 41 of the Real Property Act 1900 (NSW); Breskvar v Wall)

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Brian’s registered interest is indefeasible according to s 42(1) of Real Property Act 1900 (NSW) which is also interpreted in Breskvar v Wall, indicates the indefeasibility of the registered interest

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Since it is a fee simple estate and Brian is the owner, he can grant interest to other people

b) Samantha in Blackacre? -

Blackacre is held under Torrens title, s 23B of the Conveyancing Act 1919 (NSW) is not applicable. Instead, since the arrangement was settled via a conversation between Samantha and Brian, ss 23D and 54A should be considered.

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Consider what arrangement might be?

o Drawing on the King & David Allen case, it is possible, based on the facts, to discuss whether the arrangement is a licence or a lease 

Did Brian and Samantha intend that she should have exclusive possession?

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What was the significance for her paying rent to Brian during a specified period?

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Noted that the lack of registration precluded the arrangement from being a legal lease for the operation of ss 41 and 42

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The issue then become whether Samantha nonetheless could claim her interest? o Whether s 23D(2) applies? 

Arise to a general law legal lease

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Possession for a term not exceeding three years

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The creation by parol of a lease at the best rent/market rent

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With immediate right or about to possession? – no

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Whether it might be an equitable lease? (Walsh v Lonsdale)

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Executory or executed contract? ( Ciaglia v Ciaglia) o It is an executory agreement, hence the focus was on s 54A(1) as explained in Ciaglia

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Section 54A(1) – in writing o The absence of writing gives rise to the operation of s 54A(2) – discussion of part performance

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Section 54A(2) – part performance o Cooney v Burns o Act are not sufficient because they do not relate to the possession or use or tenure of the land, therefore Samantha has no interest in the land as at 18 May

c) Northpic and Eastpac in Greenacre? -

Greenacre is held under Old System title

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A mortgage of old system title land transfers the interest of the mortgagor to the mortgagee with the proviso that the mortgagee will reconvey that interest to the mortgagor when the debt is repaid (Figgins v SEAA)

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or

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The interest of a mortgagee under old system is title – which is transferred by way of security with a mortgagor obtaining an equity of redemption (Figgins v SEAA)

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Although Northpic’s mortgage has been described written, there is nothing to suggest that it was a deed. Hence, s 23B of Conveyancing Act 1919 (NSW) precludes Northpic from obtaining a legal mortgage

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Arguable that Northpic has an equitable mortgage, given the intention of the parties to transfer the title by way of security, it would have to be in writing, pursuing s 23C(1)(a)

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It was possible for the Eastpac’s mortgage to be legal since s 23B was satisfied and a deed had been used

2. Adam as a purchaser, his entitlement to the grinder -

Whether the grinder is a chattel or a fixture? o Degree /mode of annexation 

Was the slab just resting on the land or is attached to the land?

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Could the grinder readily be removed from the slab?

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Cite Re Cancer and also Belgrave v Barlin

o Purpose/object of annexation  -

Could argue eitherly

Had the grinder been abandoned? o Apply the test in Re Jigrose o Adam has to show that he appropriated as well o No facts given to be able for this point to be further developed

3. Whether Jane has claim at all? (the possible basis for her claim would be ownership) -

Valid gift inter vivos from Brian to Jane? o Nolan v Nolan o Intention on the part of the donor to make a gift o Intention on the part of the donee to accept the gift o Delivery of the object 

Constructive delivery in this scenario, change in possession needs to be proven

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Also consider the common establishment – they lived in the same family home, however, the toolkit was in another property, this type of argument is hard to run based on the fact

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Abandoned or lost? (Re Jigrose)

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William as a finder o Need to explain why a person is a finder refers to Parker v British Airways Board

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o Rights and obligations of the finder (Parker v British Airways) o William’s claim as a finder is good against all but the true owner o Also usefully cited Armory case -

If Jane is not the owner – it is hard to see any other basis for her claim against William.

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