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Contents Estates and Interests in Land................................................................................................................. Chattels and Fixtures............................................................................................................................. E...

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Contents Estates and Interests in Land.................................................................................................................2 Chattels and Fixtures.............................................................................................................................3 Extent to freehold interests...................................................................................................................4 Immediate Indefisability........................................................................................................................6 Land Transfer fraud................................................................................................................................7 Manifest injustice..................................................................................................................................9 Fraud by agent.....................................................................................................................................10 Correction of the register....................................................................................................................10 Other exceptions for Indefeasibility.....................................................................................................10 Caveats................................................................................................................................................12 Effects of caveats on priority of equitable interests.............................................................................15 Leases..................................................................................................................................................18 Mortgages...........................................................................................................................................25 Easements...........................................................................................................................................32 Covenants............................................................................................................................................34 Unit titles.............................................................................................................................................36 Concurrent interests in land................................................................................................................37 Maori land law.....................................................................................................................................38

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Estates and Interests in Land An estate is an interest of “bundle of rights”. It’s “a time in the land, or land for the time” – Walshingham’s Case. Types of estates   

Fee simple (called freehold) – the most powerful estate in regards to legal rights of a property. Leasehold (for term of years) – having a right to use the property and have possession of it for a set time. Life estate – lasts until a particular person dies

Legal v Equitable principles 

All estates may be legal or equitable.

Equitable interests and caveats  

Equitable interests are caveatable – if you have an unregistered interest, you can lodge a caveat on the tile. Paul v Graham asks if guarantee creates an equitable mortgage. In contrast to an agreement to mortgage, a security agreement in which the debtor merely agrees to grant a mortgage if requested to do so by the creditor does not, prior to the request, give the creditor an equitable mortgage, and will not support a caveat.

How equitable interests in land are created?  

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Equitable interests can be based on trusts (e.g. a trustee holding a property) or via contract (specific performance regarding the sale of property). Terry v McLellan outlines that “constructive trusts” and “oral agreements” are equitable interests. Even though there is s 24 PLA, that does not mitigate the doctrine of oral performance. Mortgagor’s equity of redemption is also an equitable interest in land. Gifts unenforceable at law can also be equitable.

Differences of legal and equitable interests for CREATION Legal 

Equitable  May be created informally  Created by contract or deed of lease   On an unregistered lease instrument  On an agreement for easement, mortgage Differences of legal and equitable interests for ENFORCEABILITY Legal 

Formally created under s 41 LTA 2007, is a transfer between private owners. Must be able to be registered

Enforceable against the whole world

Equitable  Only binds original contractual parties and 3rd parties “with notice”. May be defeated by 3rd party who is a BFP4V without notice.  Equity binds the conscience of the 2

parties who must act in certain way to complete transaction. Differences of legal and equitable interest for TRANSFER Legal 

Equitable  May be transferred “informally” (e.g. selling between friends, family without  proper paperwork).  If an unregistrable document, might have to get specific performance to get registrable document Differences of legal and equitable interest for PRIORITY Can only be transferred following statutory requirements. Needs to be registered to be transferred

Legal v equitable - If one mortgage is registered, the other I unregistered, the registered interest take priority. - For this, the time of creation is irrelevant. - Mercury Geotherm Ltd (in rec) v McLachlan the holder of an unregistered (or equitable) interest cannot improve their priority by lodging a caveat

Legal v legal - If both mortgages are registered, priorities between registered (legal) based on “time of registration” – first in time, first in law. - Time of creation is irrelevant, time of registration is. - Perkins v Purea – children were promised mothers house after paying off mortgage. They lodged a caveat for this. Paid off mortgage, was not given house by father (who had legal interest). Held that they were allowed the house, they had done everything right (and also oral promise)

Equitable v equitable - If neither is registered, the first to be created would be prioritised, unless justification to reverse (general principle, first in time if all is equal). - The holder of the equitable interest that is first in time, all other things being equal, is entitled to priority. - Justification to change priority includes a caveat lodged by one mortgagee. The mortgagee would take priority against the mortgagor who didn’t put the notice on the land even though he has created the mortgage first.

Chattels and Fixtures The general rule is that whatever is attached to the soil becomes part of the land. Maori Trustee v Prentice – is a house a fixture  

Here, a house was seen as NOT being a fixture. This house was argued to be a chattel to help pay off debts for rent. The factors that were considered in deciding this were: 1. House had been moved to the site rather than erected on it 2. There was no dispute that the house was movable 3. There was direct evidence there was no intention to make the house a fixture.

Lockwood Building v Trust Bank Canterbury 3

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Showhome found to be a chattel due to intention of temporariness. Follow similar reasoning to that of Maori Trustee.

Auckland City Council v Ports of Auckland  

Endorsed Elitestone in New Zealand. Here, the test for looking at if a chattel is a fixture by considering the: 1. Degree of annexation (if there is a HIGH degree of annexation, then there is a prima facie view that the item is a fixture). From Lockwood - [A]rticles not otherwise attached to the land than by their own weight are not to be considered as part of the land, unless the circumstances are such as to shew that they were intended to be part of the land, the onus of shewing that they were so intended lying on those who assert that they have ceased to be chattels, and that, on the contrary, an article which is affixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to shew that it was intended all along to continue a chattel, the onus lying on those who contend that it is a chattel. 2. Object (purpose) of annexation Elitestone Ltd – is the object designed for the use of enjoyment of land or for the more complete or convenient use or enjoyment of the thing itself. Intention is viewed objectively.

Hallidays v BNZ – regarding trees  

Can forestry be considered a chattel or fixture? Trees were seen as fixtures of the land. This was also due to the fact that the agreement between the parties was a contractual agreement and NOT a caveat.

Lakes Edges Development Ltd v Kawarau Village Holdings Ltd   

Regarding rock anchors supporting land Was seen that the rocks were a fixture. There was no intention to remove the rocks from the land, also moving the would be extremely unlikely due to their structural integrity. Has parallels regarding the right to support

Extent to freehold interests Airspace and minerals General principle is “cuius est solum” – rights extend upwards to heaven and down towards the centre of earth. 

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There are limitations to this notion: people can enjoy their land ”to such height as is necessary for the ordinary use and enjoyment of his land and the structures on it” (aka a REASONABLE height) – Bernstein of Leigh (Baron) v Skyviews & General. Also, s 97(2) CLA – planes can fly over land. Items can also hang over your land – Brewhouse Developments Ltd v Berkley House (Dockland Developments) Ltd Crown Minerals Act 1991 says Crown owns all gold, silver, petroleum and uranium (s 8) and reserves all other minerals when land alienated in the future (s 10). People can get permits to mine these resources. 4

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Water in its natural state is not capable of being owned. Water includes fresh water, costal water and geothermal water (s 2). Under the RMA, Crown owns the water in the ground, in the streams (s 354(1)).

Landlocked land Sections 327-331 of the PLA deal with landlocked land. This outlines that courts can make orders regarding landlocked land. Squally Cove Forestry Partnership v Wagg 

  

Neighbours used Red and Yellow road owned by Squally Cove and T based on good faith. S wanted exclusive possession of red road, had been using it for about 50 years. N’s were offered licence to yellow road for upkeep and maintenance. N’s wanted to use red road, sued due to them being “landlocked” under s 327 of PLA to get order from the court. They were seen as landlocked in the HC. In the CoA, it was seen that they were NOT landlocked, whilst the yellow road was longer, they still had access to their property. KEY PRINCIPLE FROM THE DECISION – THING THAT WILL BE CONSIDERED WHEN GRANTING ACCESS TO LANDLOCKED LAND THAT MAY AFFECT ANOTHER PARTY’S FREEHOLD [60] From the cases that have considered this definition, the following principles are established: (a). Whether there is reasonable access to land is a question concerned with whether there is practical physical access in fact, rather than whether there is legal access. (b). It is a question of present fact, concerned with whether reasonable access now exists, not whether (for example) “it is possible to provide access by upgrading existing tracks on the applicant’s own land. (c). Access “at the whim of an adjoining owner” or dependent on the “courtesy and goodwill” of the adjoining owner is not reasonable access. (d). What is reasonably necessary to use and enjoy the land “in accordance with any right … [or] consent under the Resource Management Act” is concerned with existing uses, not potential uses for which a land owner could apply for consent. (e). Reasonable access is not necessarily the same as the best access that could be achieved. Other access may be convenient and reasonable but that does not mean that the access the land presently has is unreasonable. (f). Whether there is reasonable access is a value judgment that the Court has to make on the basis of the evidence. Factors such as the characteristics of the locality (residential, commercial or mixed), the topography of the area and contemporary transportation requirements are relevant. (g). The circumstances as they existed at the time the land was acquired may be relevant evidence as indicating what the purchaser regarded as reasonable at that time. (h). Reasonable access does not invariably mean vehicular access, but nowadays the situations in which non-vehicular access will be regarded as reasonable are likely to be few because of the great dependence people now have on motor vehicles. (i). The legislation is remedial. There is no presumption in favour of non-interference with another title.

Greenslade v Honeymoon Bay Holdings

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On the first question, the Court of Appeal found that reasonable access may include vehicular access, but it all depends on the circumstances . What is reasonable is a question of fact, and the Court agreed with the Judge that the section was not landlocked, given its existing combination of pedestrian and sea access which was reasonable in the circumstances. That conclusion was also supported by the stance the appellants had taken with the Council which, while “not dispositive”, did provide strong evidence that the appellants considered sea and foot access reasonable for both construction and use. Boundaries and Accretion RMA ss 2 & 237A (sections argue that Crown could take away land due to erosion caused by a encroaching water body). Foreshore and Seabed Act 2004, govt owns all of the foreshore and seabed. Southern Centre of Theosophy v State of South Australia  

Lake kept changing size with it getting smaller. Property owner applied to the government to change the title as they believed there land had gotten larger. Government refused. HELD that person was entitled to new land. Created the “gradual and imperceptible test” – is the change in the water taking place over a long period of time to justify change in title.

Paki v Attorney-General 

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Pouakani had land adjoining from the Waikato River. Crown claimed the riverbed was vested in them under s 14 of the Coal Mines Amendment Act 1903 as a “navigable river”. They took a whole river approach, if the whole river is navigable then the riverside is then vested in the Crown. Paki sued that the declaration was inefficient as the river at that approach was not navigable. AG disagreed, river was navigable under the whole river approach. HELD with SC saying that “navigability” must be assessed with respect to particular stretches of a river.

Immediate Indefisability    

Replace the position of limo debt, or where people would have bad title. Regal Casting v Lightbody – once you are registered, you have good title irrespective if there was a vice in title. Gibbs v Messer – no longer good law in NZ. Frazer v Walker – a landmark decision. Outlined that: o Torrens system provides for immediate indefeasibility: registration of void or forged instruments is effective to vest title and give Indefeasibility. o BFP4V at a mortgagee sale is entitled to protection of s 83 as if land purchased from registrar of property. o However, does not prevent claims “in personam” o Principle does not override Registrar’s powers of correction in ss 80, 81 LTA 2017.

Bona fide mortgagees and relationship to immediate indefeasibility Merbank Corp v Cramp – void mortgage which was registered by mistake. In HC, Frazer v Walker was applied, saw that registration vets and divests title. Thus, void mortgage was validated by act of registration. Morrison v BNZ 6

Burmeister v Registrar-General of Land – ASB were a bona fide mortgagee for value without notice. They had no knowledge of the fraud taking place, thus the registered mortgage was upheld. Case also outlined the four components regarding a bona fide person receiving compensation for being deprived of land. 1. There must be a person 2. That person must be deprived of any land or any estate or interest in land 3. It must be the registration of any other person as the register of property of that land that has bought about the deprivation 4. The person must, by the Act, be barred from brining an action for the possessor or other faction for the recovery of the land, estate or interest.

Land Transfer fraud The LTA definition

6 Meaning of fraud (1) For the purpose of this Act, other than subpart 3 of Part 2, fraud means forgery or other dishonest conduct by the registered owner or the registered owner’s agent in acquiring a registered estate or interest in land. (2) For the purposes of subsection (1), the fraud must be against— (a) the registered owner of an estate or interest in land; or (b) the owner of an unregistered interest, if the registered owner or registered owner’s agent, — (i) in acquiring the estate or interest had actual knowledge of, or was wilfully blind to, the existence of the unregistered interest; and (ii) intended at the time of registration of the estate or interest that the registration would defeat the unregistered interest. (3) For the purpose of subpart 3 of Part 2, fraud means forgery or other dishonest conduct by any person. (4) The equitable doctrine of constructive notice does not apply for the purposes of deciding whether conduct is fraudulent. Cases regarding this section Assets Co v Mere Rohi – the principles for fraud codified in the LTA   

What is meant by fraud in the LTA is actual fraud i.e. dishonesty of some sort. This must be bought home to the person whose registered to the person whose registered title is impeached or to his agents If it is seen that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth fraud may not be property ascribed to him. 7

Waimiha Sawmilling v Waione – knowledge MUST NOT be constructive, MUST BE actual   

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If the designed object of a transfer be to cheat a man of a known existing right, that is fraudulent… Must be a deliberate and dishonest trick The general test for fraud is: “whether he knew enough to make it duty as an honest man to hold his hand (was there actual knowledge of the fraud taking place)… to make further inquiries… or to abstain… or to purchase subject to the claimants rights rather than in defiance of them”. If, knowing as much as this, he proceeds without further inquiry or delay to purchase an unencumbered title with intent to disregard the claimant’s rights … he is guilty of that wilful blindness or voluntary ignorance which … is equivalent to actual knowledge, and therefore amounts to fraud.

Effects of fraud on a registered title 



S 52(1)(a) LTA 2017 – a title is subject to where the title of the estate or interest of a registered owner is acquired through fraud on the part of the registered owner or the registered owners agent. S 6(2) – fraud must be against the registered owner of an estate or interest in land or the owner of an unregistered interest.

Fraud against previous registered owners Can arise in two circumstances If the perpetrator of the fraud still holds the title (current owner was part of the fraud) – s 51-52 PLA 2017. Heron v Broadbent B forged transfer for H’s title to himself (was not registered). B executed mortgage in favour of H (the creditor). H then registered the title transfer to B (the fraudster) & the mortgage to H. Now, B holds fee simple title subject to registered mortgage of H (creditor and mortgagee). HELD that B title was impeachable for fraud meaning they could bring proceedings for possession. The mortgage was protected as it was a BFP4V thus protected by indefisability. Thus, H could get land back subject to the mortgage BUT could claim compensation from the government.