Land Law Notes 2021 PDF

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Land Law 2021Buying a houseHousing systemTorrens system – system through which you can gain a title.Comparison with deeds system – every time the property changes title there is a new contract that is stored in the land office. Was expensive and cumbersome for the client.Automation of the register –...

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Land Law 2021 Buying a house Housing system Torrens system – system through which you can gain a title. Comparison with deeds system – every time the property changes title there is a new contract that is stored in the land office. Was expensive and cumbersome for the client. Automation of the register – both buyer and seller have a lawyer and the two lawyers exchange documents electronically. Do not have to worry about previous buyers.

Lim Details all resource and building consents (such as building a garage or top story etc.) Building consent give you the consent to build and resource consent gives you the consent to build outside of your area. being able to build retaining wall over 1m must have consent if a retaining wall is there should check for resource consent. If resource consents are not there you are in a bargaining position. Tc1 – fine in earthquakes Tc2 – average Tc3 – not suitable for earthquakes may get flooding etc. Crown plans to widen roads etc. (they want 10m of your land and you must comply)

Record of title Freehold – best title other than crown which you cannot get. Identification number – 958549 Date issued – last time the was brought 03/12/2020 (2 months ago so should not be a big difference in the seller’s price and your price) Simple title – not a cross lease etc. The best you can do. Area – is the area of land and not the building. Driveways are included and if it is a shared driveway then you must give your neighbours the right of way over your driveway. Also buying a 1/6 share of lot 8 which is an access lot. Price will be included as part of the buying price (600k). have 1/6 obligation and advantage of the lot e.g., if re tar sealing etc. must contribute 1/6.

Private individual client Authority and instruction for an electronic transaction Is this transaction High Risk – regarding anti money laundering (legit companies that are running some kind of illegal activity) Transfer and discharge documents come in.

ID must be a photo ID

Terminology in Land Transfer Act 2017 Lecture 5, 3/03/2021 Record of title replaces earlier terms, certificate of title and computer register. Register owner replaces registered owner. Practitioner is a lawyer or conveyancing practitioner as defined in s 6 of the lawyers and conveyancers act 2006. All land is now electronic transactions land.

Land It is a very important commodity and most peoples biggest asset. Land law contains rules regarding the ownership of land The doctrine of tenure – adopted from Britain that the crown owns all the land and we own an estate (overlaid by the land transfer act 2017) Maori land has its own act – Te Ture Whenua Act 1993 Land law prescribes the mean by which land can be transferred or otherwise dealt with (land transfer act 2017) Land law deals with the interests and rights other people might have over my land (Land Transfer Act 2017)

Tenure and estates (2) Something: Fee simple – the best you can have Fee tail – an estate of inheritance that can only be inherited by a specific group of decendence (does not exist in New Zealand so normally brought under fee simple) Life estate – I give this to A for life and Then R when I die (s 76 of the land transfer act 2017 allows this) Tenures: Cross lease – both a fee simple estate and a leasehold estate the owners land all the land each and lease it to each other so both are accountable for damages and improvements.

Equity and Land law (3) Creation of trusts - cannot be entered on record of title, the trustees are entered as the registered owner (the family and often the lawyer is also a silent trustee) In personam claim – expressly recognised in (s 51(5) of the land transfer act 2017) unconscionable conduct which is a lesser form of fraud. Unit title - Complexes such as apartments, commercial buildings etc... Buying a unit title, you join a group that is the body cooperate for the complex. Each body corporate has a chairperson that

manages all sort s of rules about maintenance ect.. that come with a complex. Body corporates also include additional fees for all of the costs associated with the running of the complex. Leasehold – the leasehold title that comes with a cross lease

Fixtures and chattels (4) Fixture – if the structure cannot be removed in whole or in sections (buildings) Chattels – anything that can be easily moved off. Lecture 6, 5/03/2021 The blank box is a record of title – and the owner is x who has this record of title

Fraud Fraud is the main exception of indefeasibility. Under s 51 – registered owner’s title cannot be set aside (estate paramount). It doesn’t matter if you brought the property or the property was gifted to you, you can hold record of title. The exceptions (s 52) • • • • • • • •

In the case of fraud A registered interest or noted at the time of interest. Prior record of title – if there is 2 titles for the same land although there has never been Wrong description of area or boundaries – surveyors report or the little wooden pegs showing the boundaries. If the fences are wrong, then you can get compensation. Omission or misdescription – sometimes easements Manifest injustice – the last person always gets the easements of title, if it is not just then the record of title stays with the last owner instead. Mortgagee against mortgagor – mortgagee can sell your property if you are not paying Lessor against lessee – can

In a situation of fraud you will get compensation from the government. You do not own the property until it goes through the land registry office when your lawyer presses the button. If x is the original registered owner and y takes the land through fraud and y then sells it on to z which is now the current owner. Z has an indefeasible title (immediate indefeasibility) so X has to suffer although they can get compensation from the state (government). Lecture 7, 8/03/2021 With mortgage fraud the mortgagee such as the bank is safe and it is the original owner that must pick up the cost of the mortgage however they get to keep their title. Gibbs v Messer – Messer was the owner of the house and Gibbs was her lawyer. Gibbs forges Messer’s signature and puts the house under the name of a fictitious person. Under the name of the fictitious person and put a mortgage on the house under the fictitious person with the Mcintyre’s which is the mortgage. Any outcome gives the house unencumbered back to Messer and the mortgagee was the one that took the damage. With Boyd v Wellington cc the rule was that even with a void instrument the title goes back to the last registered proprietor.

Fraser v Walker – Mr and Mrs Frazer are joint owners of a farm. Mrs Frazer needs 3000 pounds, and the Radomski are willing to give money and so Mrs Frazer organisers a mortgage to the Radomski and signs her own name and forges her husbands name. Mrs Radomski does not tell her husband and eventually she defaults on her mortgage and the Radomski exercises her power of sale and sell the property to Mr walker. The courts rule that Mr Walker keeps his record of titles he is too far away from the fraud of Mrs Frazer. An obiter statement say that the Radomski’s are safe as they have immediate indefeasibility of Title (protection) and if they are innocent, it doesn’t matter if you take it from someone who forged something, they are safe and they keep the mortgage. Mortgagees are as safe as purchasers. Section 51 of the land transfer act say that it does not matter if it is from a gift or buy paying or buy a fictious person you get immediate indefeasibility of title.

Manifest injustice Lecture 8, 10/03/2021 Section 54 – a person (A) who has been deprived of an estate or interest in land or who suffers any other loss or damage by the registration under a void or void instrument or another person (B) as the owner of the estate of interest can apply for an order under s 57. (both people are innocent in this situation, Frankie and the coopers) Section 55/56 – Issues court can consider. • • • • • •

Failure to comply with statutory power or authority when acquiring estate. How b acquired the estate Nature of the estate, fee simple or mortgage Length of time A and B have occupied the land. Nature of improvements on land Conduct of A or B in relation to acquisition of the land (carelessness)

Mortgages and manifest injustice Under section 54 and 55, if manifestly unjust for the mortgagee to keep the mortgage, the mortgage can be cancelled, and the original owner can get the property back unencumbered. The mortgagee can then apply for compensation although there is a cap. The mortgage can only be removed if the damages and compensation is enough to pay back the mortgage under subsection 3 of section 55. The difference being that the state will pay compensation of the asset whereas courts will pay compensation of the mortgage which will generally be more. Undersection 53 – 57 of the LTA 2017 under extreme circumstances the system can be reversed, and the original owner can receive the house and the new owners have to get compensation.

Exception of indefeasibility of title The top exception is fraud which is referred to s6 of the land transfer act 2017 S6 LTA 2017 Fraud is the forgery or dishonest conduct that leads acquiring a registered estate or interest in land. For the purpose of fraud must be against the owner of an estate or interest in land or the owner of an unregistered interest if the registered owner: -

In acquisition the registered owner had knowledge of the interest and Intended to register to defeat the unregistered interest.

If you have knowledge but do not intend to cheat that is not fraud Infinity Enterprises NZ Ltd v Kinara Trustees Ltd 2020. The two attacks on a registered owner 1. Competing claims – who gets it which unless there is manifest injustice is the new owner. (fraud against the registered owner) 2. Unregistered interest – North Shore Aero Club, Unless there is fraud, someone taking or dealing with land from a registered owner does not need to -

Inquire as to how the registered owner became registerer. Worry about what happened to the purchase money. Be affected by the notice of any trust or unregistered interest.

Morrison v BNZ – BNZ is an innocent mortgager and so they are safe.

Registered Owner is guilty of fraud. New Zealand Meat Nominees v Sim – x allowed meat nominees to park their cars in the carpark. X also had a mortgage to q which they defaulted on so q exercised the power of sale and sold to sim. Sim didn’t know of the agreement to park till after he signed. He didn’t want them to park and so he put pamphlets on their cars and when he finally brought, he would kick them all out. The court ruled him guilty of fraud as the unregistered interest of allowing the meat nominees to park their cars, he knew before he made the payment and therefore, he was guilty of fraud. Burmeister v O’Brien – Burmeister had a unencumbered house but were asset rich and cash poor. A third party manipulated the Burmeister’s to sign away their record of title to trustees. The house was then mortgaged to the ASB. The O’Brien’s were found guilty of fraud as they knew that the house, they were getting was not a gained legally and then continued to go and get a mortgage on the house. However, the mortgage on the house to the ASB was not removed. Cook v Abdallah 2016 – Cook was in contact with Abdallah online which she grew quite attached to. Abdallah wanted to come and live in New Zealand but needed property to get his visa. Cook talked to his solicitor and the solicitor wrote everything up to her. Abdallah then did not pay what he agreed and ordered that if Cook pays him, he will give it back, but he did not. However, because he could not defend the court awarded Ms cook.

Registered owner not fraudulent Bunt v Hallinan – district court found him guilty of fraud, high court of guilty, in the court of appeal 2 judges found him not guilty and one found him not guilty. Bunt had an unregistered lease for access for 15 years to the pottery shed on the property and Hallinan owned the property. To solve the problems that occurred a caveat should have been launched. For the first few sales there was not a need because the registered owner always agreed. However, when Hallinan went to buy the house, he showed that he did not want this pottery shed on the property. Hallinan went to the solicitors and the land asked whether the bunts had any rights to the shed of which they said they have no rights. Hallinan then brought it and told the bunts to vacate in a week and destroyed a pottery shed. Because although it is fraud, he had made it utterly clear he did not want to buy it if it had any interests on it and the information, he had was wrong. Therefore, he did not dishonestly cheat he was relying on his solicitor’s advice. Waller v Davies – like Burmeister and O’Brien. CH finance says They will take look after your property put it in a family trust and pay you some amount over a period and give it back at the end

of the set period. CH Finance then transfers the property to themselves and put mortgages. Of the 12 properties 10 signed away their rights the other 2 were not there and so signatures were forged. Mortgages were placed on each property through Davies SNC. A solicitor nominees’ company (SNC) essentially, they act as a bank in a law firm generally for their clients.

RO = X

RO = CH finance X transfers to CHF

Mortgage to Davies SNC

The high court found Mr Davies is guilty of fraud and so all the properties go back to the owners. However, the mortgagee is safe, and the land original owner has to go to the land transfer agency and get compensation. The judge should have made the order to return the property to the owners. There was an appeal that Davies was not fraudulent. The high court was under the impression that CH finance had guilty of fraudulent misrepresentation which they had not so the court courts finding was incorrect . The plaintiffs did not commit fraudulent misrepresentation. Therefore, Davies could not commit a fraud as there was nothing to cheat the owners on. It was just that the owners did not know what they were singing they had not been misled. Therefore, Davies is not guilty of fraud no compensation for the owners except for the 2 that had their signatures forged. NorthShore Aero Club v Black River

Fraud by an Agent Nathan v Dollars and Sense Finance Ltd – Rodney, Nathans’s son needs 250k for a business start-up and he borrows it from Dollars & Sense which is a third-tier lender but they will only offer it if they put a mortgage on a property as a security and so they do so on his parent’s property. Mr Thomas was solicitor was the agent for dollars and sense. To get the mortgage Thomas sent him off to get signatures from his mum and dad he got his dad’s, but he could not get his mum’s, so he forged his mother’s signatures. Rodney was then told that the signatures needed to witness so he got his girlfriend to sign. The first hearing at the high court said that signatures were forged so it was fraud by Rodney and the agent for the mortgagee was wilfully blind and so the mortgage is removed, and Dollars & sense lost. The court of appeal affirmed the high court and added that there was also on false attestation grounds because Rodney got his girlfriend to sign as a witness. The case then goes to the supreme court who then decided to rewrite the law. Looked at the line of cases where unless you can trace the fraud back to the mortgagee the mortgagee is fine. The supreme court decided that this test is incorrect. Instead, the courts should look at whether the agent was working within his authority. In this case the Mortgagee, dollars and sense had very loose rules set out for Rodney. The court decided that Rodney was fraudulent, and he was working within his authority that the fraud can trace back to the mortgagee. Even thou the principle did not tell the agent to do fraud it is a close enough connection. Therefore, the mortgage was cancelled. This set outs that the looser you are with your contract the more liable. Cricklewood Holdings ltd v CV Quigley & Sons Nominees Ltd – Cricklewood set up a main company named Farmshare. Farmshare had many smaller companies each with their own record of title one

of which was Cricklewood Holdings. Mr Quigley took out 300k and put a mortgage on Cricklewood to pay on it. The Cricklewood Holdings shareholders wanted to put a mortgage on the company and found out that Quigley had already put a mortgage on the company and ended up with 2 mortgages. The court decided that the agent Mr Quigley was guilty of fraud but had to decide whether the mortgage stays or goes. The court decided that the agent was not working in his authority and so the company is safe. Court held that the

Answering an Exam Question; • • • •

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Isolate the problem What area of land law does it involve? How are you going to solve it? Find relevant case law and statutory provisions to the problem- these are fundamental. Explore other cases around the area. What further information might you require to solve the problem? Give advice to the client- in many cases this is not completely ‘black and white’ but your advice must be backed up with good law.

Compensation: SS 58-72 LT 2017 S 58: Compensation for loss or damage resulting from Registrar’s error or from system failure 1) This section applies to a person who suffers any loss or damage as a result of(a) an error or a wrongful at of omission of the registrar or of a person to who a power or function is delegated under section 233; or (b) a failure or malfunction of a system of facility used to keep the register under section 9 (2) The person may bring a proceeding in the court against the crown for compensation (eg if you buy a property and on the title there is no mention of the burden of a right of way, you go to a lawyer and they check and see that it was likely the error of the registrar and say it must be added back to the title document. You brought the property without this burden, so can apply for compensation from the government).

Section 59: Compensation for loss of estate or interest in land (1) a person may bring a proceeding in the court against the crown for compensation if the person(a) by reason of anything in subsection (2), is deprived of an estate or interest in land

• and

(b) by this act, is barred from bringing an action for possession or other action for recovery of the estate or interest (other than an application for an order under s55) (2) The things referred to in subsection (1) are as follows: (a) a registration of another person as the owner of the estate or interest or of a different estate or interest under a void instrument or through fraud

(b) the bringing of any land under the Act otherwise than in accordance with the procedure prescribed by this act or any other Act: (c) an order under section 55 (which relates to the power of the court to direct that the register be altered) (d) unlawful alterations to, or entries on, the register. (3) the liability of the crown to pay compensation does not depend on whether the person acquires the estate or interest for valuable consideration

Section 64: Maximum amount of compensation for deprivation of estate or interest in land (1) The maximum amount of compensation payable where a claimant has been deprived of an estate or interest in land is the value of the lost estate or interest in land. (2) where the claimant is a mortgagee, no compensation is payable for any amount owing on the mortgage that exceeds the value of the estate or interest in land that the mortgagee has been deprived of. (3) this section is subject to sections 65, 66 and 67.

Section 65: Valuation of estate or interest in land and matters relating to onus of proof (1) The value of the estate or interest in land is the market value of that estate or interest at the date on which the claimant gained (or ought reasonably to have gaine...