LLB253 Tutorial 3 PDF

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LLB253 PROPERTY LAW A 2020 TUTORIAL THREE (Weeks 10 and 11) Topics: Equitable Ownership of Property and Co-ownership

Problem 1 Your client, Danica, recently contracted to purchase the fee simple estate in land at 7 Riverview Road, Mosman Grove (‘the Land’). Pursuant to the contract, which was signed on 1 February 2020 using a standard REIWA offer and acceptance form, the vendor, Bjorn, promised to convey an unencumbered fee simple estate in the Land to Danica, in return for $2,000,000. Danica has paid a $20,000 deposit. Settlement was scheduled for 1 July 2020. Since then, Danica has discovered that, on 1 January 2020, Bjorn entered into an oral contract, with Carlos, by which he agreed to sell the Land to Carlos for $1,500,000. The only evidence of this contract consists of a letter that Bjorn wrote to Carlos, in which he refers to the contract. Danica has also discovered that the fee simple estate in the Land was actually owned by Bjorn and his sister Agnetha. For the purposes of answering this question, you may assume that all of Bjorn’s actions in relation to the sale of the land (both to Carlos and to Danica) were done by Bjorn on his own behalf and as agent for Agnetha. You may also assume that Agnetha (orally) authorised Bjorn to act on her behalf in selling the Land and that all of his actions were within the scope of this authority. Advise Danica about her rights with respect to the Land and as to her best course of action. If you require any further information, say what it is that you need to know and why.

Problem 2 Agnetha and Bjorn are siblings. They are also co-owners of the fee simple estate in the Land and co-hosts of a popular Youtube channel (‘Swede As …’). Bjorn is the elder sibling. He earns a second income as a model/actor/musician and is wealthier than Agnetha. Five years ago, Bjorn and Agnetha purchased the Land for $500,000. The purchase was primarily made as an investment. However, they had also toyed with the idea of using the house on the Land as an office and as a location for their Youtube videos. The deposit of $100,000 and was paid entirely by Bjorn. The balance was paid by each of Bjorn and Agnetha equally out of their own personal savings. Ownership of the fee simple in the Land was registered to both Bjorn and Agnetha. The register merely states that the proprietor of the fee simple is ‘Bjorn Lingstrop and Agnetha Lingstrop’. It does not specify

whether they own the fee simple as joint tenants or tenants in common. Nor does it say anything about the size of any shares that they might hold in the Land. When Bjorn told Agnetha that he had paid the deposit, Agnetha hugged him and said, ‘You are too good to me. How can I ever repay you?’ Bjorn did not reply. In fact, Agnetha has never repaid Bjorn. Nor has Bjorn ever sought payment. Three years ago, Agnetha moved into the house on Land and has been living there ever since. She has made several small improvements to the Land. Two years ago, Agnetha built a granny flat in the back yard of the Land and leased it to Yvonne. The granny flat cost Agnetha very little (only $10 000) to build, because her boyfriend, Sven, who is a builder, did most of the work on it for free. Agnetha received a total of $12,000 in rental payments from Yvonne, who stayed there for one year. During 2019, the value of the Land has sky rocketed. Agnetha and Bjorn decide to sell the property to Carlos. Bjorn (acting on his own behalf and as agent for Agnetha) contracted to sell the Land to Carlos for $1.5 million and then again to Danica for $2 million. Last week, Bjorn handed Agnetha a cheque for $600, 000, stating that this was to pay her out in full her share of the sale proceeds. He says that, if the sale to Danica goes ahead, he will pay her a further $200,000, Agnetha objects that, as half owner, she was entitled to half of the sale proceeds (ie $750 000 or, if the sale to Danica goes ahead, $1 million), less her share of the deposit ($7, 500). Now advise Bjorn of his obligations and rights vis a vis Agnetha in relation to the Land. Optional question for tutorial: Would it make any difference if Agnetha was not Bjorn’s sister, but rather his spouse? And should it? If you require any further information, say what it is that you need to know and why. You may exclude from your advice the doctrines of estoppel and the Family Law Act 1976 (Cwth).

Problem 3 You are consulted by Sven, Agnetha’s boyfriend. Last week, Agnetha died. By her will, she left all of her property to Sven. Sven now seeks your advice. Advise Sven as to his rights (if any) with respect to the proceeds from the sale of the Land (when and if it goes ahead). You may assume that the sale to Danica is scheduled to take place on 1 July 2020 and that Carlos has since agreed (with Bjorn [on behalf of himself and Agnetha] and Danica) to allow the sale to proceed, on the basis that the $500 000 increase in purchase price is paid by Danica to him, rather than to Bjorn. If you require any further information, say what it is that you need to know and why....