Property Law Exam Notes PDF

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Property Law Exam Notes Content: 1. Interests in land (including mortgages) and concepts of property. 2. Title systems (including proof of titles, dispositions, and priorities among interests). 3. Rights of interest holders to control activities above and below the surface of land. 4. Fixtures. 5. Co-ownership. 6. Easements and covenants. 7. Adverse possession and prescription Reception of English law The rules  Country acquired by conquest ◦ Laws and customs remain in force until replaced  Country acquired by settlement ◦ Settlers carried with them so much of English law as was applicable to their new situation Reception of English law in Australia  Regarded as settled and not conquered  Cut off date set at 25 July 1828 (Australia Courts Act)  Question of reception settled by Imperial Acts Application Act 1969 (NSW) Development of Australian law  Doctrine of repugnancy ◦ Colonial Case Law  Colonial Laws Validity Act 1865 ◦ Colonies bound only by those British statutes that were directed to the colonies ◦ Colonial statutes that conflicted would be void  Statute of Westminster 1931 ◦ Australian laws would no longer be void for repugnancy  Created a climate where Australian land law could differ from English law ◦ Conveyancing Act 1919 ◦ Various English statutes that were never replicated in Australian law Doctrine of tenure  Linked with the social system of feudalism  Commendation  Transfer of ownership of land to more powerful neighbours (a Lord)  Small landowner (vassal) does not own the land, but holds it “of” or “from” the Lord.  Vassal is now a “tenant”  The tenant’s interest in the land is called a “fee” Subinfeudation  In England, all land was held by the King  The King’s knights (vassals) held land “of” the king. Provided military services in return for the “fee” (the benefit of the land).  The knights could then subgrant portions of their land to their own vassals.  Land that was not broken up into “fees” was called “allodial”  Services in return for land not only military

◦ Knight service ◦ Serjeanty ◦ Frankalmoin ◦ Socage Tenant also had other obligations ◦ Homage ◦ Suit of Court ◦ Financial support ◦ Escheat The manorial system  The lord’s land was the manor  As far as feudalism was concerned, the only tenant of the manor was the lord  Lords granted portions of the manor to villagers, who performed labour in return  Internal affairs of the manor were in the lord’s hands ◦ Taxes ◦ Movement of villagers ◦ Marriage Decline of subinfeudation  Statute of Quia Emptores 1290 prohibited subinfeudation  Each escheat brought land closer to king  Gradual disappearance of services  Tenures Abolition Act of 1660 – converted all tenures into socage Tenure in New South Wales  Australian colony was never organised along feudal lines  Australian courts nevertheless adopted the principle that on assuming sovereignty over the Australian colonies, the whole of the lands of Australia became the property of the King of England Tenure and native title? Mabo v Queensland (No 2) (1992) 175 CLR 1 ◦ Plaintiffs sought recognition of native title at common law over islands in the Torres Strait. ◦ Plaintiffs claimed that since time immemorial, the Meriam people had followed laws and customs under which they exercised land rights ◦ Sought a declaration that their rights were legal rights of ownership ◦ Established that:  The doctrine of tenure gives Australian land law its “shape and consistency”  The Crown’s acquisition of sovereignty over NSW did not, by itself, extinguish customary native title to land  Recognition of the “radical” title of the crown is not inconsistent with the existence of native title. QUIZ What is a “tenant”? a) Someone who rents a property b) The owner of the land c) Someone who holds land of the crown What is a “fee”? a) Any charge b) The payment made to occupy land

c) A vassal’s right to own and occupy land in return for services What is “subinfeudation”? a) A process of creating tenure b) The feudal system c) The settlement or conquering of land What is “radical title”? a) Recently created title b) Title created by tenure c) The crown’s ultimate title to the land

Overview  The nature of property rights  Overview of different property rights  Fee simple  Fee tail  Life estates  Reversions  Remainders  Vested interests  Mortgages  Leasehold  Protecting interests in land  Actions for possession  Trespass  Nuisance  Yanner v Eaton (1999) 201 CLR The nature of property rights  It can be useful to think of property as a “bundle rights”, or “control over access”.  To understand what you mean when you say that A has property in B, you need to ask “what is the interest that A has in B”? The doctrine of estates  Interests that entitled the holder of the land to “seisin” were called estates.  Seisin is difficult to define, but a rough definition is:  the rights that we equate with ownership, combined with…  actual possession  Estates were distinguished by their duration  Life estates  Estates in fee Fee simple  Right to full possession and enjoyment of the land, to the exclusion of all the world (subject to certain legislation)  Power of total or partial alienation of his or her rights by will, or by grant inter vivos (subject to formalities prescribed by legislation, and rules of inheritance) Fee tail  Fee tail restricted inheritance to lineal heirs only  Abolished by the Conveyancing Act 1919 (NSW)

Life estates  Not an estate of inheritance, but an estate of freehold because it entitles the holder to seisin.  Two forms: ◦ Estate for the life of the grantee ◦ Estate for the life of another (pur autre vie) Reversions and Remainders  A reversion is the interest remaining in a person who has granted away less than the whole of his or her interest in the land (a ‘lesser interest’)  A remainder is the future interest in an estate given to a third party (and must be created in the same instrument that created the lesser interest) Mortgages  Some useful terms: ◦ Mortgagee (the bank or lender) ◦ Mortgagor (the person who applies to the bank for finance)  A mortgage is traditionally understood as a conveyance of property given as security for the payment of a debt or the discharge of some other obligation. ◦ Mortgages of old system title  conveyance of fee simple title to the mortgagee on the proviso that the mortgagee will return the fee simple title to the mortgagor on repayment of the debt ◦ Mortgages of Torrens title  takes effect as a statutory charge or security only – no conveyance of land to the mortgagee Leasehold  Lease must include: ◦ legal right to exclusive possession of the land; and ◦ period (term) that is certain (or capable of being rendered certain) and that is less than the term for which the landlord holds the land.  Types of leases ◦ Tenancy at sufferance ◦ Tenancy at will ◦ Periodic tenancy ◦ Tenancies for fixed term Lease v Licence Exclusive possession  Radaich v Smith (1959) 101 CLR 209 ◦ Parties cannot by the mere words of their contract turn it into something else. Their relationship is determined by the law and not by the label they choose to put on it. The true test of a supposed lease is whether exclusive possession is coferred upon the lessee. per McTiernan J  Since licensees lack exclusive possession, conventionally they are seen to lack standing to sue to recover possession, but note that a licence may be coupled with the grant of a proprietary interest ◦ Cowell v Rosehill Racecourse Co Ltd (1936) 56 CLR 605 Protection of interests in land  Actions for possession ◦ Sections 20 and 92, Civil Procedure Act 2005 (NSW) ◦ Rule 14.15, Uniform Civil Procedure Rules 2005 (NSW)

Trespass  Every unjustified entry directly by a person on land in the possession of another, which is carried out either intentionally or negligently, is a trespass  Plenty v Dillon (1991) 171 CLR 635 Nuisance  Attempt to balance the right of an occupier to use his or her land freely with that of his or her neighbour to enjoy his land without interference  Plaintiff must demonstrate ◦ That he or she has title to sue in respect of the nuisance ◦ That the defendant has interfered with a property right of the plaintiff ◦ The interference was substantial and unreasonable  Victoria Park Racing and Recreation Grounds Company Ltd v Taylor (1937) 58 CLR 479  Kent v Johnson (1973) 21 FLR 177 Summary  There is no universal definition of “property” – it can be thought of as a bundle or rights  Many different types of interests in property  Fee simple  Fee tail  Life estates  Reversions  Remainders  Vested interests  Mortgages  Leasehold  How to protect a property interest  Action for possession  Trespass  Nuisance Week Three  How to protect a property interest ◦ Action for possession ◦ Trespass ◦ Nuisance  Systems of title: ◦ Old system title ◦ Torrens title  Native title ◦ The Mabo decision ◦ The Native Title Act 1993 (Cth) Protection of interests in land  Actions for possession ◦ Sections 20 and 92, Civil Procedure Act 2005 (NSW) ◦ Rule 14.15, Uniform Civil Procedure Rules 2005 (NSW

Trespass

 Every unjustified entry directly by a person on land in the possession of another, which is carried out either intentionally or negligently, is a trespass  Plenty v Dillon (1991) 171 CLR 635 Nuisance  Attempt to balance the right of an occupier to use his or her land freely with that of his or her neighbour to enjoy his land without interference  Plaintiff must demonstrate ◦ That he or she has title to sue in respect of the nuisance ◦ That the defendant has interfered with a property right of the plaintiff ◦ The interference was substantial and unreasonable  Victoria Park Racing and Recreation Grounds Company Ltd v Taylor (1937) 58 CLR 479  Kent v Johnson (1973) 21 FLR 177

Old system title  Proof of title depends on two features: ◦ The land having been granted by the Crown ◦ The chain of title being unbroken  As a practical matter this can be a difficult task  English courts adopted a rule that required a vendor to trace title back in an unbroken chain to an “acceptable” documentary starting point not less than 60 years old  What is an acceptable documentary starting point? ◦ “it was of such a nature as to give rise to a reasonable supposition that the person taking title under it would have investigated the title and been satisfied with it” Re Marsh and Earl Granville (1883) 24 Ch D 11  In Australia, the period is now 30 years: s53(1), Conveyancing Act 1919 (NSW) Conveyances of Old system title  Must be by deed: s23B, Conveyancing Act 1919 (NSW)  Elements of a deed: s38, Conveyancing Act 1919 (NSW)) ◦ Most solemn form of document that a person can execute ◦ Signature ◦ Witness ◦ Sealing Torrens title  Developed to deal with the problem of the dependent nature of titles  First Torrens statute was enacted in South Australia in 1858  Introduced in NSW by the Real Property Act 1862 (NSW)  All land alienated in fee simple by the Crown is Torrens title  The Registrar-General of the Department of Lands maintains a register of all Torrens land: s31B(1), Real Property Act 1900 (NSW)  The folio contains:  a description of the land  a description of the proprietor  particulars of any interests affecting the land  Each folio is allocated a distinctive reference  The Registrar-General may issue a certificate of title (CT) – basically a copy of the folio of the Register

Effect of registration  Confers indefeasible title  Torrens system is one of “title by registration” ◦ title rests on the act of the Registrar-General registering an instrument rather than on the act of the party executing the agreement  Section 42(1) of the Real Property Act 1900 (NSW).  Confers indefeasible title  Torrens system is one of “title by registration” ◦ title rests on the act of the Registrar-General registering an instrument rather than on the act of the party executing the agreement  Section 42(1) of the Real Property Act 1900 (NSW). Bringing land under the Torrens system  All land alienated in fee simple by the Crown after 1 January 1863 is Torrens title  Land alienated by the Crown before that date is held under old system title  Land may be brought under the Torrens system by making a “primary application”: s14, Real Property Act 1900 (NSW) The traditional view of native title  Common law did not recognise indigenous property rights derived from traditional laws and customs: Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 The Mabo litigation Facts:  Meriam people occupied Murray Islands before the first European contact  Retain a strong sense of affiliation with their forebears  Groups of houses were organised in named villages  Queensland’s boundaries extended to include Murray Islands in October 1878  Laws of Queensland became the laws of the Murray Islands in 1879  The doctrine of terra nullius and the fiction by which the rights and interests of indigenous inhabitants were treated as non-existent has no place in the contemporary law of Australia  Recognition of the radical title of the Crown is consistent with the rights and interests of the indigenous inhabitants.  Extinction of native title is not due to the acquisition of sovereignty, but to its subsequent extinction by the Crown  Native title must be ascertained by reference to the laws and customs of the indigenous inhabitants  Rights and interests which constitute a native title can only be possessed by the indigenous inhabitants  When the tide of history has washed away any real acknowledgement of traditional law the foundation of native title has disappeared.  Sovereignty carries the power to extinguish native title Native Title Act 1993 (Cth) Section 223 The expression native title or native title rights and interests means the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where:  the rights and interests are possessed under the traditional laws acknowledged, and the traditional customs

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observed, by the Aboriginal peoples or Torres Strait Islanders; and the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and the rights and interests are recognised by the common law of Australia.

Section 225 A determination of native title is a determination whether or not native title exists in relation to a particular area (the determination area) of land or waters and, if it does exist, a determination of: a) who the persons, or each group of persons, holding the common or group rights comprising the native title are; and b) the nature and extent of the native title rights and interests in relation to the determination area; and c) the nature and extent of any other interests in relation to the determination area; and d) the relationship between the rights and interests in paragraphs (b) and (c) (taking into account the effect of this Act); and e) to the extent that the land or waters in the determination area are not covered by a non-exclusive agricultural lease or a non-exclusive pastoral lease—whether the native title rights and interests confer possession, occupation, use and enjoyment of that land or waters on the native title holders to the exclusion of all others. Extinguishing native title Confirmation of the extinguishing effect of previous “exclusive possession acts”: s23B  Freehold estate  Commercial lease  Exclusive agricultural lease  Exclusive pastoral lease  Residential lease  Community purposes lease  Any other lease that confers a right of exclusive possession A non-exclusive possession act will only extinguish native title to the extent that the act involves the grant of rights and interests that are inconsistent with native title: s23G Future acts  Proposed activities or developments that may affect native title are classed as 'future acts' under the Native Title Act 1993 (Cth)  Because claimant applications may take years in mediation or court proceedings before a final decision is reached, a system was devised to let claimants and project proponents negotiate about their interests while native title applications are being resolved. This is the 'future act process'.  Two main principles underly the future act scheme: ◦ The “non-discrimination” principle – acts that affect native title should be subject to the same standards as acts that affect freehold land (ss24MA – 24MD) ◦ The “non-extinguishment” principle

Native title holders may be entitled to compensation for loss or impairment of native title caused by the following:

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the doing of some government acts that affect native title where compensation is payable chiefly through the operation of the Racial Discrimination Act 1975 ◦ the validation of acts done since the commencement of the Racial Discrimination Act 1975 which were invalid because of the existence of native title (past acts) ◦ the validation of some acts done between 1 January 1994 and 23 December 1996 which were invalid because the future act steps in the Native Title Act 1993 were not followed (intermediate period acts) ◦ the effect of future acts on native title. Compensation is payable only once for the same act in an area.

This week:  Development of the equitable interest in land  Trusts  Leases ◦ Legal leases ◦ Equitable leases  Mortgages ◦ Legal mortgages ◦ Equitable mortgages EQUITABLE INTERESTS Nature of equitable interests Maitland has said that: An equitable right is not equivalent to a legal right; between the contracting parties an agreement for a lease may be as good as a lease. But introduce the third party and then you will see the difference. In Macmillan Inc v Bishopgate Investment Trust plc (No 3), Millett J said with regard to the difference between legal and equitable interests: The essence of the distinction is that a legal estate binds all the world, whereas an equitable interest binds only the transferor and those deriving title under him with notice of the interest. History of uses  The development of the equitable interest in land law began as a result of the many fetters that the common law placed on the holders of freehold estates  A “use” was where a holder of a freehold estate (grantor) conveyed land to a trusted person to hold for the benefit of the grantor and family. ◦ The person taking the legal estate was called the “feoffee to uses” ◦ The person entitled to the use of the land was called the “cestui que use”  The common law courts did not recognised the cestui que use as an interest in land, but the Court of Chancery did.  Equity follows the common law in terms of types of interests that could be created  Statute of Uses of 1535 vested the legal estate in the cestui que use.  Development of the “double use” to avoid the effect of the Statute of Uses.  Legal language began to change: ◦ Relationship called a “trust” ◦ Legal owner called a “trustee” ◦ The form of grant was to hold “in trust for”

 Statute of Uses was abolished in NSW on 1 January 1971 Creation of an express trust  The three certainties ◦ Certainty of intention: Commissioner of Stamp Duties v Joliffe (1920) 28 CLR 178 ◦ Certainty of subject: Mussoorie Bank v Taynor (1882) 7 App Cas 321 ◦ Certainty of object: McPhail v Doulston [1971 AC 424  Declaration of trust to be in writing: s23C(b), Conveyancing Act 1919  Transfer of trust or equitable interest to be in writing: s23C(c), Conveyancing Act 1919 Leases Requirements for a lease:  The date on which the lease commences must be certain, or capable of being rendered certain  Maximum duration must be creation (does not apply to tenancies at will or sufferance) Legal leases Old system title  Must be by deed: s23B, Conveyancing Act 1919 Torrens title  No requirement for a deed: s23B(3), Conveyancing Act 1919  Must be in writing: s23C, Conveyancing Act 1919  Lease > 3 years must be registered to pass a legal interest: s41, Real Property Act 1900  Lease > 3 years must be executed in the approved form: s53, Real Property Act 1900 Tenancies at will ◦ All leases not in writing are leases at will: s23D(1), Conveyancing Act 1919 ◦ Common law implies a lease from year...