Summary Australian Real Property Law topics 1, 7-10, 12-13 PDF

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Summary

Summary of topic 1 principles including case citation, lecture summaries and from required readings. - Summary of topic 7 principles including case citation, lecture summaries and from required readings. - Summary of topic 8 principles including case citation, lecture summaries and from required r...

Description

Topic 1: The concept of property law Definition: property is any type of right, interest, or thing which is legally capable of being ownership and usually of value.

Justifications for property law Theory

Philosopher

Description

Labour theory (Most influential)

Locke

Where a person creates something through their own labour/work they should be entitled to ownership of that thing = right to fruits of your own labour (invested labour – reward hard work). ‘the sower is entitled to reap what he has sown’

Utilitarianism

Bentham

It is the greatest good for the greatest number, the incentive effects of encouraging property promotes the greater effect for society. Moore case

Economic efficiency theory

Posner

In order to maximise the wealth of society, property rights should be exclusive, universal and transferable. Exclusivity is important for economists because without it there is no incentive. No push for innovation if property is taken. This empowers successful business operator to direct economic activities but does not demonstrate that greater productivity is necessarily achieved by private ownership of resources

Personhood theories

Heigal

Property is a basic human right necessary for human expression and freedom we only achieve self-realisation through personality, reason and free will (reflected in covenants) Supports the unequal distribution of property and is not a sound argument for private property but reflects reality. Cohen argues that a regime of private property necessarily limits the freedom of the less fortunate

First occupation theory

No philosopher

First possession/occupation is enough to justify legal protection of the claims of the possessor. This theory is based on natural law and idea of Finder’s Keepers. If you find something you can keep it, maximise the use of resources. If something is left unused someone should be able to effectively use that asset

Book: principals of property pg13

Characteristics 

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Ownership entails the right to:  Use  Exclude; and  Alienate (dispose of one’s interest) Don’t need all three to form a proprietary interest (Milirrpum) Can derive from own system of law (Mabo (No 2) Blackburn J in Milirrpum) Property rights are rights in rem (person/thing):enforceable against the whole world and superior to contractual rights (King v David Allan)

Topic 1: The concept of property law New forms of proprietary rights Recognition by court: (reluctant)  To recognise new rights courts must be prepared to consider:  Subject of property  Object of property  Various rights/entitlements attached to object for benefit of the subject  Examples  Restrictive covenants: a legal obligation imposed by the seller upon the buyers of a real estate to do or not to do something  Formal agreement (covenant) which limits how you use a parcel of land  Equity: runs with the land, therefore binds future owners (Tulk v Moxhay)  Native title: Mabo HC re-characterised the Crown’s title so that native title could exist concurrently  Property in spectacle: not recognised (Victoria Park Racing; Lenah Meat Games) natural rights of land do not include freedom from view  Property in human body: no property interest in body part once removed from the body (Moore) but sperm extracted from the human body could be property (Bazley)  Digital property Recognition by parliament  

Intellectual property rights New property rights in environmental goods

Constitutional protection of property rights 

Commonwealth: 61 (16) c’th cannot acquire property except on just terms, can oppose price but not acquisition

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Victoria: Vic Constitution act no constitutional protection requiring state government to acquire your property on just terms Land acquisition and Compensation act 1986: s30 same effect as c’th constitution but protection is lesser because it can be amended whereas the c’th cannot without referendum

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Human rights: ICCPR and responsibility, common law and statute protect these acts. s20 charter of HR cannot be deprived of property unless under law, must consider charter so that its purpose is not contradicted

Topic 1: The concept of property law Doctrine of fixtures: chattel v land   

Definition: a fixture is a chattel so attached to the land it becomes part of the land (corporeal hereditament). Ownership of land entitles ownership of fixture Applies in the absence of clear contractual /statutory guidance: can contract out of doctrine Statutory definitions of land  s18 Property Law Act 1958 (Vic): includes tenure, mines, minerals, buildings/part of building, other corporeal hereditaments, rent and incorporeal hereditaments, easement/right/benefit /privilege from the land  s38 Interpretation of Leg Act 1984: buildings & other structures permanently land covered w water/ any estate, interest, easement, servitude, privilege or right in or over land

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CL maxim: quicquid plantatur solo, solo cedit (whatever is attached to land forms part of land) CL presumptions: both rebuttable but allocate onus of proof  if chattel is attached, there presumption that it is a fixture. Onus lies on person contending it to be a chattel (NAB v Blacker) = more securely attached, stronger presumption  Resting on own weight: presumed a chattel (Blackburn). Onus lies on party contending it to be a fixture (NAB v Blacker)

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Two stage test to determine whether a fixture or a chattel: would be crude and unnecessarily rigid to just be one test) (Holland v Hodson)  Degree of annexation  Manner in which attached to land  Greater degree of annexation, greater the presumption of it being affixed (Hodgson per Blackburn)  Would removal cause damage to land or building? Suggests it’s a fixture (NAB)  Whether removal would destroy or damage item  Whether cost of renewal would exceed value of attached property  Object of annexation:  Intention of parties: what a reasonable person would have intended in attaching the object to land. Consider all circumstances to determine OBJECTIVE intention Evidence can submit: Standard practise, industry of practise, expensive product may be affixed, put there to improve property, personal value of item, oral evidence (viva voce)  Affixed to land to be reasonably enjoyed not to form part of estate (Lee; Conti)  Nature of the article (Belgrave)  Position of permanence or temporarily placed  Purpose/function of annexure Removal of fixtures  CL position: tenants who install fixtures without landlord’s consent in breach of lease, especially implied covenant to use premises in ‘tenant-like manner’ (to keep in a good state of repair)(usually expressed in the lease)  Fixtures of tenant removable s15 PLA: subject to terms of lease, a tenant who installs fixtures in leased premises retains ownership of them, can remove them during time in possession but not without consent afterwards  Residential Tenancies Act 1997  s64(1): subject to terms of lease (or another agreement b/w LL & tenant), a tenant must not install fixtures without landlord’s consent  s64(2): If tenant has renovated or altered premises or installed fixtures with or without landlord’s consent, must restore the premises to their previous condition or provide the LL with an amount equal to the reasonable cost of doing so 

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Topic 7: leasehold estates Leasehold interest or contractual licence? 

Leasehold interest: granted by the registered proprietor of fee simple to another person which allows them exclusive possession of land for a certain period. T has a contractual right & proprietary interest

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Contractual licence: permission to be on land/do something but NO PROPRIETARY INTEREST T can dispose of interest  By assignment: disposes entire interest, purchaser = assignee. Creates Privity of estates not K  By sublease: T disposes of interest in temporal terms. Rights and duties b/w LL and T are not affected. There is no Privity of contract or estates b/w subtenant and LL.

Classifications of leases 

Fixed term: fixed duration and ceases when term expires  Can only be created expressly and exact date of termination must be known or ascertainable (Lace v Chantler) but need not be one continuous period (Smallwood)

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Periodic term: consist of a number of shorter definite periods e.g. months, a week, a years  CL leasehold estate created in five ways:  Express agreement b/w parties in a deed  Created orally at commencement of agreement  Where T enters into possession and pays rent pursuant to fixed-term lease invalid at CL  T enters into possession of premises prior to signing of formal lease  Fixed-term lease expires and T remains in possession of premises with consent of LL and pays rent of over-holding period  Court determines type of lease based on intention of the parties (evident by payment of rent) Tenancy at will: tenant in possession of land with consent of landlord but not paying rent  Can be implied by law or by expressed agreement  May still be negotiating term of agreement  No party needs to give notice for terminating

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 Merely licence allowing tenant to be in possession but does not grant proprietary interest Tenancy at sufferance: T ‘over holds’ without LL express consent or dissent / does not pay rent  If landlord later gives consent, becomes periodic lease  Distinguished from a trespasser because original entry lawful

Characteristics of leases In Australia, if legal right to EP has passed for determinate period, however short, it will be a lease. 

Exclusive possession: ability to control the property to the exclusion of all others (Street v Mountford)  Look at substance rather than form of lease (Radiach): objective inquiry  Per Windeyer: must be determined based on intention & rights afforded. If lease is in writing, ascertain intention by construing what rights the document creates by applying ordinary principles of contractual construction  Per McTiernan: three factors  substance of agreement (res or retail)  what the agreement contemplates  responsibilities confers  Indicators of exclusive possession:  Physical control of entry (Radiach) e.g. right to eject and suit in trespass. Reservation to LL is not inconsistent with EP so long as T can exclude LL (Windeyer)  Right to quiet enjoyment (uninterrupted tenure for duration of lease)  Obligation to yield up premises on expiry of lease

Topic 7: leasehold estates 

Certainty of duration  Commencement date & lease termination must be known before commences (Lace v Chandler)  Applies to periodic leases as well as each period has a certain duration (Prudential)

Leasehold covenants: Formal agreement of promised deed or seal 

Express covenants  Parties free to determine agreement: based on principle of freedom of contract  Landlord covenants include:  Allows tenant quiet enjoyment of property (uninterrupted exclusive possession)  Makes structural repairs: T conveyances obligation to pay rent and to make repairs but not structure just normal repairs  Tenant covenant include:  Requirement to pay rent  Make non-structural repairs  Use premises for specified purpose only  No assigning or subletting without landlord’s consent  Resolving issues:  Any ambiguity read in favour of the tenant (Downie v Lockwood)  Determined in light of the whole lease and SC (Iggulden v May)  Any term of lease will be construed against the coventor in favour of covenatee  Doctrine of mutuality: enforceable at common law, e.g. performance of one covenant conditional upon the performance of another but in absence of such express agreement, court will treat each covenant independently

Implied terms make up for when the lease is silent as to terms of the formal lease 

Implied by statute  Leases of Torrens System Land  TLA s67  A pay rent  B lessee kept and yield up property  C lessor can inspect once a year  D if lessee is in a arrears for more than a month, LL can re-enter  TLA s71(4) sublessor during term to pay rent and perform covenant (RTA)  Residential tenancies  Imply tenant will pay rent: does not alter CL in absence of express terms, rent is not payable in advance but in arrears at end of each period specified for payment  Implied instrument of lease that tenant will keep an yield up leased property in good and tenantable repair, accidents, and damage from storm, tempest and reasonable wear and tear excepted  TLA s67(1)(c) Landlord right to entry for inspection: may enter once a year at reasonable time of day without notice  Landlord right to re-entry for breach of covenant (other than payment of rent) 1 month  Retail tenancies

Topic 7: leasehold estates 

Implied by common law  Implied by CL custom or usage  Implied in fact to give business efficacy to contract/lease  Term implied by fact are based on imputed intention of the parties  Test per BP refinery v Hastings Shire Council 1977  Must be reasonable and equitable  Necessary to give business efficacy to K (not implied if K effective without it)  So obvious it goes without saying  Capable of clear expression  Must not contradict express terms  Implied by law irrespective of parties’ intentions  Implied by virtue of K’s nature /K’s obligation  Can be implied even if not intention of parties’  Terms don’t apply if express covenant deals with same matter  Obligation of the landlord  Implied condition of fitness for human habitation at commencement of lease  Smith v Marable: furnished premises should be fit for habitation  Now applies to defect but not defective furniture or appliances e.g. infestation  Dispute over whether applies to furnished and unfurnished premises  Implied covenant for quiet enjoyment (Hawkesbury) – RTA s67  Quiet: means peaceful or freedom from interruption rather than without noise  Not a guarantee against all disturbances from LL but non-payment does not remove obligation LL must ensure T can occupy & enjoy without disturbance/interference by LL or those responsible  Breach does not need to be physically there e.g. K someone else (JC Burndt)  Question of fact as to whether it amounts to substantially interference (Hawkesbury) and can be by acts and omissions  Implied obligation not to derogate from grant (Aussie Traveller; Nordem; Purple Tangerine)  ‘a grantor having given a thing with one hand is not to take away the means to enjoying it with the other (Bown LJ) 

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concerned with use of the retained part of the land which makes the demised premises less fit for the purpose for which they were let obligation does not extend to special branches of business which call for extraordinary protection (Aldin v Latimer, Clark, Muirhead)

interference must be substantial and mere interference with convenience or amenities (privacy/ tranquillity) not sufficient (Norden)  Obligation of tenant  Implied covenant to use premises in tenant like manner  Obligation to make fair and tenantable repairs (Gregor v Mighell)  ‘Tenant must take proper care of the place’ (Denning)  Denning illustrations  Winter holiday  turn off water/empty boiler  Clean chimney and windows  Unblock sink  Not fall into disrepair  Applies to intentional/negligent acts 

Topic 7: leasehold estates  Extends to family/guests  If tear/wear due to lapse of time then not liable  Implied duty not to commit waste  Tortious not contractual doctrine  Places obligation on T to ensure estate is handed on in a reasonable condition  Implied covenant to yield up possession  Requires tenant not merely to vacate premises but to ensure landlord is able to retake possession  At expiry of term, lessee bound to deliver vacant possession to lessor. This obligation extends to subtenants and other occupiers and thus he lessee must see that such possessors has vacated (Granger) Retail tenancies  Legislation bestows minimum term of lease for each tenant (five year duration)  Regulates option to renew – for Victoria, there must be a date to which this right is exercisable, manner in which the option is to be exercised, terms and conditions upon which lease is to be determined 

CL right to negotiate freely as to rent is compromised by statute – for Victoria, current market rent is taken to be rent free and open market b/w wiling landlord and tenant

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Every lease is taken to include certain specified covenants by landlord regardless of parties’ intention No additional charges to be imposed on tenants – for Victoria declares void any provision in retail premises lease to extent that it purports to indemnify or require tenant to indemnify landlord against any action, liability, penalty, claim or demand

Assignment of leases: T disposes entire interest (creating privity of estates not K) In absence of express covenant, CL allows LL and T to dispose of all or part of their interests to a third party by way of assignment (does not apply to tenancy at will or sufferance) 

Assignment of Lease  s144 T cannot assign lease without LL’s consent  LL cannot unreasonably withhold consent, burden lies on T  Assignment would not necessarily lead to breach  Trying to force T to surrender lease  Want to increase value of reversion  Condition /fine to get consent

Enforceability of leases after assignment 

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Assignment does not create a new lease: covenant can remain binding on LL or T even after assignment on the basis of Privity of contract (doesn’t alter relationship)  Privity of K: contractual relationship (with effect on land)  Privity of estates: interest in land Original LL and T  Enforceability of covenants depends on their wording  Enforceable if includes success in title (covers breach after assignment, T liable)  Unenforceable if only applies while T is a T  Implied covenant that assignee indemnifies T  s72 registered lease  s77 unregistered lease covers non-payment of rent by A

Topic 7: leasehold estates 

LL and A  Privity of estates allows burden and benefit of certain covenants to run with the lease  T not liable then LL can hold A liable  Only covers covenants that touch and concern the land meaning subject matter of grant is referred to in the covenant

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Assignee of reversion  Not based on Privity of contract but Privity of estate (so alters relationship)  s141 PLA states that rent and benefit of T covenants ‘have reference to the subject matter of the grant’ (i.e. touch and concern the land) run with the reversion  s142 PLA states that obligations and burdens of the LL covenants that ‘have reference to the subject matter of the grant’ (i.e. touch and concern the land) run with the reversion

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 These provisions apply to leases under the torrens system (s136 PLA) Touch and concern the land  If affect LL as LL or T as T then touches and concerns the land  Three step test from PNA Swift investment, affirmed in Gumland  1. Covenant beneficial for reversioner or T for time being only  2. Affects nature, quality, mode of user or value of land (need only be one  3. Covenant not personal in nature (not based on specific T or LL)  4. Rent, fact that covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as the three foregoing provisions are satisfied and covenant is connected with something to be done on, to or in relation to the land DO touch and concern Landlord’s covenants

Tenant’s covenants

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Consent to assignment of lease not to build on certain parts of neighbouring property, to supply rented premises with good water

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To a...