Summary of property law designed for exams PDF

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These notes have all the law of property crammed into two A4 sheets of paper which you can print off and take into exams (only if your exam is open book). ...

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LC4Torrenstitle: S43 RPA A person who without fraud deals with the registered proprietor of land (as they see on the register) is not obliged to inquire into the circumstances in which the registered proprietor’s registration was obtained Frazer v Walker; Breskvar v Wall: Under torrens, the registration of that void transfer was sufficient to vest statutory or legal title in Wall and as long as he remained on the register, he was then able to subsequently create a valid equitable interest in Alban when he entered into a contract with them So what Alban had done was what they were required to do under the real property act – being to examine the folio of the register; and look into the mirror of title – and what they saw was that Wall was the registered proprietor – they didn’t see any historical or derivative material. S42 no requirement registered proprietor have provided value in NSW – Volunteers will also get indefeasibility. S42: in order to have indefeasible title, a registered proprietor of torrens title land must not be guilty of fraud as defined under the act LC4part 2: Volunteers Bogdanovic v Koteff – volunteer could claim indefeasibility Limits of indefeasibility Mercantile Credits v Shell option for lease renew for 5 year terms is given indefeasibility. It is ordinary incident of lease, and if people want to know what lease terms were, can search on register. It is so intimately connected with term granted to leasee so to be regarded as part of estate/lease No indefeasibility: guarantee in mortgage no indefeasibility; Clos Farming v Eaton: no indefeasibility for an agreement labelled as an easement when rights granted far too extensive for an actual easement. 2 elements mortgage: 1. Give property as security. 2. Personal right to repay loan which can be enforced if security not enough for repayment. – entitles mortgagee to sue if no repay. Mortgage documentation: registered dealing, memorandum registered S80A RPA, and lenders internal loan docs (eg. Loan application etc.) Forged Mortages Butt: forged docs must be “incorporated” into the registered mortgage. Matter of construction. S56C RPA places on the mortgagee an obligation to make sure that they take reasonable steps to identify the person who executed the mortgage. It provides that the mortgagee, before presenting a mortgage for lodgement under this act, must take reasonable steps to ensure that the person who executed the mortgage or on whose before the mortgage was executed as mortgagor is the same person who is or is to become the registered proprietor of the land that is security for payment of the debt to which the mortgage relates. Watt v Lord Death of the transferor after they’ve executed the transfer and placed the transferee in a position to become registered (for eg. By also handing over the certificate of title or providing access to it) will not render the transfer unregisterable or incapable of achieving indefeasibility even if the transfer was executed many years ago. LC4part3Exceptions indefeasibility: S42 RPA S42(1) Fraud, S42(1)(d) Short-term tnncies, in personam. Fraud definition: Waimiha Sawmilling v Waione It means dishonesty – a willful and conscious disregard and violation of the rights of another. Must be mens rea (mental). “mere” notice of existing unregistered interest is NOT fraud (s43) Willful blindness Assets Co v Mere Roihi There has to be notice of or wilful blindness to a fraud – not just wilful blindness to the fact that someone else may hold an unregistered interest (because section 43 says that notice of an unregistered interest is not fraud). Rgstred prop, person/institution with rgstrd mortgage, lease etc.) Bahr v Nicolay fraud must occur in process of getting onto register. Anything happen after rgstrion not relevant to fraud (but maybe for in personam) 3 years Short-term tnncy S42(1)(d) RPA a registered interest will be held subject to a short term tnncy if: elements: 1. The lease + any option does not exceed 3 years; 2. The tnnt is in pssn of property or entitled to its immediate pssn; 3. The holder of the registered interest, before becoming registered, had notice (including constructive) of tnncy against which he is not protected LC7Securities/Mortgages: Santley v Wilde "A mortgage is a conveyance of land or an assignment of chattels as security for the payment for a debt or the discharge of some other obligation for which it is given. This is the idea of a mortgage: and that security is redeemable on the payment or discharge of such debt or obligation, any provision to the contrary notwithstanding. That, in my opinion, is the law." Waldron v Bird 1. promise to repay money. 2. transfer of property as security. 3. An obligation on the mortgagee to retransfer or reassign the property when the obligation is discharged. Freedom of contract v Equity Lord Henley Vernon v Bethell someone who needs to borrow money is not going to be in position of equal bargaining power with the mortgagee – they’re going to agree to anything to get to borrow the money And it was for this reason that equity stepped in to ameliorate what was at the time a very harsh outcome under common law. Cntractual right to redeem (on the due date, a common law right). Equitable right to redeem This recognises the substance of a mortgage as a transaction by way of security only. It arises after the contractual date for redemption has passed. The equity of redemption – an interest in land – this is a true equitable interest in land – this is described as what is left in the mortgagor – once the mortgageor has transferred the legal estate to the mortgagee, they have an equity of redemption left - the ‘sum total’ of the mortgagor’s rights in the property, including the right to get the property back, but also the right to get the property back in the same state it was at time of mortgage. Intervention 1. Equity’s intervention via the creation of the “equity of redemption” and the refusal to enforce provisions which would amount to a penalty or a ‘clog’ on the equity of redemption; 2. legislation such as the National Credit Code – this closely governs relationship of lending and borrowing between lender and borrower where credit is provided for predominantly personal, domestic, or household reasons. 3. rise of the doctrine of unconscionability in equity. 4. The introduction of statutory actions for unconscionable conduct, for example s 20 and 21 Competition and Consumer Act, 2010 (formerly Trade Practices Act) Mortgage Elements: 1. A charge over “security” usually in the form of property owned either by the mortgagor or some other person 2. a personal covenant, or promise to pay; this will usually take the form of some sort of loan agreement. Torrens Mortgage: Torrens title mortgage: Title to the property remains at all times with the mortgagor (registered proprietor) and the mortgage is registered as a statutory charge. The mortgage will appear as an encumbrance in the second schedule to the folio of the register. - For both torrens and old system, as far as current conveyancing practices are concerned, the first mortgagee is entitled to possession of certificate of title. This is a security/safety measure. Because if first mortgagee holds CT, then they’re going to be aware of any other encumbrances that are to be registered. Eg. First mortgagee is Westpac – they’ll take CT and hold it in their safekeeping. And if anyone else needs to register a mortage, Westpac will be requested to produce the CT – which they may or may not do depending on their terms of agreement with the borrower. So if the borrower has entered into a ‘negative pledge’ (they wont create any other encumbrances), then Westpac will be entitled to not produce the CT and not to permit the registration of any other encumbrances. But if the borrower is entitled to create further encumbrances, then Westpac will produce the CT at the LPI to allow the registration of further encumbrances. Form v Substance: Once a mortgage always a mortgage Since equity always looks to the substance of a transaction rather than to the form, these will be applied whenever equity determines that the true nature of the transaction (whatever form it takes) is a loan on security. The onus of proof is on the person alleging that a mortgage was intended and not some other type of transaction. Some examples from the cases are Breskvar v Wall (1971) 126 CLR 376 and Abigail v Lapin [1934] AC 491. Gurfinkel v Bentley Pty Ltd High court had to decide what was the true substance of this transaction. Was it an outright sale with right of repurchase, or was it, in substance, a mortgage being a transfer in property by way of security only. Because if, in substance, it was a mortgage, then equity was going to give Gurfinkel the right to redeem his property even though the contractual date had passed Torrens Title Mortgage takes form of a statutory charge s56+57 RPA. Equitable Mortgages 1. Mortgage of an equitable interest in the land Agreement to grant a mortgage (the rule in Walsh v Lonsdale) “equity looks on that as done which ought to be done” in order to hold that an equitable mortgage comes into existence. 3. An informal written, but unregistered mortgage of Torrens title land - Under s23C and s54A of Conveyancing Act, if you can find the 4 Ps in writing (parties, price, property, promises; no matter what its written on, eg napkin), you will have an equitable mortgage. 4. Mortgage by way of deposit of title deeds and the application of the doctrine of part performance (s23E(d) Conveyancing Act). 5. Mortgage created by the principles of estoppel. Mortgage by deposit of title deeds Part performance: In mortgage area, what has traditionally and consistently being held to be a sufficient act of part performance is the handing over – ‘deposit’ – of title deeds. The depositing of title deeds is unequitable referrable to the existence of an agreement to grant a mortgage. you must prove on the evidence in front of you that the reason the title deeds or CT was handed over was so that it would be security for the performance of an obligation (INTENTION) Shulz v Turner. CLOGS ON EQUITY OF REDEMPTION Rice v Noakes [1900] Because equity of redemption is the right of the mortgagor to have their property returned to them once they pay off their mortgage, this is very closely guarded by the equity courts – and the equity courts would strike down any provisions in a mortgage which fettered or clogged the mortgagor’s right to redeem the property that’s under old system, or to clear their title of statutory charge if it’s torrens title clog=anything that means the property that is returned to the mortgagor once they’ve paid off their loan is different or less valuable in some way than the property that was originally mortgaged – or prevents the mortgagor from ever redeeming their property at all. Call Options options to purchase the mortgage property – an option granted to the mortgagee to purchase the mortgage property – this is obviously going to be a big clog on the right of the mortgagor to redeem their property – because if the mortgagee has the option to purchase it, and it is exercised, the mortgagor would never be able to get their property back. Early cases Void call options Early cases prohibited the granting of the option to purchase mortgage property entirely – they said that any provision in a mortgage which grants the mortgagee an option to purchase the property is void. They’re saying here that you simply can’t have a clause in a mortgage which gives the mortgagee the right to purchase it – equity simply will not enforce it. this seems like an intrusion into the freedom of contract – it’s telling people what they can and cannot agree to – and essentially you cannot, in mortgage, grant the mortgagee an option to purchase the property. Against Void Warnborough Ltd v Garmite [2003] House of Lords “A perfectly fair bargain made between two parties to it, each of whom was quite sensible of what they were doing, is not to be performed because at the same time a mortgage arrangement was made between them.” Westfield Holdings v Australian Capital TV (1992) 32 NSWLR Young J: “There does not appear to be any commercial reason why, in 1992, the court should invalidate any transaction merely because a mortgagee obtains a collateral advantage or seeks to purchase a mortgage property. Quite obviously, equity must intervene if there is unconscionable conduct. Again equity must intervene in a classic case where it can see that a necessitous borrower is not, truly speaking, a free borrower” Lift Capital Partners&Others v Merrill Lynch, SCNSW Barrett J if these clauses are going to be struck down, there must be an element of unconscionability – it’s not just an automatic ‘wiping’. Sun North Investments Pty Ltd v Dale: option was a penalty on mortgagor. Henry J declined to follow the Westfield decision. Since the mortgage and the option were not, in truth, two separate transactions the option was unenforceable. It was not necessary to find that the parties had acted unconscionably – it was sufficient that the transaction itself would lead to an unconscionable result. Donnelly v Australia and New Zealand Banking Group Ltd [2014] NSWCA HK AD$ convert currency. It was held bank not acted unconscionably by failing inform – the bank HAD explained the facility to her, and their allegedly failure to recommend that Mrs Donnelly obtain legal advice was not unconscionable in the circumstances of the case. Primary judge found that Mrs Donnelly was an intelligent and articulate woman and it was her choice not to seek advice from lawyers in her family – or a solicitor who was acting for her in another matter. They said that she may have had an imperfect understanding about how the whole thing worked, but they said that she was not in a position of special disadvantage. Refer to High Court in Kakavas v Crown Melbourne Ltd [2013] HCA "... equitable intervention does not relieve a plaintiff from the consequences of improvident transactions conducted in the ordinary and undistinguished course of a lawful business. A plaintiff who voluntarily engages in risky business has never been able to call upon equitable principles to be redeemed from the coming home of risks inherent in the business. The plaintiff must be able to point to conduct on the part of the defendant, beyond the ordinary conduct of the business, which makes it just to require the defendant to restore the plaintiff to his or her previous position." Re Funds in Court; Application of Mango Credit Pty Ltd [2016] NSWSC “[E]quitable intervention is not available simply to rewrite a contract or merely because a contractual stipulation, in the abstract, is “unreasonable. A burden on a mortgagor’s right to redeem is likely to be “unreasonable” in the current context only if it impedes redemption of a security to such an extent that it bears upon characterization of the parties’ transaction as a mortgage or otherwise defeats the purpose of the transaction” - Said if a transaction is properly characterised as a mortgage (and this was), then it may be necessary for equity to interfere with freedom of contract. He said that equitable intervention is not available simply to rewrite a contract or merely because a contractual stipulation in the abstract is unreasonable. He is suggesting that the Sunnorth investments, queensland line of authority is correct – and that if the transaction itself leads to some unconscionable result such that it bears upon characterisation of the parties’ transactions as a mortgage, it will be struck down. Kreglinger v New Patagonia Meat and Cold Storage Lord Parker: collateral advent be valid unless: unfair/unconscionable; or

it’s in nature of a penalty clogging the equity of redemption; or inconsistent with contractual/equitable right to redeem. Foreclosure right of foreclosure is given to a mortgagee under s100 CVA - In short, the effect of foreclosure is that the mortgagee gets the property in full satisfaction of the debt, and cannot thereafter, seek any shortfall from the mortgagor Power of Sale 3 steps: 1. the mortgagor must be in default under the mortgage, usually through non- payment of interest or principal. 2. There are strict rules about formalities such as the giving of notice. If these are not complied with then the mortgagee will not be able to exercise the power of sale. 3. The duty or standard of care that must be attained in the sale of the property to be met by the mortgagee. S11A CVA Mortgagee’s duties when selling the mortgagee must take reasonable care to ensure that the land is sold for either market value (if the property has a market value) or the best price that may reasonably be obtained. S114A purchaser’s title can’t be challenged if mortgagee didn’t uphold duties. But if a person suff losses as result of breach, then remedy in damages against mortgagee. LC8Leases/ResidentialTnnc: 2 requirements for lease: Crtnty drtion+grnt of exlpssn. Commencement of lease – commencement date + term duration must be or cable of being rendered certain at time lease takes effect. Skorpos v United Petroleum lease hasn’t commenced coz condition of test+assessments n ot satisfied so dismissed claim for rent and occupation fee. duration of war Lace v Chantler; until land required by council; end of peanut crop are void. Smallwood v Sheppards successive public holidays valid – can also have a lease for non-consecutive periods (eg. Lease for 6 days a week but not Sunday). Exclusive pssn Radaich v Smith substantive analysis of relationship/rights to determine if it is lease – nature of biz milk bar, premises lock up shop, occupier had control of premises during biz hours + other times too. Addiscombe Garden Estates Ltd v Crabbe ‘licence’ for tennis court 2 years with condition of monthly payments – exl pssn conferred – fees were actually rent. Banjima People v WA (No 2) native title claim over land which had interests/rights from other companies – if rights were exclusive (grant of a freehold interest or a grant of common law leasehold interest, or under a statutory lease (eg. Mining lease), then claim fail because connection broken. Native title existed because strangers needed permission from Banjima to use land. No lease: family member allow another occupy premise; employer allow employee occupy premise carry duties; legislation granting license over land say no grant of lease. Registering lease on torrens register doesn’t cure breach of substantive defect. For lease be indefeasible, must registered. S13 residential tenancy agreement grant someone right of residential occupation: oral/written, no require grant of exlpssn. S53 RPA must register lease more than 3 years. Parkinson v Braham lease less 3 years can also rgsted and be indefeasible by s42 – tenant must be in pssn or entitled to immepssn + The rgsted propter before becoming rgsted must have had notice against which he was not protected - This means that in order to be bound by an oral lease, the registered proprietor must have had notice of it at the date of completion/settlement. And if the tenant is in possession, then the registered proprietor, on completion/settlement, will have notice even if it’s only constructive notice because one of the inspections that you make as a reasonably prudent purchaser is an inspection of the property. Rgstrion cures formal defects in docmntion - Quest Rose Hill v Owners Corporation rgistrion cured unauthorized OC signature. Also confer indefeasibility on provisions of dealing inherently related to interest – Mercantile v Shell rgstrion gave indefeasibility 4xoptions to renew for 5 years. Types. Fxd-tm tncy. Periodic tncy runs from 1 prd to another (eg. Wk2wk, mth2mth) & continues indefinitely unless terminated by either party. Eqble leases Walton Stores v Maher – instrument prepared for legal lease but formal reqimnts not fulfilled (not rgisted) + sufficient acts of part performance (leasee relied on promise/representation to his detriment. Imp Covenants common law: for landlord - quiet enjmnt land; not to derogate from grant of the lease; fitness for habitation of premises; for tnnt – use premise in tnntlike manner; yield pssn to landlord at end of tnncy; 4 agricultural land, to cultivate in hubbylike manner. Qu en land: Residential Tenancies Act 2010 NSW s50. Non-dero from land: Retail Leases Act 1994 s33 Karraggianis v Malltown (apar...