CONTENTS:( TENURE,(ESTATES(AND(NATIVE(TITLE(((4( … · −...

CONTENTS:

TENURE, ESTATES AND NATIVE TITLE ................................................................................. 4 Doctrine of Tenure ..................................................................................................................... 4 Doctrine of Estates ...................................................................................................................... 6

Fee Simple .................................................................................................................... 6 Life Estates ................................................................................................................... 6 Simultaneous Estates ............................................................................................................. 6

Doctrine of Native Title ............................................................................................................. 7 Future Acts .......................................................................................................................... 8

THE TORRENS TITLE SYSTEM ............................................................................................ 10 Old System Title ........................................................................................................................ 10 Torrens Title .............................................................................................................................. 10 Essentials (Register, Folio, Certificate of Title, Registration) ................................... 10

INDEFEASIBILITY .............................................................................................................. 12 Application ................................................................................................................................. 12 Fraud ............................................................................................................................................ 12

Frazer v Walker .......................................................................................................... 12 Breskvar v Wall .......................................................................................................... 12

In Personam Exception .......................................................................................................... 13 Statutory Exceptions ............................................................................................................... 13

PRIORITY RULES ............................................................................................................... 14 Part performance .................................................................................................................... 14

CAVEATS .......................................................................................................................... 15 Priorities ..................................................................................................................................... 17

SECTION 43A ................................................................................................................... 19

MORTGAGES ................................................................................................................... 20 Checklist ...................................................................................................................................... 20 Right to Redemption and Redeem ..................................................................................... 21 Formalities OST ........................................................................................................................ 21 Formalities TT ........................................................................................................................... 22 Indefeasibility ........................................................................................................................... 22

Fraud ......................................................................................................................... 22 All Monies Mortgages ................................................................................................ 23

Rights and Remedies .............................................................................................................. 25 Priorities & Tacking ................................................................................................................ 28

CO-‐OWNERSHIP ............................................................................................................... 30 Checklist ...................................................................................................................................... 30 Co-‐owner or Joint Tenant? .................................................................................................... 31 Formalities ................................................................................................................................. 32

Delehunt v Carmody ................................................................................................... 32 Indefeasibility ........................................................................................................................... 33 Severance .................................................................................................................................... 33

Corin v Patton ............................................................................................................ 33 Mcoy v Caelli .............................................................................................................. 34

Ending Co-‐ownership ............................................................................................................. 36 Dividing the Proceeds ............................................................................................................ 36

Ryan v Dries ............................................................................................................... 38

LEASES ............................................................................................................................. 39 Checklist ...................................................................................................................................... 39 Formalities ................................................................................................................................. 40 Licence or Lease? ..................................................................................................................... 41 Lease Requirements ............................................................................................................... 42

Raddaich v Smith ....................................................................................................... 42 Swan v Uecker ............................................................................................................ 43

Indefeasibility ........................................................................................................................... 44 Does the lease confer obligations with covenants? ...................................................... 45

Aussie Traveller v P/L v Marklea P/L .......................................................................... 45 Assignment ................................................................................................................................. 47 Termination ............................................................................................................................... 50

Gumland Property Holdings Ltd v Duffy Brothers Fruit Market ................................. 51 Shevill v Buidlers Licencing Board .............................................................................. 51 Progressive Mailing House v Tabali ........................................................................... 52

EASEMENTS ..................................................................................................................... 53 Checklist ...................................................................................................................................... 53 Positive or Negative Easement? ......................................................................................... 54 Characteristics of an Easement? ......................................................................................... 56

Clos Farming Estates Pty Ltd v Easton ....................................................................... 58 Resigtrar General v JEA Holdings (Aust) Pty Ltd ......................................................... 58

Formalities ................................................................................................................................. 58 Indefeasibility ........................................................................................................................... 59

Williams v STA ............................................................................................................ 60 Right of Way ............................................................................................................................... 61

Westfield Management Ltd v Perpetual Trustee Co Ltd ............................................ 61 Extinguishment ......................................................................................................................... 62 Remedies .................................................................................................................................... 63

COVENANTS .................................................................................................................... 65 Formalities ................................................................................................................................. 66 Running with the Land – The Six Steps ............................................................................. 66 Extinguishment ......................................................................................................................... 69 Enforceability by Third Parties ........................................................................................... 70

Remedies .................................................................................................................................... 70

− Real Property: Is land and interests in land. Real property is subdivided into two groups

– Corporeal hereditaments (tangible real property i.e. land) and Incorporeal hereditaments (intangible interests in lands i.e. easements or rights of way).

o Can include: § Land § Improvements § Fixtures – starts personal property and ends up part of/being ‘affixed’

to the land § Intangible Rights – rights to ownerships, things below the surface,

airspace, easements (right to cross land/right of passage) etc. § Ownership grants rights – e.g sell mortgage

o Concerns land and interest in land o Property right is a permanent rights

Doctrine: Set of rules that come together in a certain area –‘body of rules’ DOCTRINE OF TENURE − Tenure: Is a system where land is held ‘of the Crown’

o The Crown holds all land and people have interest in land via grants o Individuals hold a ‘use right’ known as an ‘estate’ the estates are held of the

Crown – can only get estate if Crown gives it to you History − The doctrine of tenure Is ‘a system of land holding where ‘the king holds himself land

which is in every sense his own’ (Maitland and Holding) − Battle of Hastings – in 1066 William the Conqueror sailed from Normandy and defeated

King Harold of England with an arrow to the eye. This brought Norman French land law to England

− Move to a Feudal System – legal fiction arises and King William becomes owner of all land in England by right of conquest and then grants everyone rights to the land

o Land holding system of France becomes landholding system in England − Based in feudalism where there are Three principles of tenure:

1. No one owns land absolutely (allodial) 2. All land is held of the crown 3. No one holds land except of the Crown (i.e. by grant)

− Feudal Tenures: o The king owned all land absolutely o He granted is subjects (‘tenants’) the right to use the land, not the land itself o The right granted was an ‘estate’ o In return, the tenant owned the King Obligations o Embedded into Australia when England settled

− Three courses of rights in or in relation to land in NSW: o The common law brought from England o Enactments of the local legislature and decisions of the local courts; and o Native title

Transmission to NSW

TENURE, ESTATES AND NATIVE TITLE

− The common law of England was brought to Australia with settlement (settlement as opposed to conquered because the land was terra nullius)

o Mid 1500’s the Crown owned everything above and below your land, gold/silver, minerals, oil, gas of commercial value, swan, sergeant (fish producing caver), unicorn

o Law v official policy – policy decision that Australia was a settled colony, therefore, there was settlement where the acquired land received as much of the law of England as was applicable to he colonists own ‘situation and condition of the colony’

o An Englishman brings as much of the common law with them as relevant to the circumstances of the colony (Cooper v Stuart (1889) 14 App Cas 286)

Attorney General v Brown (1847) 1 Legge 312

Facts: Brown could do anything on land but couldn’t mine coal. Brown found coal on his land and mined it. Crown had sovereignty but not ownership of the land – Crown did not have possession. Brown argued that when the crown acquired NSW it did not get ownership of land, therefore they did not need the land to make laws, they only need sovereignty. Crown argues that it belongs to the Crown as land was granted to him. All land in the colonies must be held by reason of Crown Grant. Issue: Was there intrusion of the Crowns land by Brown? Held: The Crown was within their rights as sovereigns to create a reservation clause Principle: ‘Feudal tenure’-‐ Feudal land is part of the law of England and was brought the coloners as they brought the law of England à therefore Crown has sovereignty and ownership.

Gove Land Rights Case (1971)

Importance: Extinguishment is a legal (not factual) test to be determined at the time of the grant (Brown HCA 2014)

Mabo v State of Qld (No 2) (1992) 175 CLR

Importance: Recognised an ongoing Indigenous connection to land as giving rise to a form of title known as ‘native title’ based on Merriem People (market gardeners). They have individual lots, which were marked either stones or some natural feature. The land could be transferred to others within their cultural group and could be devolved on death under their laws. P argued that the traditional rights to the land survived the Crowns coming to Australia. Crown acquired Radical Title but not beneficial ownership of the land. Issue: Distinction between ownership and sovereignty to determine if the land title rights of indigenous inhabitants were recognised by the common law of Australia Held: Brennan J: ‘To abolish tenure would fracture the skeleton of common law’ and overrule the decision made in AG v Brown. Radical Title came about where the Crown had beneficial interest in all lands and could not extinguish Aboriginal land rights, unless the power to grant was exercised. Within the group there was exclusive possession and it could be alienable.

Radical Title − Gives the Crown power to create interests in land and take them away − Crown did not acquire absolute ownership over all of Australia because there were

other owners (no terra nullius) − Crown acquired radical title, which is the ‘concomitant’ of sovereignty

− Therefore, Radical Title allows the Crown to still have a notional interest in the land without having full ownership therefore allowing Native Title to exist

Sovereignty − Gave rise to radical or ultimate title rather than absolute beneficial ownership.

Therefore, it was only where native title was extinguished altogether that Radical title became absolute ownership.

− This allowed the court to recognise native title rights while retaining the basic structure of he common law property system

DOCTRINE OF ESTATES − Estates: Are different bundles of rights and powers exercisable in respect of land that

proprietor holds ‘of’ the Crown e.g. possession, alienability, right to derive income. o Estates are based on time – difference between the estates is the time they exist o More than one estate can exist at any one time in one piece of land

Freehold Estates (Uncertain Duration) − Fee Simple:

o ‘Rights of Ownership’: This has the most rights out of any estate and can be passed on:

§ Exclusive possession (excludability): The right to exclude all others § Alienability/Alienation: All property is inherently alienable, therefore all

property can be bought, sold, leased, mortgaged etc (Can sell reversionary interest but cannot grant possession)

o Past à given and denoted by ‘to A and his heirs’ (could not create fee simple without word ‘hiers’ as it would not be an inheritable state)

o Now à Under Conveyancing Act s 47(1), may be given ‘to A in fee simple’ o To end an estate in fee simple is when it is sub-‐divided à it becomes two new

estates in fee simple o Transactions can happen: Inter vivos (transaction between people who are alive)

OR By will − Life Estates

o A freehold estate for the life of the person granted (after their death, the estate in fee simple falls back on the remainder-‐man and can be inheritably alienable)

o Two types: § Life Estate: ‘to A for life’ à Estate ends when A dies -‐ uncertain when

duration ends § Life estate pur autre vie à to A for the life of B à Duration is measured

by the life of another/until B dies o Past à Created by: ‘to A for the life/during the life of A or B’ in the case of pour

autre vie (for a life of another’) o Now à Under Conveyancing Act s 47(2), to show an intention to create a life

estate o Cannot change the state of the land/ fundamentally change the land i.e.

knocked down the house and turned it into something else o Leasehold land: Certain duration e.g. 99yrs of lease purchased

− Simultaneous Estates o Can have more than one estate with respect to land at any possible time o Two types:

§ Reversion: ‘To A for life; reversion to grantor’ (grantor has a fee simple in reversion)

• At the end of the life estate, possession will revert from B to A • Just because only one person can have possession, does not

mean they are not simultaneous estates, both which can be sold or mortgaged

§ Remainder: ‘To A for life, remainder to B in fee simple’ ………… SEE FULL NOTES FOR MORE

BEFORE: ‘Old system title’: − What is it? Title was given and then you could register it.

o Had to establish a ‘good chain of title’ through a ‘good root of title’: the sequence of title to a property from the present owner back to the original owner of the property.

o All documents needed to be present, validly signed, not forged. o Any of these problems would leave the purchaser vulnerable to someone else

proving that they had a better claim to the estate or interest or that the estate was subject to another interest

NOW: TORRENS TITLE − What is it? A system of titling by registration. It is the state of NSW giving you title to be

the owner (Cth v NSW per Isaac J) − Invented by Sir Robert Torrens and introduced in SA in 1888 − ‘Torrens’ does not appear in the RPA − Designed: as a ‘one stop shop’ – the purchaser does not need to investigate the

history, only need to look at one document so that once the purchaser registered the estate or interest then they held it free from all other interests subject minimal exceptions

Before: Manual System of Titling (Before Computerisation) − All grants of land made in NSW after 1 January 1863 are held according to the Torrens

system and under the provisions of the Real Property Act 1900 − After this, all land was granted as Torrens Title land and governed by the provisions of

the RPA 1. When an estate in fee simple was first granted, a folio is created and the estate is given

a Volume and Folio Number E.g. Vol. 649 Folio 245 2. Owner of a parcel of land was given a ‘certificate of title’ which was an exact duplicate of

a folio in the Register or titles kept by the Registrar of Titles 3. When any dealings happened which affected that parcel, the folio was updated and new

matching CT was given Now: Integrated Titling System − Same process but the distinctive reference is the Lot on Plan Number E.g. Lot 29 on DP

667 − All ‘Lots’ are identified on ‘Plans of Survey’ − Plan is a ‘Deposited Plan’: When new parcels of land are created, all parts of existing

land are to be used for a new purpose, therefore new plan must be prepared − The plan is registered and creates the legal identity of the land

THE TORRENS TITLE SYSTEM

ESSENTIALS 1. The Register − What is it? Central to the Torrens System à s 31B The Register (1) The Registrar-‐General shall cause a Register to be maintained for the purposes of this Act. (2) The Register shall be comprised of:

(a) folios, (b) dealings registered therein under this or any other Act, (c) records kept pursuant to s 32(7) (d) instruments of a prescribed class, and (e) records required by the regulations to be kept as part of the Register

(3) The Registrar may be maintained in/upon any medium or combination of mediums capable of having information recorded in or upon it à s 12D Registrar-‐Generals Guidelines (1) The Registrar is permitted to provide guidance and information with respect to:

(a) approved forms (b) the preparation and lodgment of documents and plans for registration or recording,

and (c) the practices and procedures of the Registrar-‐General in the exercise of titling and

registry functions 2. The Folio − What is it? Land is considered to be registered in NSW on creation of a folio for that

parcel of land − Each folio is a parcel of land and more that one estate can be recorded on the folio à s 32 Folios of the Register (1) The Registrar-‐General creates a folio of the Register for land by making a record of:

(a) a description of the land and of the estate or interest therein for which it is created, (b) a description of the proprietor for the time being of the estate or interest and the

fact that any such proprietor is a minor if the Registrar-‐General knows that to be the case, and

(c) such particulars, as the Registrar-‐General thinks fit, of: (i) other estates or interests, if any, affecting the land, and (ii) other information, if any, that relates to the land or any estate or interest and is

included in that record pursuant to this or any other Act and by allocating a distinctive reference to the record so made 3. Certificate of Title − What is it? The Certificate of Title recites the details in the folio. Can only be held/issued

between the owner and the mortgagee (the bank) à s 33 Certificates of Title (1) The Registrar-‐General may…from time to time issue a certificate of title for the land…in any folio of the Register and may, for the purposes of subsection (4), require the production to the Registrar-‐General of any certificate of title. (2) A certificate of title shall be in an approved form. (4) When the Registrar-‐General issues a certificate of title, the Registrar-‐General can cancel, wholly or partially, any certificate of title that is produced or available (5) Notwithstanding subsection (1), the Registrar-‐General can issue a certificate of title for the land comprised in a folio of the Register upon the written request of:

(a) the registered proprietor of that land, or

(b) any registered mortgagee, registered chargee or covenant chargee of that land.

− Each property under the Torrens Title System has a Certificate of Title which lists: o SCHEDULE 1:

§ The registered owner – vendor or purchaser § At the time of registration of sale, the vendors name is erased from Sch

1 and replaced by the purchasers name o SCHEDULE 2:

§ Mortgages § Borrowing, with property used as a security § Leases § Easements § Swapped rights on land § Restrictive covenants

− Some steps have been taken towards conversion to eCTs à 33A E-‐Certificates − So far there has not been any notice under s 33AAA to phase out paper certificates 4. Registration − What is it? The person who is the registered owner of the estate or interest is known as

the registered proprietor − You can be the registered proprietor of any estate in fee simple, but equally of a life

estate, OR of any interest which is not an estate that can be registered: a mortgage; a lease; an easement

− If you are the registered proprietor you have indefeasibility ………. SEE FULL NOTES FOR MORE

HOW TO APPLY INDEFEASIBILITY? 1. The registered proprietor will takes free from any estates and interests unless they are recorded in the

Register (s 42(1)) 2. Even with notice of an interest (s 43) 3. Unless there has been fraud (s 42(1) & 43) OR one of the exceptions in s 42(1)(a)-‐(d) applies OR an in

personam exception can be made out.

FRAUD à s 42 Estate of Registered Proprietor Paramount (1) The registered proprietor of any estate or interest in land shall, except in the case of fraud, hold the same, subject to other estates as are recorded but free from all other estates and interests not recorded à s 43(1) Fraud and Notice Except where there is fraud No person dealing with the registered proprietor needs to inquire into the circumstances surrounding registration nor do they need to see the application of the purchase moneys or be affected by notice of a trust or unregistered interest… or shall be affected by notice direct or constructive of any trust or unregistered interest. Any rule of law or equity contrary to this; and the knowledge that any such trust or unregistered interest is in existence is not imputed as fraud.

1. Define – ‘what is fraud’? Dishonesty and moral turpitude 2. Who was fraudulent? ‘The fraud must be brought home to the registered proprietor’ 3. Was there knowledge of fraud?

a. Actual fraud: Dishonesty, consciously dishonest act or moral turpitude (Stuart v Kingston (1923)) b. Knowledge of fraud and willful blindness

i. Did the purchaser deliberately shut their eyes for fear of finding out there was fraud? (Assets Co)

c. Excludes actual or constructive notice 4. Was there a volunteer (only need to fulfill where there is a volunteer) (Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015]) à If the answer to the above is YES… can constitute fraud and render the title of the new registered proprietor defeasible (Assets Co) 4. Agency (only need to fulfill where there is an agency) − What is it? The idea that fraud must be brought home to the registered proprietor’, allows for

fraud to be on part of an agent. − Agency: One party (the principal) grants another party (the agent) authority with respect to

certain matters to act on their behalf with 3P’s Frazer v Walker [1967]

Facts: Mrs Frazer forged her husbands signature to obtain a new mortgage on their jointly owned property. She also discharged the old mortgage. The mortgagees, the Radomskis, registered their mortgage and later, when the Frazers did not pay the money owing under the mortgage, the Radomskis sold the Frazer’s property to Walker. Held: Frazer was bound to lose because even though the Radomskis registered first, they on-‐sold it to Walker. Therefore, the Radomskis took their interest via a void instrument and once they passed it to Walker, who then registered, then Walker obtained the benefit of indefeasibility.

INDEFEASIBILITY

…………….. SEE FULL NOTES FOR MORE

Breskvar v Wall

Facts: Mr and Mrs Breskvar executed a transfer to Petrie as security for a loan. Petrie fraudulently used the transfer and sold it to his grandson Wall who became the registered owner. Wall sold to Alban but before they could register their interest, the Breskvars lodged a caveat. The conflict was therefore between the interest of Breskvars and interests of Alban Held: Despite the fraud committed by Wall and Petrie, Wall was defeasible by Breskvar.

Principle from Frazer, reaffirmed in Breskvar: On registration of the mortgage, the mortgagee’s (Radomskis) obtained immediately indefeasible title. In doing so, the court affirmed the doctrine of immediate indefeasibility.

CHECKLIST: MORTGAGES 1. Introduction

a. Who is the Mortgagor, who is the Mortgagee? b. What does each party want?

2. Has a Mortgage been created? a. OST (Conveyancing Act 1919 NSW):

i. Law: • s 23B(1): Is there a deed?

ii. Equity • s 23C(1): Is it signed or in writing? If not…. • Walsh v Lonsdale:

o Contract is final/enforceable o s 54A: Contract is written and signed OR s 23E(d) Part Performance o Equity grants specific performance

b. TORRENS TITLE (RPA 1900 NSW): i. s 56: Is the mortgage executed in the approved form? ii. s 57: Is the mortgage registered?

3. Does the mortgage have the benefit of indefeasibility? s 42(2) a. Are there exceptions?

i. Fraud (Australian Guarantee Corporation Ltd v De Jager): • Can the fraud be brought home to the registered proprietor? • Is there an act of dishonesty/moral turpitude? • Is there knowledge of fraud – wilful blindness? • s 56C: Did the mortgage take reasonable steps to confirm the identity of the mortgagor? +

Conveyancing Rules ii. Does indefeasibility of the registered mortgage attach to the unregistered collateral loan

agreement? (Grgic v Australia and New Zealand Banking Group) iii. Can the loan agreement be incorporated into the registered mortgage? iv. All monies mortgage

• Is there a forged loan agreement and mortgage dealing? (Perpetual Trustees Victoria Ltd v English & Anor; s 57(2)(a) (RPA))

• Is the void but registered all monies mortgage incorporated into the loan agreement? (Provident Capital Ltd v Printy [2008])

o QUESTION OF CONSTRUCTION 4. Are there any rights or remedies?

a. Remedies (see list) b. Rights: Power of sale (s 109(1)(a) (Conveyancing Act)

i. Is the power of sale exercised according to s 57, 58 RPA (s 111) ii. What standard of care has been exercised? • Good Faith (Cuckmere Brick Co Ltd v Mutual Finance Ltd) • Reasonable Care (Pendlebury v The Colonial Mutual Life Assurance Society)

iii. What is the conduct of the power of sale? • Who has the onus? • Was loss or damaged suffered due to breach? (s 111A(4) (Conveyancing Act)

o What type of conduct? Advertising, valuation, timing of sale, improvements • Was there a duty to inform the terms of sale and selling to self/related entity? (ANZ Banking

Group Ltd v Bangadilly Pastoral Co Pty Ltd) • Can the mortgagor get an injunction to stop the sale if it has been improperly exercised?

(Forsyth v Blundell) 5. Is there an issue with priorities or tacking?

a. Assess based on whether it is OST or TT land

EQUITY OF REDEMPTION & RIGHT TO REDEEM

Equity of Redemption: − What is it? A proprietary right and the mortgagor’s right to have the property reconveyed upon the

repayment of the debt in full. Equitable Right to Redeem: − What is it?

o For OST: Is it the right to have your interest conveyed back to you o For Torrens Title: It is the right to have the mortgaged discharged

Equity of Redemption v Right to Redeem: − Equity of redemption arises as soon as a mortgage is created − Equitable right to redeem do not arise until the date of repayment passes and the mortgagor repays the

owing funds − Cannot convey or deal with the equitable right to redeem BUT can deal with equity of redemption because it

is an equitable interest in land which could be leased, devised or mortgage

HAS A MORTGAGE BEEN CREATED? FORMALITIES: OLD SYSTEM MORTGAGE

à (Conveyancing Act) − AT LAW à The mortgagor conveying his/her legal estate in land to the mortgagee (lender) as security for

money borrowed. The mortgagee agrees to reconvey the mortgagors title to the property when the debt in fully repaid, including interest and charges owed.

o Includes § s 7: ‘Conveyance’: Includes ‘any assignment, appointment, lease, settlement or other

assurance by deed of any property § s 23B(1): No assurance in land passes as an interest in law unless made by a deed § s 38(1): Every deed must be signed, sealed delivered and attested by at least one witness not

party to the deed. § s 46: The use of the word ‘Grant’ is unnecessary to convey land

− IN EQUITY à o Includes:

§ Example 1: Where a deed has not been properly executed but not in writing OR where writing exists in an express or implied contract signed by the party charged (National Provincial and Union Bank of England v Charnley [1924])

• Rule: s 23C(1): No interest in land can be created or disposed of unless it is written and signed.

§ Example 2: Where there is an express agreement to create a mortgage, evidenced in writing and accompanied by consideration

• Rule: Doctrine of Walsh v Lonsdale (1882): 1. Contract is final/enforceable AND 2. s 54A: Contract for sale of land to be in writing and signed by the party

MORTGAGES

TERMS: − Mortgage: A mortgage is any charge on land created merely for securing payment of a debt (s 3 ‘Mortgage’

RPA). The mortgagor has title over land and retains equitable interest. If they satisfy the mortgage, they can have it conveyed back to them.

− Mortgagor: Person who borrows the money − Mortgagee: Person who grants the lender

charged OR s 23E(d): Part Performance AND 3. Equity would grant specific performance (discretionary)

§ Example 3: Where there is a mortgage by deposit of title deeds; if there is a dent and the borrower hands over title deeds to the lender, an equitable mortgage will be created, subject to evidence of any contrary intention (Theodore v Mistford (2005))

• Rule: s 23E(d): Part Performance: ‘The acts must be unequivocally related to the execution of that agreement’ – i.e. acts done only as a means of executing the agreement and no other possibility. (Maddison v Alderson (1883))

FORMALITIES: TORRENS TITLE MORTGAGE

− What is it? Operates by statutory charge or security for the debt being entered into and must be executed in the approved form (s 56(1); 57): RPA)

− AT LAW à RPA: o s 56 Lands under this Act: Mortgage or Encumbered

(1) Whenever any land or estate or interest in land is intended to be charged with, or made security for, the payment of a debt, the proprietor must shall execute a mortgage in the approved form. (2) Whenever any land, estate, or interest is intended to be charged with or made security for the payment of an annuity, rent-‐charge, or sum of money other than a debt, the proprietor shall execute a charge in the approved form.

AND…. o s 57 Procedure on default

(1) A mortgage, charge or covenant charge under this Act has effect as a security but does not operate as a transfer of the land mortgaged or charged.

à In other words, The mortgage must be registered − IN EQUITY à Conveyancing Act: Where there is failure to register…

o Includes: § The completion and execution of a mortgage instrument in statutory form that is not

registered (Barry v Heider (1914)) § An implied agreement to give a mortgage, such as a despite of the Folio of the Torrens

registered as security for money advance (NSW Conveyancing Lw and practice Loose-‐leaf) § The express but informal agreement to give a mortgage (NSW Conveyancing Lw and practice

Loose-‐leaf)

DOES THE MORTGAGE HAVE THE BENEFIT OF INDEFEASIBILITY? ARE THERE EXCEPTIONS? INDEFEASIBILITY

− Rule: Upon registration of a mortgage, a Mortgagee will, subject to exceptions, receive the benefit of indefeasibility or conclusiveness of a Mortgagee’s interest in the title (English Scottish and Australian Bank Limited v Phillips [1937]) (s 42(1)(d) (RPA)

Forged Mortgages: 1. Can the Fraud be brought home to the registered proprietor? + Can the Fraud be brought home to the

registered proprietor, where the registered proprietor is the bank? − s 56C Confirmation of identity of mortgagor (RPA) (1) Mortgagee must confirm identity of mortgagor before presenting a mortgage for lodgment…the mortgagee must take reasonable steps to ensure that the person who executed the mortgage, or on whose behalf the mortgage was executed, as mortgagor, is the same person who is, or will become, the registered proprietor of the land that is security for the payment of the debt to which the mortgage relates. (2) … the mortgagee would have taken reasonable steps to ensure the identity of the mortgagor under subsection (1) if the mortgagee has taken the steps prescribed by the Conveyancing rules (regulations)

o Reasonable Steps: § What steps did they take?

§ What questions did they ask to determine whether the conduct amounted to fraud? § Did they comply with the Conveyancing Rules?

• r 4.4 (4.4.1-‐4.4.3): o Collect the mortgagor's full name, date of birth and residential address; o Verification from an original or certified copy of: (a) a primary photo ID

document Australian Guarantee Corporation Ltd v De Jager [1984]

Facts: Husband and wife were Joint RP’s and owners of a property. The husband arranged a mortgage over the property with AGC but his wife refused to sign the mortgage. Someone forged her signature on the mortgage documents. Husbands solicitor took the mortgage documents to the AGC Bank. When he got there, he said he witnessed the husbands, not the wifes signature but attested to both in front of the AGC employee who realised that the signatures were not attested. AGC bank did not ask questions about there being no witness signature under the wife’s signature. The mortgage was registered but Mr De Jager did not pay the mortgage and defaulted in repayment of the loan. Issue: Was the AGC’s title was defeasible as a result of fraud? Held: By not questioning why the witness signature and signing the attestation clause, the bank made a representation to the RG that; it was an honest document, there was no fraud and, that the document is therefore capable of registration. Therefore, such conduct elevated it to fraud. Principle: The function of saying it is a true and honest document is acknowledging that all of the relevant formalities were followed.

2. Does indefeasibility of the registered mortgage attach to the unregistered collateral loan agreement? − In the context of forged Mortgages and Loan agreements, the principle is that even if the registered

Mortgage is indefeasible, the Mortgage will not secure anything where the relevant indebtedness may contain a separate forged Loan agreement (Perpetual Trustees Victoria Ltd v Xiao [2015])

− VIEW 1 = YES (PT v Maradona Pty Ltd (1992) o Even though the debt in the all money’s clause is not created by the mortgage (but rather by the loan

agreement), the registered mortgagee’s title may still receive indefeasibility − VIEW 2 = NO (Grgic v Australia and New Zealend Banking Group (1994))

o What if a fraudster forges the mortgagor’s signature on both the mortgage and loan agreement? § Since the mortgage is registered, it will be treated as conferral of a valid interest § The registered Mortgage will then rise to indefeasibility but, indefeasibility of nothing

because registration of the Mortgage does not cure the collateral Loan agreement of being void even though the Loan agreement is where the mortgagor’s personal covenant as to her indebtedness is found

3. Can the Loan agreement be incorporated into the registered Mortgage? o No:

§ The mortgagee can exercise their power of sale to recoup a part of their loss. § Once the property is sold, the ‘mortgagor’ can only make a claim on the Torrens Assurance

Fund § However, the mortgagee cannot sue on the personal covenant to repay to obtain the

balance o Yes:

§ If all the covenants in the mortgage (proprietary and non-‐proprietary) receive indefeasibility on registration, the mortgagee may personally sue the ‘mortgagor’ for the balance of the debt owing where an exercise of the power of sale does not satisfy the debt

All Monies Mortgages: − What is it? Secures a mortgagors indebtedness to a lender under a specific loan AND money that is advanced

to the mortgagor at various intervals in the future. The loan agreement contains the covenant to repay and the terms of repayment. The loan agreements themselves are not registered.

1. Is there a forged Loan agreement and Mortgage dealing?

− Rule: Unless the court finds that the void Loan agreement is incorporated into the forged by registered all moneys Mortgage, the Mortgage will not secure anything where the relevant indebtedness may contain a separate forged Loan agreement (Perpetual Trustees Victoria Ltd v English & Anor [2010])

o s 57(2)(a): A mortgagee’s power of sale depends the existence of a default on the covenant in the mortgage (RPA)

− If the Loan agreement is not incorporated into the mortgage, the deal cannot be defaulted on a covenant in the mortgage…

o Incorporation of the Loan agreement will prove that the true mortgagor owed a debt to the Mortgagee.

o Where this occurs, then the mortgagee will receive indefeasibility, which attaches to the personal covenant for the mortgagor to repay.

2. Is the void but registered all monies Mortgage incorporated into the Loan agreement? o Question of Construction: The mortgage needs words that effectively link the registered mortgage

to the collateral loan agreement resulting in the agreements incorporation (Provident Capital Ltd v Printy [2008])


CHECKLIST: EASEMENTS 1. Introduction:

a. Who has the Servient Tenement (Burden); Who has the Dominant Tenement (Benefit)? b. What does each party want?

2. Is it a Positive or Negative easement? 3. Has an easement been created? (Re Ellenorough Park)

a. Is there a Dominant and Servient Tenement? i. Does the easement operate for the advantage of one property to the disadvantage of another? ii. Is the easement annexed to the land and therefore appurtenant to the dominant tenement? (s 88A

(Conveyancing Act 1919 NSW)) b. Does the easement accommodate the Dominant Tenement? (Re Ellenorough Park) c. Are the dominant and servient tenements occupied by the same person? (s 88B (Conveyancing Act 1919

NSW)) d. Does the right form the subject matter of the grant?

i. Is the right well defined and understood? (Re Ellenborough Park) ii. Assess the degree to which the rights conferred interfere with the servient owner’s exclusive

possession of the site (Bursill Enterprises Pty ltd v Berger Bros Trading Co Pty Ltd) • INTERFERENCE TEST: o Reasonable Use (Clos Farming Estates Pty Ltd; Registrar General of NSW v JEA Holdings) o Distinction between right to possession from a right that confers sole possession (Moncrieff v

Jamieson) 4. Has an easement been created?

a. EXPRESS GRANT i. LAW: (RPA)

• s 88(1): Is the easement enforceable via the rules in this section? • s 46: Did the registered proprietor execute the transfer in the approved form? • s 47(1): Did the Registrar-‐General record particulars on the folio?

iii. EQUITY: (Conveyancing Act) • s 23C(1): Was the lease signed and in writing? OR • Walsh v Lonsdale:

o Contract is final/enforceable o s 54A: Contract is written and signed OR s 23E(d) Part Performance o Equity grants specific performance

b. EXPRESS RESERVATION (Can only be express not implied (Wheeldon v Burrows 1879) i. LAW: • Torrens: Is the easement put in the memorandum or transfer AND does it comply with s 88(1)

(Conveyancing Act) ii. EQUITY: Same as express grant

c. IMPLIED i. Where the conduct fits the requirements of an easement. Three types:

• Wheeldon v Burrows Easement (1979) – An implied easement will arise if: § There is severance or grant of the grantor’s land § At the time of the severance, the easement is ‘continuous and apparent’; § The easement is necessary for the reasonable enjoyment of the land granted; and § The easement has been used by the grantor for the benefit of the land granted

d. STATUE (s 88K Conveyancing Act 1919 NSW) i. Consider: • The capacity of the developer’s land for particular kinds of development or use • The nature of the development • The manner in which the development is to be effected • The effect of the easement on the Servient tenement

e. PLAN OF SUBDIVSION

5. Does the easement have the benefit of indefeasibility? a. The easement will be indefeasible; however, omitted and misdescribed easements ‘subsisting immediately

before the land was brought under the provisions of this Act’ or ‘validly created at or after the time under this or any other Act or Cth Act’, are an exception to indefeasibility

6. Are there exceptions? a. Is the easement omitted or misdescribed?

i. Option 1: Has an OST been converted into TT and the easement is subsisting before it is recorded? ii. Option 2: Has the easement been ‘validly created’ but not registered? • Has the easement been lodged for registration, registered on the registered (s 41 & 46) and created

in the approved form (s 47) (RPA) b. In personam Exception

7. Is there a right of way? QUESTION OF CONSTRUCTION Is there an easement which can be extended to impose a burden greater than that which the servient tenement holder agreed to accept (Westfield Management Ltd v Perpetual Trustee Co Ltd)

8. Can the easement be extinguished? i. Can it be extinguished by express release?

• OST: s 23B(1) Effected by execution of Deed (Conveyancing Act) • TORRENS TITLE à s 47(6): Registered Transfer (RPA)

ii. Can it be extinguished by implied release? • Who has the onus? • QUESTION OF FACT • Seek orders (s 89(3) (Conveyancing Act) • If successful; s 49 (RPA) + Treweeke v 36 Wolseley Rd

iii. Can it be extinguished by unity of the dominant and serivent tenement? (James v Plant) iv. Can it be extinguished by statutory extinguishment? (s 89(1) (Conveyancing Act)

9. Are any remedies available? − Abatement − Use of alternative route? − Action for nuisance?

TERMS: Easement: A right annexed to land to utilise the land of another in a particular manner or to prevent another using his/her land in a particular manner Servient Tenement: The land burdened Dominant Tenement: The land benefited Burden: Something oppressive Benefit: Advantage or gain Prescription: By use of 20 years of more Subject Matter of the grant: Whether the right purported to be given are expressed in terms that are too wide and vague a character Easement in gross: An easement in gross is a legal right to use another person’s land for as long as the owner owns the land or holder of the easement dies Right of Way: By driving Right of Passage: By walking

IS IT A POSITIVE OR NEGATIVE EASEMENT?

POSITIVE OR NEGATIVE EASEMENT

Positive Easement − What is it? Where the owner of the dominant tenement is allowed to do something upon the land

comprising the servient tenement I.e. ‘A right of way’ − Examples:

o A right to use the toilet (Miller v Emcer Products Ltd [1956] or cattle yards (Clifford v Dove (2003)) o Right to discharge water (Mason v Shrewsbury and Hereford Railway Co (1871)) o Occupy a church pew (Phillips v Halliday [1891]) o Fix advertising signs and boarding on a servient tenement (Moody v Steggles (1879)) o Enjoy a recreation area (Re Ellenborough Park [1956]) o Use part of a block of land (Evanel Pty Ltd v Nelson (1995))

Negative Easement − What is it? Where the owner of the servient tenement is restrained from putting his/her land to a use

otherwise allowed by law in the interests of the dominant tenement − Examples:

o The right to a flow of air through a defined aperture (Bass v Gregory (1890)) o The right to receive light for a building (Colls v Home and Colonial Stores Ltd [1904]) o The right to receive water through pipes (Rance v Elvin (1985)) o The right of support for buildings (Dalton v Angus (1881))

EASEMENTS

ARE THE CHARACTERISTICS OF AN EASEMENT PRESENT? CHARACTERISTICS OF EASEMENTS

− FOUR requirements (Re Ellenborough Park [1956]): 1. Dominant and servient Tenement − What is it? The easement must operate for the advantage of one property to the disadvantage of another − Requirements:

a. The easement must operate for the advantage of one property to the disadvantage of another o Advantaged property = Dominant Tenement/s (Benefit) o Disadvantaged property = Servient tenement/s (Burden)

b. The easement must be annexed to the land and thus appurtenant to the dominant tenement o If it is not appurtenant to the tenement it is an easement in gross o s 88A: Easement in Gross (Conveyancing Act 1919 NSW)

(1) Easement in gross are permitted (a) in favour of the Crown (b) a public or local authority established by legislation, or (c) where the easement is for the supply of a utility service to the public or for the supply of

rail infrastructure facilities, a corporation prescribed by regulation 2. Easement must accommodate the dominant tenement − What is it? It must make the dominant land a better and more convenient property

o s 46A (RPA):An easement can be created over separate parcels of land even if those parcels are owned and possessed by the same person only if they are under Torrens Title

o TEST: Does the easement must have a connection with the land in the sense of being reasonably necessary for its better enjoyment as a parcel of land?

Re Ellenborough Park [1956]

Facts: Ellenborough was a building in the city with ‘apartments’ inside – each had a small courtyard. In the middle, there was a circular park. To compensate for the small yards, only each owner had a right to access to unlock and use park in the middle. During WWII the Ministry of Defence appropriated the park and after the war, the government had to pay compensation to property owners who could not access their property rights. Issue: 1. Was there a property right? If so, what was it? 2. Does having access to the park in order to recreate, make the dominant tenement a better and more convenient parcel of land? Held: 1. Yes, it was an easement because the right to use the park adjacent to the dominant property for recreation was a right connected with the normal enjoyment of houses 2. Yes, the park made the property more desirable and better because of limited recreation land in the city

3. The dominant and servient tenements must not be held and occupied by the same person − What is it? The land cannot be owned and occupied by the same person − If it was originally validly created, it may be extinguished where the owner of the dominant and servient

tenement become the same because it no longer meets the criteria o s 88B Creation and release of easements, Profits A Pendre and restriction on use of land by plans

(Conveyancing Act 1900 NSW) (3)(c): The registration of a plan of subdivision will create all easements referred to in it, and will vest them in the owner of the land benefited by the easement

(ii) Where the dominant and servient tenements are in the same ownership or (iii) where they come to be in common

o s 46 Transfers (Real Property Act 1900 NSW) (1) An easement can be createdover separate parcels of land even if those parcels are owned and

possessed by the same person, only if they parcels are under Torrens Titles o s 47 Recording, Variation and Release of Easements (Real Property Act 1900 NSW)

(7) If it is recorded in the register, it is not extinguished solely because the two lots come into common ownership

4. The right must be capable of forming the subject matter of a grant a. The right must Right must be well defined and understood (Re Ellenborough Park)

o Cannot be too broad or imprecise, must be able to define the right (Duncan v Cliftonville Estates Pty ltd (2001)

b. Must be able to assess the degree to which the rights conferred interfere with the servient owner’s exclusive possession of the site (Bursill Enterprises Pty ltd v Berger Bros Trading Co Pty Ltd (1971)) o INTERFERENCE TEST: An easement cannot amount to ownership or possession of the servient land. To

determine this… (i) Reasonable Use (Degree and proportionality Test)

§ How much land is subject to the easement? § For what period of time § How intrusive is the use?


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