Real Property 5

8/17/2019 Real Property 5

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(c) Cameron Stewart 2005

Real Property 5Real Property 5

Associate Professor Associate Professor

Cameron StewartCameron Stewart


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Exceptions to indefeasibilityExceptions to indefeasibility

- Rights in personam- Rights in personam While registration of an interest may While registration of an interest may

extinguish other unregistered interestsextinguish other unregistered interestspersonal rights of action can still survive –personal rights of action can still survive –sometimes called “personal equities”sometimes called “personal equities”

Examples:Examples: Right of specic performance in a sale ofRight of specic performance in a sale ofland contract!land contract!

Right of "eneciary to call on performanceRight of "eneciary to call on performanceof trust!of trust!

Right to rectify a mista#e in a contractRight to rectify a mista#e in a contract $hich has "esto$ed title on the $rong party% $hich has "esto$ed title on the $rong party% &he personal equity must rest on a legal or&he personal equity must rest on a legal or

equita"le cause of actionequita"le cause of action


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- Rights in personam- Rights in personam Bahr v Nicolay (No 2) Bahr v Nicolay (No 2) '())* +, -./R'())* +, -./R

,+)%,+)% &he registered proprietor 0R* $as&he registered proprietor 0R* $as

"ound "y a personal equity $here R"ound "y a personal equity $here R#ne$ of an unregistered interest#ne$ of an unregistered interestand had purchased the property onand had purchased the property onthe "asis that R $ould recognise andthe "asis that R $ould recognise and"e "ound "y that unregistered"e "ound "y that unregistered

interest%interest%


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- Rights in personam- Rights in personam Mercantile Mutual v Gosper Mercantile Mutual v Gosper 0'(('*0'(('*

,5 12W.R 3,,5 12W.R 3,:: 4rs osper and the4rs osper and theregistered proprietor of landregistered proprietor of landsu"6ect to a mortgage to 4ercantilesu"6ect to a mortgage to 4ercantile4utual% 4r osper "orro$ed4utual% 4r osper "orro$edmoney from 4ercantile 4utual andmoney from 4ercantile 4utual andit $as agreed that the loan $ouldit $as agreed that the loan $ould"e secured "y a variation of the"e secured "y a variation of the

existing mortgage over 4rsexisting mortgage over 4rsosper7s property% 4r osperosper7s property% 4r osperforged his $ife7s signature to theforged his $ife7s signature to the variation and it $as registered% variation and it $as registered%


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- Rights in personam- Rights in personam -fter her hus"and7s death 4rs osper -fter her hus"and7s death 4rs osper

discovered $hat had happened% 2hediscovered $hat had happened% 2hesought orders removing the variationsought orders removing the variationof the mortgage from her title% &heof the mortgage from her title% &he

issue "efore the court $as $hetherissue "efore the court $as $hether4ercantile 4utual had an4ercantile 4utual had anindefeasi"le title insofar as theindefeasi"le title insofar as the

variation $as concerned or $hether it variation $as concerned or $hether it $as defeated on the "asis of an $as defeated on the "asis of an inin

personampersonam claim "y 4rs osper% 8y aclaim "y 4rs osper% 8y ama6ority the 9ourt of -ppeal held inma6ority the 9ourt of -ppeal held infavour of 4rs osper%favour of 4rs osper%


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- Rights in personam- Rights in personam Vassos v State Bank of South AustraliaVassos v State Bank of South Australia; the "an#; the "an#

o"tained a mortgage over land o$ned "y three tenants>o"tained a mortgage over land o$ned "y three tenants>in>common% ?ne of the tenants>in>common su"sequentlyin>common% ?ne of the tenants>in>common su"sequentlyo"tained a su"stitute mortgage for a greater sum "yo"tained a su"stitute mortgage for a greater sum "yforging the signatures of the other t$o tenants>in>forging the signatures of the other t$o tenants>in>common% n this case the "an#7s mortgage $as notcommon% n this case the "an#7s mortgage $as not

o"tained as the result of fraud; nor $as there ano"tained as the result of fraud; nor $as there anexception under theexception under the in personamin personam exception% ?n theexception% ?n the ininpersonampersonam exception; @ayne / said this case $asexception; @ayne / said this case $asdistinguisha"le fromdistinguisha"le from Mercantile Mutual v Gosper Mercantile Mutual v Gosper % @e% @ereaAirmed that more than a mere forgery $as required%reaAirmed that more than a mere forgery $as required%Even though the "an# $as negligent in the manner inEven though the "an# $as negligent in the manner in $hich it too# the forged mortgage; there $as; at 333; $hich it too# the forged mortgage; there $as; at 333;


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Registrar’s power ofRegistrar’s power of

correctioncorrection RG can x !p administrati"e errors in theRG can x !p administrati"e errors in the

records b!t no resol"e disp!tes # s $% not torecords b!t no resol"e disp!tes # s $% not to

pre&!dice the rights of interest holderspre&!dice the rights of interest holders

State Bank of NSW v Berowra WatersState Bank of NSW v Berowra Waters Holdings Pty Ltd Holdings Pty Ltd '$()*+ * ,S.R /()'$()*+ * ,S.R /()

James v Attorney-General James v Attorney-General '$(01+ 0( SR'$(01+ 0( SR

',S+ /0$2 it was held that the corrections',S+ /0$2 it was held that the corrections

sho!ld be made prior to a bona desho!ld be made prior to a bona dep!rchaser or mortgagee obtains an interestp!rchaser or mortgagee obtains an interest

on the faith of the !ncorrected register3on the faith of the !ncorrected register3


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4"erriding stat!tes4"erriding stat!tes

4ther stat!tes can o"erride the pro"isions of the RPA 4ther stat!tes can o"erride the pro"isions of the RPA EG # rates2 taxes and charges on land bind the landEG # rates2 taxes and charges on land bind the land

regardless of the indefeasibility pro"isionsregardless of the indefeasibility pro"isions Pratten v Warringah Shire Con!il Pratten v Warringah Shire Con!il2 part of Pratten’s2 part of Pratten’s

land was res!med by the Co!ncil before he p!rchasedland was res!med by the Co!ncil before he p!rchased

the land3 5efore p!rchasing the land Pratten madethe land3 5efore p!rchasing the land Pratten madein6!iries to the Co!ncil to ascertain if it had anyin6!iries to the Co!ncil to ascertain if it had anyinterest in the land3 7he Co!ncil replied that it had nointerest in the land3 7he Co!ncil replied that it had nointerest in the land3 Pratten also thoro!ghly searchedinterest in the land3 Pratten also thoro!ghly searchedthe register3 After Pratten became registeredthe register3 After Pratten became registeredproprietor of the land the Co!ncil asserted its rightsproprietor of the land the Co!ncil asserted its rights

o"er the land that had been res!med3 7he Co!rt r!ledo"er the land that had been res!med3 7he Co!rt r!ledin fa"o!r of the Co!ncil on the basis that Pratten8sin fa"o!r of the Co!ncil on the basis that Pratten8sregistered interest was s!b&ect to o"erridingregistered interest was s!b&ect to o"erridinglegislation2 in this case s3 /() of thelegislation2 in this case s3 /() of the Lo!al Lo!alGovernment A!tGovernment A!t of that time3of that time3


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9illpalm Pty .td " 9ea"en8s ;oor Pty .td9illpalm Pty .td " 9ea"en8s ;oor Pty .td 9CA ?( # right claimed to ha"e 9CA ?( # right claimed to ha"eeasement created p!rs!ant to s!bdi"isioneasement created p!rs!ant to s!bdi"isionplan #@a&ority fo!nd that it was not anplan #@a&ority fo!nd that it was not an

exception beca!se there was no e"idenceexception beca!se there was no e"idencethat the creation of the easement was athat the creation of the easement was acondition '@c9!gh AC2 9ayne and 9eydoncondition '@c9!gh AC2 9ayne and 9eydon

+Bf there was a right it was a right to +Bf there was a right it was a right tocreate an easement which was in personam2create an easement which was in personam2

b!t gi"en that the EPPA Act did not seem tob!t gi"en that the EPPA Act did not seem tocreate s!ch a right and gi"en the easementcreate s!ch a right and gi"en the easementdid not appear to be a condition there wasdid not appear to be a condition there wasno in personam right created3no in personam right created3


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7he Co!rt held that the res!mption by the Co!ncil was7he Co!rt held that the res!mption by the Co!ncil wasone that created a charge that too eDect by force ofone that created a charge that too eDect by force ofthe stat!te creating it3 Bt did not depend !ponthe stat!te creating it3 Bt did not depend !ponregistration3 Street obser"ed that the indefeasibilityregistration3 Street obser"ed that the indefeasibilitypro"isions of thepro"isions of the "eal Pro#erty A!t "eal Pro#erty A!t were of no eDect inwere of no eDect in

the face of o"erriding legislation that remo"ed the landthe face of o"erriding legislation that remo"ed the landfrom the registration system of the Act as hadfrom the registration system of the Act as hadocc!rred in this case3 7he fact that the Co!ncil didn’tocc!rred in this case3 7he fact that the Co!ncil didn’tapply to ha"e its interest notied !pon the registerapply to ha"e its interest notied !pon the registerwhen it became possible to do so after an amendmentwhen it became possible to do so after an amendmentto theto the "eal Pro#erty A!t "eal Pro#erty A!t did not amo!nt to an estoppeldid not amo!nt to an estoppelagainst the Co!ncil3 ,ot did an estoppel arise when inagainst the Co!ncil3 ,ot did an estoppel arise when inresponse to Pratten’s in6!iry2 the Co!ncil wrote aresponse to Pratten’s in6!iry2 the Co!ncil wrote aletter bac saying that it had no interest in the land3letter bac saying that it had no interest in the land37his was so beca!se the Co!ncil had no right to7his was so beca!se the Co!ncil had no right todispose of the land witho!t the consent of thedispose of the land witho!t the consent of theGo"ernor-in-Co!ncil3Go"ernor-in-Co!ncil3


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ol!nteers ol!nteers

$ing v Smail $ing v Smail R %1/ a h!sband and wife were R %1/ a h!sband and wife wereregistered as the proprietors of land as &oint tenants3registered as the proprietors of land as &oint tenants37he h!sband exec!ted a transfer of his interest in7he h!sband exec!ted a transfer of his interest inthe land to the wife by way of gift3 5efore thethe land to the wife by way of gift3 5efore thetransfer was registered the h!sband exec!ted a deedtransfer was registered the h!sband exec!ted a deedof arrangement !nder the banr!ptcy legislation3of arrangement !nder the banr!ptcy legislation3

7he tr!stee lodged a ca"eat claiming an e6!itable7he tr!stee lodged a ca"eat claiming an e6!itableinterest in the land !nder the terms of the deed ofinterest in the land !nder the terms of the deed ofarrangement3 Bn proceedings by the wife to remo"earrangement3 Bn proceedings by the wife to remo"ethe ca"eat the 6!estion was whether the tr!stee hadthe ca"eat the 6!estion was whether the tr!stee hadan interest which had priority o"er the registeredan interest which had priority o"er the registeredtitle of the wife3 Adam held that s *% of thetitle of the wife3 Adam held that s *% of the

ictorian Act 'which is e6!i"alent to s 0)+ did not ictorian Act 'which is e6!i"alent to s 0)+ did notgi"e the wife priority beca!se she was a "ol!nteergi"e the wife priority beca!se she was a "ol!nteerand the doctrine of indefeasibility only protectedand the doctrine of indefeasibility only protectedbona de p!rchasers for "al!e3bona de p!rchasers for "al!e3


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ol!nteers ol!nteers

Adam said2 at %10: Adam said2 at %10: FAltho!gh s *% of the 7ransfer of .and ActFAltho!gh s *% of the 7ransfer of .and Act

$(?* in itself aDords no gro!nd for$(?* in itself aDords no gro!nd fordisting!ishing between the"ol!nteer and thedisting!ishing between the"ol!nteer and thep!rchaser for "al!e and wo!ld appear to gi"ep!rchaser for "al!e and wo!ld appear to gi"e

paramo!nt eDect to registered title in eitherparamo!nt eDect to registered title in eithercase2 other sections in the Act draw acase2 other sections in the Act draw adistinction between the "ol!nteer and thedistinction between the "ol!nteer and thep!rchaser for "al!e and appear to&!stify thep!rchaser for "al!e and appear to&!stify theconcl!sion that !pon the registration ofconcl!sion that !pon the registration of

dealings s!bse6!ent to initial registrationdealings s!bse6!ent to initial registration!nder the Act2 it is p!rchasers for "al!e only!nder the Act2 it is p!rchasers for "al!e onlywho were intended to ha"e the benet of swho were intended to ha"e the benet of s*%3*%3


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ol!nteers ol!nteers Hitto in BAC 'Iinance+ Pty .td " Co!rtenayHitto in BAC 'Iinance+ Pty .td " Co!rtenay

'$(0/+ $$= C.R ??= at ?1%:'$(0/+ $$= C.R ??= at ?1%: FA pro"ision that a person is not to be aDected by notice of priorFA pro"ision that a person is not to be aDected by notice of prior

interests has no application to him so long as he remainsinterests has no application to him so long as he remains!nregistered3 Ior the same reason2 it has no application e"en to!nregistered3 Ior the same reason2 it has no application e"en toone who has become registered2 if he ac6!ired his estate orone who has become registered2 if he ac6!ired his estate orinterest as a "ol!nteer3 Bt is only a person ha"ing a legal estate orinterest as a "ol!nteer3 Bt is only a person ha"ing a legal estate orlegal interest ac6!ired for "al!e whose position is pre&!diced bylegal interest ac6!ired for "al!e whose position is pre&!diced by

his ha"ing recei"ed2 before paying his money2 direct orhis ha"ing recei"ed2 before paying his money2 direct orconstr!cti"e notice of an o!tstanding e6!itable interest3 7his is soconstr!cti"e notice of an o!tstanding e6!itable interest3 7his is soe"en !nder the Real Property Act ',S+ for a registered intereste"en !nder the Real Property Act ',S+ for a registered interestis not 'as was s!ggested in the co!rse of the appellant8s arg!ment+is not 'as was s!ggested in the co!rse of the appellant8s arg!ment+some special ind of stat!tory interest - it is a legal interest2some special ind of stat!tory interest - it is a legal interest2ac6!ired by a stat!tory con"eyancing proced!re and protectedac6!ired by a stat!tory con"eyancing proced!re and protectedfrom competition to the extent pro"ided for by the Act2 b!t ha"ing2from competition to the extent pro"ided for by the Act2 b!t ha"ing2s!b&ect to the Act2 the nat!re and incidents pro"ided by thes!b&ect to the Act2 the nat!re and incidents pro"ided by thegeneral law3 So all the pro"ision does which B ha"e 6!oted from sgeneral law3 So all the pro"ision does which B ha"e 6!oted from s*/ is to protect against notice of any tr!st or !nregistered interest*/ is to protect against notice of any tr!st or !nregistered interesta legal estate ac6!ired for "al!eF3a legal estate ac6!ired for "al!eF3


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ol!nteers ol!nteers

Bogdanovi! v $ote% Bogdanovi! v $ote% '$())+ $% ,S.R *1%'$())+ $% ,S.R *1%

@rs 5 looed after @r H on the basis of a@rs 5 looed after @r H on the basis of apromise that she wo!ld be gi"en anpromise that she wo!ld be gi"en aninterest in the ho!se which wo!ld allowinterest in the ho!se which wo!ld allowher to stay for life3 Son inherited ho!se3her to stay for life3 Son inherited ho!se3

Breskvar v Wall Breskvar v Wall applied - no distinction isapplied - no distinction is

made between "ol!nteers andmade between "ol!nteers andp!rchasers hence indefeasibility isp!rchasers hence indefeasibility is

gi"en to the songi"en to the son


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ol!nteers ol!nteers "asmssen v "asmssen "asmssen v "asmssen $ R 0$/ $ R 0$/

Grandfather farmed a n!mber of properties withGrandfather farmed a n!mber of properties withhis fo!r sons3 After he died the property passedhis fo!r sons3 After he died the property passedthro!gh G8s will to the grandson 93 9and histhro!gh G8s will to the grandson 93 9and hisfather E then arg!ed o"er who sho!ld own thefather E then arg!ed o"er who sho!ld own theproperty as E stated that one property was heldproperty as E stated that one property was heldby the father on tr!st for E3 7he p!rpose behindby the father on tr!st for E3 7he p!rpose behindthe tr!st was to a"oid tax3 98s response was thatthe tr!st was to a"oid tax3 98s response was thathe was the registered proprietor and that he hadhe was the registered proprietor and that he hadindefeasibility3indefeasibility3

Bt was held that ss *% and */ bona de p!rchaserBt was held that ss *% and */ bona de p!rchaserfor "al!e and "ol!nteers other later sections dofor "al!e and "ol!nteers other later sections do

mae a distinction3 4n this basis the co!rt heldmae a distinction3 4n this basis the co!rt heldthat the in ictoria the legislation only pro"idesthat the in ictoria the legislation only pro"idesindefeasibility to p!rchasers for "al!e3indefeasibility to p!rchasers for "al!e3


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ol!nteers ol!nteers &alotin Pty Ltd v 'rst&alotin Pty Ltd v 'rst '$(()+ $?* A.R $$(- a'$(()+ $?* A.R $$(- a

decision on the ictorian legislation3 Iinelsteindecision on the ictorian legislation3 Iinelstein 2 ha"ing referred to 2 ha"ing referred to $ing $ing22 Bogdanovi! Bogdanovi! andand (AC (AC)'inan!e* Pty Ltd)'inan!e* Pty Ltd2 said2 at $/0 - $/1:2 said2 at $/0 - $/1:

Fhen it is accepted2 as it m!st be2 that s */Fhen it is accepted2 as it m!st be2 that s */does not relie"e a "ol!nteer from e6!ities whichdoes not relie"e a "ol!nteer from e6!ities which

aDected his transferor it is diDic!lt to see why saDected his transferor it is diDic!lt to see why s*% sho!ld be held to gi"e that protection3 S!ch a*% sho!ld be held to gi"e that protection3 S!ch a "iew wo!ld be inconsistent with the str!ct!re "iew wo!ld be inconsistent with the str!ct!reand text of the 7ransfer of .and Act3 Bt sho!ldand text of the 7ransfer of .and Act3 Bt sho!ldalso be noted that Hing " Smail was followed byalso be noted that Hing " Smail was followed byColdrey in Rasm!ssen " Rasm!ssen $Coldrey in Rasm!ssen " Rasm!ssen $

R 0$/ in preference to 5ogdano"ic3 Bn my "iew R 0$/ in preference to 5ogdano"ic3 Bn my "iewHing " Smail correctly states the law3Hing " Smail correctly states the law3


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ol!nteers ol!nteers Conlan (As i!uidator "fConlan (As i!uidator "f

"aklei#h Ac!uisitions $ty td)"aklei#h Ac!uisitions $ty td)%v% &e#istrar "f 'itles "rs%v% &e#istrar "f 'itles "rs C,DD' W-29 ,D'C,DD' W-29 ,D'

Position ofPosition of Bogdonavi! Bogdonavi! is preferredis preferred


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Ca"eatsCa"eats

Protection of unregistered interestsProtection of unregistered interests 2ection FGH > 2ystem of lodging a2ection FGH > 2ystem of lodging a

“caveat” "y a person $ho claims to“caveat” "y a person $ho claims tohave a legal or equita"le interest inhave a legal or equita"le interest in

the property – any further dealingthe property – any further dealing $ith the property cannot "e $ith the property cannot "erecorded unless $ith the caveator7srecorded unless $ith the caveator7sapproval – freeIes any dealing $ithapproval – freeIes any dealing $ith

the land that $ould impact on thethe land that $ould impact on thesu"6ect of the caveatsu"6ect of the caveat


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Ca"eatsCa"eats

JiAerent types of caveats:JiAerent types of caveats:

'%'% caveat against dealingscaveat against dealings

,%,% caveat against improper dealingcaveat against improper dealing $here 9& has "een lost $here 9& has "een lost

3%3% caveat against improper exercise ofcaveat against improper exercise ofpo$er of salepo$er of sale

G%G% caveat lodged "y R to protectcaveat lodged "y R to protectinterest of a person under a legalinterest of a person under a legaldisa"ility or on "ehalf of the Kueendisa"ility or on "ehalf of the Kueen


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Ca"eatsCa"eats

What is a ”caveata"le interest”L 4ust "e What is a ”caveata"le interest”L 4ust "ean interest inan interest in landMMMlandMMM 1ot 6ust a1ot 6ust acontractual right or personal right –contractual right or personal right –the interest must exist at the time ofthe interest must exist at the time oflodgment – no future interestslodgment – no future interests

EgEg

nterest of a purchaser under a contractnterest of a purchaser under a contractfor salefor sale

nterest of an equita"le mortgageenterest of an equita"le mortgagee

?ption to purchase land?ption to purchase land -nd many many more -nd many many more


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Ca"eatsCa"eats

@o$ can they "e removedL@o$ can they "e removedL .apsing notice $ith dealing – serve a.apsing notice $ith dealing – serve a

notice of lodging a dealing and thennotice of lodging a dealing and then

,' days for the caveator to go to 29 for,' days for the caveator to go to 29 forextension of time – other$ise theextension of time – other$ise thecaveat lapsescaveat lapses

.apsing notice $ithout dealing – ,' days.apsing notice $ithout dealing – ,' daysto o"tain 29 order extending caveat >to o"tain 29 order extending caveat >other$ise the caveat lapsesother$ise the caveat lapses

29 order – no notice29 order – no notice


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Ca"eatsCa"eats

-fter lapsing further caveat "y same -fter lapsing further caveat "y sameperson "ased on same interest $ill "eperson "ased on same interest $ill "eof no eAect unless court leave hasof no eAect unless court leave has"een o"tained"een o"tained

Wrongful lodgment – if a caveator is Wrongful lodgment – if a caveator isfound to have $rongfully lodged afound to have $rongfully lodged acaveat they are lia"le to compensatecaveat they are lia"le to compensatethe person sustaining a pecuniary lossthe person sustaining a pecuniary loss– “$rongfully” means in infringement– “$rongfully” means in infringement

of the rights of the person againstof the rights of the person against $hom the caveat is lodged $hom the caveat is lodged


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Section */A Section */A

?n completion of the contract for sale?n completion of the contract for saleof land and "efore registration theof land and "efore registration thepurchaser has less rights than theypurchaser has less rights than they $ould have under the old system as they $ould have under the old system as they

only have an equita"le interest $hich isonly have an equita"le interest $hich issu"6ect to any earlier equita"le interestsu"6ect to any earlier equita"le interest0even though they may have ta#en the0even though they may have ta#en theinterest for value and $ithout notice* –interest for value and $ithout notice* –under old system they $ould have hadunder old system they $ould have had

the legal estate provided they too# thatthe legal estate provided they too# thatestate $ithout notice of earlier interestsestate $ithout notice of earlier interestsand for value%and for value%


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&o remedy this defect in the RP- sG3-&o remedy this defect in the RP- sG3-"esto$s upon such a purchaser of &orrens"esto$s upon such a purchaser of &orrensland the same rights as they $ould haveland the same rights as they $ould haveunder old system – that is the sectionunder old system – that is the section

declares that they ta#e a legal interestdeclares that they ta#e a legal interestafter sale "ut prior to registration%after sale "ut prior to registration%

&herefore s G3- allo$s a purchaser of an&herefore s G3- allo$s a purchaser of aninterest in land; $ho ta#es for value andinterest in land; $ho ta#es for value and

$ithout notice; to get a legal estate – thus $ithout notice; to get a legal estate – thus

protecting him or her against earlierprotecting him or her against earlierequita"le interestsequita"le interests


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&he interest purchased must&he interest purchased musthad "een eAected "y ahad "een eAected "y a

“dealing registra"le” that is“dealing registra"le” that is you must "e a"le to lodge the you must "e a"le to lodge thedealing fordealing for immediateimmediate registrationregistration


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Eg if - "uys land from 8 for valueEg if - "uys land from 8 for valueand $ithout any #no$ledge of theand $ithout any #no$ledge of theprior equita"le interest of J; underprior equita"le interest of J; under

s G3- - $ill ta#e the legal estates G3- - $ill ta#e the legal estateand J7s interest $ill "e defeated% fand J7s interest $ill "e defeated% f"efore registering his interest; -"efore registering his interest; -then executes a mortgage to 9; 97sthen executes a mortgage to 9; 97sinterest $ill still ta#e priority overinterest $ill still ta#e priority overJ7s; even if 9 had notice of J7sJ7s; even if 9 had notice of J7sinterest%%interest%%


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*AC (+inance) $ty td v Courtenay *AC (+inance) $ty td v Courtenay 0'(+3* ''D0'(+3* ''D9.R 55D9.R 55D 9ourtney "ought land oA 4rs -ustin for '5DDD9ourtney "ought land oA 4rs -ustin for '5DDD

pounds% 3DDD $as paid as deposit and the restpounds% 3DDD $as paid as deposit and the rest $as secured "y a mortgage "ac# to 4rs -ustin% $as secured "y a mortgage "ac# to 4rs -ustin%

&he documents $ere not lodged for&he documents $ere not lodged for

registration until seven months afterregistration until seven months aftersettlement% 4rs -ustinNs solicitor had retainedsettlement% 4rs -ustinNs solicitor had retainedthese documents to allo$ the mortgage to "ethese documents to allo$ the mortgage to "eregistered% .ater 4rs -ustin and theregistered% .ater 4rs -ustin and the9ourtneyNs agree that 4rs -ustin $ould "uy9ourtneyNs agree that 4rs -ustin $ould "uythe land "ac#% &he original transfer andthe land "ac#% &he original transfer and

mortgage had not "een registered "y this time%mortgage had not "een registered "y this time%


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8efore the second sale $as registered 4rs -ustin8efore the second sale $as registered 4rs -ustinagree to sell the land to Jenton 2u"divisions Ptyagree to sell the land to Jenton 2u"divisions Pty.td% 2he did this $ithout the 9ourtneyNs.td% 2he did this $ithout the 9ourtneyNs#no$ledge% 4rs -ustinNs solicitor uplifted the#no$ledge% 4rs -ustinNs solicitor uplifted theoriginal sale and mortgage documents from theoriginal sale and mortgage documents from theR% When the sale to Jenton $as "eing settled aR% When the sale to Jenton $as "eing settled aquestion $as as#ed a"out $hy these documentsquestion $as as#ed a"out $hy these documentshad "een uplifted% 4rs -ustinNs solicitor lied andhad "een uplifted% 4rs -ustinNs solicitor lied andsaid it $as part of a deal to nalise the resalesaid it $as part of a deal to nalise the resale"ac# to 4rs -ustin% - copy of the second contract"ac# to 4rs -ustin% - copy of the second contractfor sale $as produced as evidence% JentonNsfor sale $as produced as evidence% JentonNspurchased $as nanced "y -9 as mortgagee%purchased $as nanced "y -9 as mortgagee%&he documents $ere lodged "y -9 "ut "efore&he documents $ere lodged "y -9 "ut "efore

they $ere registered the 9ourtneyNs commencedthey $ere registered the 9ourtneyNs commencedtheir actiontheir action


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Hitto - the fact that the solicitor withdrew theHitto - the fact that the solicitor withdrew theregistration witho!t a!thority meant that s */Aregistration witho!t a!thority meant that s */Adid not gi"e priority to BACdid not gi"e priority to BAC

7aylor - 7he ordinary r!les of priority apply3 BAC7aylor - 7he ordinary r!les of priority apply3 BAChad notice of the e6!itable interest of thehad notice of the e6!itable interest of theCo!rtney8s hence they co!ld not satisfy the r!le3Co!rtney8s hence they co!ld not satisfy the r!le3

;ixon - an !na!thorised withdrawal was not a;ixon - an !na!thorised withdrawal was not awithdrawal and was ineDecti"e3 9ence thewithdrawal and was ineDecti"e3 9ence theconLict was between an early registrableconLict was between an early registrableinterest and a later registrable interest3 Sectioninterest and a later registrable interest3 Section*/A meant that two registrable dealings wo!ld*/A meant that two registrable dealings wo!ld

be determined by the rst in time r!lebe determined by the rst in time r!le


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Jonray )Sydney* Pty Ltd v Partridge Bros Pty Ltd Jonray )Sydney* Pty Ltd v Partridge Bros Pty Ltd '$(0(+'$(0(+)( , ',S+ Pt $+ ?0))( , ',S+ Pt $+ ?0)

@ contracts to sell land to 3 At the date of the contract @@ contracts to sell land to 3 At the date of the contract @was not the registered proprietor b!t was a p!rchaser ofwas not the registered proprietor b!t was a p!rchaser ofthe land in a contract from A3 7he land was s!b&ect to athe land in a contract from A3 7he land was s!b&ect to amortgage to 53 7o settle the sale to @ intended to handmortgage to 53 7o settle the sale to @ intended to hando"er the transfer of the land to 2 exec!ted by A at theo"er the transfer of the land to 2 exec!ted by A at the

direction of @2 in con&!nction with a discharge ofdirection of @2 in con&!nction with a discharge ofmortgage exec!ted by 53 was not happy with thismortgage exec!ted by 53 was not happy with thisarrangement and said that it wanted to recei"e the titlearrangement and said that it wanted to recei"e the titlefrom @3 wanted the mortgage discharged before thefrom @3 wanted the mortgage discharged before thesettlement3 so!ght to rescind the contract3 9owe"er itsettlement3 so!ght to rescind the contract3 9owe"er ithad not lodged its ob&ections within the time period forhad not lodged its ob&ections within the time period for

the maing of ob&ections to title3 7he iss!es were whetherthe maing of ob&ections to title3 7he iss!es were whethera p!rchaser co!ld ref!se a transfer by direction anda p!rchaser co!ld ref!se a transfer by direction andwhether it co!ld re6!ire the title free from inc!mbrances3whether it co!ld re6!ire the title free from inc!mbrances3


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7he co!rt fo!nd that the p!rchaser co!ld not7he co!rt fo!nd that the p!rchaser co!ld notob&ect to the sale by direction as it was still aob&ect to the sale by direction as it was still asale from the registered proprietor3 Asale from the registered proprietor3 Ap!rchaser recei"ed the same protection as ap!rchaser recei"ed the same protection as ap!rchaser taing directly from a registeredp!rchaser taing directly from a registeredproprietor3proprietor3

As for the ob&ection to the discharge of As for the ob&ection to the discharge ofmortgage2 the co!rt fo!nd that the p!rchasermortgage2 the co!rt fo!nd that the p!rchaserco!ld not ob&ect as !on registration it wo!ldco!ld not ob&ect as !on registration it wo!ldrecei"e indefeasible title3 After completion orrecei"e indefeasible title3 After completion orprior to registration the p!rchaser wasprior to registration the p!rchaser wasprotected by s */A against any defects ofprotected by s */A against any defects ofwhich it had no notice3which it had no notice3


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7he fact that the holder of an7he fact that the holder of an!nregistered instr!ment has not2 at!nregistered instr!ment has not2 atthe time of settlement of thethe time of settlement of thetransaction2 paid the rele"ant stamptransaction2 paid the rele"ant stamp

d!ty and had the instr!ment stampedd!ty and had the instr!ment stampedby the 4Dice of State Re"en!e doesby the 4Dice of State Re"en!e doesnotnot mean that s!ch a holder is notmean that s!ch a holder is notable to obtain the protection oDeredable to obtain the protection oDeredby s3 */A:by s3 */A: +iemasters Pty Ltd v +iemasters Pty Ltd v

,eadow!or# Pty Ltd ,eadow!or# Pty Ltd ,SSC ,SSC*(? at para %%3*(? at para %%3


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Section3 */A cannot be relied !pon2 if theSection3 */A cannot be relied !pon2 if theinstr!ment is act!ally registered2 and theinstr!ment is act!ally registered2 and theregistered proprietor is not a party to anyregistered proprietor is not a party to anyfra!d2 he or she does get an indefeasible title3fra!d2 he or she does get an indefeasible title3

Bn bothBn both Jonray )Sydney* Pty Ltd v Partridge Jonray )Sydney* Pty Ltd v Partridge

Bros Pty Ltd Bros Pty Ltd '$(0(+ )( , ',S+ Pt $+ ?0)'$(0(+ )( , ',S+ Pt $+ ?0)andand ,ayer v Coe ,ayer v Coe '$(0)+ )) , ',S+ 'Pt $+'$(0)+ )) , ',S+ 'Pt $+?*( it was s!ggested that if notice of a "oid?*( it was s!ggested that if notice of a "oidinstr!ment was recei"ed after completion ofinstr!ment was recei"ed after completion ofthe transaction b!t before its registration2 thethe transaction b!t before its registration2 the

tr!e proprietor co!ld pre"ent registration of ittr!e proprietor co!ld pre"ent registration of itby obtaining an in&!nction to pre"entby obtaining an in&!nction to pre"entregistration3registration3


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Competing !nregisteredCompeting !nregistered

interestsinterests Breskvar v Wall Breskvar v Wall '$(1$+ $%0 C.R /10 - @r and'$(1$+ $%0 C.R /10 - @r and

@rs 5res"ar exec!ted a transfer to Petrie as@rs 5res"ar exec!ted a transfer to Petrie assec!rity for a loan3 Petrie fra!d!lently !sed thesec!rity for a loan3 Petrie fra!d!lently !sed thetransfer and sold to his grandson all2 whotransfer and sold to his grandson all2 who

became registered owner3 all sold to Albanbecame registered owner3 all sold to AlbanPty .td b!t before they co!ld register theirPty .td b!t before they co!ld register theirinterest the 5res"ars lodged a ca"eat whichinterest the 5res"ars lodged a ca"eat whichin&!ncted the sale3 7he conLict was thereforein&!ncted the sale3 7he conLict was thereforebetween the interest of 5res"ars and thebetween the interest of 5res"ars and theinterests of Alban Pty .tdinterests of Alban Pty .td

5arwic : 8title by registration83 hat sort of5arwic : 8title by registration83 hat sort ofinterest did all ha"eKinterest did all ha"eK hat sort of interesthat sort of interestdoes Alban ha"eK hat interest do the 5res"arsdoes Alban ha"eK hat interest do the 5res"arsha"eKha"eK

d


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interestsinterests Heid v "elian!e 'inan!e Cor#oration Pty Ltd Heid v "elian!e 'inan!e Cor#oration Pty Ltd '$()/+'$()/+

$?* C.R /%02 9eid agree to sell land to Connell$?* C.R /%02 9eid agree to sell land to ConnellBn"estments3 Connell was owned by ,ewman @cHayBn"estments3 Connell was owned by ,ewman @cHayM Co3 9eid accepted ad"ice from ,ewman to !seM Co3 9eid accepted ad"ice from ,ewman to !setheir employee 'Gibby+ as a solicitor3 7he solicitortheir employee 'Gibby+ as a solicitor3 7he solicitor

was !n6!alied3 9ied left for o"erseas and left Gibbywas !n6!alied3 9ied left for o"erseas and left Gibbyto complete the sale and p!t part of the proceedsto complete the sale and p!t part of the proceedsinto an in"estment3 7he remainder of the proceedsinto an in"estment3 7he remainder of the proceedswere not to be paid by Connell b!t to be sec!red bywere not to be paid by Connell b!t to be sec!red byway of a mortgage in fa"o!r of 9eid3 Bn fact Connellway of a mortgage in fa"o!r of 9eid3 Bn fact Connellmortgaged the property to Reliance before itmortgaged the property to Reliance before it

registered the sale from 9eid to Connell3 Afterregistered the sale from 9eid to Connell3 Afterregistering the sale b!t before Reliance8s or 9eid8sregistering the sale b!t before Reliance8s or 9eid8smortgage co!ld be registered2 9ied disco"ered themortgage co!ld be registered2 9ied disco"ered thefra!d3 hose mortgage too priorityKfra!d3 hose mortgage too priorityK

C d


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interestsinterests Gibbs C foc!sed rst on priority based !ponGibbs C foc!sed rst on priority based !pon

the time of creation of the rele"ant e6!itablethe time of creation of the rele"ant e6!itableinterests2 with s!ch priority being displacedinterests2 with s!ch priority being displacedonly if the e6!ities fa"o!red the holder of theonly if the e6!ities fa"o!red the holder of theinterest created second in point of time3 9isinterest created second in point of time3 9is9ono!r2 at ///2 said:9ono!r2 at ///2 said:

Bn the present case the interest of the appellantBn the present case the interest of the appellantwas rst in time3 7he 6!estion therefore iswas rst in time3 7he 6!estion therefore iswhether his cond!ct N has the conse6!encewhether his cond!ct N has the conse6!encethat has the better e6!ity2 and theappellant8s interest sho!ld be postponed to thatappellant8s interest sho!ld be postponed to thatof 3of 3

C i i d


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interestsinterests

At /*$2 @ason2 ;eane obser"ed: At /*$2 @ason2 ;eane obser"ed:

Bt will always be necessary toBt will always be necessary tocharacteriOe the cond!ct of thecharacteriOe the cond!ct of the

holder of the earlier interest inholder of the earlier interest inorder to determine whether2 in allorder to determine whether2 in allthe circ!mstances2 that cond!ct isthe circ!mstances2 that cond!ct iss!ch that2 in fairness and ins!ch that2 in fairness and in

&!stice2 the earlier interest sho!ld &!stice2 the earlier interest sho!ldbe postponed to the later interest3be postponed to the later interest3


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Iail!re to lodge a ca"eat andIail!re to lodge a ca"eat and

postponing cond!ctpostponing cond!ct

.apins8 interest sho!ld be postponed -.apins8 interest sho!ld be postponed -they armed 9ea"ener with the means tothey armed 9ea"ener with the means todeal with the estates3 7he fail!re todeal with the estates3 7he fail!re to

ca"eat was one factor to consider in theca"eat was one factor to consider in the6!estion of who had the better e6!ity36!estion of who had the better e6!ity37he 6!estion of whether a ca"eat sho!ld7he 6!estion of whether a ca"eat sho!ldbe lodged is a 6!estion of con"eyancingbe lodged is a 6!estion of con"eyancing

practice or whether it was reasonable3practice or whether it was reasonable3 Abigails search of the register was not Abigails search of the register was notrele"ant as it had not been ca!sed by anrele"ant as it had not been ca!sed by anrepresentation by the .apinsrepresentation by the .apins


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postponing cond!ctpostponing cond!ct BnBn J . H Jst )Holdings* Pty Ltd v Bank of New J . H Jst )Holdings* Pty Ltd v Bank of New

Soth WalesSoth Wales '$(1$+ $%? C.R ?*02 the ban loaned'$(1$+ $%? C.R ?*02 the ban loanedmoney to osephson3 7he ban obtained amoney to osephson3 7he ban obtained amortgage in registrable form as well as themortgage in registrable form as well as thecerticate of title b!t did not register thecerticate of title b!t did not register the

mortgage3 M 9 !st ad"anced f!rther money tomortgage3 M 9 !st ad"anced f!rther money to osephson on the sec!rity of the land3 7hey ased osephson on the sec!rity of the land3 7hey ased osephson abo!t the certicate of title and osephson abo!t the certicate of title andaccepted his statement that it was with the banaccepted his statement that it was with the banfor safeeeping3 M 9 !st lodged a ca"eat3 7hefor safeeeping3 M 9 !st lodged a ca"eat3 7heiss!e before the 9igh Co!rt was whether the baniss!e before the 9igh Co!rt was whether the banmaintained its priority according to time3 7hemaintained its priority according to time3 7he9igh Co!rt r!led in fa"o!r of the ban3 5y9igh Co!rt r!led in fa"o!r of the ban3 5yrecei"ing the title doc!ments the ban had taenrecei"ing the title doc!ments the ban had taenade6!ate preca!tions to protect themsel"es3ade6!ate preca!tions to protect themsel"es3

l l d d


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postponing cond!ctpostponing cond!ct (n /smanoski v "ose 0 (n /smanoski v "ose 0 $(1*> R ?%/2 A$(1*> R ?%/2 A

contracted to sell land to 5 and then againcontracted to sell land to 5 and then againto C3 hen C contracted he searched theto C3 hen C contracted he searched theregister and saw that A was the registeredregister and saw that A was the registered

proprietor3 5 had not lodged a ca"eat inproprietor3 5 had not lodged a ca"eat inrelation to his !nregistered interest at thatrelation to his !nregistered interest at thattime b!t did lodge one before C lodged atime b!t did lodge one before C lodged atransfer for registration3 7he co!rt heldtransfer for registration3 7he co!rt heldthat 5’s fail!re to lodge a ca"eat before Cthat 5’s fail!re to lodge a ca"eat before C

contracted with A was postponing cond!ctcontracted with A was postponing cond!ctas it led to C contracting in the belief thatas it led to C contracting in the belief thatthere was no other interest s!ch as 5’s inthere was no other interest s!ch as 5’s inexistence3existence3

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postponing cond!ctpostponing cond!ct Person-to-Person 'inan!es Pty Ltd v Sharari Person-to-Person 'inan!es Pty Ltd v Sharari

$ ,S.R 1*? 7redgolde had a $ ,S.R 1*? 7redgolde had aregistered mortgage o"er 7orrens title land3registered mortgage o"er 7orrens title land3

As a registered mortgagee he also held the As a registered mortgagee he also held the

certicate of title3 Sharari too acerticate of title3 Sharari too as!bse6!ent mortgage o"er the property2 b!ts!bse6!ent mortgage o"er the property2 b!this solicitor failed to ha"e that mortgagehis solicitor failed to ha"e that mortgageregistered3 Sharari did not lodge a ca"eat toregistered3 Sharari did not lodge a ca"eat toprotect his !nregistered mortgage3protect his !nregistered mortgage3

S!bse6!ently Person-to-Person too aS!bse6!ently Person-to-Person too amortgage o"er the property after being toldmortgage o"er the property after being toldby the owner of the land that 7redgolde hadby the owner of the land that 7redgolde hadthe only other mortgage o"er the property3the only other mortgage o"er the property3

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postponing cond!ctpostponing cond!ct Person-to-Person’s search of the registerPerson-to-Person’s search of the register

re"ealed only 7readgolde’s mortgage3re"ealed only 7readgolde’s mortgage3Person-to-Person lodged a ca"eat inPerson-to-Person lodged a ca"eat inrespect of its !nregistered mortgage3respect of its !nregistered mortgage3

7he iss!e before the Co!rt was whether7he iss!e before the Co!rt was whetherSharari’s fail!re to lodge a ca"eatSharari’s fail!re to lodge a ca"eatamo!nted to postponing cond!ct3amo!nted to postponing cond!ct3

@c.elland r!led that Sharari [email protected] r!led that Sharari was

g!ilty of postponing cond!ct and that2g!ilty of postponing cond!ct and that2therefore2 Person-to Person had prioritytherefore2 Person-to Person had priorityo"er Sharari3o"er Sharari3

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postponing cond!ctpostponing cond!ct 9is 9ono!r2 at 1/)2 said:9is 9ono!r2 at 1/)2 said: t is the settled practice of competent solicitors 333t is the settled practice of competent solicitors 333

acting for second or s!bse6!ent mortgagees2 to ens!reacting for second or s!bse6!ent mortgagees2 to ens!reeither the prompt registration of the mortgage oreither the prompt registration of the mortgage orlodgment of a ca"eat3 7he fail!re by thro!ghlodgment of a ca"eat3 7he fail!re by thro!ghhis solicitor to conform to this practice wo!ld leadhis solicitor to conform to this practice wo!ld lead

nat!rally to those who searched2 s!ch as

Real Property 5

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Transcript of Real Property 5