Real Property SkeletonsProblem question skeletons, awesome paragraphs and random shit I think I should remember

1. Old System Title........................................................................................................................... 21.1 Question on priorities........................................................................................................21.2 A question on conversion.................................................................................................4

2. Mortgages....................................................................................................................................... 52.1 There has been default: what can the bank do?.....................................................52.2 What can the borrower do?.............................................................................................62.3 Early discharge of mortgage...........................................................................................62.4 Tacking..................................................................................................................................... 7

3. Co-ownership................................................................................................................................ 83.1 At common law, there is a presumption for joint tenancy................................83.2 CA s 26(1) expresses an assumption for tenancy in common.........................83.3 Equity may modify these assumptions......................................................................83.4 A severance will turn a joint tenancy into a tenancy in common...................93.5 Rights inter se (before the end of the relationship).............................................93.6 Partition (CA s 66G/Environmental planning and assessment act pt 4)....93.7 Ending co-ownership.........................................................................................................93.8 The taking of accounts: after co-ownership ends...............................................103.9 Profits..................................................................................................................................... 10

4. Easements....................................................................................................................................114.1 Requirements (Re Ellenborough Park)...................................................................114.2 Creation.................................................................................................................................114.3 Changing/extending/modifying and easement...................................................134.4 Extinguishment..................................................................................................................134.5 Remedies...............................................................................................................................14

5. Restrictive Covenants.............................................................................................................151.1 Requirements for a binding covenant under OST..............................................151.2 Restrictive covenants on TT land...............................................................................16

6. Leases.............................................................................................................................................176.1 Lease or license..................................................................................................................176.2 Type.........................................................................................................................................176.3 Requirements..................................................................................................................... 176.4 Relationship.........................................................................................................................186.5 Covenants.............................................................................................................................18

1. Old System Title

1.1 Question on priorities

1 - Classify the interest

A legal interest is created by deed

Who has the legal estate?

the vendor pre-settlement

a purchaser post settlement

A first mortgagee by deed in poseession of the deed (Lloyds Bank v Bullock)

Does anyone else have a legal interest?

Other interests created by deed (e.g. leases)

Oral leases taht comply with CA s 23D (<3 years, best rent, immediate right to posession)

Are there any equitable interests?

A purchaser who has exchanged but not settled

Subsequent mortgagees

etc. (see notes)

2 - Apply the rules of priority

L v Ldeed delivered earlier has priority - qui prior est tempore potior est jure

L v ELegal interest has priority - qui prior est tempore potior est jure

E v LLater legal prevails, as long as the interest is bona fide, with no notice and for value.

E v EEarlier equitable interest prevails - qui prior est tempore potior est jure

3 - Has there been postponing conduct?

Failure to take posession of deeds

Failure to retain deeds

Premature release of deeds

etc. (no requirement to caveat)

4 - Has registration affected priority?

Instruments are registered under CA s 184G, and the first registered interest will have priority iff:

The person first registered has registered an effective instrument

it must be in writing

it must not be void (Re Cooper)

The person first registered is competing with another interest created by an instrument

this section does not grant priority over oral leases, equitable mortgagers or beneficiaries

The person first registered has paid valuable consideration

the deed is not protected if it was a gift

or if the consideration was not substantial (Bullen v Becket)

The person first registered was bona fide

not bona fide if with notice of an earlier interest over which priority is sought by registration (Marsden v Campbell).Remember order is important

1.2 A question on conversion

1Old System Title(OST priorities)

2

Qualified title (6-12 years)(limited indefeasibility, except against interests before conversion)

3

Torrens Title(indefeasibility: OST interests must register or caveat if they wish their interest to be maintained)

2. Mortgages

2.1 There has been default: what can the bank do?

2.1.1 Mortgagee Sale1. A default (either failure to make a repayment, or breaking a term of the

mortgage);2. Serving a statutory notice (RPA s 57(2)(b); Conveyancing act s 111); the

notice must:a. Call for the default to be rectified;b. Be in writing, signed by mortgagee or agent; and,c. Describe the default in particular: if it is a non-payment, the

amount missed should be described, though inaccuracy does not invalidate it (Clarke v Japan Machine Tools; Network Finance v Lane)

3. Non-compliance with this notice for <30 days.

Limitations The mortgagee cannot sell to himself The mortgagee must either take reasonable care or act in good faith

(depending on judicial opinion)

The order of payment of proceeds is as follows (RPA s 58; Conveyancing act s 112C):

1. Realtor/lawyer for mortgagee;2. M1’s debt;3. Subsequent mortgagees’ debts; and finally,4. If any money left, the mortgagor receives, if there is a deficit, the

mortgagees may sue under personal covenants.

2.1.2 Foreclosure1. The mortgagor must have defaulted (the common law right to redeem is

expired);a. Where there is no default, the bank cannot touch you.b. At this point, the bank may take possession.

2. A valid, statutory notice of default, requiring the default to be remedied within a month, must be given;

a. Torrens (RPA s 57(2)(b)).b. Old system or unregistered (Conveyancing Act s 111).

3. There must be non-compliance with the notice;a. At this point, mortgagee sale can occur.

4. There must be a properly conducted auction (Conveyancing Act s 99A) (RPA s 61);

5. The highest bid must be less than the mortgage debt (Conveyancing Act s 99A; RPA s 61);

6. The Supreme court makes a “decree nisi” where the mortgage debt is calculated and the mortgagor is given a specific time-frame (usually 6 months) to repay (RPA s 62);

7. The mortgagor must fail to repay;8. The court must order the foreclosure in absolute (RPA s 62(3)).

2.1.3 Other remedies The bank may sue on a personal covenant (covers difference between

mortgagee sale and loan amount CA s 100) The bank may take the right to possession (RPA s 60) The bank may appoint a receiver to collect rents (CA ss 115A, 109(1)(c)) The bank may (under OST) lease the property (this remedy is only

available in TT where the lender is in possession) The bank may improve the land (Matzner v Clyde)

2.2 What can the borrower do? Repay within the time of the equity of redemption Apply for an injunction Where there is fraud, a sale may be set aside (Latec Investments)

2.3 Early discharge of mortgage Have a right to early discharge of mortgage Have to pay interest unless it seems to be a penalty May default, require Bank to force repayment, and then pay with no

penalty

2.4 Tacking

2.4.1 OST (tabula naufragio) Iff:

1. M12. M23. M3

And: M3 acquires M1 Without notice of M2

Then: M3 has priority over M1 (Taylor v Russel)

2.4.2 OST (tacking of further advances)Iff:

1. M1 (not considering subsequent advances)2. M23. M1 (subsequent advance)

And: M1 has no notice (actual, constructive or imputed) of M2

Then: M1 can tack advances, with priority (Hopkins v Rolt; West v Williams;

Credland v Potter)

Iff:1. M1 (considering subsequent advances)2. M23. M1 (subsequent advance)

And: M1 has no actual notice of M2

Then: M1 can tack, with priority (Re O’Byrne’s Estate)

2.4.3 TT (tacking of further advances)Central Mortgage Registry v Doneware; Westpac v Adelaide Bank:

M1 can tack unless there is actual notice, where the mortgage is registered

Matzner v Clyde In OST, if M1 improves land, cost of improvement may be tacked

(Southwall v Roberts) OST cases apply to TT land

o In this case, there was actual notice, so tacking shouldn’t have worked

But for Matzner exceptiono But for improvement, M2 would not have gotten a cento Thus, considered bits are definitely tackableo Other bits may (arguably) be tacked

3. Co-ownership

3.1 At common law, there is a presumption for joint tenancyUnless (any):

The four unities aren’t present;o Unity of titleo Unity of interesto Unity of possessiono Unity in time of vesting

There are words of severance in the document creating the relationship; or,

The facts/circumstances express an intention contrary to joint tenancy.

3.2 CA s 26(1) expresses an assumption for tenancy in commonUnless (CA s 26(2)) (both):

There are clear words to the contrary AND The four unities are present

3.3 Equity may modify these assumptionsIff:

The position is tenancy in commonThen:

Equity follows the law (Delehunt v Carmody)

Iff: The position is joint tenancy

Then: Equity will follow the law

Unless: There is an inequality in contribution to purchase price There is an inequality to mortgage payments There is an inequality in partnership assets

Then: The ratio of the above will be the “shares” in equity

3.4 A severance will turn a joint tenancy into a tenancy in commonA severance may happen by:

Unilateral acto Transfer

Severance at equity happens when Enforceable contract For valuable consideration (e.g. 1/50th share)

Severance at law occurs when A transfer is registered (Wright v Gibbons)

o Mortgage in OST (Re Pollard’s estate) But not in TT (Lyons v Lyons: if mortgagor predeceases,

ends mortgagee’s interes)o Lease severs joint tenancy for the term of the lease (Freize v

Unger) Mutual agreement/merger (Williams v Hensman; CA and RPA s 99) Court order

o May be unilateralo Under s 97: RG registers a transfer from one owner to themselves

Unlawful killingo Common law

Unlawful killing doesn’t cause severance But the guilty party holds a share on behalf of the deceased

in trust (Rasmanis v Jurewitsch)o The Forfeiture act

You cannot benefit from a crime Unless you can benefit from a modification under s 5

(Leneghan-Britton v Taylor)

3.5 Rights inter se (before the end of the relationship)The following may be compensated/distributed:

Contractual obligations which are enforceable Local government rates (s560 Local Government Act)

There is no right for improvement/occupation rent until the relationship ends

3.6 Partition (CA s 66G/Environmental planning and assessment act pt 4) A partition order splits the property into sections. There is no right to refuse such an application in common law or equity. This may also create a trust for sale.

3.7 Ending co-ownershipThe following may end a co-ownership:

Agreement to sell between partieso Severance only occurs after the proceeds of the sale are allocated

(Re Allingham) All shares are bought by one person The operation of the right of survivorship in a joint tenancy

o If they die at the same time, the youngest is said to die last (CA s 35)

A government resumption of land

3.8 The taking of accounts: after co-ownership ends

3.8.1 ImprovementsIff (Brickwood v Young):

Value > CostCompensation:

Cost

Iff (Ryan v Dries): Value < Cost

Compensation: Value

3.8.2 Mortgages Payments count as improvements since they increase “equity” (Ryan v

Dries

3.8.3 Occupation rentIff:

Possession has been isolatedThen:

It may set off accounts (e.g. reduce improvement re-allocation)

3.9 Profits On behalf of co-ownership? (Question of fact)

If yes Profits from property per se? (as apposed to owner’s services) (Squire v

Roges)If yes allocate profits

4. Easements

4.1 Requirements (Re Ellenborough Park)1. There is a dominant and servient tenement2. The easement accommodates the dominant tenement3. In OST, the dominant and servient tenements cannot be owned by the

same person4. The easement must be capable of forming the subject matter of the grant Note – if it is a negative easement, it must fall into the following categories

to be valid:o Right to receive lighto Right to receive water through pipeso Right to receive air through defined channelso Right to support

4.2 CreationCreation is via express, implied, statute or proscriptive means.

4.2.1 Express grant or reservationA legal interest is created if:

OST: the easement is created by deed (CA s 23B) TT: there is a transfer in approved form (RPA s 46) that is recorded on DT

and ST’s folio (RPA s 47(1) Where DT is TT: easement must be created by deed (Cowlishaw v

Ponsford) Easements must comply with CA s 88(1)

o Specify burdened and benefited lando Which parties may modify/endo What is the subject of the easement

An equitable interest is created if: The easement is created with a specifically enforceable contract with

consideration (CA s 23C); OR There is part performance; OR In cases of equitable estoppel (Walton Stores)

4.2.2 Implied grant or reservationAn easement is implied (Wheeldon v Burrows):

1. Continuous and apparent use2. Necessary for reasonable enjoyment of land3. Used for the part of the land benefited

It arises where:1. The easement is not created by instrument2. This is a legal interest3. And cannot be defeated by subsequent ST

Types: Easement of necessity

o Since CA s 88K, not used much, since it is easier to get a court order

o The DT must otherwise be completely landlocked (Gibson v M’George)

o Must be absolutely necessary Vendor retains DT

o Any easement (other than one by necessity, s 88K and common intention) will not be implied in favor of vendor because it could have been reserved on sale (Wheeldon v Burrows)

Sale of DT and ST at the same timeo Existing easement remains (Swansborough v Coventry)

Omitted/misdescribedo Exception to indefeasibility (RPA s 42(1)(a1)o Implied easements in OST enforceable when land becomes TT,

even if unregistered (RPA s 42(1)(a1))o New implied easements cannot be made under TT (Aus Hifi v Gehl;

Beck v Aurbach; Dobbie v Davidson)

4.2.3 Easement by proscriptionFor prescription, must be 20 years+ (if not, try easement by implication)

Doctrine of lost modern grant (Delohery v Permanent Trustee)In order to be enforceable, DT must prove that ST:

1. Had knowledge (Lloyds Bank v Dalton)2. Power to stop and failure to exercise power (Dalton v Angus) Must not be by secrecy, force, license or permission (Gardener v

Hodgson’s Kingston Brewery)

4.2.4 Easement by statuteCA s 88B

Register/recording of easement under CA 196 of a plan detailing easements intended to be created

For the benefit of existing roads, easements in gross (CA s 88A), easements intended to act (benefit or burden) on the land in the plan

Public Works Act s 4A Easement may be resumed by crown over private land

Crown Land Consolidation Act s 279 Every purchase of crown land entitles road access through other crown

land (if required)

CA s 88K1. Reasonably effective for effective use and development (sub-s 1)2. Must be

a. Not inconsistent w public interestb. Adequately compensateablec. All reasonable attempts have been made to negotiate an easement

3. Specific4. Applicant pays compensation for easement5. Costs payable by applicant (most of the time)6. Could be modified under s 89

Note: easements are, above all requirements, up to the discretion of the court (Owner’s strata plan v Ryan)

May limit when easements apply (sub-s 3) May order compensation (sub-s 4) May grant ancillary rights (117 York St)

4.3 Changing/extending/modifying and easementDepends on creation

Implicationo Cannot extend (Corp of London v Riggs)

Expresso Easement ‘for all purposes’ NOT limited by original context; use

may change (White v Grand Hotel)o BUT proposed use limited if use so excessive that it is outside the

reasonable contemplation of the parties (Jelbert v Davis) OR if it causes wanton, capricious & causeless injury to owner of ST (Todrick v Western National Omnibus). Injunction may be sought (British Railways v Glass).

Proscriptiveo Connot change on extend (Wimbledon v Dixon)o Limit for what was necessary for DT at time of creation (British

Railways v Glass)o Intensification is not a change if there is no increase in burden

(British Railways v Class

4.4 ExtinguishmentExpress release

OST – deed (CA s 23B) TT – registered transfer (RPA s 47(6)) Equity – in writing for value (CA s 23C(1)(c)

Operation of law Same owner (Coke upon littleton) except:

o Easement by recording of a plan under CA s 196 (CA s 88B(3)(c)(iii))

o TT registered land (RPA s 47(7))Order of Court (CA s 89(1))

Court can MODIFY or EXTINGUISH where:o Reason for creation is obsolete and ST is impeded (CA s 89(1)(a))o DT agrees or implies abandonment (CA s 89(1)(b))o DT waives or seems reasonably to have waived benefit (CA s

89(b1)(i))o Proposed modification does not injur DTo Implies where previous owner agrees to surrender easement, even

if unrecorded (Pieper v Edwards)

o Courts should not restrict this section (CA s 89)Implied Release

Within 20 years if there is evidence that DT intended this Non-use is not enough (Ward v Ward)

o Unless it is for long (Treweeke v 36 Wolsely Rd)o Or unless it combines with other circumstances implying intention

(Swan v Sinclair)Abandonment in TT

If not used for 20 years (RPA s 49(2)), RG may cancel recording (RPA s 3/4?9(1))

But RG must consider interested party’s submission during notice period (RPA s 49(4))

RG may cancel easement if it has no purpose because separate properties were consolidated (RPA s 49(5))

4.5 RemediesAbatement (self-help)

Not encouraged (Lagan v Lamberg) No notice required (Perry v Fitzhowe) Mustn’t be excessive, breach peace or injure 3rd parties

Injunction Against continuing interference (Andale v Goetjens) Not granted if minor or temporary interference (FCA v Moreton)

Damages Where substantial interference with enjoyment (Saint v Jenner)

Court Order Nuisance for unreasonable interference: need substantial injury (NOT

total destruction; less convenient is fine)

5. Restrictive Covenants

1.1 Requirements for a binding covenant under OST1. The covenant must be restrictive in substance (Tulk v Moxhay)2. The purchaser must have taken with notice of the covenant (Tulk v

Moxhay; Wilkes v Spooner for someone claiming through such a purchaser)3. The covenant must “touch and concern” the land benefited (Rogers v

Housegood; Tulk)a. The interest must be annexed to landb. The interest must not be personal (i.e. it must be for the benefit of

the land, not the specific owner)4. If the land has been subdivided, the covenant is only binding on the

subdivisions (rather than to the block of land as a whole, which is the assumption) if there are words to the effect of “benefit of the land and every part of it that may lawfully be subdivided” (Tulk; Ellison v O’Neil)

5. CA ss 70 and 70A may not be rebutteda. CA s 70 implies that the benefit of the covenant is binding on the

successors of the covenanteeb. CA s 70A implies that the burden of the covenant is binding on the

successors of the covenantor6. The covenantee must own the land benefited at the time of creation

(Kerridge v Foley – land sold lot by lot, land sold subsequent could not get a covenant from land already sold since the vendor no longer owned the land), unless there is a valid scheme of development (Elliston v Reacher)

a. There must be a reciprocity of covenants (each must be burdened by the others)

b. Others are suggestions (Re Application of Poltava Pty Ltd)i. Common vendor (may be two or more vendors acting in

concert (Re Dolphin’s Conveyance))ii. Plan must have been laid out (size may be changed

according to the requirements of each purchaser (Baxter v Four Oaks)

7. There must be compliance with CA s 88(1).a. Must be created by an instrument (after 1930)b. Benefiting and burdened party must be stated (sub-sub-ss (a), (b))c. The person able to release or change the easement (sub-sub-ss (c),

(d))

1.2 Restrictive covenants on TT landSimilar to OST (except for additional requirements for proving a building scheme and the application of CA s 88B instruments), a covenant requires the following to be valid:

1. The covenant must be restrictive/negative in substance (Tulk v Moxhay)2. The Purchaser must have taken with notice of the covenant (Tulk v

Moxhay)a. Note, in TT, if the interest is on the register, notice is implied (CA s

88(3))3. The covenant should be recorded on the register in accordance with CA s

88(3)4. The covenant must “touch and concern” the land benefited (Rogers v

Hosegood; Tulk v Moxhay)5. There is a presumption that a covenant does not apply to a subdivision. If

it is to apply to a subdivision, this needs to be expressly stated (Tulk v Moxhay; Ellison v O’Neill)

6. CA ss 70 and 70A may not be rebutteda. CA s 70 implies that the benefit of the covenant is binding on the

successors of the covenanteeb. CA s 70A implies that the burden of the covenant is binding on the

successors of the covenantor7. The covenantee must own the land benefited at the time the covenant is

created (Kerridge v Foley)

7A. UNLESS you satisfy the elements of a building scheme (Elliston v Reacher)8. There must be compliance with the formal requirements of CA s 88(1) (Re

Louis)a. Must be created by an instrument (after 1930)b. Benefiting and burdened party must be stated (sub-sub-ss (a), (b))c. The person able to release or change the easement (sub-sub-ss (c),

(d))

8A UNLESS there is a CA s 88B instrument (after June 1964) registered containing a covenant

a. Registered under CA s 196b. Complies with the requirements of CA s 88(1)

1.2.1 A s 88B instrumentThis instrument is a method of subdivision (CA s 196), which if it complies with CA s88, is enforceable whether or not the other requirements of easements have been satisfied (e.g. they can both be owned by the same party). It needs to be valid under CA s 88, therefore, must touch concern, describe benefited etc. The covenant is to be recorded under each burdened CT, the covenant. Ommited is still enforceable.

6. Leases

6.1 Lease or license Test is exclusive possession: facts and circumstances (Radaich v Smitch)

6.2 Type Fixed term Periodic (either express or implied [by payment period = notice period]) At will (not tenancy at all, can be determined=ended at any time) At sufferance (“holding over” where a fixed term comes to an end,

compensation available)

6.3 Requirements Exclusive Possession Must be of certain duration Certainty to parties, property and price Correct form

o OST Deed (CA s 23B(1)) Unless it complies with ss 23D(2) (oral lease)

<3 years best reasonably obtainable price immediate right to possession

or 23C(1) [in writing] with consideration Or there is equitable estoppel (Walton Stores)

o TT Valid signed document by lessor/agent 23C/D RPA s 53 (need to be registered if more than 3 years, if

unregistered is a valid equitable (Chan))o TT Unregistered

Legal CA s23D(2) (oral)

Equitable Valid lease less than 3 years (short tenancy

exception) Enforceable agreement to lease complying w s 54A

[in writing] with either consideration or part performance (look to intention)

Or s 23C(1) [some form of writing signed] with consideration

Or equitable estoppel

6.4 Relationship Is there privity of contract (original signatories to the contract) – all

covenants are enforceable Or privity of estate – covenants enforceable must “touch and concern”

o CA ss 117 (benefit) and 118 (burden) allows the assignment of the reversion

6.5 CovenantsObligations in lease:

1. Express clauses2. Clauses implied by common law (and inherent in T/LL relationship) (e.g.

non-derogation and quiet enjoyment)3. Clauses implied by statute4. Clauses which are a necessary implication

6.5.1 Repair Prospective duty, put into repair, but not give the guy something new For natural disasters, the contract is considered frustrated If on LL, he must have notice to be required to fix

6.5.2 Quiet enjoyment Not absolute, just have to minimize impact E.g. water (Martin’s camera corner) Not where defect is observable (Southwark, flushing)

6.5.3 Non-derogation Often brought alongside quiet enjoyment claims Whores upstairs (Nordon Case) was non-derogation Where third parties, LL is guilty if consented or authorized (Nordon)

6.5.4 Other LL Furnished to reasonable standard – fit for purpose

6.5.5 Common law implied on tenant Us in a tenant-like manner Yield up possession (don’t sublease after the end) Not waste

6.5.6 Statutory covenants Lessee repair (CA s 84(1)(b)) – keep in repair regarding age/char of the

house (Proudfoot) LL required to pay rent on time (CA s 84(1)(a)) LL may inspect/repair with two days notice (CA s 85(1)(d)) LL may re-enter if rent forfeit for a month (CA s 85(1)(d)) – two months

for other breach (CA s 85(1)(d))

6.5.7 Obligations in contract Good faith or business efficacy (Renard Constructions; Alcatel)

6.5.8 Obligations in tort LL may be liable for injury on their property If it is within scope (Circua v Williams) [no duty to upgrade, if he sees

something dangerous, he should fix it]

6.6 Assignment/subleasing Assignment/subleasing may be prohibited Where there is a qualified covenant that he can only assign with consent

o Consent can not unreasonably be withheld CA ss 133B(1), 132o Reasonable person

Cannot assign residential tenancies

6.7 Termination By re-entry

o 1 month rent, 2 month otherwise CA s 85(1)(d)o notice under CA s 129 (maybe not for rent ss (8) Butts thinks no

need)o or implied right under s 85(1)(d)

Contractualisation via repudiation (no fundamental breach) (Progressive) and get damages for rent until re-leased: duty to mitigate

Note: a breach may be waived