Priorities

Creation and Enforcement of Proprietary Interests

Recall foundation concepts

Old system title = common law,

not statute

Interests in land can be

legal or equitable

What sort of interest?

writing

grant

signed If not…

Agt to grant?

Part performance?

Resolving competing interests

equitable legal

equitable legal

land

LEGAL V LEGALFirst type of competition

legal

legal

land

Can you sell what you do not own?

PRIOR LEGAL V SUBSEQUENT EQUITABLE

Second type of competition

legal

equitable

land

Where the equities

are equal, the law prevails

1. Except fraud

2. Except gross negligence

3. Unless agent exceeds authority

4. Unless represents equitable interest to

3rd party who relies

on it

EQUITABLE V LEGALThird type of competition

equitable legal

land

Legal interest prevails where acquired by ‘purchaser’:

Bona fide For value Without notice

Notice: actual, constructive, implied

EQUITABLE V EQUITABLEFourth type of competition

equitable

equitable

land

Where the equities are equal, the first in time prevails… Principle of last resort.

Rice v Rice

To see if the equities are equal, examine the conduct of the

parties

Examples of postponing conduct

Fail to keep title deeds

Carelessness

Conduct allows

mistaken belief

If later holder has notice of earlier interest

Mere equity v equitable interest

Latec Investments v Hotel Terrigal

A lawyer’s view of Latec

Equity takes into account all the conduct of all the parties

Review

What kind of interests?

Order of creation?

Which competition?

What is the law?