Land Law Principles and the PLA

• An estate is essentially an interest in land
• Estates characteristics:
  • Defined duration
  • Confers a right to possession of land either at once or in the future

Estates of Freehold

• Fee Simple
  • A Freehold Estate lasts as long as the holder has heirs
  • The largest estate known to Law
  • Closest interest to absolute ownership
  • Passed on through via next of kin and wills
• Fee Tail
  • A Freehold Estate lasts as long as the holder had direct heirs (lineal descendants)
  • The fee tail is abolished in Western Australia by the PLA S23
• Life Estate
  • A freehold estate is usually granted as long as the holder lives or another person lives (an estate Pur Autre Vie)
  • Subject To The Doctrine Of Waste
  • Waste comprises any acts by the life tenant which alters the nature or quality of the land
  • Waste can be restrained by injunction or may give rise to liability in damages to the person entitled to the fee simple in reversion
  • PLA s 17

Features of freehold estates

• Seisin:
  • A person possessing a freehold estate is said to be ‘seised' of the land
  • Seisin must always be vested in someone
  • At common law, this was significant as only seisin (i.e. a freehold interest) gave a right to seek recovery of land in a Royal Court of Justice
  • The concept of seisin has ceased to be of practical relevance with the development of the action in ejectment
  • Action can be brought by any person dispossessed of an interest in land, whether a freehold interest or an estate less than freehold

Estates Less Than Freehold

• Leasehold estates are covered in the Real Property Law unit
• The distinction between these estates is that freehold estates are of uncertain duration whereas estates less than freehold are for a fixed period
• Conveyance of Estates in Old System Title:
  • Feoffment with livery of seisin (conveyance and delivery of possession)
  • Common law required the correct form of words to be used (called words of limitation)
    • FEE SIMPLE: at common law strict words of limitation using "To A and his/her heirs"
  • Ss 23, 37 PLA: A disposition will pass the whole estate unless a contrary intention appears

Fee Simple Modifications

• Estates in land can be restricted by factors which limit the duration of the estate
• Grantor may place a determinable limitation on the grant or may insert a condition subsequent to the grant
• A determinable interest automatically ends on the determining event happening
  • On the occurrence of the determining event, the estate automatically reverts to the grantor
  • Grantor retains an interest called a 'possibility of reverter', example "If Y marries then property goes to X"
• Conditional fee simple includes a grant of fee simple subject to a condition
  • An interest subject to a condition will be brought to an end only on the exercise of a right of re-entry where the condition is breached
  • A condition must not offend against certain rules: total restraints on alienation will render a condition void
    • If void condition is struck and fee simple estate continues
  • Public policy; conditions totally restraining marriage will be void
    • Public policy terms struck out by courts based on uncertainty in terms, ex uncertainty in 'religion term'
• Determining event catchwords: While, During, as long as, until
• Conditional catchwords: On the conditions that, but if, if it happens that provided that

Remainders and Reversions

• Estates provide for interests in land that will fall into possession at some future date
• A remainder is an interest given to another that will only fall into possession on the completion of a prior estate, ex. the grant of a life estate to X, and the fee simple in remainder to Y
• A reversion is the interest remaining with the grantor after the grant of a lesser estate, such as the grant of a life estate, with the fee simple in reversion remaining with the grantor
• A future interest confers a right to the enjoyment of the land at a future time
  • Reversions
  • Remainders
  • Equitable Future Interests
  • (Legal Executory Interests)
  • Future interests created during the grantor's lifetime are governed by the PLA s 26
  • Section 26 PLA (WA): A contingent remainder is capable of taking effect ignoring the destruction or determination by forfeiture, surrender or merger of any preceding estate of freehold
  • Strict common law rules do not apply to such future interests

Legal and Equitable Interests in Land

• Equity developed the doctrine that there was not just one estate in land, there were two estates, one legal and one equitable
• It is possible for the legal and equitable estates in land to be vested in different people; equity affects Land Law

How do legal and equitable interests in land differ?

• Legal estates involve the legal title to property and rights in rem
• Equitable estates involve the beneficial use and enjoyment of property with contractual rights
• Legal rights are good against all the world
• Equitable rights are good against all persons except for a bona fide purchaser of the legal estate for value and without notice

Types of legal and equitable interests in land

• The trust (use)
  • A fee simple owner grants another party in fee simple on trust
  • A, the trustee, holds the legal estate
  • B, the beneficiary, holds the equitable estate
• The equitable fee simple
  • Purchaser has an equitable fee simple on the signing of a contract of sale as the purchaser has a right to specific performance of the contact
  • Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315
• The equitable lease
  • Arises out of a binding contract/agreement for a lease that can be enforced by specific performance, see Walsh v Lonsdale
• Walsh v Lonsdale [1882]
  • Court of Appeal (CA) held that the rules of equity enabled a landlord to enforce a term of a lease with the claimant, despite the lease not being created by a deed, as required at common law
  • Because ‘equity looks on as done that which ought to be done', the lease agreement was enforceable in equity

Facts in Walsh v Lonsdale

• D entered into an agreement with C for the lease of a property with;
  • The lease was to last for seven years
  • The rent was to be paid quarterly in arrears
  • A year's rent was payable in advance should the landlord D demand
  • There was no deed executed for this tenancy, though the C moved in and paid the agreed amount in arrears
  • D demanded the rent for the next year in advance, and C refused, on the basis that because there was no deed executed, there was no lease, and thus D's demand was not enforceable
• The issue for the CA was whether the lease agreement and the terms therein was enforceable
  • The question at law was whether the common law rules relating to leases applied, or equity applied Held by the CA:
• The CA found in the favour of the defendant, and held that equity was the rules which ought to be applied, notwithstanding the absence of a deed which formalised the lease
• Following the Judicature Acts which were introduced between 1873 and 1875, the common law system and the system of equity were combined, and where the two systems conflict, the rules of equity shall be the rules which prevailed
• The parties created an enforceable lease Statutory requirements to create legal and equitable interests in land are:
• PLA s 34 (1)(a): No interest can be created except by writing and signed
• PLA: 33 (1): Conveyances of land are void unless made by deed
  • The significance of using a deed is that it is enforceable and does not need consideration
• PLA s 35 (1): Creation of interests in land by parol, and not put in writing and signed, have the force and effect of an interest at will only

Legal interests in old system land

• S 33 (2)(d) PLA – conveyances of legal interests in land should be in a deed
• S9 PLA - formalities for a deed
• The Statute of Frauds remains operational in Western Australia: Section 2 Law Reform (Statute of Frauds) Act 1962 (WA): Statute of Frauds 1677 s 4 applies in amended form

Legal interests in Torrens Title land

• Legal interests are not created until registration
• Unregistered interests take effect as equitable interests
• All interests in land should be in writing and signed
• 34 (1) Subject to this Act with respect to the creation of interests in land by parol:
  • No interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, of by the person's agent lawfully authorised in writing, or by will, or by operation of law
  • A declaration of trust respecting any land or any interest therein shall be manifested and proved by writing signed by a person who is able to declare the trust or by his will

Enforceability of contracts for the transfer of an interest in land includes

• S 35 PLA: Any interest in land created by parol and not put in writing and signed by the person so creating it, or by his agent thereunto lawfully authorised in writing has, the force and effect of an interest at will only
• Contracts concerning land will be interests at will and unenforceable unless there is in existence:
  • A memorandum or note of the contract,
  • In writing, and
  • Signed
• A full contract will contain the 4 P's
• Price, property, parties and promises, agreement must be concluded

Exceptions to the statutory requirements for the creation of legal and equitable interests in land involves

• Under the doctrine of part performance the courts may allow an oral contract for the creation of an interest in land to be proved by oral evidence
• This may occur where the party seeking to enforce the contract has done acts in the partial performance of the obligations under the contract which satisfy certain established principles
• A party wishing to enforce an object once completing acts of part performance will allow oral evidence to be admitted to courts S 36(d) PLA recognises and preserves the doctrine of Part Performance in Western Australia
  • S 36(d) PLA provides that nothing in sections 34 and 35 affects the operation of the law relating to part performance

Regent v Millet

• The plaintiffs sought specific performance of an oral contract with the defendants the parents of one of the plaintiffs
• Agreement was for the plaintiffs to pay the defendants $1000 and to pay off the mortgage on a house owned by the defendants, in return for which they could live in the house as their own
• The plaintiffs moved into the house, commenced paying off the mortgage and later expended $5000 on renovations
• Taking of possession, effecting repairs and renovations, and making mortgage repayments
• Plaintiff must establish that it would be fraud for the defendant to shelter behind the Statute of Fraud provisions
  • Acts relied on as part performance should be undertaken by or on behalf of the party seeking to enforce the contract
  • Plaintiff must establish that the acts of part performance must be explicable only by reference to a contract generally of the type alleged to exist
  • Courts look to see what acts have been done to see if a contract has been made between the parties (Madison v ausison)
• Acts don't need to show precise terms of the contract, simply the contracts relation to land, approved in regent v Millet
• Acts of land must be unequivocal, standard of proof being beyond reasonable doubt

Requirements to a tenancy case

1. The act relied on must unequivocally and in its own nature be referable to 'some such agreement as that alleged'
2. By 'some such agreement as that alleged' is meant some contract of the general nature of that alleged
3. The proved circumstances in which the act was done must be considered in order to judge whether it refers unequivocally to such an agreement as is alleged
4. It must have been in fact done by the party relying on it on the faith of the agreement and further the other party must have permitted it on the faith of the agreement, and further the other party must have permitted it to be done on that footing. Otherwise there would not be 'fraud' in refusing to carry out the agreement, and fraud that is moral turpitude, is the ground of jurisdiction
5. It must be done by a party to the agreement. These requirements must be satisfied before the actual terms of the alleged agreement are allowed to be deposed to. Further, when those terms are established it still remains to be shown
6. That there was a completed agreement
7. That the act was done under the terms of that agreement by force of that agreement

Summary Outline - Equitable Remedies

• Two possibilities: Injunction and specific performance

Injunction

• As every piece of land is unique thus damages are not satisfactory

Specific Performance

• An order that directs a person to carry out an obligation
• Party seeking specific performance as a remedy must establish:
  • A valid and binding contract
  • Damages must not be an adequate remedy
  • Plaintiff must be ready, willing and able to perform his/her obligations under the contract

Explore key land law principles, including equitable leases under Walsh v Lonsdale. Understand the requirements for legal interests in old system land per the Property Law Act (PLA). Also, examine the impact of Section 35(1) on oral agreements and the concept of 'seisin'.