Property Law Notes PDF

Property 2 Week 1 Torrens Land Freehold land Crown land Government owned land Indefeasibility - paramount interests at time of registration Product of liberalism and positivism Torrens system creates greater certainty -- puts faith in freehold registry Boundaries to land For ownership, exc...

Property 2 Week 1 Torrens Land Freehold land Crown land Government owned land Indefeasibility - paramount interests at time of registration Product of liberalism and positivism Torrens system creates greater certainty -- puts faith in freehold registry Boundaries to land For ownership, exclusive possession of the property must be present -- millar v taylor In light of the fact that land is a three dimensional concept, what do we need to consider in order to determine the scope (in other words, ***[the boundaries]***) of a person's '***[exclusive possession]***' of land? 1. The airspace above; 2. The minerals below; 3. Horizontal (or lateral boundaries); and 4. Whether the contents of the property forms part of the land (Fixtures). Airspace above **[THE 'AD COELUM' RULE]:** The owner of land owns 'everything up to the sky and down to the centre of the earth' (*Cujus est solum, ejus est usque ad coelum et ad inferos*). *Bury v Pope* (1586) 78 ER 375.\ \ Note: The text refers to 'Cuius est solum'. Either terms are acceptable! A diagram of a house Description automatically generated **[RESTRICTIONS/QUALIFICATIONS ON THE AD COELUM RULE]:***\ *[\ ]Trespass and Nuisance laws under the common law however, have placed ***[limitations]*** upon the fundamental *ad coelum* rule established in *Bury v Pope*. [FIRST APPROACH]: *Bernstein of Leigh v Skyviews & General Ltd* \[1978\] QB 479:\ \ Ad coelum rule should be restricted to the extent of allowing the public to '***[enjoy the benefits of science']*** without interfering with the land owner's right to ***[use and enjoy]*** their land. A diagram of a house Description automatically generated per Griffiths J at 488:... I find that the defendants\' aircraft ***[did not infringe any rights in the plaintiff\'s air space]***, and thus no trespass was committed. It was... flying many ***[hundreds of feet above the ground]*** and it is not suggested that... it caused any interference with any use to which the plaintiff put or might wish to put his land. per Griffiths J at 489: \[I\]f the circumstances were such that a plaintiff was subjected to the harassment of ***[constant surveillance]*** of his house from the air, accompanied by the photographing of his every activity, \[this would amount to\] an actionable nuisance for which \[a court\] would give relief. [SECOND APPROACH]: *LJP Investments v Howard Chia Investments* (1989) Aust Tort Rep 80-269: Considering conduct that '***[may interfere]***' with any ***[ordinary uses of the land]*** including '***[significant commercial gain]***' caused by the use of the plaintiff's airspace. See also *Bendall Pty Ltd v Mirvac Pty Ltd* (1989) 24 NSWLR 490.  per Hodges J at 495-497: \[T\]he relevant test is not whether the incursion actually interferes with the occupier's actual use of land at the time, but rather whether it... ***[may interfere with any ordinary uses of the land]***... \[The\] case really comes down to the question of whether one person should be permitted ***[to use the land of another person for considerable commercial gain for himself]***, simply because his use of the other person's land causes no significant damage to that other person's land. As a matter of general principle \... "No". per Bryson J at 472: In my view, the defendants have made an unfortunate choice based on ***[economic considerations]*** and have been caught poaching with the squire's game tucked in their belts. The resource represented by the plaintiff's airspace is not available like natural resources of the countryside for them to take as they find suitable, any more than they could count on using other people's bricks or other resources. At the heart of the litigation is a very simple question of using or not using other people's property, and this disqualifies the defendant's from any real claim to consideration of hardships which they have incurred. A diagram of a tower under construction Description automatically generated The Minerals Below **[THE AD COELUM RULE]:** *Bury v Pope* (1586) 78 ER 375: Prima facie, persons own all space above and below land. **[RESTRICTIONS/QUALIFICATIONS ON THE AD COELUM RULE]:** [COMMON LAW]: *The Case of Mines* (1568) 75 ER 472: Gold and silver vest with the crown. *Bocardo SA v Star Energy UK Onshore Ltd* \[2011\] 1 AC 380 also suggests that land owners only own as much space below the ground as can be reasonably enjoyed. -- oil company drilling 1800 feet below plaintiff, held in favour of the oil company due to impractical that plaintiff could enjoy that depth [LEGISLATION]: - *Mineral Resources Act 1989* (Qld) - *Petroleum Act 1923* (Qld) and *Petroleum and Gas (Production and Safety) Act 2004* (Qld) - *Geothermal Energy Act 2010* (Qld) -- ownership of geothermal energy is with crown - *Water Act 2000* (Qld) -- ownership of water from waterways rests with crown s26 - *Atomic Energy Act 1953* (Cth) -- uranium is with crown Horizontal/lateral boundaries **[BOUNDARIES INVOLVING CREEKS AND WATERWAYS]:** [NON-TIDAL WATERWAYS]: s 13A of the *Land Act 1994* (Qld): Land on the water side of a ***[non-tidal waterway]***, vests with the state. [TIDAL WATERWAYS]: s 9 of the *Land Act 1994* (Qld): In the case of ***[tidal waters]***, the crown owns up to the so-called '***[tidal boundary]***'. This is to be determined as per the definition under ss 62 and 70 of the *Survey and Mapping Infrastructure Act 2003* (Qld). [DOCTRINE OF ACCRETION AND EROSION]: *Hazlett v Presnell* (1982) 149 CLR 107 per Gibbs CJ, Mason, Murphy, Wilson, Brennan and Deane JJ: In the event of a change in the course of a river, the legal boundary of the land would change if: 1\. The change was '***[gradual and imperceptible]**'*; and 2\. The change was a result of '***[natural phenomenon]**'*.  Argument that the dredging changed the border failed due to not being natural, so he was still in victoria not NSW 1. A different result, but applying the same test however, was achieved in *Southern Centre of Theosophy Inc v Sth Australia* \[1982\] AC 706. This case also established that ***[accretions caused by wind]*** could also potentially alter the boundary under this doctrine. 2. Importantly, s 10 of the *Land Act 1994* (Qld) provides that this doctrine does not apply when the change was ***[assisted by]*** 'man made works' even when it would otherwise be gradual and as a result of natural phenomena. In such cases, land below the 'high water' mark would remain with the crown. (*State of Qld v Beames* \[2002\] QCA 209) High watermark under s6 (spring tide) **[ENCROACHMENT]:** s 184 of the *Property Law Act 1974* (Qld) provides that: **Application for relief in respect of encroachments** 1. Either an adjacent owner or an ***[encroaching owner]*** may apply to the court for relief under this division in respect of any ***[encroachment]***. s 182 of the Act provides the relevant definitions for the purposes of s 184: ***[encroachment]*** means encroachment by a ***[building]***, including encroachment by ***[overhang]*** of any part as well as encroachment ***[by intrusion]*** of any part in or upon the soil. ***[building]*** means a substantial building of a permanent character, and includes a wall. s 185(1) provides that: 1. On an application under section 184 the court may make such order as it ***[may deem just with respect to]***--- a. the payment of ***[compensation]*** to the adjacent owner; and b. the ***[conveyance, transfer, or lease]*** of the subject land to the encroaching owner, or the grant to the encroaching owner of any estate or interest in the land or of any easement, right, or privilege in relation to the land; and c. the ***[removal]*** of the encroachment. Under s 185(2), the court may take account of the following factors in determining the scope of relief which is granted: a. the fact that the application is made by the adjacent owner or by the encroaching owner, as the case may be; and b. the situation and value of the subject land, and the nature and extent of the encroachment; and c. the character of the encroaching building, and the purposes for which it may be used; and \(d) the loss and damage which has been or will be incurred by the adjacent owner; and \(e) the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment; and \(f) the circumstances in which the encroachment was made. s 186 of the *Property Law Act 1974* (Qld) provides that the compensation that is awarded should be equivalent to the "***[unimproved capital value of the subject land]***" unless it can be proven on the balance of probabilities that the encroachment was as a result of ***[negligence]*** in which the compensation would be ***[three times this amount]***. Whether the contents of the property forms part of the land. (Fixtures) Fundamental rule established in *Minshall v Lloyd* (1837) 150 ER 834:\ \ per Parke B at 838: \[T\]he law is clearly settled... that every thing substantially and permanently affixed to the soil is in law a fixture. The principle of law is, that 'quicquid solo plantatur solo cedit.' \[what is attached to the land, becomes part of the land\] When then is an object a fixture? *Holland v Hodgson* (1872) LR 7 328: Consideration needs to be given to the ***[degree]*** and ***[purpose]*** of annexation. A diagram of a company Description automatically generated per Blackburn J at 334: There is no doubt that the general maxim of the law is, that what is annexed to the land becomes part of the land; but it is very difficult, if not impossible, to say with precision what constitutes an annexation sufficient for this purpose. It is a question which must depend on the circumstances of each case, and mainly on two circumstances, as indicating the intention, viz ***[the degree of annexation]*** and the ***[object of annexation]. [ ]*** *Australian Provincial Assurance Co v Coroneo* (1938) 38 SR (NSW) 700: Further guidance as to whether an object is a fixture, was provided by His Honour Jordan CJ who established that: 1. If a item is ***[fixed to the ground]*** then the item is ***[presumed to be a fixture]*** and the ***[onus is on those who object to prove otherwise]***; 2. If an item is ***[not fixed to the ground]***, then the object is ***[presumed to not be a fixture]*** and the ***[onus is on those who object to prove otherwise]***; and 3. In considering whether or not an item is a fixture, consideration should be given as to: a. Whether or not it was ***[intended as permanent]***; and b. Whether or not there was an ***[intention to improve the land]***.  **[FURTHER FIXTURE AND CHATTEL CASES]:** 1\. [STEAM ENGINE]: *Hobson v Gorringe* \[1897\] 1 Ch 182:\ \ Steam engine bolted to concrete floor held to be a fixture due to intention of installation to be permanent. A diagram of a product Description automatically generated with medium confidence 2\. [TAPESTRY]: *Leigh v Taylor* \[1902\] AC 157: Tapestry held not to be a fixture due to intention for enjoyment of resident not to improve value of land.  per Lord Halsbury at 158: \[The\] purpose of it being placed there, is ***[not intended]*** to form part of the realty, but is only a mode of enjoyment of the thing, while the person is temporarily there, and if it is there for the purpose of his or her enjoyment then it is removable and goes to the executor. 3\. [DISHWASHER/SHED]: *Farley v Hawkins & ors* \[1996\] QCA 520: Dishwasher held to be a fixture because it would create significant disfigurement to the house if it was removed. Shed bolted to concrete base held to be a fixture as it could not be easily removed. per Derrington J at 5-6: In respect of the ***[dishwasher]***, its status as a fixture is established because not only is it lightly connected with fixtures but also it is set into fixtures. Although it could easily be removed after the disconnection of the plumbing, the entire fixture into which it was built was ***[intended as an integrated whole]***. This is not the case where it merely occupies an empty space. per Derrington J at 6: The ***[shed]*** was so substantial as to amount to a fixture.... It is ***[not of the type of structure fabricated for easy transportability]*** where the bolting to a base is merely for security during its temporary location at the place where the base is located.... By its ***[size]*** and ***[relative permanence]*** the shed in this case is intended to be a fixture and its being bolted to the base as a convenient form of building construction does not detract from this. [TV AERIAL/VENETIAN BLINDS/CABINET /STOVE/CARPET]: *Palumberi v Palumberi* \[1986\] NSW ConvR 55287: A TV aerial installed on the roof of a unit using a U-Bolt, a non built-in cabinet and venetian blinds were held to be chattels and hence, did not form part of the land. A Stove and Carpet installed to replace existing items were held to be fixtures.  *Palumberi v Palumberi* per Kearney J at 287: It would seem from perusal of these and other authorities in the field that there has been ***[a perceptible decline in the comparative importance of the degree or mode of annexation]***, with a tendency to ***[greater emphasis being placed upon the purpose or object of annexation]***. [AIRCONDITIONING UNITS]: *Belgrave Nominees Pty Ltd v Barlin-Scott Airconditioning (Aust) Pty Ltd* (1984) VR 947: Airconditioning considered fixture due to connection to power and water supply. A diagram of a construction worker Description automatically generated [HOUSES RESTING ON STUMPS]: *Reid v Smith* (1905) 3 CLR 656: Houses resting on stumps held to be fixtures.  [PIPES EMBEDDED IN THE GROUND]: *North Shore Gas Co Ltd v Commissioner for Stamp Duties* (NSW) (1940) 63 CLR 52: Pipes embedded in the ground were held to be fixtures. A diagram of a company Description automatically generated BUT consider *Commissioner of Main Roads v North Shore Gas Co Ltd* (1967) 120 CLR 118: In this case, gas pipes embedded in the ground were held to not be fixtures despite the level of annexation because the Gas Company had a ***[mere license]*** with respect to the use of the land.  **[WHEN FIXTURES CAN BE LAWFULLY REMOVED FROM THE LAND]:\ \ **[TENANT'S FIXTURES]: 1. Fixtures intended for '***[trade]***' or '***[domestic convenience or ornament]***' can be removed by a tenant. (*Holland v Hodgson*) 2. This right can be exercised ***[prior to the expiry of the lease]***. (*New Zealand Government Property Corp v H M & S Ltd* \[1982\] QB 1145, 1156) 3. The courts have also suggested that this right could be exercised if the ***[tenant legally remains in occupancy]*** or ***[for a reasonable time post termination]*** in the case of a ***[non fixed-term lease]***. (*D'Arcy v Burelli Investments Pty Ltd* (1987) 8 NSWLR 317 at 323.) [AGRICULTURAL FIXTURES]:\ \ With an exception of crown leases, agricultural fixtures can be removed as a tenant's fixture if: 1. Involving land which is '***[agricultural]***' (including inter alia that used for dairying); 2. Land is ***[less than 5 acres]*** in total. ss 153-167 of the *Property Law Act 1974* (Qld). Week 2 Co-ownership is: 1. Where two or more people are entitled to the simultaneous ownership of land which occurs as a consequence of the doctrine of tenure and the doctrine of estates; and 2. Can exist in law and in equity; 3. Can exist in possession or remainder; and 4. Can occur as both freehold and leasehold estates. **[THE TWO TYPES OF CO-OWNERSHIP]:** s 33(1) of the *Property Law Act 1974* (Qld) confirms that there are two remaining types of co-ownership that can be created in Queensland, ***[Joint Tenancy]*** and ***[Tenancy-in-Common]***. [JOINT TENANCY]: 1. Common with married and long-term de facto couples. 2. A joint tenancy creates a ***[right of survivorship]***: a. If one joint tenant dies, the land is automatically vested in the remaining joint tenant or tenants. The remaining interest or interests therefore '***[enlarge]***'. (*Wright v Gibbons* (1949) 78 CLR 313, 323 per Latham CJ). b. If ***[all die simultaneously]***, they are deemed to have died in ***[order of age]*** with the youngest being the deemed survivor. The estate of the youngest person would therefore take the whole interest. (s 65 of the *Succession Act 1981* (Qld)) c. There must be a presence of four unities of possession, title, interest and time. If any are missing, then a 'tenancy in common' is formed. *a. UNITY OF POSSESSION:* No co-owner can claim an individual parcel and/or exclude another (as with a tenancy-in-common). (*Mischel v Mischel Holdings Pty Ltd (in liq)* \[2012\] VSC 29) *b. UNITY OF TITLE:* Title must originate from the ***[same source]*** such as a single conveyance. *UNITY OF TIME:* All joint tenants must take from the same source for exactly the same time unless there is a disposition via will. *d. UNITY OF INTEREST:* All co-owners must hold interests of the ***[same nature, type and duration]***. One co-owner cannot hold a freehold interest whilst the other holds a leasehold interest. Likewise, if parties have separate obligations (even those that are identical), then there will be no unity of interest. They ***[must]*** also hold an ***[equal 'undivided' share]*** in the property (so it ***[cannot]*** be in unequal proportions) See *Mikeover Ltd v Brady* \[1989\] 3 All ER 618. [TENANCY-IN-COMMON]: 1. Occur when any of the four unities are missing such as when there are uneven shares (lack of unity of interest) or the transfer specifies that the co-owners will take as tenants-in-common. 2. Although they cannot exclude any co-owners from using any part of the land, they hold a 'distinct share' 3. They can hold the land in unequal proportions. (e.g. 75/25) 4. The interests can be of a ***[different type]*** such as leasehold /freehold. (See *Nullagine Investments Pty Ltd v Western Australian Club Inc* (1993) 177 CLR 635, 643-​644) 5. There is ***[no right of survivorship]***. The proportion that is held by the deceased co-owner ***[passes according to what is specified in their will]***. (Part 7 of the *Succession Act 1981* (Qld)) 6. The co-owners are free to dispose of their share without impacting upon the nature of the co-ownership. 7. The only unity which must be present is the unity of possession. **[THE CREATION OF CO-TENANCIES]:** 1\. [CREATION OF JOINT TENANCIES AND TENANCIES-IN- COMMON]: *THE PRESUMPTION IN FAVOUR OF A TENANCY-IN-COMMON:* 1. Under common law, co-owners were presumed to be joint tenants. (See *Delehunt v Carmody* (1986) 161 CLR 464, 470) 2. This presumption however, has been altered by s 35(1) of the *Property Law Act 1974* (Qld) and s 56 of the *Land Title Act 1994* (Qld) which provides ***[a statutory presumption in favour of a tenancy in common]***. This applies to both legal and equitable interests. (*Delehunt v Carmody* (1986) 161 CLR 464) *WHEN THE PRESUMPTION DOES NOT APPLY:* The presumption will ***[not apply]***, and a ***[joint tenancy]*** will be created, when: 1. There is ***[specific wording]*** or a ***[clear intent]*** in the disposition that a joint tenancy is to be created. e.g. use of the words 'as joint tenants' or 'jointly'. (s 35(1) of the *Property Law Act 1974* (Qld)) 2. The grant is being made to ***[executors]***, ***[administrators]***, ***[trustees]*** and/or ***[mortgagees]**.* (s 35(2)(a) of the *Property Law Act 1974* (Qld); *Mitchell v Arblaster* \[1964\] NSWR 119) 3. The grant consists of property for a ***[business partnership]***. (s 35(2)(b) and (3) of the *Property Law Act 1974* (Qld)) *REQUIREMENT OF A 'DISPOSITION':* 1. In order for a co-tenancy to be created in the first place however, there must be a '***[disposition']***. (*Dennis v Dennis* (1971) 124 CLR 317) 2. Disposition can include a conveyance or a transfer via will. (s 18 of the *Property Law Act 1974* (Qld)) 3. Dispositions ***[do not necessarily need to be in writing]***. (s 35(5)) Leasehold interests of three years or less for example, can be created orally (s 12(2) of the *Property Law Act 1974* (Qld)) and again, they can be equitable interests also. [CREATION OF EQUITABLE (BENEFICIAL) TENANCIES-IN-COMMON:] 1. Even though the formal requirements for the creation of a joint tenancy at common law have been complied with (thereby creating a joint tenancy a law), a ***[parallel tenancy-in-common at equity]*** may be implied in the following circumstances: a. The property consists of partnership assets (s 35(2)(b) of the *Property Law Act 1974* (Qld)). b. The purchase price was provided in unequal shares (*Calverley v Green* (1984) 155 CLR 242 per Gibbs CJ); or c. When two or more co-owners advance money on the mortgage. (*Calverley v Green* (1984) 155 CLR 242 per Gibbs CJ). The effect of this parallel tenancy-in-common at equity is that: a. When a joint tenant dies, the remaining joint tenant(s) will merely hold formal/nominal title over the land. This is known as ***[bare legal title]*** which has been created because of the existence of a ***[joint tenancy at law]***. b. Those listed under the deceased co-owner's will however, will have a ***[right to occupancy]*** over this land and/or to charge rent. This is known as the ***[beneficial interest]*** which is created through the existence of this ***[parallel tenancy in common at equity]***. *Calverley v Green* (1984) 155 CLR 242.  In all other circumstances, the co-ownership will presumed to also be a joint tenancy at equity if the joint tenancy has been validly created at law. This is because of the principle that equity follows the law unless the circumstances justify otherwise. Likewise, if a tenancy-in-common has been created in law, it will also be presumed to be a tenancy-in-common at equity. Once again, this is because of the principle that equity follows the law. **[RIGHTS BETWEEN CO-OWNERS]:** 1\. [TO ENJOY WHOLE OF THE PREMESIS:] 1. Each co-owner, despite the type of co-ownership, is entitled to enjoy the whole of the property alongside the other co-owners due to unity of possession. (*Oates v Oates* \[1949\] SASR 37, 40) 2. No co-owner is able to pursue action against another co-owner for trespass, unless there has been a wrongful exclusion by one of the co-owners. 2\. [TO DISPOSE/ENCUMBER]: 1. Each co-owner has the right to dispose/encumber some or all of their interest in the land. *Farrelly v Hircock* \[1971\] Qd R 341. 2\. That said, in order for the disposal to ***[bind the other co-tenants]*** (in other words, impact upon their use and enjoyment and legal rights over the land), the ***[authority]*** of these other co-tenants needs to be obtained. *Frieze v Unger* \[1960\] VR 230; *Hedley v Roberts* \[1977\] VR 282; *Catanzariti v Whitehouse* (1981) 55 FLR 426. 3. This authority ***[does not need to be obtained for a transfer/ disposal with respect to a periodic tenancy]*** unless the rights of the other co-tenants are unjustly impacted upon with respect to this transfer/disposal: a. Periodic tenancies are leases from month to month, etc ***[where an exact start and finish date have not been specified]**.* b. The basis for this exception is that because periodic tenancies can be terminated by one of the co-tenants at any time through the provision of notice (as per the requirements under ss 130-139 of the *Property Law Act 1974* (Qld)), in essence, the other co-tenants will not be strictly bound by the transfer/disposal as their rights of occupancy and enjoyment will not be impacted upon. The court established that the disposal by Jacob of his half share in the joint tenancy was ***[ineffective]*** because: 1. This disposal ***[interferes with the rights of Henry]*** who would not be able to use and enjoy the house as a co-owner (in the same manner as he did in the past) due to the almost full occupancy of Unger and his family. In other words, Henry's access to the property had been significantly curtailed due to the occupancy of Unger and his family; and 2. There was ***[no authority obtained]*** from Henry by Jacob.  The issue was whether or not the disposition of part of lot 1 by Mr Male, by allowing the Sextons to build and maintain the toilet block, was effective requiring the plaintiff to observe it. The court held it was effective as although no authority was obtained by Mrs Male, ***[her right to access the land was not unjustly interfered with]*** by allowing the Sextons to access the area required for the toilet block. A diagram of a house Description automatically generated The court held that yes, the wife was not party to an agreement to dispose or transfer the husband's share of the joint tenancy and yes, she did have the right to occupy the house alongside Mr Whitehouse. That said, she did not have the right to then exclude Mr Whitehouse completely. As she demanded that Mr Whitehouse vacate then when he refused, damaged his belongings, she was effectively excluding Mr Whitehouse from any occupancy/use and enjoyment of the property whatsoever. [OCCUPATION RENT]: *GENERAL RULE:* There is no ***[obligation to pay occupancy rent]*** to any of the co-owners if that co-owner ***[simply chooses to not occupy the land]*** in any way. (*Luke v Luke* (1936) 36 SR (NSW) 310 per Long Innes CJ). *WHEN OCCUPANCY RENT MAY BE PAYABLE:* Occupancy rent may however be payable if: 1. There is ***[an agreement]*** to this effect between the co-owners; or 2. There has been ***[wrongful exclusion]*** (or ouster) by one of the co-owners such as: a. Violence or threats of violence (*Dennis v McDonald* \[1982\] 2 WLR 275); b. A threat to call police as well as 'continued unpleasantness' (*Re Thurgood* (1987) QLSJ 441); c. A co-owner stating that the other co-owner does not have title (*Biviano v Natoli* (1998) 43 NSWLR 695); or d. When it would be unreasonable in light of a relationship breakdown and there is no fault of the parties. (*Callow v Rupchev* \[2009\] NSWCA 148) [COMPENSATION FOR IMPROVEMENTS]: 1. Compensation is ***[not payable]*** for improvements made by a co-owner unless this has been ***[agreed]*** to by the other co-owners, or the co-ownership comes an end by an ***[order for partition or sale]*** by the court or due to compulsory acquisition. (*Leigh v Dickeson* (1884) 15 QBD 60) 2. In the event of an order for partition or sale, an allowance for any improvements will be made by the court in terms of the amount that the individual co-owner will receive. (*Boulter v Boulter* (1898) 19 LR (NSW) Eq 135) [AN EQUAL SHARE OF PROFITS/INCOME RELATING TO THE LAND]: 1. Under the general law, there is no requirement for co-owners to pay other co-owners, any profits they have obtained from the land. 2. s 43 of the *Property Law Act 1974* (Qld) however, provides that co-owners are liable to pay a fair share of the profits they have obtained from the land, to the other co-owners. This is to be proportioned according to the share owned by the co-owners. 3. These profits must however, be in ***[primarily]*** in relation to ***[use of the land itself]*** by ***[a third party]*** and not the individual skills and efforts of the co-owner. (*Henderson v Eason* (1851) 17 QB 701) 4. In the event that the profit is brought about by a combination of the co-owner's skill and efforts as well as use of the land itself by a third party, a deduction will be made for the profit created through the co-owner's individual skill and effort. (*Squire v Rogers* (1979) 27 ALR 330, 334) **[THE ENDING OF A CO-OWNERSHIP]:** [CONVERSION OF A JOINT TENANCY TO A TENANCY-IN-COMMON:] 1. Occurs when a Joint Tenancy is converted to a Tenancy in Common. 2. This removes the right of survivorship. 3. Will involve the severance of Unity of Title and Unity of Interest. 4. If there is a severance of Unity of Possession, then the co-ownership is destroyed completely and a partition is formed. *SEVERANCE BY MUTUAL AGREEMENT:* Parties may agree to mutually sever the joint tenancy. (*Williams v Hensman* (1861) 1 J&H 546 per Wood VC) *SEVERANCE BY ALIENATION:\ \ ***By Alienation to a Third Party:** 1. Severance can occur by alienation by a co-owner, of their interests to a third party as there will no longer be unity of time and title. This transfer can occur by way of law or equity. (*Corin v Patton* (1990) 169 CLR 540). 2. If there is just one other co-owner, the new co-owner becomes a tenant in common with the other co-owner. This is because there is no longer unity of title. (*Wright v Gibbons* (1949) 78 CLR 313 per Latham CJ) 3. If there are three joint tenants, and one alienates to a new co-owner, the new co-owner becomes a single tenant in common with the other co-owners. The two original joint tenants still remain joint tenants between themselves. (*Wright v Gibbons* (1949) 78 CLR 313 per Latham CJ) **By a 'Cross-Transfer' between Joint Tenants:** Joint tenants can sever the joint tenancy by transferring their interests to each other. *Wright v Gibbons* (1949) 78 CLR 313.  **By Transfer of a Joint Tenant's Interest to Themselves** Under s 59 of the *Land Title Act 1994* (Qld) a joint tenancy may be severed if: 1. A copy of the proposed transfer instrument is provided to the other joint tenant or joint tenants; and 2. This transfer instrument is lodged with the titles office by the joint tenant to transfer the interest to themselves so that they become a tenant in common. **Mortgages [will not] sever a joint tenancy:** 1. Under the general law, a mortgage will sever a joint tenancy. 2. This however, cannot occur with respect to Torrens land. *Lyons v Lyons* \[1967\] VR 169. *SEVERANCE BY HOMOCIDE:* 1. Prima facie, when a joint tenant commits homicide against another, the surviving joint tenant holds the interest of the deceased on constructive trust for the executor of the deceased. 2. This however, may not occur if there has been an element of ***[total]*** 'diminished responsibility' or other extenuating circumstances where the ***[accused is not responsible in any way]***. This occurs in less serious cases of manslaughter. 3. If there has been only ***[partial]*** diminished responsibility where the accused is ***[still partially responsible for the death]***, then the constructive trust will be formed. This occurs in more serious cases of manslaughter. 4. *Re Stone* \[1989\] 1 Qd R 351. [TERMINATION OF CO-OWNERSHIP BY WAY OF COURT ORDER]: Both ***[joint tenancies and tenancies-in-common]*** may be terminated by way of a court order under s 38 of the *Property Law Act 1974* (Qld) which will appoint a trustee for either the partition or sale of the land.\ \ *ORDERS FOR PARTITION:* This involves subdividing the land into distinct physical portions. *ORDERS FOR SALE:\ \ *Involves the sale of the land with the proceeds distributed amongst the co-owners. [BY AGREEMENT TO TERMINATE]: The co-owners may simply ***[agree]*** to ***[partition]*** or ***[sell]*** their property which would also have the effect of terminating the current co-tenancy. *Nullagine Investments Pty Limited v The Western Australian Club Incorporated* (1993) 177 CLR 635 per Brennan J: Co-owners having the capacity to deal with their respective shares or interests are at liberty to agree the terms on which the land will be disposed of or the terms on which the shares or interests of one or more co-owners will be acquired by another or others or the manner in which the land in co-ownership shall be divided. Week 3 **[FUNDAMENTAL PRINCIPLES OF TORRENS]:** 1. It should not be necessary to investigate the history of the registered owner's title. 2\. Those interests that can be registered, and are registered, should give, in the absence of fraud or error, an indefeasible title. 3\. If a person is deprived of an interest in land as a result of the operation of the Torrens system, monetary compensation for the loss of interest should be paid. **[MAIN FEATURES OF TORRENS]:** 1. The system involves a base of land not people; 2. The existence of a public register; 3. Powers granted to a Registrar (see ss 6, 15, 17-22, & 25-36, 186 of the *Land Title Act 1994* (Qld)); 4. The safeguarding of registered proprietors ss 37, 38, 184, 185; and 5. A guarantee by the state of compensation for loss, ss 188-190. See D. Whalan, *The Torrens System in Australia*, Law Book Co, Sydney, 1982, page 17. **[REGISTRATION]:** 1. Emphasis on the actual time of registration which is when, in most cases the interest is created. 2. Once registration has occurred, then prima facie, it is protected under the *Land Title Act*. 3. This concept of protection upon registration is called 'Indefeasibility' and is created by ss 37, 38, 184 of the *Land Title Act*. s 37 of the *Land Title Act* provides that: 4. **Creation of indefeasible title** 5. An ***[indefeasible title]*** for a lot is created on the recording of the particulars of the lot in the freehold land ***[register]***. 6. s 38 provides that: 7. **Meaning of "indefeasible title"** 8. The ***[indefeasible]*** title for a lot is the current particulars in the freehold land ***[register]*** about the lot. s 184 provides that: **Quality of registered interests** 1. A ***[registered proprietor]*** of an interest in a lot holds the interest subject to ***[registered interests]*** affecting the lot but free from all other interests. \(2) In particular, the registered proprietor - a. is ***[not affected by actual or constructive notice]*** of an ***[unregistered]*** interest affecting the lot; and a. \(b) is liable to a proceeding for possession of the lot or an interest in the lot only if the proceeding is brought by the registered proprietor of an interest affecting the lot. \(a) to an interest mentioned in section 185; or b. \(b) if there has been ***[fraud by the registered proprietor]***, whether or not there has been fraud by a person from or through whom the registered proprietor has derived the registered interest. The time of execution of the documentation effecting a transfer, lease or other interest in land does not have any legal significance except in circumstances involving at least two unregistered interests. 5\. Generally speaking ***[registered]*** interests are '***[legal']*** in nature whereas ***[unregistered]*** interests are '***[equitable']*** in nature. **[COMPENSATION SCHEME]**: Where a person, through no fault of their own, has been deprived of an interest in land or suffers other loss or damage such loss can be compensated by the State. s 188 provides that: **Compensation for deprivation of lot or interest in lot** 1. This section applies if a person (the "claimant") is deprived of a lot, or an interest in a lot, because of--- \(a) the fraud of another person; or \(b) the incorrect creation of an indefeasible title in the name of another person; or \(c) incorrect registration; or \(d) an error in an indefeasible title or in the freehold land register; or \(e) tampering with the freehold land register; or \(f) loss, destruction or improper use of a document deposited or lodged at the land registry or held by the land registry for safe custody; or \(g) an omission, mistake, breach of duty, negligence or misfeasance of or by the registrar or a member of the staff in the land registry; or \(h) the exercise by the registrar of a power in relation to an application or dealing with which the person had no connection. \(2) The claimant is entitled to compensation from the State for the deprivation. s 188 provides that compensation cannot be sought for personal injury. Under s 188C, a ***[12 year limitation period]*** applies from the time affected the party knew or ought to have known the circumstances resulting in deprivation. s 190 provides that the state is "subrogated to the rights of the claimant against any other person, in relation to the deprivation, loss or damage". 1. **[UNREGISTERED INTERESTS UNDER THE TORRENS SYSTEM]:** 1\. Unregistered interests do in fact have a role as equitable interests in the Torrens system although they have a different status under Torrens then they do under the common law. 2\. There are a number of maxims that have been developed by courts to resolve conflicts between two or more of these unregistered equitable interests. 3\. The ***[prima facie rule]*** that has developed is that the ***[first in time prevails]*** unless there has been some disentitling conduct which has postponed the interest. (*Barry* *v Heider* (1914) 19 CLR 197)  Courts have also demonstrated a willingness to postpone 'mere equities' that are followed by 'full equitable estates'. *Phillips v Phillips* (1862) 45 ER 1164, 1167 per Lord Westbury: A prior equity may be postponed if it amounts to 'an equity as distinguished from an equitable estate -- as for example, an equity to set aside a deed for fraud, or to correct it for mistake' in the event of the holder of the equitable estate acquiring the interest with good consideration and without notice of the earlier equity. See also *Latec Investments v Hotel Terrigal (in liq)* (1965) 113 CLR 265. A diagram of a fraud Description automatically generated Generally speaking, priority disputes involving competing unregistered equitable interests are resolved in the following manner. 1. Equitable interest followed by another equitable interest - general law rules apply; 2. Equitable interest followed by a legal (Torrens) interest - priority is obtained by the legal interest (in the absence of an exception to indefeasibility); 3. Legal interest followed by an equitable interest - priority is obtained by the legal interest (in the absence of an exception to indefeasibility); and 4. Legal interest followed by a legal interest. This situation will depend on a contract, a statute, or equitable considerations. **[DEFINING INDEFEASIBILITY]:** Lord Wilberforce in *Frazer v Walker* \[1967\] 1 AC 569, 580-581 has defined Indefeasibility as the ability of a registered proprietor to be protected from competing claims with respect to the land: The expression... is a convenient description of the immunity from attack by \[an\] adverse claim to the land or interest... which a registered proprietor enjoys. This conception is central in the system of registration. It does not involve that the registered proprietor is protected against any claim whatsoever; as... there are provisions by which the entry... may be cancelled or corrected, or he may be exposed to claims in personam.... But as registered proprietor, and while he remains such, no adverse claim (except as specifically admitted) may be brought against him. Professor Whalan has established that there are four elements of indefeasibility: 1. Paramountcy; 2. Protection against Notice; 3. Ouster of Possession; and 4. Protection of the Purchaser. See Douglas Whalan, *The Torrens System in Australia* (Law Book Co, 1982) 293 and further forward. *PARAMOUNTCY*: Registered interests take priority over non-registered interests. s 184 provides that: **Quality of registered interests** 1. A ***[registered proprietor]*** of an interest in a lot holds the interest subject to ***[registered interests]*** affecting the lot but free from all other interests. 1. *PROTECTION AGAINST NOTICE:* Even if a person who takes a registered interest has notice of a prior unregistered interest, this person's interest remains protected. s 184 (2)(a) provides that: \(2) In particular, the registered proprietor - \(a) is ***[not affected by]*** actual or constructive ***[notice]*** of an unregistered interest affecting the lot; and *OUSTER OF POSSESSION:* No claimant can disturb the Registered Proprietor's possession unless the claim falls within an exception listed in the *Land Title Act*. s 184(2)(b) provides that: \(2) In particular, the registered proprietor - \(b) is liable to a proceeding for possession of the lot or an interest in the lot only if the proceeding is brought by the registered proprietor of an interest affecting the lot. Furthermore, s 184(3) provides that: \(3) However, subsections (1) and (2) do not apply--- a. to an interest mentioned in section 185; or b. if there has been fraud by the registered proprietor, whether or not there has been fraud by a person from or through whom the registered proprietor has derived the registered interest. *PROTECTION OF THE PURCHASER:* A bona fide purchaser is protected against claims arising from the fraud or an error of a predecessor-in-title. See *Latec Investments Ltd v Hotel Terrigal Pty Ltd.* **[TYPES OF INDEFEASIBILITY]:** The case law has recognised two types of indefeasibility: 1. Deferred Indefeasibility; and 2. Immediate Indefeasibility. The case law has established that the preferred approach in Queensland is that of Immediate Indefeasibility although Deferred Indefeasibility has been applied recently in other Australian states. *DEFERRED INDEFEASIBILITY:* 1. Under the concept of deferred indefeasibility, indefeasibility is deferred if the transferring instrument is void upon the basis that the previous registered proprietor is incapable of transferring good title. 2. This would apply for example, in instances in which a "fictitious transferee" is involved. *Gibbs v Messer* \[1891\] AC 248.  *IMMEDIATE INDEFEASIBILITY:* Indefeasibility is created once registration has occurred, despite any defects in the title instrument. *Frazer v Walker* \[1967\] 1 AC 569; *Breskvar v Wall* (1971) 126 CLR 376. *Frazer v Walker* created a Legal Ambiguity as it did not specifically over-rule *Gibbs v Messer*. It simply distinguished both cases based upon facts and ***[still allowed deferred indefeasibility to be argued when a fictitious transferee was involved]***. Greater certainty, was created with the High Court's decision of *Breskvar v Wall.*  per Barwick CJ at 385-386: The Torrens system of registered title... is not a system of registration of title but a system of ***[title by registration]***. That which the certificate of title describes is not the title which the RP formerly had, or which but for the registration would have had. The title it certifies is not historical or derivative. It is the title which registration itself has vested in the proprietor. ***[Consequently, a registration which results from a void instrument is effective according to the terms of registration.]*** It matters not what the cause or reason for which the instrument is void... Thus, ***[the effect of the Stamp Act upon the memorandum of transfer in this case is irrelevant]*** to the question whether the certificate of title is conclusive of its particulars. A diagram of a legal system Description automatically generated with medium confidence per Barwick CJ at 387: The interest of \[Alban\] in the land was competitive with that of the \[Breskvars\] as persons deprived of their land by fraud... There is thus a competition between the respective interests of the \[Breskvars\] and \[Alban\] to be resolved on equitable principles. *COMPARING DEFERRED AND IMMEDIATE INDEFEASIBILITY:* *Wicklow Enterprises Pty Ltd v Doysal Pty Ltd* (1987) 45 SASR 247 per O'Loughlin J at 256-257: \[With respect to ***[deferred]*** indefeasibility,\]... upon the registration of an instrument that is void under the general law the person thereby registered (A) does not obtain an indefeasible title but, on the contrary, remains at risk from attack by the prior RP (B) who seeks to set aside the registration even though (A) has acted without fraud, in good faith and for valuable consideration. Under this principle of "deferred indefeasibility", immunity from attack at the suit of (B) is only available to a third party (C) who purchases in good faith for valuable consideration from (A).  per O'Loughlin J at 256-257: On the other hand, the doctrine of ***[immediate indefeasibility]*** confers a good title on (A) immediately upon registration of his instrument and regardless of its invalidity so that if (A) registers a transfer from (B) he is entitled to protection against any action instituted by (B) notwithstanding, for example, that (B)'s signature is a forgery -- provided, of course, that (A) has, at all times, acted in good faith and given valuable consideration for the transfer. **[THE SCOPE OF INDEFEASIBILITY]:** *Mercantile Credits Ltd v Shell Co Ltd* (1976) 136 CLR 326. The court established that individual covenants within an instrument are indefeasible if the covenant 'touches and concerns the land' in other words, integral to the instrument that has been registered. per Gibbs J at 345-346:\ The right of renewal is so intimately connected with the term granted to the lessee, which it qualifies and defines, that it should be regarded as part of the estate or interest which the lessee obtains under the lease, and on registration is entitled to the same priority as the term itself. Week 4 Statutory fraud exception to indefeasibility **[THE SCOPE OF THE STATUTORY FRAUD EXCEPTION]:** s 184 of the *Land Title Act 1994* (Qld) provides that: **Quality of registered interests** \(1) A registered proprietor of an interest in a lot holds the interest subject to registered interests affecting the lot but free from all other interests. \(2) In particular, the registered proprietor--- \(a) is not affected by actual or constructive notice of an unregistered interest affecting the lot; \(3) However, subsections (1) and (2) do not apply--- \(b) if there has been ***[fraud by the registered proprietor]***, whether or not there has been ***[fraud by a person from or through whom the registered proprietor has derived the registered interest]***. *Assets Co Ltd v Mere Roihi* \[1905\] AC 176: Lord Lindley established that so called 'statutory fraud': 1. Must involve conduct which is ***[dishonest or lacking moral decency]***; 2. Therefore ***[limited only to legal fraud]*** whether there is intentional deceit and ***[not equitable fraud]*** where a person gains an unfair advantage despite a lack of intention of doing so; 3. Must be committed or '***[brought home']*** to either a ***[registered proprietor or an agent]*** who was acting in accordance with the authority of the registered proprietor; and 4. Can include instances in which a person's '***[suspicions are aroused']*** as to a particular state of affairs and the person ***[fails to make further enquiries "for fear of learning the truth]***" as this amounts to conduct which lacks moral decency. Lord Lindley at 211-212 concluded that the transfer to Assets Company ***[could not]*** be set aside upon the basis of fraud: \[T\]he agents of the Assets Company... took to the registrar \... documents which according to their purport and effect entitled, and which they believed did in fact entitle, the company to be registered as owners. \[In other words, they were bona fide purchasers for value without notice\] There is no evidence whatever of any fraudulent statement made by the company\'s agents to the registrar, nor of any bribery, corruption, or dishonesty in the matter. In defining the scope of 'statutory fraud', Lord Lindley established at 210 that: \... by fraud in these \[Torrens\] Acts is meant actual fraud, ie, ***[dishonesty]*** of some sort, not what is called constructive or equitable fraud. \... \[T\]he fraud which must be proved in order to invalidate the title of a registered purchaser for value \... must be ***[brought home to the person whose registered title is impeached or to his agents]***. Fraud by persons from whom he claims does not affect him unless ***[knowledge]*** of it is brought home to him or his ***[agents]***. per Lord Lindley at 210: The mere fact that he might have found out fraud if he had been more vigilant, and had made further enquiries which he omitted to make, does not of itself prove fraud on his part. But if it be shown that his ***[suspicions were aroused, and that he abstained from making enquiries for fear of learning the truth]***, the case is very different and fraud may be properly ascribed to him. A person who presents for registration a document which is forged or has been fraudulently or improperly obtained is not guilty of fraud if he honestly believes it to be a genuine document which can be properly acted upon. Since the *Assets Company Case* had been decided, Australian courts have both affirmed and further refined the scope of the 'statutory fraud' exception under s 184(3) of the *Land Title Act 1994* (Qld). **[NOTICE MUST BE ACCOMPANIED BY DECEIT OR MORAL TURPITUDE]:** 1. The courts have established that notice must be *accompanied by* dishonesty or moral turpitude. 2. Mere notice without the person also engaging in dishonesty or moral turpitude will (if anything) only amount to constructive fraud which is not covered by the statutory fraud exception. *Stuart v Kingston* (1922-3) 32 CLR 309 per Knox CJ. [REPUDIATED PRE-CONTRACTUAL ASSURANCES]: 1\. The courts have established that dishonesty or moral turpitude can occur when an assurance is made prior to a property transaction that an existing interest be protected which is repudiated after registration. 2\. This can include instances in which there has been: a. A ***['deliberate plan' from the outset]*** to defeat this existing interest; or *Loke Yew v Port Swettenham Rubber Company* \[1913\] AC 941. b\. Or, if the assurance ***[was intended to be honoured from the outset]**,* the surrounding circumstances (or the 'matrix of circumstances') would result in the repudiation amounting to moral turpitude. *Bahr v Nicholay (No 2)* (1988) 164 CLR 60.  A diagram of a document Description automatically generated with medium confidence per Mason CJ and Dawson J at 615: There is no difference between the false undertaking which induced the execution of the transfer in *Loke Yew* and an undertaking which induces the execution of a transfer and is subsequently repudiated for the purpose of defeating the prior interest. per Mason CJ and Dawson J at 616: The right to re-purchase was designed to do more than give notice of the Bahr's rights, it was also aimed at the enforceability of their rights. Even though unlike in *Loke Yew* the assurance was originally intended to be followed through, the 'matrix of circumstances' rendered the repudiation of the assurance a moral turpitude. So in summary, when looking to see if the repudiation of a prior assurance amounts to fraud: 1. Look to see if the assurance was ***[never intended to be followed through]*** from the outset by the person making it (*Loke Yew*); or 2. Alternatively, ***[look at the surrounding circumstances]*** (the 'matrix of circumstances') to examine if repudiation would still amount to moral turpitude. (*Bahr v Nicolay*) **[FRAUD MUST BE 'OPERATIVE']:** 1\. The courts have established that in order for the statutory fraud exception to be relied on, the fraud must be "operative" in effect, in other words, the defendant's fraud must have ***[induced]*** the plaintiff to ***[act to their detriment]***. 2\. In other words, the person subject to the fraud must have been disadvantaged by that fraud. *Bank of South Australia Ltd v Ferguson* (1998) 151 ALR 729.  per Brennan CJ, Gaudron, McHugh, Gummow and Kirby JJ at 734: \[Fraud\] must operate on the mind of the person said to have been defrauded and to have induced detrimental action by that person. **[LIABILITY OF REGISTERED PROPRIETORS FOR THEIR AGENT'S FRAUD REQUIRES THEIR AUTHORITY AND/OR KNOWLEDGE]:** The courts have established two circumstances in which a registered proprietor can be held liable for the fraud of an agent: 1. When the agent has acted within the actual or apparent authority of the registered proprietor; and/or 2. When the agent has actual knowledge of the fraud in which case, it can be presumed that this had been communicated to the registered proprietor. The onus is then on the registered proprietor to prove that this information had not been conveyed to them. *Schultz v Corwill Properties Pty Ltd* \[1969\] 2 NSWR 576 per Street J; See also *Cassegrain v Gerard Cassegrain & Co Pty Ltd* (2015) 254 CLR 425 A diagram of a property Description automatically generated per Street J at 537: **\[There are two circumstances in which a principal would be liable for their agent's actions.\] The first is one in which the fraud is actually committed by ("brought home to") the person whose title is impeached or his agent. And the second is one in which he or his agents have *[knowledge that a fraud]* has been committed whereby the previous registered proprietor is being deprived of some or all of his interests.** per Street J at 539: \... that if the matter \... which it is sought to affect the principal with notice is the agent's own fraud or fraudulent dealing \..., or if the agent during his time of employment \... when he acquired the information in question was a party to a scheme of fraud, then the principal is permitted to give evidence to rebut the above presumption and prove his ignorance of the matter; for the supposition that the agent communicated his fraud to the principal is too improbable to be entertained even by a court of equity **[FRAUD CAN BE COMMITTED AGAINST REGISTRAR OF TITLES]:** The courts have recognised that the lodgement of a document for registration that has been executed in a fraudulent manner also amounts to fraud against the registrar. *AGC v De Jager* \[1984\] VR 483 per Tadgell J: To lodge an instrument for registration in the knowledge that the attesting witness had not been present at execution must deprive the lodging party of an honest belief that it is a genuine document on which the Registrar can properly act. In personam exception **[THE SCOPE OF THE IN PERSONAM EXCEPTION]:** s 184 of the *Land Title Act 1994* (Qld) provides that: **Quality of registered interests** \(1) A registered proprietor of an interest in a lot holds the interest subject to registered interests affecting the lot but free from all other interests. \(2) In particular, the registered proprietor--- a. is not affected by actual or constructive notice of an unregistered interest affecting the lot; \(3) However, subsections (1) and (2) do not apply--- ***[(a) to an interest mentioned in section 185]***; s 185(1)(a) provides that: \(1) A registered proprietor of a lot does not obtain the benefit of section 184 \[Indefeasibility\] for the following interests in relation to the lot - \(a) an ***[equity arising from the act of the registered proprietor.]*** *MMI v Gosper* (1991) 25 NSWLR 3, 45 per Mahoney JA: \[Equity means\] the person involved may invoke the assistance of the equity court or equity principles to achieve the relevant relief. The exception therefore only applies when there is an ***[equitable remedy]*** available due to the ***[conduct of the registered proprietor]***. It therefore cannot apply simply because there is unfairness. There must be some degree of unconscionability involved. *Logue v Shoalhaven Shire Council* (1979) NSWLR 537: Local councils have the ability to obtain a court order to allowing them to sell property in the event of rates being overdue by ratepayers. In this particular case however, incorrect amounts were stated in the notices that were sent to an overdue ratepayer whose interest had been transferred to the council due to the non-payment of rates. The executors under the will of the overdue ratepayer argued that the testator was ***[denied procedural fairness]*** due to the incorrect amounts being provided and that the property should be transferred back to them under the in personam exception. The majority of the court (Reynolds and Huxley JJA) held for the council upon the basis that the in personam exception can only apply with respect to an existing category of equity involving ***[unconscionability]*** and not mere procedural unfairness. per Mahoney JA (in dissent) at 563: If the \[Registered Proprietor\] had... agreed that, if he did acquire the land, he would hold it on trust or for a stated purpose, or had agreed that the land should be charged for a particular purpose, that agreement would be enforced against him. And this does not depend upon fraud; it follows even where, for example, the fact of the prior agreement had been forgotten by the \[Registered Proprietor\], and there was no fraud involved.  The court held unanimously that the Bahrs had an existing in personam claim that could defeat the registered interests of the Thompson's. Wilson and Toohey JJ (at 638) held that the duty was owed on the basis of a ***[constructive trust]*** being formed in which the Bahrs were beneficiaries. This arose out of the terms of the agreement between the Bahrs and the Thompsons and because a letter that had been sent by the Thompsons indicated that they acknowledged that they took the transfer upon the basis that the Bahr's right to repurchase would be protected. Mason CJ and Dawson J (at 618) (who also established that statutory fraud had occurred) held that the ***[terms of the agreement]*** and the surrounding 'matrix of circumstances' gave rise to the creation an ***[express trust]***. **[EXCEPTION]:** 1. The in personam exception applies with respect to instances in which there has been equitable fraud. 2. This can be argued as an alternative to actual fraud under the 'Statutory Fraud' exception under s 184(3)(b) of the *Land Title Act 1994* (Qld). 3. This is less onerous to prove than legal fraud which requires actual knowledge. 4. With respect to equitable fraud under the in personam exception, ***[it is sufficient that a person had constructive knowledge]***. In other words, they ought to have known of the facts and circumstances arising out of the fraud and they have received an unfair advantage. There is also no need to prove moral turpitude. Difference between this and stat fraud is that this is more concerned with outcome whereas fraud is more concerned with conduct [EQUITABLE FRAUD ARISING FROM FORGERY]: 1. One of the instances in which equitable fraud may arise in which a transaction may be set aside under the in personam exception, is in the case of a forgery. 2. In such instances, the registered proprietor will be deemed to have had constructive knowledge of the forgery if for example, the signature had not been witnessed or in the case of a mortgage arrangement, a person who has ownership of the property listed as security, did not stand to benefit from the transaction. *MML v Gosper* (1991) 25 NSWLR per Kirby P at 37: It cannot be doubted that in circumstances such as the present, where a legal relationship existed between the parties immediately prior to registration, the court may examine their pre-registration positions in equity and is not forbidden from doing so by the state of the register. \... An equity may arise from events which occurred before registration. The respondent \[Mrs Gosper\] as mortgagor... had more than a mere equity in the land. She had an equity of redemption and thereby enjoyed an equitable interest in the land\... Accordingly, the personal equities which existed prior to the registration of the forged variation in this case were wholly unaltered by the registration, purportedly effected on behalf of the appellant of a variation of mortgage signed by someone else. Upon the appellant's (MMI's) contention if a complete stranger to a mortgagor secured the registration of a variation without the mortgagor's knowledge or consent, the mortgagor would be fixed by the obligation, simply by reason of the registration of the variation although no third party rights have intervened. This cannot be. And in the present case, the mere fact that the stranger was the respondent's late husband does not affect her separate entitlements at law [EQUITABLE FRAUD THROUGH THE REPUDIATION OF A PRIOR ASSAURANCE]: 1. As with the 'statutory fraud' exception, equitable fraud may arise in the case of a repudiation of a prior assurance. 2. The courts have established that this in personam right would arise not simply because of mere notice of a prior interest but in light of whether the ***[surrounding circumstances]*** would make it ***[unconscionable]*** to repudiate. 3. This can include the repudiation of a ***[right to repurchase]*** as established in *Bahr v Nicolay* (1988) 164 CLR 604. 4. 4\. Furthermore, as established by the Queensland Supreme Court in *Valbirn Pty Ltd v Powprop Pty Ltd* \[1991\] 1 Qd R 295, the in personam exception can also be relied upon with respect to an assurance that the ***[right to renew]*** would be honoured.  The Court (de Jersey CJ of which Macrossan, Shepardson JJ agreed) held that it would be unconscionable to not allow the option to renew to be honoured as ***[Valbirn took subject to this obligation]***. This included not only to the right to repurchase (as in *Bahr v Nicolay*) but also ***[the right to renew a lease]***. [EQUITABLE FRAUD BY THE FAILURE TO DISCLOSE INFORMATION RELEVANT TO THE TRANSFER]: The courts have established that the failure of a registered proprietor to inform the other party to the transfer of all information relevant to the transfer in a manner that creates deceit, amounts to equitable fraud and hence their interest can be defeated by way of the in personam exception. *Wicklow Enterprises Pty Ltd v Doysal Pty Ltd* (1986) 45 SASR 247. A diagram of a company Description automatically generated Mossell used the fake name for tax avoidance purposes. Mossell's tax avoidance however, was inconsequential for the purposes of indefeasibility. The ***[intention in this instance was to defraud the tax commissioner]*** and therefore, there was ***[no fraud for the purposes of the Torrens System]***. In this case however, Wicklow Enterprises could succeed because ***[Doysal deliberately withheld information]*** and this amounted to a designed cheating which met the threshold for equitable fraud for the purposes of the in personam exception. Radaidch v Smith Per J Windeyer at 222 It (a lease) is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes. And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives. If he was, he is a tenant. And he cannot be other than a tenant, because a legal right of exclusive possession is a tenancy and the creation of such a right is a demise. Week 5 In personam cont **[KNOWING RECEIPT OF TRUST PROPERTY /ASSISTANCE IN BREACH OF TRUST UNDER THE IN PERSONAM EXCEPTION]:** The courts have been willing to apply the in personam exception in instances in which a registered proprietor has breached a trust as a result of 'knowingly receiving trust property' or assisting in a 'fraudulent design' in accordance with the 'two limbs' of *Barnes v Addy* (1873--74) LR 9 Ch App 244*.* See *Tara Shire Council v Garner* \[2003\] 1 Qd R 556 and *Farah Constructions Pty Ltd v Say-Dee Pty Ltd* (2007) 230 CLR 89.  A green box with blue arrow Description automatically generated The council argued the ***[First Limb]*** of the Rule in *Barnes v Addy* in which Lord Selborne LC at 251-252 held that there are two instances in which a third party can be held liable for breach of trust: ***LIMB ONE:* "receive and become chargeable with some part of the trust property".** ***LIMB TWO*:** "assist with knowledge in a dishonest and fraudulent design on the part of the trustees". *Tara Shire Council v Garner* per Atkinson J at \[46\]: The Council argued that Arcape held the property on constructive trust in accordance with the ***[first limb]*** of the rule in *Barnes v Addy*. This principle dictates that a person who ***[knowingly receives and retains trust property]*** in a manner that is ***[inconsistent with the rights of the beneficiary]*** is deemed to hold that property on constructive trust. In terms of ***[scop]e*** of knowledge required*,* Atkinson J held at \[73\] - \[75\] that it: 1. Involves 'knowledge of circumstances which would indicate the facts to an honest and reasonable person'; BUT 2. Does not involve knowledge which would merely put such a person 'on inquiry'. In coming to this conclusion, the court adopted the classification of knowledge established by Gibson J in *Baden v Societe Generale* \[1983\] BCLC 325 with 1-4 only, amounting to sufficient knowledge for the purposes of the First Limb of *Barnes v Addy.* 1. Actual knowledge; ✓ 2. Wilfully shutting one\'s eyes to the obvious; ✓ 3. Wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; ✓ 4. Knowledge of circumstances which would indicate the facts to an honest and reasonable person; ✓ 5\. Knowledge of circumstances which would put an honest and reasonable person on inquiry. X The Council's argument was accepted by their Honours of the Queensland Court of Appeal because of Arcape having 'requisite knowledge' that they ***[received]*** the trust property and hence held the Lot 3 on trust for the council. This was because: 1. Arcape, through their agents, were specifically shown by the Garner's, the area of land which was set aside for the council, in other words Lot 3. This particular parcel of land was 'clearly marked by surveyors peg' 2. The agents for Arcape were informed by the Garner's that the council had purchased Lot 3 and that the council owned Lot 3; and 3. Arcape undertook a Title Search which showed that the Garner's remained the registered proprietors of Lot 3. *Tara Shire Council v Garner* per Atkinson J at \[46\]: In the present case, it follows that the Garners must be deemed to have held Lot 3 on a bare trust from the time when the purchase price was paid. This is a *[resulting trust arising from operation of law]*. Since Lot 3 was trust property it is possible, if the other prerequisites are met, that the *[knowing receipt and retention of that land]* could enliven the first limb of the rule in *Barnes v Addy*.  Say-Dee in this case argued both the FIRST and SECOND limb of *Barnes v Addy*. They firstly argued the first limb. Say-Dee claimed that the family members of the Director of Farah had been *[given confidential information]* held by the Joint Venture (which Say-Dee argued amounted to trust property) which was in breach of trust. This was the information held by the joint venture that purchasing surrounding properties would more likely result in council approval being obtained. ***LIMB ONE:*** 'receive and become chargeable with some part of the trust property'. The court rejected this argument upon the basis that: 1. Mere information could not amount to trust property; 2. The information was not in itself confidential as Say-Dee also knew of the council's rejection, the reasons behind the rejection, and through their knowledge of the real estate industry, that the purchase of surrounding properties would more likely result in approval due to the land no longer being too narrow; and 3. There was no evidence that the family members themselves had received this information. They were encouraged to purchase this property, but were not advised by the Director of Farah as to why and hence they did not have the requisite degree of knowledge required to fall under this exception. Furthermore, the second limb was argued upon the basis that the family members 'assist\[ed\] with knowledge in a dishonest and fraudulent design' on the part of the trustees. ***LIMB TWO*:** 'assist with knowledge in a dishonest and fraudulent design on the part of the trustees'. This argument however, was also rejected by the court at 261-264: \[There was no evidence of the family members of the Director of Farah Constructions Pty Ltd being\] consciousness of those elements of the transaction which make participation transgress ordinary standards of honest behaviour.... \[E\]ven if \[the Director's\] conduct amounted to a dishonest and fraudulent design, ***[there is no evidence that \[his wife\] and her daughters had any sufficient notice or knowledge of it]***. In doing so, the court also held in obiter that the FIRST FOUR categories of the knowledge classifications established by Gibson J in *Baden v Societe Generale*, also extended to the SECOND LIMB, of *Barnes v Addy*: 1. Actual knowledge; ✓ 2. Wilfully shutting one\'s eyes to the obvious; ✓ 3. Wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; ✓ 4. Knowledge of circumstances which would indicate the facts to an honest and reasonable person; ✓ 5\. Knowledge of circumstances which would put an honest and reasonable person on inquiry. X **[SPECIFIC INSTANCES IN WHICH THE IN PERSONAM EXCEPTION DOES NOT APPLY]:** 1\. [WHEN THERE HAS BEEN MERE CONSTRUCTIVE NOTICE OF A BREACH OF TRUST]: The courts have held that the Doctrine of Constructive Notice established in *Barclay's Bank v O'Brien,* in which a person is ***[deemed]*** to have had knowledge of a breach of trust, cannot be relied upon in the Torrens System under the in personam exception upon the basis that it was ***[used to resolve priority disputes between unregistered interests]***. *Macquarie Bank v Sixty-Fourth Throne Pty Ltd* \[1998\] 3 VR 133 It was argued by Sixty-Fourth, that in accordance with the 'Doctrine of Constructive Notice' established by Lord Browne-Wilkinson in the House of Lords decision of *Barclays Bank v O'Brien,* the interest of Macquarie Bank as Registered Mortgagee could be set aside under the in personam exception. In doing so, they argued that the bank officers and its solicitors were in possession of relevant information that would have told a reasonable person that they were in breach of trust, and had therefore exercised "wilful blindness". It would therefore be unconscionable, harsh, unjust and inequitable for the appellant to rely on registration to defeat its interest. This argument was rejected by the Victorian Court of Appeal upon the basis that the Doctrine of Constructive Notice, which is used to resolve priority disputes between unregistered interests, does not apply in Australia with respect to the holder of a registered mortgage. Furthermore, even if the Doctrine of Constructive Notice did apply to registered interests, the interest of Macquarie Bank could not be defeated because unlike in the *Barclay's Bank* case where there was a priority dispute between an innocent wife whose husband had forged her signature and a mortgagee, in this current case, both the husband and wife were jointly involved in the fraud.  [WHERE MERE PROCEDURES WERE NOT PROPERTY FOLLOWED]: The courts have recognised that the in personam exception cannot apply in instances when: 1. A document is void due to a procedure not being followed; but 2. There is the absence of fraud, or any intended obligation or recklessness. As to do so would undermine the notion of immediate indefeasibility. *Palais Parking Station v Shea* (1980) 24 SASR 425. [WHEN THERE HAS BEEN FORGERY WITHOUT UNCONSCIONABILITY]: The courts have made it clear that the in personam exception can not be relied upon in instances in which there has been a forgery of a signature but there was no personal obligation including no knowledge whatsoever of the forgery (including constructive knowledge) and no unconscionability involved. *Vassos v State Bank of SA* \[1993\] 2 VR 316. [WHERE THERE HAS BEEN NOTICE OF A MISTAKE BUT NO UNCONSCIONABILITY]: The courts have held that the in personam exception cannot be relied when there has been notice of a mistake but no personal obligation has been made to rectify it and hence there has been no unconscionability involved. *Tanzone Pty Ltd v Westpac Banking Corporation* \[1999\] NSWSC 478. The court held that the in personam exception could not be relied by upon by Westpac as there was no personal obligation involved. Tanzone knew of the mistake but ***[did not make any promise]*** to the Raymond's to allow the agreement to be rectified based on this mistake. There was therefore ***[no unconscionability]***. [WHEN FRAUD HAS BEEN COMMITTED WITHOUT THE INTENT OF INFLUENCING THE TRANSFER]: When there has been fraud committed by one of the parties which does not have the intent of influencing the transfer, (e.g. a person using a false name to evade tax obligations) then the transfer cannot be set aside under the in personam exception. *Wicklow Enterprises Pty Ltd v Doysal Pty Ltd* (1986) 45 SASR 247. Short lease exception s 185(1)(b) of the *Land Title Act 1994* (Qld) provides that: \(1) A registered proprietor of a lot does not obtain the benefit of section 184 for the following interests in relation to the lot... \(b) the interest of a lessee under a ***[short lease]**...* Schedule 2 of the *Land Title Act 1994* (Qld) provides that: ***[short lease]*** means a lease--- \(a) for a term of ***[3 years or less]***; Short leases have the effect of a legal interest. *Deventer Pty Ltd v BP Australia* (1983) Q Conv R 54-104. The case law has recognised that a short lease cannot be protected unless ***[notice]*** of its existence has been provided by the lessee. This notice may be ***[constructive or actual]*** notice. *Hunt v Luck* \[1902\] 1 Ch 428: In this case it was held that knowledge of a person in occupancy other than the vendor is tantamount to notice. The short lease exception cannot apply with respect to a right to obtain a reversionary estate or fee simple at the end of the lease. s 185(2)(a) of the *Land Title Act 1994* (Qld) 4\. The exception also does not apply with respect to the right to renew beyond this three year period. That said, it does include options to renew within the three year period. s 185(2)(b) of the *Land Title Act 1994* (Qld); See *Friedman v Barrett* \[1962\] Qd R 498. Adverse possession exception **[INTRODUCTION]:** 1. Adverse possession of land occurs where the documentary owner fails to eject someone who occupies their land. 2. It is a statutory exception to indefeasibility under s 185(1)(d) of the *Land Title Act 1994* (Qld) although it has also had a long standing presence outside the Torrens System. The courts have established that in order for a claim for adverse possession to succeed, the following elements will need to be established. a. Factual possession (*a factum possessionis*); and b\. An intention to possess (*animus possidendi*). See both *Woodward v Wesley Hazell Pty Ltd* (Supreme Court of Tasmania, unreported, 17 March 1994), per Underwood J; and *Buckinghamshire CC v Moran* \[1990\] Ch 623 per Slade LJ at 636. 1. **[THE REQUIREMENT OF FACTUAL POSSESSION]:** *Mulcahy v Curramore Pty Ltd* \[1974\] 2 NSWLR 464: per Bowen CJ: \[possession must be\] open, not secret; peaceful, not by force; and adverse, not by consent of the true owner.  Under the *Real Estate (Limitation of Actions) Act 1837* (NSW), in order to establish a claim for adverse possession, there must have been 20 years of factual possession. (unlike in Queensland which is currently 12 years) In this case however, there were two separate periods of adverse possession by Mulcahy's two predecessors: 1. Gilroy for 12 years (1935 to 1948); and 2. Hurley for 16 years (1948 to 1964). Each of these periods when considered separately, *[fell short of the 20 year time limit]*. [OPEN NOT SECRET']: 1. The adverse possession must be 'open' enough so that it can be noticed by a documentary owner who is reasonably careful of his or her interests. 2. If the documentary owner cannot possibly know of the possession, then it will not be 'adverse' possession. ['PEACEFUL NOT BY FORCE']: 1\. Although this was clearly stipulated as a requirement in *Mulcahy v Curramore*, the cases have been inconsistent on this point. 2\. In fact in some cases the use of force has been held to be evidence of adverse possession. 3\. Butt for example, points out that the following acts have been treated as an intention to control: a\. Warning people off the land as in *Harnett v Green* (1883) 4 LR (NSW) 292. Using a shotgun to warn a surveyor off the land in *Beever v Spaceline Engineering Pty Ltd* (1993) NSW Conv R 55-678. c\. Using a shotgun to warn the documentary owner and others off the land as in *Shaw v Garbutt* (1996) 7 BPR 14,816 at 14831-2. P. Butt, *Land Law*, 4th ed., LBC, Pyrmont (NSW), 2001, 742. ['WITHOUT CONSENT']: If the occupant has permission from the documentary owner then this will not amount to "adverse" possession. **[THE REQUIREMENT OF AN INTENT TO POSSESS]:** 1. Factual possession must be accompanied by an intent to possess. 2. The question of intention is only contentious where the facts are unclear. *Buckinghamshire CC v Moran* \[1990\] Ch 623 at 643. The court firstly established that Moran had ***[physical possession]*** of the land: per Slade CJ at 641: He had secured a complete enclosure of the plot and its annexation to Dolphin Place. Any intruder could have gained access to the plot only by way of Dolphin Place, unless he was prepared to climb the locked gate fronting the highway or to scramble through one or other of the hedges bordering the plot. The defendant had put a new lock and chain on the gate and had fastened it.... They had incorporated it into the garden of Dolphin Place. They had planted bulbs and daffodils in the grass.... It is hard to see what more he could have done to acquire complete physical control of the plot... Furthermore, and more importantly, they also held that he had the necessary ***[intention]*** to possess that land due to: 1. The letters between Moran and the Council and meetings in 1975 where Moran indicated that he had possession of the land; and The contract for sale to Moran and the contemporaneous statutory declaration from the Wall's indicating that the sale included the use of the council's land At 643 per Slade CJ: The conversation with \[the council\] and the letter of 18 December 1975, to my mind demonstrate the intention of the defendant for the time being to continue in possession of the plot to the exclusion of the council unless and until the proposed by-pass is built. The form of the conveyance to the defendant and of the contemporaneous statutory declaration which he obtained from Mr. and Mrs. Wall, are, of course entirely consistent with the existence of an intention on his part to take and keep adverse possession of the plot, at least unless and until that event occurred. **[THE REQUIRED LENGTH OF ADVERSE POSSESSION]:** 1. Under the adverse possession exception, an occupier gains superior title after ***[12 years]*** of adverse possession. ss 13 and 19(1) *Limitation of Actions Act 1974* (Qld). 2. If however, ***[the true owner cannot be identified]***, then ***[30 years]*** continuous possession will need to be established. s 29 of the *Limitation of Actions Act 1974* (Qld); *Re Johnson* \[2000\] 2 Qd R 502. Week 6 **[THE CATEGORIES OF INTERESTS UNDER THE TORRENS SYSTEM]:** 1\. [LEGAL INTERESTS]: Legal interests under the Torrens Title System must satisfy ***[two sets of requirements]***: 1. Those specified under the *Property Law Act 1974* (Qld); and 2. Those specified under the *Land Title Act 1994* (Qld). *REQUIREMENTS UNDER THE PROPERTY LAW ACT 1974 (QLD):* 1\. Under ss 10, 11 and 59 of the *Property Law Act 1974* (Qld) all contracts for the sale/disposition of land as well as any interest in land must be ***[in writing]*** AND ***[signed]*** unless transferred by will. s 59 provides that: **Contracts for sale etc. of land to be in writing** No action may be brought upon any contract for the sale or other ***[disposition]*** of land or any interest in land unless the ***[contract]*** upon which such action is brought, or some ***[memorandum or note]*** of the contract, ***[is in writing]***, and ***[signed]*** by the party to be charged, or by some person by the party lawfully authorised. Schedule 6 of the *Property Law Act* *1974* (Qld) provides that: ***['disposition]*'** includes a conveyance, vesting instrument, declaration of trust, disclaimer, release and every other ***[assurance of property by an instrument except a will]***, and also a release, devise, bequest, or an appointment of property contained in a will. **'assurance'** includes a conveyance and a disposition made otherwise than by will. s 10 of the *Property Law Act 1974* (Qld) provides that: **Assurances of land to be in writing** \(1) No assurance of land shall be valid to pass an interest at law unless made by deed or in writing signed by the person making such assurance. \(2) This section does not apply to- \(a) a disclaimer made under any law relating to bankruptcy...; or \(b) a surrender by operation of law, including a surrender which may, by law, be effective without writing; or \(c) a lease tenancy or other assurance not required by law to be made in writing; or \(d) a vesting order; or \(e) an assurance taking effect under any Act or Commonwealth Act. s 11 of the *Property Law Act 1974* (Qld) provides that: **Instruments required to be in writing** 1. Subject to this Act with respect to the creation of interests in land by parol -- a. no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent lawfully authorised in writing, or by will, or by operation of law; and 1. \(b) a declaration of trust respecting any land must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will; and 2. \(c) a disposition of an equitable interest or trust subsisting at the time of disposition, must be manifested and proved by some writing signed by the person disposing of the same, or by the person's agent lawfully authorised in writing, or by will. 3. \(2) This section ***[does not affect the creation or operation of resulting, implied, or constructive trusts]***. Under s 12 of the *Property Law Act 1974* (Qld) however, an exception applies to ***[tenancies at will]*** which can be created ***[verbally]***. s 12 provides that: **Creation of interests in land *[by parol]*** \(1) ***[All interests in land created by parol and not put in writing and signed]*** by the person so creating the same, or by the person's agent lawfully authorised in writing, shall have, despite any consideration having been given for the same, the force and ***[effect of interests at will only]***. A tenancy at will is an arrangement in which both the landlord or tenant can ***[terminate the lease at any time]*** without resulting in a breach of contract. See Megarry and Wade, *The Law of Real Property* (7th ed, London, Sweet & Maxwell, 2008) 771. *REQUIREMENTS UNDER THE LAND TITLE ACT 1994 (QLD):* Under s 181 of the *Land Title Act 1994* (Qld), all ***[legal estates]*** need to be ***[registered]*** in the Freehold Land Registry. s 181 provides that: **Interest in a lot not transferred or created until** **registration** An instrument does not transfer or create an interest in a lot at law until it is ***[registered]***. [EQUITABLE ESTATES]: 1\. Equitable Estates can include: a\. Unregistered conveyances; b\. Equitable mortgages; and c\. Restrictive covenants. Equitable Estates are ***[property rights]*** as opposed to a mere right to sue as in the case of a Mere Equity. Equitable Estates are estates that arise because there is a specific interest in land that satisfies the formal requirements under the *Property Law Act 1974* (Qld), in other words, they are in writing, there is some documentation and signed by the relevant parties (see ss 10 to 12 of the *Property Law Act* and s 59 discussed previously) BUT unlike a legal estate, ***[registration has not yet occurred]*** under s 181 of the *Land Title Act 1994* (Qld). In the alternative, if the formal requirements under statute have not been strictly complied with, an Equitable Estate may be inferred if most of the formal requirements have been satisfied AND there is the availability of Specific Performance as a remedy. 5\. This is known as the rule in *Walsh v Lonsdale* (1882) 21 Ch D 9 which is authority for the maxim that "Equity regards done as ought to be done". See *Chan v Cresdon Pty Ltd* (1989) 168 CLR 242; but compare with *Tanwar Enterprises v Cauchi* (2003) 217 CLR 315.  By way of comparison, a decision in which the court was not willing to apply the rule in *Walsh v Lonsdale* in the particular circumstances, was *Tanwar Enterprises v Cauchi* (2003) 217 CLR 315. In this case, as the ***[vendors had not caused or contributed to the purchaser's inability to complete the contract]***, Specific Performance could not be relied upon. [MERE EQUITIES]: 1\. Rights that may emanate from a property right but are essentially personal: viz a right to sue, the availability of equitable remedies etc. 2\. Can also include beneficial interests such as constructive trusts. See *Pavey Matthews v Paul* (1987) 162 CLR 221. **[RULES WITH RESPECT TO COMPETING EQUITIES]:** There have been numerous ***[conflicting approaches]*** that have been adopted by the courts with respect to resolving disputes involving ***[competing equities]***. These have been divided into two lines of authority: 1. Dividing into ***[Mere Equities and Equitable Estates]*** with ***[Equitable Estates taking priority]*** (the *Phillips v Phillips/Latec* approach) ; and 2. Considering the ***[Merits of the Competing Equities]*** (the *Barry v Heider*, *Rice v Rice, Breskvar v Wall, Issa v Owens* approach) with the ***[better equity taking priority]*** as well variations on this approach. **Equitable Estates take priority over Mere Equities** Lord Chancellor Westbury in *Phillips v Phillips* (1861) 45 ER 1164 at 1176 established that priority disputes between equities can be resolved by considering whether each equity is a '***[Equitable Estate]***' or a '***[Equity]***" with Equitable estates taking priority. This approach was also adopted by Kitto and Menzies JJ in *Latec v Hotel Terrigal* (1965) 113 CLR 265. There were two issues: 1. Was the exercise of power of sale a species of fraud and if so; 2. What was the priority between MLC Nominees' equitable right and the interest held by Hotel Terrigal? All justices held that the sale to Southern Hotels by Latec Investments was a species of fraud. That said, the judges were divided as to how the ***[priorities]*** between the competing equitable interests held by MLC and Hotel Terrigal should be resolved. per **Kitto J** at 271-279: ***[MLC]*** had an ***[Equitable Estate because they were a bona fide purchaser without notice.]*** Hotel Terrigal on the other hand as the original mortgagor, had a ***[mere equity]*** which stemmed ***[from the right to have the transaction set aside for fraud]*** in the form of an equity of redemption (basically to pay out the mortgage). Any priority between a mere equity and an equitable estate (BFPFVCWN) ***[will be resolved in favour of the equitable estate]*** based on *Phillips v Phillips*. That said, if a court order had been obtained setting aside the transaction, then Hotel Terrigal would have an equitable estate in the form of an equity of redemption. If in the alternative, even if the two interests were both equitable estates, Hotel Terrigal's interest should be postponed by way of estoppel through its delay of over five years in exercising their right to have the transaction set aside. per **Menzies J** at 286-291: Two lines of competing authority about what happens when you have a voidable conveyance; one line points to a mere equity the other line to an equitable interest. Held that ***[Hotel Terrigal's interest was a mere equity]*** therefore the maxim of first in time is inapplicable as this applies to contests concerning equitable estates.  **Taylor J** on the other hand, at 279 - 286, chose not to make the distinction between the two types of equitable interests and held that Hotel Terrigal had an Equitable Estate which had been postponed by the fact that that MLC was a ***[bona fide purchaser for value without notice]***. **Competing Equities Resolved using an Overall Merits Analysis** Vice Chancellor Kindersley in *Rice v Rice* (1854) 61 ER 646 at 648 established that "... in a contest between persons having only equitable interests, ***[priority of time is the ground of preference last resorted to]***." Consideration must be instead given to the conduct of the parties. When there is 2 equities, when noticed has occurred first in time prevails, where both don't know about interest, a priorities dispute is resolved by looking at all circumstances and which has better equity. If truly equal, first in time prevail  *Heid v Reliance Finance Corporation Pty Ltd* (1983) 154 CLR 326 per Mason and Deane JJ at 342: The mere failure of the holder of a prior equitable interest in land to lodge a caveat ***[does not in itself involve the loss of priority]*** which the time of creation of the equitable interest would otherwise give... notwithstanding that the person acquiring the later interest had, before acquiring that interest, searched the register book and ascertain that no caveat had been lodged. It is ***[just one of the circumstances to be considered]*** in determining whether it is inequitable that the prior equitable owner should retain his property. *Jacob v Platt Nominees* \[1990\] VR 146: In this case, it was also held that the failure to caveat by itself, is insufficient to postpone an equity. **Competing Equities Resolved using an Overall Merits Analysis: [Variation 1] - First in time prevails unless there is disentitling conduct (Reversal of the presumption in *Rice v Rice*)** *Abigail v Lapin* \[1934\] AC 491 at 504 per Lord Wright: The opinion of the Vice-Chancellor no doubt has not been approved in so far as he says that priority in time is only taken as the test where the equities are otherwise equal. It is now clearly established that *prima facie* priority in time will decide the matter unless \... that which is relied on to take away the pre-existing equitable title can be shown to be something tangible and distinct having grave and strong effect to accomplish the purpose. See *Breskvar v Wall* (1971) 126 CLR 376 per Barwick CJ and Menzies and Walsh JJ This is contrary to the rule in *Rice v Rice* (1854) 61 ER 646 where timing is only important when the equities are equal as last resort. Following the *Abigail v Lapin* approach, the earlier in time prevails unless there are adequate grounds to rebut this presumption. **Barwick CJ** established at 387-388, that even if the Breskvar's claim to set aside the sale was a mere equity, it was still capable of competition with an equitable interest of the third party to become registered. This is therefore authority for the principle that there is no need to divide the equities into equitable interests and mere equities. per **Menzies J** at 388-389: On the question of whether the Breskvar's claim in equity to registration (which was earlier in time than the claim of Alban) should be postponed to Alban's claim, he held that failure to comply with the *Stamp Act* amounted to disentitling conduct by the Breskvar's and hence, their equity should be postponed. per **Walsh J** at 408-411: The Breskvar's right was in the nature of an equitable right to ask the court to compel Wall to make good the fraud. The legal estate was divested from the Breskvars through their own conduct so it was not necessary to decide on the basis of a mere equity competing with an equitable interest. Hepburn points to the frequently cited remark of Farwell J at 173 in *Rimmer v Webster* \[1902\] 2 Ch 163: If the owner of property ***[clothes a third person with apparent ownership]*** \... he is estopped from asserting his title as against a person to whom such third party has disposed of the property... S. Hepburn, *Australian Property Law: Cases, Materials and Analysis,* Butterworths, Chatswood (NSW), 2008, 536. **Consideration of Merits of Competing Equities: [Variation 3] - Prior Equity postponed through a Subsequent Equity which is a Bona Fide Purchaser for Value Without Notice** Where the later equity is a Bona Fide Purchaser for Value Without Notice it will ordinarily succeed. On the other hand where the later equity ***[has notice]*** of the earlier equity it would ordinarily ***[give way to the earlier equity]***. In *Moffett v Dillon* \[1999\] 2 VR 480, 489 per Booking JA: \[It is a\] deeply rooted rule or principle that ***[a person taking with notice of an equity takes subject to it]***, since his conscience is affected by the equity of which he had notice.  s 346(1)(a) of the *Property Law Act 1974* (Qld) provides that constructive notice of an interest may be provided if the conditions mentioned in this provision are fulfilled: **Restriction on constructive notice** 1. A purchaser shall not be prejudicially affected by notice of any instrument, fact, or thing, unless--- a. it is within the purchaser's own knowledge, ***[or would have come to the purchaser's knowledge, if such searches as to instruments registered or deposited]*** under any Act, inquiries, and inspections had been made as ought reasonably to have been made by the purchaser; Caveats 1. Vulnerable, unregistered interests can be protected by the lodgment of a caveat. 2. A caveat is a notification in the register, that ***[forbids dealings with the particular lot]*** that is subject to the caveat. 3. Generally speaking, caveats ***[lapse after 90 days]*** and hence, cannot be used as a substitute for registration. 4. Instead, the main purpose of a caveat is to allow the person who lodges the caveat (the 'caveator') time to commence an action in the Supreme Court to protect their interest. 5. 5\. Each state has a system of rules regulated by statute with respect to caveats. Although for most part they overlap, Queensland has a number of unique subtleties therefore, caution needs to be exercised when making use of interstate case authorities. In Queensland, a distinction is made between: a\. Caveats lodged with the ***[written consent of the Registered Proprietor]*** which ***[do not lapse]***; and b\. ***[Other caveats]***, which generally ***[lapse after 90 days]*** unless the caveator has initiated litigation. 7. Caveats are similar in effect to a "statutory injunction". That said, they are ***[not the same as a statutory injunction]*** per se as under s 122(1)(e) of the *Land Title Act 1994* (Qld), a person who obtains an injunction against a registered proprietor may also have the right to then lodge a caveat against the registered proprietor. Caveats however, are often the most practical remedy. **[FORMAL REQUIREMENTS FOR LODGING A CAVEAT]:** 1\. A caveat must be ***[signed]*** and include ***[adequate details]*** as specified under s 121 of the *Land Title Act 1994* (Qld): **Requirements of caveats** \(1) A caveat must be ***[signed]*** by ***[or for]*** the caveator. \(2) The caveat must state--- \(a) the name of the caveator; and \(b) an address where documents can be served on the caveator; and \(c) unless the registrar dispenses with it, the name and address of - \(i) ***[the registered owner of the lot affected by the caveat]***; and \(ii) ***[anyone else having the right to deal with the lot affected by the caveat]***; and \(d) the ***[registered interest]*** affected by the caveat; and \(e) if the caveat relates to only a part of a lot - a description of the affected part; and \(f) the ***[interest claimed by the caveator]***; and \(g) the ***[grounds]*** on which the interest is claimed. \(3) This section applies to all caveats under this Act. Provided that the formal requirements of a caveat are complied with, the registrar has the obligation to accept the caveat as it functions as a unilateral direction to the registrar. *Kuper v Keywest Constructions Pty Ltd* (1990) 3 WAR 419. s 123 requires that the Registrar notify all affected parties in writing upon the ***[lodgment]*** of a caveat: **Notifying caveat** The registrar must give written notice of lodgment of a caveat to each person whose interest or whose right to registration of an instrument is affected by the caveat. **[WHEN A CAVEAT IS DEEMED TO BE EFFECTIVE]:** 1\. In other states, caveats have not been considered instruments and hen