University of Adelaide 1511 Topics: 01 – An Introduction to 02 – Torrens System and the concept of Indefeasibility 03 – The Doctrine of tenure and Adverse 04 – Native 05 – Doctrine of estates, fixtures and the issue of 06 – Leases 07 – Subsidiary interests ( and mortgages) 08 – Co- and strata title 09 – Creation and enforcement of equitable interests 10 – Priorities between registered interests 11 – Priorities between unregistered interests 12 – Revision

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Topic 01: Property Law PART A: Introduction to Property Perspectives What is property? • There is no universal or agreed upon definition of property. • Property is about the distribution, allocation and control of scarce resources. • The content of property includes three critical aspects: - Things; - Rights; - Social Relationships; Property as Things ‘The intuitive appeal of making things the mediator of the relationship is evidenced by the pervasiveness of ‘thingness’ in the layperson’s understanding of property.’ − David Lametti, ‘The Concept of Property: Relations Through Objects of Social Wealth’ (2003) 53 University of Toronto Law Journal 325: 354. Property Rights • Property rights are created, conferred and protected by law. - Property rights are legal rights (not natural). - What kind of rights? • There are three dominant property rights (liberal triad): - Use - Exclusivity - Abandonment • These rights give owners choice Property as a Social Relationship • Property is about relations between people in respect of control over goods and resources i.e. things. • The source and internal constitution of private property arises from social relationships: ‘Property is something we must collectively define and construct. It is not given to us whole; it does not emerge fully formed like Athena from Zeus’s head. It is closer to a piece of music that unfolds over time. Like music, property gets its sense of stability from the ongoing creation and resolution of various forms of tension.’ − Joseph William Singer, Entitlement: The Paradoxes of Property (2000) 13. Divisibility • There are multiple ways property can be conceived and structured: - Private Property e.g. your own home - State/Public Property e.g. libraries, public parks - Common Property e.g. seabeds, the atmosphere, space

PART B: An Introduction to Property Rights Introductory Concepts • Distinction between Real and - : Land and Fixtures

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- Personal Property: Movables • Possession • Ownership (indicated by satisfying the 3 liberal triads of use, exclusivity, and abandonment) Distinction between Property and Non-Property Rights Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 • 496; distinction between property and non- property rights • 504 – minority judgment; Rich J seeks to find balance two competing rights – right to free prospect i.e. looking over one’s fence against right to have profitable enjoyment of one’s land by drawing upon two ‘unique’ authorities - Article is about an invasion of privacy by a family who was able to observe everything that happened in a dentist’s clinic by forming a unique arrangement of mirrors in their own garden • Majority finds no (quasi-) property right in a spectacle, no nuisance, no unnatural construction that has been built – Victoria Park loses appeal • Held: No property in a spectacle TWO ways to hold a property right: Property right in:

General/Torrens Law Equity

General law land (old system) , valid chain of title, for a Principles of , trust and right recognised at law. fraud.

Torrens system land Registration e.g. registering Equity is not abolished. ownership of house with Lands Title Office () n.b.: Law and equity are separated here for conceptual clarity. In practice, law and equity were fused by the Judicature Acts of 1873 and 1875. People either have an interest in LAW or EQUITY. Property Rights at Law – by registration • Property Rights at General Law (in rem) – the old system – Not assessable I. Recognised at Law; e.g. Estates and Interests (Numerus Clausus): Fees Simple, Life Estates, Leases, Easements, Profits, Mortgages, Rentcharges II. Valid Title (i.e. not stolen) III. Deed (an old instrument of seal). • Contemporary importance of General Law rules.

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Topic 02 – An introduction to the Torrens System and the concept of Indefeasibility Introduction to the Torrens System  Title by registration • and private system – complicated and did not provide a simple, speedy and inexpensive method for conveyancing and dealing with interests in land. • You don’t have a legal title which you then go and register – it’s the process of registration that gives you the legal title - Once registered, you are said to have an indefeasible title

Indefeasibility  treats the registered proprietor’s interest as paramount (good against the rest of the world), except in the case of fraud or statutory qualification. Indefeasibility of title does not apply to land under old system title. • The Torrens System is a system of title by registration. The title to land is displayed on the Certificate of Title which discloses ownership and all other encumbrances to which that land is subject. Relevant (New Zealand) authority; Frazer v Walker [1967] 1 AC 569

Frazer’s Prior equitable interest vs. subsequent legal interest • Mr Frazer claiming equitable interest due to (1) wife’s forgery against Walker who now holds the legal interest

Walker • Pp. 577-78; Lord Wilberforce delivers

material facts Mortgage o Ms. Frazer has forged signature of her husband, unbeknownst to him, to

(2) obtain loan from Radomskis; their property acting as mortgage Radomski’s o Radomskis sell property to Walker, who

registers her new interest (protected by

s 69)

o Frazer’s claim that he is victim of forgery and seeks duress • 585B; n.b. NZ’s Land Transfer Act 1952 = AUS’ Real Property Act o Walker is a registered proprietor, not a party to the forgery and therefore holds indefeasible legal title that no one, including the defrauded Mr. Frazer, may be able to challenge successfully against – under the rules of the Torrens System o N.b. different outcome had the Walkers been directly involved in the fraud

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Topic 03 – The Doctrine of tenure and • Real property is about social relationship - Grant of property has been given to you by the Crown or the State 3.1 The Feudal System of Tenure  Personal relationship of dependency between lord and tenant o Brennan J in Mabo (No.2) (1992)- ‘tenure is a [social] relation between the tenant and the lord, not the tenant and the land’ o Organised into a system in England by William the Conqueror ▪ Distinguish allodial and tenurial ownership − Allodial; having DIRECT ownership of the land – there is no intermediary between yourself and your ‘home’ − Tenurial; relationship between you and someone else i.e. the Crown who GRANTS us the possession (ownership) of the land ▪ Land is 'held of’ the Crown − rather than Crown owning all the land A cascading chain of ownership: ▪ Pyramid structure with Crown granting to • King/Queen is the ultimate ‘tenants in chief’ in return for services. owner over all of the land 3.1.1 Types and Incidents of tenure (ownership over land during the - Able to land to feudal period) those favourable to  Originally wide variety, sometimes very personal or bizarre him/her i.e. nobles and 1. Military (service): knight service, guarding castles, honorary barons official roles • Nobles/barons able to gift 2. Religious (service): frankalmoin, pray for soul or masses land to others for services 3. Socage-residual services commuted to money payment (still performed exists today): • Eventually reaches the • Free and common socage; peasants who perform the • Incidents - aids (payment), wardship, homage and fealty. agriculture work on the 3.1.2 Evolution of Tenure land, however, they don’t receive direct ownership – • Became more centralised and standardise. only ownership of the land • The END of Subinfeudation (tenants under their superior cannot as a result of the chain of carve out new and distinct tenures in their turn by ‘sub-letting’ relationship above them or alienating a part of their lands) - o Statute Quia Emptores 1290 - alienation or substitution, so only tenants in chief eventually holding from the Crown ▪ Still in force today in South Australia • Tenures Abolition Act 1660: Remaining vestiges of tenures and incidents removed - Military service cannot be traded for ownership of land

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Topic 04 – Native Title Land Rights Milirrpum v Nabalco (1971) 17 FLR 141; • Challenge to mining project • 1963; Prime Minister Menzies announced Cth govt. was going to excise piece of land from Arnhem Land for creation of mine with Swiss consortium Nabalco • Yolngu people objected on basis they were not consulted with, along with other essential social concerns (drinking, etc.) o Presented a ‘bark’ petition which was signed by 17 leaders • Brings issue to NT Supreme Court – “I am very clearly of the opinion, upon the , that the social rules and customs of the plaintiffs cannot possibly be dismissed…The evidence shows a subtle and elaborate system highly adapted to the country in which the people led their lives, which provided a stable order of society and was remarkably free from the vagaries of personal whim or influence. If ever a system could be called “a government of , and not of men”, it is that shown in the evidence before me…I hold that I must recognise the system revealed by the evidence as a system of law.” − Justice Blackburn • Despite saying this, Blackburn J eventually holds that customary (/traditional) land laws were not capable of being recognised inside of a Western legal system – he rejects the Yolngu’s claim Key factors in Blackburn J’s reasoning are 3-fold; 1. Indigenous land laws lacked essential characteristic of a property right (i.e. use, exclusivity, alienability) 2. Blackburn J noted that even if he were mistaken about this, any native title right being claimed that once existed were extinguished by the British proclamation of sovereignty (and radical title) 3. Plaintiffs were unable to prove the elements of native title Native Title Mabo (No2) v Queensland (1992) 175 CLR 1 • Upon assertion of sovereignty, the Crown acquired a radical title with native title surviving colonisation. • Native title declared a sui generis (‘a unique’) right. Bottom, pp. 69 – Brennan JJ; • Point 3.; The Crown, in taking sovereignty, also had ability to grant beneficial title (e.g. title, exclusive possession leases) to other people • Point 6; sui generis (unique), ascertain land’s meaning by referencing the respective community Interpreting Mabo Majority v Dissent; • Brennan JJ (majority) – Court has responsibility to update the Common law and to not stick to a time and place where explicit discrimination was written into the law

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Topic 05 – Estates, fixtures and the issue of waste

Estates in Land • The is a unique innovation of the common law. o ‘An estate in the land is a time in the land, or land for a time’, Walsinghams Case. o Enables fragmentation of ownership interests in same land, both present and future. ‘In particular, with the evolution of the doctrine of estates, property interests came to be fragmented on the basis of time’, Western Australia v Ward (2000) 170 ALR 159, per North J [359]. • Estates are flexible – allows for concurrent interests to exist (e.g. freehold title and lease/mortgage/ co-existing at the same time) as well successively (owning your own land and being able to create future interests, in your heir) • The term estate refers to the fullest (absolute) set of rights a person can have with respect to land. • Estates enabled early distinction between conditional estates and absolute estates, e.g. is absolute, is conditional. Classification of Estates • Freehold and leasehold o Common feature of ‘freehold’ estates is uncertainty of duration. o Leases must have certainty of duration. • Freehold estates o The fee simple o Fee tail o o Leasehold estates (or tenancies) Freehold Estate – Fee Simple • Closest thing to absolute ownership, Gumana v Northern Territory (2007) 153 FCR 349. • A.K.A. ~ Holding in free and common socage for a fee simple absolute in possession! • Fee simple continues as long as heirs, potentially therefore indefinitely. o ‘simple’ derived from ability that it can be inherited by anyone/whomever (i.e. no closed category of people to pass land onto) – best friend, family, charity • If an owner dies intestate, and with no next of kin, Crown takes land as bona vacantia. See also section 72G(e) of the Administration and Probate Act 1919 (SA). ~ Freehold Estate – Fee Tail • An estate of inheritance.

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Topic 06 – Leases

Terminology • / of reversion: The lessor retains the reversion (a residual interest). The property reverts back to the lessor or grantor at the end of the lease. • Assignment or lease vs sublease: an assignment = A lessee/tenant can (if their contract permits) transfer their entire interest to another person. But if only part of the interest is transferred (e.g. 5 of 10-year lease given away), it is called a sub-lease. • Covenants and conditions: Concern the terms of the contract which create specific obligations or restrictions on the parties. Difference between two terms relates to how essential they are and the consequence for a breach. For example, if a lessee breaches a condition (usually more critical), the lease might be terminated. Leases as Property Rights • Historical position; o Leases were not within the freehold tenure system o Real/personal property – forms of action historically o Became called ‘chattels real’ (hybrid) as importance emerged (note diagram from last week). • Now, leases are a form of ‘estate’ • Leases are contractual and proprietary rights • Has an end date Law and Equity • They can be legal or equitable – formalities issue • Legal = In Torrens system, leases of one year and over must be registered – s116 RPA o Otherwise they are unregistered leases – s69(h) exception to indefeasibility if in actual possession • Equitable = Walsh v Lonsdale (1882) 21 Ch D 9. Approved by the High Court in Chan v Cresdon Pty Ltd (1989) 168 CLR 242. Essentials of a Lease – 2 criteria 1. Exclusive possession 2. Certainty of duration o Commencement and termination date • Rent? Not essential, though will appear suspiciously as though it is a familiar agreement if not stipulated • Other material terms – subject matter (e.g. land to be leased – citing specific address, who are the parties) Exclusive possession – the more important criteria • What is exclusive possession? o Radaich v Smith [1959] HCA • How do we find it? o From terms of the lease, but o Not just labels; the role of intention?

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Topic 07 - Subsidiary interests such as easements and mortgages

Part I - Easements and Profits

• Numerus clausus – fee simple, life estate, leasehold, easement, mortgage, rentcharge, a prendre – all exists in law - restrictive (most recent and final exists only in equity) • Estates = fee simple, life estate, - Each one features exclusive possession • Subsidiary interests = interests that are less than those estates [listed above] – distinguished by having possession (estates) and not having such (interests) • Easements and Profits are ‘incorporeal’ interests (aka ‘incorporeal hereditaments’) – estates in land are ‘corporeal’ as they involve possessory interests in the land - Corporeal = (physical/tangible) possession; incorporeal = inchoate/intangible (having no) possession • Easements and mortgages are both within the numerus clausus as non-possessory rights • Easement is usually a right for one landowner to do something on adjacent land of another e.g. a right of way o Rarely – it can be a right that something not be done by the other, or an obligation on the other to do something at their expense • A profit a prendre is a right to go onto another’s land and remove/retain something physical that was part of the land (that is capable of forming the subject matter of property) e.g. timber, crops, fish – fructus naturales o Note that a profit is not the right to enter – simply the right to remove o May sometimes be difficult to tell whether licence, contract for sale or profit – must be intended as a grant of right to take something from the land only – if the substantive content requirements ( for fee simple = use, exclusivity, alienability; for life estate – same rights but limited by life of person; leasehold estate – same rights with exclusive possession for term of year) of any of the 8 estates/interests are not met, then the relationship must be a o Since rules for easements and profits are very similar, the focus here will be on easements o Usually coupled/encompassing (with) a license (which is the right to enter) & profit is right to remove • Easements and profits can be legal or equitable depending on formalities of creation o S3 RPA – Torrens – reference to ‘easement’ in RPA includes profit a prendre Terminology of Easements (and Profits) • Land to be benefited by the right is the dominant tenement • ‘Tenement’ = land (with or without buildings) o Easements ‘in gross’ (i.e. with no dominant land to be benefited) are only permitted for government/utility companies. E.g. agreement to park car on another’s land (no land benefits from such ability to access land), cut across onto another’s land – simply rights that are personal to the party and offer no limitations to ways in which it may be used ▪ Not an easement – a license • Land with the burden (i.e. affected by the dominant owner’s rights) is the servient tenement o Respective land-holders are the dominant and servient owners

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Topic 08A – Co-ownership

~ Another means of dividing the physical resource • Where more than one person owns the same estate or interest in land o Can apply to fee simple, leases, easements etc., even personal property • Terminology – we talk of co-owners or ‘co-tenants’ in all the above cases (in sense of tenure) • Another means to divide a physical resource by way of Joint Tenancy or Tenancy In Common • All co-owners have unity of possession o Each is entitled to possession/enjoyment of each and every part • Two types of co-ownership – joint tenancy and tenancy in common The right of survivorship ~ may be the most significant principle used to distinguish between a joint tenancy and tenancy in common • If co-owners are joint tenants (JT), ‘the right of survivorship applies’ to the relationship between those two tenants • On death of one JT, the survivor’s interest is ‘correspondingly enlarged’ (in value equal to deceased tenant’s) o i.e. the survivor simply become sole owner/fee simple title holder (of estate, interest, etc. depending on the resource, nature of the estate/interest) – left with absolute possession o Same principle works for any number of JTs – in which case continues to ‘aggregate up’ until there is one left standing e.g. as each JT dies, the remaining JTs survive to the entirety of the fee simple o As it is an automatic right of survivorship, it is not affected by, and does not pass under, the deceased JT’s will – operates automatically upon the death of a JT to the benefit of the remaining JTs i.e. cannot be left under one’s will (established by the common law to be an automatic right) • In contrast, there is NO R.O.S if co-owners are tenants in common (TIC), each has an ‘undivided’ but distinct share - Brennan J in Nullagine Investments v Western Australian Club (1992-3) 177 CLR 635 at 643-4 o ‘Undivided’ because of unity of possession o If one TIC dies, her (undivided, but distinct) share will pass under will or intestacy rules o Joint tenants are able to lease out whole property – TICs only entitled to lease out according to their share proportion NB this is the ONLY consequence of the distinction between JT and TIC i.e. WHERE the interests of the deceased tenant vests following death – either by survivorship or by will

• If it is an (incorporeal) interest, and there are no heirs/successors, these rights merge into the title of the serviant tenement (e.g. fee simple title, or underlying title) - If an estate, and a lease concludes, returns to the fee simple holder (head title holder) OR - If an estate without heirs/successors, title reverts to the Crown (by way of escheat) regardless of whether JT or TIC Distinguishing Joint Tenancy from Tenancy in Common - the Four Unities JT is established by the satisfaction of the 4 unities; • (Unity of) Possession - both have right to possession of whole (physical resource considered)

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Topic 08B – Strata Title

~ An elaborate structure for multiple landholding which achieves: 1. A form of divided individual ownership in respect of the three main rights in the ownership bundle: use, exclusivity, and alienability; and 2. A structure which allows for collective management decisions of common ownership interests. I. Overview • Strata title is a legislative response to need for more intensive housing or commercial use where ownership divided amongst different landholders. o Typically arises in situations where there is one building, and a multitude of individuals have separate ownership interests to their part (unit/) of the building as well as having a collective interest in relation to the common areas of that building • The difficulty was how to provide for a diverse form of co-ownership. On the one hand, all of the existing property interests in land could be used to allow for diverse forms of title in defined areas of ‘land’, i.e., in airspace — easements, covenants, leaseholds — but the issue of obligations of the common owners to one another were difficulty e.g. where would someone who has the 10th floor slice of airspace go if they have a problem with someone on floor 9? • The concept of a corporation or company allows for the division of ownership, with defined rights and obligations, among various individual owners, or shareholders. • Strata title legislation is an attempt to deal with the rights and obligations involved in such ownership interests by combining existing proprietary interests in land with the concept of the corporation. • Every State and Territory now has such legislation – In SA; Strata Titles Act 1988 (SA); Community Titles Act 1996 (SA). • Legislation deals with the holding of (registration of) title pursuant to Torrens legislation, see e.g. Strata Titles Act 1988 (SA), s 4: o This Act and the Real Property Act 1886 will be read together and construed as if the two Acts constituted a single Act. • The legislation confers upon individuals’ ownership interests in that part of the land occupied by the owner, while conferring on a corporation the ownership of common areas with shared responsibilities in terms of maintenance. Sets out a management structure whereby a body represents all individual owners; mutual rights and obligations stem from legislation and rules which the corporation is empowered to make. • A form of individual property in the defined boundaries of floors, ceilings, and walls, and common ownership in open space, access, and supply of services, such as water and electricity. II. Scope of Legislation • Strata titles flow from deposit with Land Titles Office of Strata Title Plan: Strata Titles Act 1988 (SA), Part 2. Applies to a whole or a part of a building. • Management can either be contained in the same legislation as that which allocates the ownership shares, or in separate legislation. South Australia is an example of the former (management and ownership contained in one legislation) and New South Wales otherwise. • See the Strata Titles Act 1988 (SA) for structure of legislation generally. III. The Corporation

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Topic 09 – Equity and Equitable Interests Law of Property Act 1936 s 26(1) • Provides that relating to interests and estates i.e. the numerus clausus (fee simple, life estate, leasehold estate & incorporeal hereditaments (non-possessory interests) – easements, mortgages, profit a prendre, restrictive covenants) must be presented in writing S 28 – conveyance of estate/interest by deed (Torrens system version is by registration) • Otherwise attempt in conveying such becomes void Fusion – Equity and the Law • S28 Supreme Court Act 1935(SA) • Rule of Equity to prevail where in conflict with the common law • Subject to the express provisions of any other Act…generally in all matters not particularly mentioned in this Act in which there was formerly any conflict or variance between the rules of equity and the rules of common law with reference to the same matter, the rules of equity shall prevail in all the courts of the State, so far as the matters to which those rules relate, are congnisable by those courts. What’s the ‘Use’? • A use was device where land/tenure could be conveyed to one person (feofee) to hold it for the benefit (the use of) of a third party (the cestui que use) • Common law was inflexible in not allowing for gaps in seisin/possession – only present possessor o Also freeholds could not then be left by will, just automatic passing to heirs • The use was designed to provide this flexibility o But it deprived Crown of feudal dues and other incidents such as payments where heirs were minors (wardship) • Statute of Uses 1535 ‘executed the use’ i.e. treated the CQU as a tenant/seised • But this was unpopular as could not (again) leave property in will o Pilgrimage of Grace 1536 o Henry VIII was forced to pass Statute of Wills to allow transmission of freeholds by will • As per previous class, Tenures Abolition Act 1660 was abolished most tenures and their incidents The Development of the Trust • Separation of legal and equitable (beneficial) ownership is inherent in trust o E.g. you cannot be a trustee just for yourself • When combined with estates, trusts provide enormous flexibility for fragmenting ownership interests over land, though can be trusts of personal property too e.g. money/funds Types of Trust • Express Trusts o Private or public purposes • Resulting Trusts o Automatic or presumed • Constructive Trusts o Institutional or remedial • Statutory trusts o Clients’ trust funds, as imposed by statute

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Topic 10 – Priorities between Registered Interests (Torrens System =) Title by registration ≠ Registration of title • Registration of title – deed (a document) creates the fee simple title, subsequent registrations add/do nothing (simply conveys the fee simple title) • Title by registration – creation of title effected by the registration (creates that legal estate/title which previously had not existed) o Curtain principle – registration brings down the ‘curtain’ on the transactions, that is, the State guarantees that your title is legitimate vs. old system where purchaser needed to search through all prior title documents to verify that prior transactions were valid so that your title will also be legitimate (nemo dat – you can’t sell what you don’t have) o Mirror principle – whatever title says is an accurate reflection of state of the title ▪ NB a tension that persists between curtain and mirror principle; curtain principle essentially ignores past transactions to give effect to the current one vs Mirror which aims to portray that accurate reflection of state of title o Assurance principle – State guarantees state of title i.e. title as reflected in registration is accurate and any loss by (virtue of the operation of the system of) registration will accordingly be provided redress (compensation) by the relevant State (jurisdiction) – State maintains an ‘assurance fund’ to address when such difficulties arise • Infeasibility – every registered right over the same piece of land is considered to be paramount and absolute o Title is unassailable, unimpeachable and cannot be impugned – absolute; a certainty of title which cannot be diminished by any claims o Essentially, a structure which surrounds the curtain principle o Mirror principle alerts systems run by the title by registration to create exceptions… Introduction to Exceptions S 69 & 70 – establishes indefeasibility and the idea that it grants paramountcy to the registered proprietor

S 56 – priority between those who have (registered) legal title is determined as a matter of time (/date) of creation of registered rights or time/date of transfer of registered rights • When was the registerable instrument lodged? o S 67 – time of lodgement = time of registration ▪ i.e. idea that earlier registered lodgement binds later registered rights hypothetical (based upon provisions [above]); if X has fee simple title (subject to an easement registered against the title) and sells to A, then A will be bound by the easement that bound X.

Once A registers as the fee simple title holder and is subject to the prior easement, as well as a later mortgage he created, then A will be bound by the latter as well.

The fee simple title holder has the highest priority of rights; between the subsidiary interests (easement and mortgage), priority is determined as a function of time (which is given to the easement based upon the date of lodgement) even where there are two of the same subsidiary interests

A is now the registered proprietor of the fee simple (prima facie has an indefeasible title). Are there exceptions which may affect A’s title?

1. Other registered rights

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Topic 11 – Priorities Between Unregistered Interests Recap; All of the ways in which equitable interests are created are – 1. Express trusts 2. Operation of law 3. Contracts giving proprietary interests in relation to land (Walsh and Lysaght) 4. Unconscionability (Baumgartner) and estoppel Introduction to Unregistered Rights • Multiple unregistered interests over the same piece of land, and thus, disputes between them cannot be solved by the principles of registration/indefeasibility o Dispute resolved through the normal principles of equity applied to the Torrens system. ▪ Breskvar v Wall (1971) 126 CLR 376 held that courts should apply the principle in Rice v Rice (1854) 61 ER 646, at 648: “where the merits are equal, the earlier in time prevails over the later.” Note that Rice is a pre-Torrens case. ▪ Later cases emphasised that that principle in Rice should not be applied mechanically and that the real task of the court “is to determine where the better equity lies”: Latec Investments Ltd v Hotel Terrigal Pty Ltd (1964-1965) 113 CLR 265 at 276 and Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326 at 333. Equity (equitable interest) v mere equity

• Mere equity? A right in equity that is ancillary to an interest in property and is binding on a third party who has notice of its existence or is a volunteer. o In Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265, a priority dispute between a ‘mere equity v equity’ the BFP (bona fide principle) rule applies. ▪ BFP (a priority) rule which deals with mere equity v subsequent equitable interest disputes – if subsequent has notice of prior equity, they will take subject to it; if had no notice, then they will take free and clear that prior mere equity • Equitable interest is classified as a property interest, and thus, transferable/alienable

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Topic 12 – Revision

Take Home Exam: 2018

• Format – exactly the same as the interim assignment (three questions with the same weighting). o Official Reading Time: 10mins; Writing Time: 60 mins; Total Duration: 70mins. o TIP: Time yourself so that you spend time on each question i.e. 30m for the question worth 50 points. o Markers do not expect the same level of detail as the interim assignment. • Every component of the course is examinable. o Perspectives material is all examinable. ▪ Make sure that you are across all of the articles/links provided on Myuni for the seminars. In the interim assignment some papers did not refer to the articles and links provided on native title. o All LAND WILL BE TORRENS LAND. 7 steps for Answering a Problem Question

1. Read the facts carefully and create a list of issues. 2. Identify the key parties. 3. What kind of interest are they claiming? Are the substantive requirements or elements of that interest present? • Numerus Clausus: Fees Simple, Life Estate, Lease, Easement, Profit, Mortgage and Rentcharge. • If the interest does not fall into the NC it might be a license (bare or contractual), or an equity (e.g. estoppel, unconscionability claims) • Establishing the substantive criteria is important when the interest is not registered. 4. Is the interest legal or equitable? • Establishing a legal interest under the Torrens System.  The Torrens System is a system of title by registration.  Duplicate of certificate of titles have been abolished.  Parties no longer execute their own instruments.  Verification of Identity: practitioners, conveyancers and mortgagees are required to take ‘reasonable steps’ to verify the identity of their client.  Verification of Authority: practitioners, conveyancers and mortgagees are required to take ‘reasonable steps’ to verify their client has the right to deal with the land. • Establishing an equitable interest under the Torrens System.  Equity is not abolished.  Trusts, rights arising out of contract, part performance, estoppel, rights arising out of unconscionable behaviour. 5. Priority dispute: There are three possible kinds of disputes • Legal v Legal  Dealing with two registered/legal estates/interests → as a matter of time ▪ Time of lodgement of registerable instrument  Section’s 56 (2) & (3) Real Property Act 1886 (SA).

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