LAWS 3082 Property Law Assignment

PART A (20 marks)

Donald owns a property, “MyLago” a parcel of land governed by the Real Property Act 1900 (NSW). It includes a palatial mansion in which he lives and also operates as a casino and hotel for guests seeking a memorable vacation.

In the basement of the mansion Donald has installed a heavy printing press (weighing several tonnes) to print promotional material to build support for an upcoming election campaign in which he is considering running as a candidate. The printing press is secured to a concrete foundation by nuts and bolts in order to stabilize the presses during operation so that the printing press can print clearly without being adversely affected by any vibrations from external sources.

Donald commissioned a large neon sign displaying the words “Winners are not Losers” to be mounted to the wall over the entrance to the mansion.

A heavy freestanding bronze life-size statue of Donald himself has been placed in the courtyard of the mansion and each of the hotel rooms in MyLago is adorned with random framed oil paintings from Donald’s eclectic art collection that are hung on the walls. Although the framed oil paintings can be removed from a room, removal of the framed oil paintings from their mounting brackets would cause minor damage to the paint on the walls in the course of removal.

Donald has also installed expensive rows of luxury seats fastened together and temporarily bolted down to the floor in a large Hall in the mansion. The location of the seats in the Hall is regularly moved depending upon the entertainment offered at the mansion with different positions of seating adopted for the Hall’s use as a cinema or theatre or as a concert hall.

Donald’s property MyLago is adjacent to another property “Little Rock” a parcel of land also governed by the Real Property Act 1900 (NSW) in which his neighbour Hillary had previously lived as the registered proprietor. The estate Little Rock comprises a cedar plantation and a large country house.

20 years ago, Hillary had moved overseas to conduct some important business telling her neighbour Donald to ‘keep an eye’ on Little Rock while she was away.

18 years ago, Donald - noticing that Hillary had still not returned - began to harvest cedar (a type of wood) from the cedar plantation at Little Rock to supplement his income.

16 years ago, Donald, experiencing serious financial difficulty, surreptitiously began to store valuable goods in the empty double garage of the house at Little Rock as part of a self-storage business he established to earn additional income. Donald picked the locks to the garage to gain access at twilight when he would covertly move goods in and out of the garage.

12 years ago, Donald changed the locks to access the house on Little Rock with his own keys and began to live in the empty house during the summer season of every year, for three months per year, as he found it to be ‘the ideal summer holiday retreat’. During this time Donald would host lavish outdoor parties at Little Rock to the consternation of his neighbour who were exasperated by the loud noise caused by Donald’s perpetual celebrations.

9 years ago, Donald met Hillary at a local restaurant to ‘catch up’ and orally offered to purchase ‘Little Rock’ from her for $500,000. Hillary, insulted by the offer, told Donald that he was ‘delusional’ and that she would never sell him ‘Little Rock’. From this date onwards, Donald then began to live full-time at Little Rock throughout the year until the present.

5 years ago, Hillary briefly inspected Little Rock by walking around on the front lawn for 10 minutes without entering the house - after which she returned overseas again.

Hillary has now returned from overseas, and at her instruction her lawyers have sent Donald a formal letter demanding that Donald cease occupying Little Rock immediately and surrender the keys to Hillary.

Donald refuses to cease living at Little Rock or to permit Hillary to access Little Rock.

All students must answer the following questions, providing reasons for their answers:

1. Donald decides to retire and sell his estate in MyLago to his protégé Ron. The contract for sale is silent regarding the proprietary interests of parties in relation to the printing press, neon sign, statue of Donald, framed oil paintings and rows of luxury seats in MyLago. The settlement of the sale proceeds and Ron moves in. Donald wants the printing press, neon sign, statue, framed oil paintings and rows of luxury seats removed from MyLago and returned to him. Ron refuses. Advise Donald regarding his legal position in relation to these items. (10 marks)
2. Advise Donald regarding his legal position in relation to Little Rock. (10 marks)

PART B (25 marks)

Bill is the registered proprietor of the freehold estate in fee simple of Bag End, a parcel of land governed by the Real Property Act 1900 (NSW).

In January 2023 Bill - weary of living at home and planning to travel around the world on an extended holiday later that year - executes a written and signed agreement to lease Bag End for a fixed term of 2 years to his cousin Lowbelia with the lease to only commence later that year in July 2023. The lease also includes a clause conferring upon the lessee an option to renew the lease for an additional 1 year upon the completion of the original 2 year term. Lowbelia does not lodge a caveat in relation to her unregistered agreement to lease the property.

In February 2023 Bill, yearning for companionship and assistance at home in his old age, says to his nephew Fred

If you come and live with me here at Bag End and look after me until July this year then Bag End belongs to you.

Fred, eager to help his Uncle Bill and also interested in the prospect of owning a home, then moves into Bag End to live with his Uncle Bill and care for him.

In March 2023, Bill decides to raise some money to start a business as a travel influence on InstaTok (a social media platform). He obtains a loan from Lonely Mountain Bank of $300,000 (secured by a written mortgage granted by Bill in favour of Lonely Mountain Bank over Bag End). As Bill has been an esteemed client of unimpeachable reputation – Lonely Mountain Bank neither registers the mortgage nor lodges a caveat in relation to their unregistered interest as a mortgagee.

In April 2023, in response to the rising cost of travel due to a war overseas, Bill, desperate to raise additional finances for his planned extended holiday then enters into a written and signed contract to sell Bag End to his friend Alf for $1,000,000 (in relation to which Alf pays Bill a $100,000 deposit). Alf is entirely unaware of the existence of any other interests in the property other than Bill’s own interest as the Registered Proprietor.

However, prior to the scheduled settlement date with Alf, Bill receives a better offer from Gladys to purchase Bag End for $2,000,000. Gladys is unaware of either the prior exchange of contracts with Alf or of any other transactions relating to the property. She has searched the Register and confirmed that only Bill holds a recorded interest in the property of any kind. Bill then proceeds to enter into a written and signed contract of sale for Bag End to Gladys.

However, before Bill can execute the transfer of his interest in favour of Gladys and complete the contract of sale to Gladys, Fred becomes aware of these dealings and in May 2023 lodges a caveat on Bag End, claiming that he has an unregistered interest in Bag End.

All students must answer Question 1, providing reasons for their answer:

1. Identify the nature of each party’s proprietary interest (if any) in BagEnd, and also provide advice regarding the priority that would be accorded to the enforcement of each of those proprietary interests.
   Students in LAWS7067 must answer the following additional question (Question 2), providing reasons for their answer:
2. Assume that the facts in the scenario above are now amended as follows:
   After entering into the contract of sale for Bag End, Gladys becomes aware of the existence of all the other parties’ interests but nevertheless proceeds to complete the contract of sale by paying the balance of the purchase price to Bill. Bill then executes a transfer of his interest in Bag End (properly stamped) in favour of Gladys and Gladys’ solicitor lodges Gladys’ dealing for registration. After Gladys’ dealing has been lodged for registration, Fred then becomes aware of these dealings and then lodges his caveat in relation to the interest that he claims he has in Bag End. At the time that Fred lodges his caveat, Gladys’ interest in Bag End has not yet actually been registered by the Registrar General.
   How does your answer in 1 change, if at all?

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