LAWS12065 Foundations of Property Law Assessment

PARTA– LIVENEGOTIATION

Background Facts:

In 2002 Grace and Samantha purchased a four acre lot at 123 Central Street, Bluesea. The lot has a large brick building which is surrounded by land. Bluesea is a Queensland local government area in the City of Bluesea.

The four acre lot at 123 Central Street sits alongside an adjacent one acre patch of land which Grace and Samantha call the “garden” (for the purposes of this problem, this one acre sized patch of land will be called the “garden”). The area known as the “garden” was given to Bluesea City Council by one of its predecessors, the Shire of Bluesea, in 1998 but the council never used the area.

In 2003 Grace and Samantha, who are passionate gardeners, decide to use the “garden” to grow cherry tomatoes. They also planted lemon and orange trees on the four acre lot on 123 Central Street, and landscaped the area to give it a Mediterranean look and feel.

In 2004 they decide to start a restaurant on the four acre lot at 123 Central Street which they call “Positano”. They make use of the cherry tomatoes grown in the “garden” and the citrus grown in the lot at 123 Central Street in its recipes. The restaurant is an instant success and many customers comment that they enjoy that the restaurant uses produce from the “garden”.

Grace and Samantha saw the “garden” as a unique selling point for the restaurant and many people enjoyed having events at the venue because of its beautiful surroundings. In 2005 Grace and Samantha install Tuscan style birth baths and maintain the native vegetation in the “garden”, which Samantha feels reflects the restaurant’s Italian and modern Australian “fusion” concept. To ensure that customers would not damage the cherry tomato plants, Grace installed a white picket fence on one side of the “garden” which faced the restaurant car park. All the other sides of the “garden” did not have fencing. Grace and Samantha continued to maintain the “garden” until 2013 when Samantha was involved in a car accident which severely injured her lumbar spine. This injury prevented her from gardening. To avoid having to do all the gardening herself, shortly after Samantha’s injury Grace installed an irrigation system in the “garden” which she operates from her smart phone to water the cherry tomatoes. From 2013 they stopped tending to the “garden”. From August to December 2013 weeds grew throughout the “garden” and the grass grew very tall. After they received complaints from customers to the restaurant, Grace reluctantly spent each second Sunday pulling weeds and maintaining the “garden”. Samantha would also help out by using a rake to collect leaves. This arrangement went on until December 2022, when both Grace and Samantha decided to retire and sell the lot at 123 Central Street.

Grace and Samantha advertised the lot at 123 Central Street on the local real estate agent’s website. The advertisement came to the attention of representatives at Bluesea City Council, which had wanted to buy that lot for some years so that it could build a new library and small park. It considered that the four acre lot at 123 Central Street could be used together with the one acre lot which it had received from the Shire of Bluesea.

The council contacted the real estate agent to express interest in the lot at 123 Central Steet. It also arranged to inspect the lot and the brick building which was used as the restaurant. When the council inspected the building on the lot it contained industrial stoves and dishwashers in its large kitchen, three large air-conditioning units on its roof, a wooden wine cellar with wine racks, an artwork and a floor to ceiling cabinet. The stoves were connected to gas and they sat on the tiled floor. The dishwashers were fitted underneath cooking benches and connected to water inlets and outlets. The air-conditioning units were affixed to the roof of the building to keep customers cool during summer months. The air-conditioning units were installed by a refrigeration mechanic who was engaged by Grace and Samantha because customers would complain that the building was very hot during summer, and this had significantly impacted the number of people who visited the business in summer. The wine racks were affixed with bolts to the wall. The artwork was an original painting which hung on a hook on the wall. The floor to ceiling cabinet sat on its own weight but for safety it was securely drilled into studs in the wall and adjoined to the ceiling using decorative plaster so as to conceal a gap.

In January 2023 council representatives made an offer on the lot at 123 Central Street which was accepted by the vendors. The council then entered into a contract of sale with the vendors with settlement scheduled for July 2023. In February 2023 council representatives arranged to inspect the property for a second time. At this second inspection, they discover that: the stoves have been removed with no noticeable damage to the kitchen area; the dishwashers had been removed and there were large gaps under the benches where the dishwashers had been; the wine racks had been removed from the wall without causing any damage to the brickwork; the painting had been removed from the wall; and the floor to ceiling cabinet had been removed leaving large holes in the wall and damage to the plasterwork along the ceiling.

The council contacted the real estate agent via telephone to request the return of the stoves, dishwashers and floor to ceiling cabinet. The real estate agent advised the council that Grace and Samantha would not be returning any of the items which were removed from the building. Further, the real estate agent advised the council that it had instructions from Grace and Samantha to seek payment from the council for the air-conditioning units on the roof and obtain a written undertaking that their use of the “garden” would not be disturbed.

A dispute has arisen between the council on the one hand, and, Grace and Samantha on the other. Each party now instructs lawyers in relation to their respective claims. One group must act for the council. One group must act for Grace and Samantha. Your group and the opposing group must agree on which party they will act for, as per the above assignment instructions.

The parties must negotiate whether the items in dispute remain the property of Grace and Samantha, or whether they pass with the land to become owned by the council. This also requires assessing which items are in dispute and which items are not in dispute. The parties must also negotiate the issue of who has title to the “garden”.

PARTB–REFLECTIONANDMEMORANDUM

After the negotiation, the managing partner of your firm’s property group asks you to prepare an internal firm memorandum which reflects on the negotiation by:

• explaining the conflicts that arose between the council on the on hand, and, Grace andSamantha on the other;
• updating the managing partner on the legal position of your client with regards to each ofthe items in dispute and on the issue of adverse possession. You must explain, using authority, whether you think your client has a strong or weak case and whether you think they should concede or commence litigation on each of the items in dispute and on the issue of adverse possession;
• explaining whether the negotiation changed your position on any of the issues in dispute.You must complete Part B alone after the It is an individual assignment.