Week one: introduction to property

Property law

Week one: introduction to property

Have an idea of some of the key ideas behind property in western and indigenous Australian contexts

Understand the interrelationship between the benefits and challenges of property

What is property?

Property is a thing or place that has ownership responsibilities by an individual or party.

At its core, property is a social institution. It is a type of relationship that exists between persons, with respect to an object or thing in the world. The objects of property are many and varied. We can have property relationships vis--vis things as diverse as land (real property), ideas (intellectual property), arts, animals and so forth. Because property is socially constructed that means, its an idea that we all hold in common and thus, the idea is given form what we understand the limits and forms of property to be varies from culture to culture.

What does it mean to own something?

John Locke, the second treaties of government (1690) and the beginning of possessive individualism:

Assumes un-owned things terra nullius

Labour theory of property

Its a bit more complicated than that, but for the purposes of this course, thats all you need to know.

William BLACKSTONE commentaries on the Laws of England (1753) Bk 1, ch 1, Of Property there is nothing which so generally strikes the imagination, and engages the affections of mankind, as the right of property; or that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.

The essential elements of property

The right to use and enjoy, i.e., exploit (including the right to possess and the right to destroy)

The right to exclude (other people, the whole world) and

The right to alienate (e.g., the right to sell, gift)

Indigenous Australian relations with land:

In the Mabo decision, the court had to grapple with the fact that indigenous relationships with the land did not include a right to alienate or sell land, which has always between very important to western ideas of property. Take a look at the quote on the screen you can see how Brennan J dealt with this.

It would be wrong, in my opinion, to point to the inalienability of land by that community and, by importing definitions of "property" which require alienability under the municipal laws of our society, to deny that the indigenous people owned their land. The ownership of land within a territory in the exclusive occupation of a people must be vested in that people: land is susceptible of ownership, and there are no other owners.

This is important, because when our system of law attempts to accommodate (or not accommodate) indigenous land relations, it is attempting to accommodate radically different ideas about what it means to own land. From the outset, I think its important to understand that the epistemic framework between western property law and indigenous property imaginings may well be incommensurate. By Epistemologies I mean, the ways in which we make sense of the world and, what constitutes valid information on which a decision is based. The result is that Indigenous Australians ontologies that is, understanding of the world, their social roles, and their responsibilities to other people including in past and future generations - is thus fundamentally different to mainstream Australian conceptions of the same. As property is an ethnical, socially constructed, concept, it shouldnt surprise anyone that the conceptions of property are different.

Irene Watson tells us:

There is no law-full authority held to consent to destruction of the land, for that is the law (2017, 210*).

The laws of the land are as old as the continent itself; they continue to exist. The laws of the land cannot be finished, other than perhaps in the minds of those who proclaim their ending. Law continues just as the natural world continues, regardless of how it may be denied by humans. For that is the law. Law is what cares for country, for that is the law (2017, 212).

Irene Watson cites the Kombu-Merri and Waka Waka philosopher Mary Graham:

The two most important kinds of relationship in life are, firstly, those between land and people and, secondly, those amongst people themselves, the second being always contingent upon the first. The land, and how we treat it, is what determines our human-ness. Because land is sacred and must be looked after, the relation between people and land becomes the template for society and social relations. Therefore all meaning comes from the land

Fairly obviously these ways of understanding human relationships with land are fundamentally different to how pretty much everyone in this class (but not necessarily all of us) understand our obligations to land.

What is a person?

Subjects of property are persons, both legal and human.

Jurisprudence and laws in Latin American and NZ are developing the idea that parts of nature (a river, Pachamama etc) can be legal persons capable of holding rights.

A person is not the same as a human being. As we know not all human beings have been granted legal personhood and some legal persons (corporations) are clearly not human. Personhood as a legal concept (from the Latin persona a mask) refers to an entity recognised as capable of having legal rights. New claims for personhood are also being made in relation to nature such as rivers, parks, the great apes etc. (there is some super exciting decisions being handed down in Latin America and New Zealand. Do take a look at them if this sounds interesting to you!) Why grant legal personality to a corporation (an abstract entity) and not to other, real sentient beings?

What is a thing?

As for things these may be tangible or intangible (ideas, knowledge etc). Think about the right that an artist (or their record company) owns vis--vis a song, for example. Of course - There are many things where the appropriateness of private property rights are contested. Again, think of the types of rights/relationships and ask should an individual be able to claim exclusive possession/control or be able to sell these things?

Things can be tangible or intangible (ideas, knowledge etc)

The objects of property i.e., what we can own is a moral question, and the answer depends on social context. Remember, for example, that it wasnt long ago that society condoned the ownership of human beings slaves.

Opportunity and conflict

Classical economics suggests strong property rights create wealth and opportunity

They also potentially exclude theres from making decisions about land and

Drive inter- and intra-group conflicts as individuals and communities seek to control assets.

As you can see from the Dr Soto video and the Economist article, there are lots of advantages that come from having a robust system of property rights. It enables the transfer of assets; it facilities the modern economy and borrowing; it enables individuals to grow their wealth.

Living in Sydney, you are likely aware of the incredible wealth that members of earlier generations who were able to purchase land have been able to amass as a result. Land that was bought for $30,000 in the 70s, when Paddington, for example, was a working-class part of Sydney, might have sold this year for $4 million. Great for the person who bought the terrace 50 years ago, less great for young people in Sydney who want to put down financial and social roots in place.

This inter-generational conflict is just one example of the types of conflicts that property can generate. During the tutorial well be reflecting on the Rutten article and the Shut the Gate videos. They highlight two types of property conflicts: the over conflict between individuals competing for property, and the conflicts that exist between different interest groups when it comes to determining what people are allowed to do with their property.

Hernado De Soto on Property Rights and Rule of Law

a property right initiates the rule of law.

when issues arise such as who lives where and who owns what People value standard rules and you not only have to have rules that you and your group respect but that everybody understands and thats the rule of law.

Week one tutorial

How many different definitions or descriptions of property can you identify from the readings?

Property is not a thing; it is a relationship.

For example, land bank has rights to the land and the person paying the mortgage all has rights, if the owner is not making payments this means banks have rights to the land.

Are there any essential characteristics of property? What are the three mains elements identified in the textbook?

Common law:

Right to enjoy (use)

Right to alienate (right to sell it or dispose of it)

Right to exclude

Example a trademark you can exclude other to use your trademark or logo

Example trespass on land is property right

According to Gray and Gray, what is the trap that people fall into when talking about property? Is it a trap? What assumptions underlie a description of property as a degree of control over that resource?

They think of it only objects and things you can own. Instead of produced, intellectual thing in tangible thing.

Involves the notion of private property, for example royal national park, notion of private property and private control takes a toll on degree of control over the resource being a park.

Identify and describe the utility in the recognition of private property rights? What is the role of the Rule of Law in the protection of private property rights?

If you allow notion of property what use it is going to be private property. For example, a house you have someone walking into your house, you have the right to alienate and exclude this person. Trespass to land or goods and actionable for damages. Punishment, damages and imposing liabilities.

Rule of law brings security and you know where you stand.

For example:

When you go to court, you want the court to imply the law and no give opinion.

What is meant by the phrase objects of property? What is capable of being (or becoming) an object of private property?

Property

1265530-201725255730-165725

Realty Personalty (chattels)

404035-22699

171475-92474 Corporeal hereditaments

Incorp hereditament

Personalty (chattels)

158803-233882 Eg. Lease

50620067310

1404987-54888

Personal Real

225475-131446

72229062055chose in possession chose in action

Consider Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479. What is the 'property' claimed by the Plaintiff and how did the Courts respond to this claim?

Victoria Park Racing & Recreation Grounds Co Ltd v Taylor, commonly referred as the Victoria Park Racing case, isa leading case of the High Court of Australia on determining whether property rights exist and protecting claims in property for the purposes of tort law.

Court said You dont have a property interest

Criteria of human skill as a test

For example, mummies being mummified

According to ALRC

What is property?

The idea of property is multi-faceted. The term property is commonly used to describe types of property, both real and personal. Real property encompasses interests in land and fixtures or structures upon the land. Personal property encompasses tangible or corporeal thingschattels or goods, like a car or a table. It also includes certain intangible or incorporeal legal rights, choses in action, such as copyright and other intellectual property rights, shares in a corporation, beneficial rights in trust property, rights in superannuation HYPERLINK "https://www.alrc.gov.au/publication/traditional-rights-and-freedoms-encroachments-by-commonwealth-laws-alrc-report-129/18-property-rights/definitions-of-property-3/" l "_ftn20" o "" [20]and some contractual rights, including, for example, many debts. HYPERLINK "https://www.alrc.gov.au/publication/traditional-rights-and-freedoms-encroachments-by-commonwealth-laws-alrc-report-129/18-property-rights/definitions-of-property-3/" l "_ftn21" o "" [21]Intangible rights arecreatedby law. Tangible things exist independently of law, but law governs rights of ownership and possession in themincluding whether they can be owned at all. HYPERLINK "https://www.alrc.gov.au/publication/traditional-rights-and-freedoms-encroachments-by-commonwealth-laws-alrc-report-129/18-property-rights/definitions-of-property-3/" l "_ftn22" o "" [22]Week 2: Boundaries of property

Identify and distinguish between the nature of rights arising under Property Law (i.e. in rem) and rights arising under Contract Law (i.e. in personam)

Understand the typology of different types of rights arising under Property Law

Distinguish between real property (i.e. Land) and personal property (i.e. Chattels) in the context of the Doctrine of Fixtures

Rem refers two as rights in rem in rem referring to in relation to things as opposed to the rights arising under contract law

A recognition that property as a concept is synonymous with a reference to proprietary interest at least in the strict legal sense and more specifically a recognition that when we refer to property as a relationship we are not referring to a thing that is a object or now but rather a relationship between persons or a person.

Property (proprietary interests): Definition

to talk about property is to talk not about objects but about relations between persons in relation to things

Cohen, Dialogue on Private Property (1954) 9 Rutgers LR 357

Property / Proprietary Interests = Bundle of rights exercised by a person in relation to a thing (i.e. property to a thing vested in a person) generally include: (There are three consistent hallmarks or characteristics of Papa Terry interests that is of a bundle of rights that are exercised or recognised by law as being exercised by a person in relation to thing)

Exploitation

The right to use and enjoy (Sometimes this actually extends to even the right to destroy thing)

Possession

The right to exclude & control access (in relation to a thing from other people and the whole world)

Alienation

The right to transfer (e.g., the right to sell, gift)

Important! To know the difference in a general list characteristics

NATURE OF PROPERTY: PROPERTY RIGHTS V PERSONAL RIGHTS

Proprietary Rights (Property Law)

Personal Rights (Contract Law / Tort Law)

Enforceable against the world at large in relation to a particular thing/object (i.e. in rem/ follows the thing)

Contingent upon existence of thing/ object

Irrevocable (by Grantor) e.g. licence coupled with grant of proprietary interest in Profit a Prendre

Binding upon third parties (i.e. enforceable in relation to the world at large)

Finite (i.e. Limited) combinations / bundles of rights (i.e. Numerus Clausus = Closed List)

Cause of Action: Ejectment now replaced by Civil Procedure Act 2005 s20 claim for judgment for possession of land / Tort re trespass to land / chattels etc.

Remedies

Specific Performance

Injunction

Enforceable against a particular person in relation to a particular person (i.e. in personam/ follows the person)

Contingent upon existence of obligation to be discharged by a particular person.

Revocable (by Grantor albeit subject to award of Remedy of Damages for breach of contract) e.g. bare license / contractual license

Not binding upon third parties (i.e. other persons not party to contract or not subject to tortious obligations)

Infinite (i.e. unlimited) combinations / bundles of rights (E.g. contract)

Cause of Action: Contract or Tort

Remedies

Damages

PERSONAL RIGHTS (IN PERSONAM): EXAMPLE

Scenario:

If A borrow $50 from B, and promise to repay it, A owe B $50.

B does not expect to get the same $ 50 note back.

Instead, A has a personal obligation to pay which corresponds to Bs personal right to be paid $ 50.

This is a right in personam which can be enforced against A, regardless of what has become of the $50 note A borrowed.

Legal consequence (enforceability):

If A gives that note to a friend or spend it at a shop, B does not acquire any rights against As friend or the shopkeeper.

B has no right to that note nor to any other $50 note that A may have.

Note: Bs right (in personam) follows the person (A), but does not follow the thing (that $50 note)

PROPRIETARY RIGHTS (IN REM)

Scenario:

If A borrows Bs book, and promises to return it, B continues to own the book.

In addition to As promise, B has a right in rem, which is enforceable against A, because A has Bs book.

Legal consequence (enforceability):

The property right follows the book (against thing).

If A gives Bs book to a friend C, B can assert Bs right in rem against C, because C has Bs book.

Note: Bs right (in rem) follows the thing (book), not limited to the person (A)

LICENCE: PROPERTY VS PERSONAL RIGHTS

Licence = permission / consent by party in possession granted to another party to use/access land for a particular purpose

Bare / Contractual Licence = Personal Right NOT Proprietary Right

right to use / access land less extensive than any bundle of proprietary rights to exploit/ exclusive possession / alienation and therefore merely contractual not proprietary

revocable at law (subject to award of remedy of damages for breach of contract) In other words now again I do concede there are exceptions to this inequity there's an exception to every rule but as a general rule most fair and contractual licences can be revocable at law albite of course if it involves breach in the event that it also involves a breach of contract subject to the award of remedy of damages as opposed to of course a proprietary interests which is theatrical not revocable at law

NOT binding upon third parties to contract (limitation of privity)

Exception: Licence coupled with Proprietary Interest = Property Right e.g. Profit a Prendre

LICENCES: FACT PATTERNSWhat is meant by the relevant fact pattern is the circumstances the events and the circumstances that commonly so we use the word pattern because these tend to because the commonly arise in relation to certain concepts so in the context of licences which can be a fixed issue it's worth noting the following cases total straight out of your book there are three important cases here of course

Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605: a right to view a spectacle conferred by a ticket is a contractual licence but not a licence coupled with a proprietary interest. Contractual licences are revocable albeit subject to award of a remedy of damages (unlike a proprietary interest which is irrevocable) as equity will not grant specific performance to enforce performance of a contract for service.

King v David Allen & Sons, Billposting Ltd [1916] 2 AC 54: an agreement conferring a right to affix bills and posters to a wall is only a contractual licence granting personal rights and is not proprietary in nature (as it did not expressly confer a sufficient plenitude of rights over the land). Contractual licences therefore cannot be enforced against third parties (e.g. subsequent lessees of the premises to which the wall belonged) as they are not proprietary in nature.

Georgeski v Owners Corporation Strata Plan 49833 (2004) 62 NSWLR 534: cause of action in Trespass (seeking a remedy of Injunction) only available to protect recognised proprietary interests in land (i.e. in accordance with Numerus Clauses principle) and not personal (i.e. contractual) interests in land. As the Plaintiffs interest was confined to a licence to occupy the land for a particular purpose but did not extend to also include any right to exclusive possession (and as the plaintiff did not enjoy any kind of possessory title arising from factual exclusive possession of the land) the Plaintiff was not entitled to any relief in relation to a third party to the original licence (contract) granted.

REAL PROPERTY (LAND) VS PERSONAL PROPERTY (CHATTELS)

Real property Personal property

Corporeal Hereditaments

Land (i.e. freehold estates)

Fixtures (chattels annexed to land)

Incorporeal Hereditaments intangible interests derived from land e.g. easements

Fructus Naturales the natural products of the land from which they arise, such as agricultural produce and wild game.

All property that is not real property including:

Chattels real leasehold estates (historically only freehold estates were enforceable by real actions for recovery)

Chattels personal

Chose in possession a movable corporeal (tangible) thing

Goods

Fructus Industriales work created by labour

Animals

Chose in Action (legal & equitable) a movable incorporeal (intangible) thing in the form of rights which are enforceable by action eg shares, patents copyrights, equitable securities, contractual rights, promissory notes, cheques, mere equities

DOCTRINE OF FIXTURES: DEFINITION

Fixture = Personal Property (i.e. chattel/good/thing) annexed / attached / affixed to Real Property (i.e. land) in circumstances which transform the chattel/good/thing into a form of Real Property by law.

Doctrine of Fixtures = common law which determines the circumstances in which the annexation of a chattel / good to land transforms the Chattel / Good into a form of Real Property (i.e. Fixture).

DOCTRINE OF FIXTURES: SIGNIFICANCEDetermination of whether an item/thing is a chattel (That is a form personal property) or fixture (real property) affects:

Title/Ownership of Item/Thing

Vendor vs purchaser

Lessor vs lessee

Mortgagee vs mortgagor

Life tenants v remainderman

Testamentary disposition devise real property vs bequeath personal property

Stamp duty/Tax payable

DOCTRINE OF FIXTURES: RATIONALE

Quicquid plantatur solo, solo credit (i.e. what is attached to the land becomes part of the land)

DOCTRINE OF FIXTURES: ORIGINAL COMMON LAW (amended)

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.

Blackburn J in Holland v Hodgson (1872) LR 7 CP 328 at 334-5

Degree of Annexation

Purpose of Annexation

DOCTRINE OF FIXTURES: MODERN COMMON LAW

there is no single test which is sufficient to determine whether an item of property is a chattel or a fixture. It is clear that the Court ought to have regard to all the circumstances of the case in making its determination No particular factor has primacy and each case depends on its own facts

Conti J in National Australia Bank v Blacker (2000) 104 FCR 288 at 296

DOCTRINE OF FIXTURES: MODERN COMMON LAW (FACTORS)

1633971162213Model/Degree of (physical) Annexation (attachment & removal)

00Model/Degree of (physical) Annexation (attachment & removal)

4210050158634Enhancement of either utility of Land or Object

00Enhancement of either utility of Land or Object

-610235227965Economic

Consequences

00Economic

Consequences

120390370023Whether an Item is a Fixture or Chattel dependent upon Object/Purpose of Annexation (as determined objectively by inference from the surrounding circumstances):

Whether an Item is a Fixture or Chattel dependent upon Object/Purpose of Annexation (as determined objectively by inference from the surrounding circumstances):

4308071111760Duration of Affixation (contemplated at affixation)

00Duration of Affixation (contemplated at affixation)

-470419200487Status of the Affixer

00Status of the Affixer

199390040409Nature & use of the object & community standards

00Nature & use of the object & community standards

DOCTRINE OF FIXTURES: FACT PATTERNS (important cases)

Holland v Hodgson (1872) LR 7 CP 328: spinning looms bolted to the floor of a mill are attached to the land other than by own weight and therefore a fixture.

Hobson v Gorringe [1897] 1 Ch 182: gas engine a fixture despite express intention for item to be a chattel as articulated in contract between owner of gas engine and third party lessee (i.e. Vendor of land) as this circumstances was not patent for all to see and Purchaser of land took interest in land without notice of circumstances of contract with Vendor.

Attorney-General (Cth) v RT Co Pty Ltd (No 2) (1957) 97 CLR 146: printing presses weighing 45tons secured to a concrete foundation by nuts and bolts in order to stabilize the presses during operation were a chattel because purpose of affixation was to enhance efficacy of operation as presses.

Leigh v Taylor [1902] AC 157: valuable tapestries affixed to wall by life tenant held to be chattels as affixation was for purpose of enjoyment of ornamental tapestries and not intended to be left for benefit of remainderman.

Re Whaley [1908] 2 Ch 497: tapestries attached by the owner and designed to enhance the Elizabethan character of the room regarded as fixtures.

Norton v Dashwood [1896] 2 Ch 497: tapestries regarded as fixtures because could not be remove without damaging the brickwork, tearing the fabric and leaving the room maimed and disfigured.

Australian Provincial Co Ltd v Coroneo (1938) 38 SR(NSW)700: rows of seats bolted to the floor and fastened together in a theatre nevertheless chattels because intention was to secure temporarily as location of seats changed regularly depending upon whether cinema or concert.

Vaudeville Electric Cinema Ltd v Muriset [1923] 2 Ch 74: chairs bolted in place by owner for exclusive use in cinema held to be fixtures as never moved and purpose to enhance value of building as cinema.

Reid v Smith (1905) 3 CLR 656: dwelling house not affixed to land but resting upon its own weight on brick piers nevertheless held to be a fixture / not removable because of context of building lease but conceded that a temporary dwelling such as a managers house erected on a gold mining lease may be a chattel.

May v Ceedive Pty Ltd (2006) 13 BPR 24, 147: original affixer intended house / structure to remain affixed permanently / indefinitely as evident objective assessment of surrounding circumstances although subjective intentions of affixer may have limited bearing re function of annexation / duration of annexation.

Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (2017) 93 NSWLR 765: ability to remove turbines without damage and the fixed term of the rental agreement and the express provision in affixers agreement that turbines were not to become part of the land.

Belgrave Nominees Pty Ltd v Barlin-Scott Airconditioning (Aust) Pty Ltd [1984] VR 947: although the chillers rested on their own weight on purpose built platforms the circumstances in which they were connected to water reticulation and power sockets established an inference that the air-conditioning equipment was intended to be fitted permanently to each building as they were necessary for their use and occupancy as modern office premises.

Agripower Barraba Pty Ltd v Blomfield [2015] NSWCA 30 items constituted integrated components of a mining processing facility which enabled the land to be utilized for mining and were therefore fixtures but other items which rested on their own weigh and could be removed relatively easily were chattels.

Ball-Guymer v Livantes (1990) 102 FLR 327: affixers relationship to land as a mere licensee to a licence which could be terminated by a weeks notice confirmed that the objective intention was to affix temporarily thereby rendering the item a chattel.

Week 3: possession and possessory title as a proprietary interest

Possession is title (common law) both land and goods (Possessory title)

Even if you steal, a thief has title

Adverse possession of land

What do we mean when we talk about adverse possession?

Someone is in possession of land, and the legal owner wants to reclaim possession, they must bring cause of action within the designated time period

Once the limitations period is up, then they lose the right to remove the person in possession of the land from the land.

Possession thus becomes ownership (best title). It goes from being adverse possession (possession against [legal] interests) to possession giving rise to legal rights.

The operation of the statue of limitations differs between old system title and Torrens title, and between different states.

Public policy

What are the policy reasons for a temporal limit on claims to secure possession of land?

Public policy reasons for the limitations and for allowing claims of adverse possession:

certainty of title

Improves alienability of land, should use land (capitalist assumptions)

Recognise the status quo

Problems of proof

Known end to litigation

Arguments against adverse possession?

Torrens system of title by registration removes some of the earlier rationales for certainty of title (but compare widely different approaches in NSW and Victoria)

Human Rights arguments (against potential loss of property without compensation).

What do you need to know about the statue of limitation?

The time limits to bring an action (different time limits for the crown and other persons)

When does time start running?

When a cause of action accrues.

When might the limitation period be extended?

What happens at the end of the limitation period?

What do we mean when say adverse possession?

The word adverse is referring to the type of person in possession of the land

The person in possession does not have a legal interest; they are in possession 'adverse to the interests of the legal owner/prior possession

To establish possession, you need to establish

1. Physical control over the land;

2. An intention to possess the land

Establishing possession;

Whittlesea city council v Abbatangelo

Facts:

A dispute over a parcel of land in Mernda north of Melbourne.

The disputed parcel, 581 Bridge Inn Rd, was gifted to the council in 1908 for a shire hall that was never built.Mr and Mrs Abbatangelo bought the adjoining land on three sides of the parcel in 1958; i.e. One boundary on the parcel was the road and the other three sides were the Abbatangelo's property.

The Abbatangelos lived at home on the surrounding block from 1958 (excepting from 1970 to 1975 but they regularly returned).

The abbantangelos over the years used the parcel of land frequently, and the council never stopped them from using the land for all those years.

In 2004, the Whittlesea Planning Scheme was amended, making the value of the property increase significantly, and so the council wanted to now sell the land.

Issues

Mrs Abbatangelo claimed adverse possession and said the council no longer owned the land but she did, so they couldn't sell it.

The council appealed the first decision (which favoured Mrs Abbatangelo) but the appeal was denied and the Victorian Court of Appeal upheld Mrs Abbatangelos

claim to the land via adverse possession.

The case cited Slade J in Powell v McFarlane-->

In the absence of contrary evidence, the holder of paper titled was deemed in

possession;

If the law is to attribute possession of the land to a person with no paper title,

they must show both factual possession & requisite intention to possess.

The court considered whether Mrs Abbatangelo had the elements of possession:

1. Physical control over the land;

2. Intention to possess the land.

Physical control

The Abbatangelos undertook many actions to use the land which gave rise to the adverse possession:

1. Constructed a fence around the land;

2. Used it for grazing many animals;

3. Built play equipment on it;

4. Allowed their children to play on it;

5. Hunted and consumed Rabbits from the land

6. Etc.

During the time the Abbatangelos used the land in these ways, the council did NOTHING to stop them using the land.

They more or less used the land as if it was their own, and so based on these actions the court concluded at first instance AND on appeal that the first step of possession was met; the Abbatangelos had physical control over the land.

The bar isn't that high to show physical control over the land, and it may change depending on the type of land (i.e. City block VS farmland).

Intention to possess

The Court concluded:

1. The court rejected this argument, as the Abbatangelos regularly visited their own land and continued to use the land in this time;

2. Just because you are not physically present on the property does not mean you have given up possession;

3. The judge said the Abbatangelos still possessed the property as they regularly returned to use it.

4. The CoA said this was not a gap in possession, and even IF we viewed it as a gap in possession the 15 year period still expired before 2004 after 1975.

5. The intention to be proven for adverse possession is NOT an intention to own, it is merely an intention to possess.The bar is not high with respect to intention; and so even though the Abbatangelos did not have intention to own as shown by their acknowledgement the council owned the land, they STILL have intent to possess. Again, citing Powell v McFarlane, intent--> involves the intention, in one's own name and on one's own behalf, to exclude the world at large so far as is reasonably predictable and so far as the processes of the law will allow

Limitation periods

LA, s 27 (2):

Subject to subsection (3) an action on a cause of action to recover land is not maintainable by a person other than the Crown if brought after the expiration of a limitation period of twelve years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.

Adverse possession and the crown

Originally a limitation period of 60 years

s 27(1) a limitation period of 30 years (after 1 Jan 1971), BUT

s 170 Crown Lands Act 1989 no title by adverse possession to Crown land (extremely limited exceptions) and Part 6A Real Property Act 1900

When does a right of action accrue?

(ss 28-38)

Deceased estate

Grantor on possession

Future interests

Forfeiture

Incorrect rent

Tenancies

Equitable estates

Key issue

The commencement of the period depends on on whether the person

is presently entitled to possession eg, LA s 28 and s 38(1) OR

If future entitlement to possession eg, An Interest in remainder: LA s 31 and s 38(1)

Special provisions in relation to tenancies (s 34)

Special provisions in relation to other interests

Present entitlement to possession (limitation act s28)

28 Accrual--dispossession or discontinuance

Where the plaintiff in an action on a cause of action to recover land or a person through whom the plaintiff claims:

(a) has been in possession of the land, and

(b) while entitled to the land, is dispossessed or discontinues his or her possession, the cause of action accrues on the date of dispossession or discontinuance.

BUT need to read with s 38.

Limitation acts 38 (1)

Where, on the date on which, under this Act, a cause of action would, but for this section, accrue, the land is not in adverse possession, the accrual is postponed so that the cause of action does not accrue until the date on which the land is first in adverse possession

Tenancies and licences

Often a person will be in possession or occupation of land with the original permission of the owner eg, Under a tenancy agreement or licence. Different rules apply depending on the type of tenancy:

For a fixed term tenancy the cause of action will accrue to the owner at the determination of the lease (ie, the end of the fixed term)*

Section 34(2)(b): for a tenancy at will the cause of action will accrue one year after the tenancy at will began

Or, for a periodic tenancy, at the expiration of the relevant period: s 34(2)(a).

The running of time

Once a cause of action accrues time starts running in favour of the adverse possessor (and against the person out of possession either the documentary owner or a prior possessor. There are a number of issues that arise with the running of time.

First, successive periods of adverse possession can be added together to bar a claim

Asher v Whitlock - can transfer (assign) or devise a possessory interest

By successive dispossessions (so long as continuous). If there is a break time starts running again: LA, s 38(2) and s 38(3)

Stopping time running

The person with the cause of action must effectively assert their title. This may be done by either:

regain actual possession (mere formal entry not sufficient: LA, s 39) or

commence legal proceedings

LA, s 54 Adverse possessor acknowledges the superior title in writing and signed or pays money owing or makes payment under mortgage

Acknowledgment or payment binds all other persons in possession in the ensuing limitation period

Effect is stops time running and will need to start again.

Extensions of time disability

LA, s 52(1) Extension in case of disability

disability defined in s 11(3)

Limitation period extended to 3 years after the person with the cause of action ceases to be under a disability.

Extension of time fraud

LA, s 55 Fraud time doesnt start running until the fraud is discovered or could with reasonable diligence discover the fraud

The ultimate bar

LA s 51: Despite the provisions relating to disability, confirmation and fraud, there is a 30 year limit after which an action to recover land cannot be maintained.

Operation of limitation act: (Old system title)

eliminates the claim of a person who has a better title to that of the person in possession: LA, s 27

eliminates the title of the person: Possessory title enhanced because prior and better title are extinguished: LA, s 65.

Previously, only the action was barred this meant that if the dispossessed owner regained possession, their title was restored to its original status.

Adverse possession and Torrens system

We have been considering the general principles of adverse possession and the Limitation Act.

Torrens system of title is a system of title by registration in brief the Register is meant to be conclusive evidence of interests in land.

Title by adverse possession is sometimes considered to contradict the aims of Torrens title

In NSW title by adverse possession was only recognised in relation to registered titles in 1979 (Real Property Act 1990, Part 6A)

s45D provides that an adverse possessor can now make an application for title by possession

Limited to whole parcels of land (or residue lot as defined)

s45D(4) is important: in effect it provides that time only starts to run against a registered proprietor without fraud and for valuable consideration from the time of registration.

This means that

For Torrens Title Land in NSW, title is not automatically extinguished by the passing of the relevant time.

Instead you need to read the Limitation Act as subject to the Real Property Act 1900.

The Limitation Act is still relevant for determining when a claim would be barred as that is a necessary element in any application for possessory title under the Real Property Act (see s 45D(1)(b)).

Land law systems doctrines

Doctrine of estates -Describes the extent of the rights in time or duration

-Heritable estates maintain family wealth

-Give rights to possession -the idea relates to everything being owned by the king

- everyone down the chain holds an estate

An estate is simply a word that defines the rights in time over a particular piece of land.

There may obligations owed to parties further up the chain (eg. Rent payments)

Types of estates

Freehold estates:

Fee simple: largest estate, potentially lasts forever

Life estate: : for the life of the grantee or for the life of another

Fee tai now obsolete (conveyancing act 1919, ss 19 and 19A

-Leasehold estates duration is key difference with fee simple, however there can be legislative obligation on parties

Doctrine of tenure -Derives from English feudal system - traced to the Norman conquest. A legal fiction that all land titles were the result of a royal grant.

-Originally described the relationships between lord and tenant

-Historically there were many different tenures

-the idea relates to everything being owned by the king

-doctrine of tenure involved reciprocal obligations (known as services and incidents) and hierarchical social/economic structures based on land holding and primarily agricultural means of production.

- monarch grants tenure over land to a lord in return for money or goods

- that money is shared around

- lord to minor lord

- minor lord to farmer

- farmer to serf etc

The English monarch

Section 36:

Land held of the crown in fee simple may be assured in fee simple without licence and without fine and the person taking under the assurance shall hold the land of the Crown in the same manner as the land was held before the assurance took effect. (current version of statue of Quia Empotres

Impact of Mabo (no.2)

Prior to Mabo (1992) the interpretation of the doctrine of tenure denied recognition of common law native title as the crown was considered beneficial (or absolute) owner of all land in Australia.

The crown acquired this status because upon the acquisition of sovereignty the common law of England became the common law of the colony to the extent that it was applicable. This of course was based on the use of another legal fiction, terra nulius

Mabo (no2), reaffirmed that the doctrine was skeletal principle of the common law.

Land law systems old systems transfers

Be able to identify key issues in old systems land transfer

These are systems of evidencing ownership

old system land transfers- the integrity of a claim of ownership depended on the ability of any new owner to identify issues in the chain of title

Torrens title by registration was indented to remediate the issues in this system

Old system property transfer

You have an estate but you want to make some money. You decide to sell your land. How do you transfer ownership

Find someone negotiate a price sell them the land providing a document evidencing your transfer ownership

The idea is to be able to trace the current ownership back to the original grant.

What happens if there is fraud?

79502016954500

The principle of nemo

That really governs here and so Nemo dat is this idea that you cant give what you dont have.

nemo fat non quod habit you cant give what you dont have

If there was a defect in the title anyone you sell to acquires the same defective title

If a deed was void no tide passes

If the land was encumbered by another interest you got the land encumbered by interest

E.g. mortgages, leases , subject to an easement etc

How long do you need to go back? English court 60 years , Victoria 30 years

Exceptions

Purchaser for value without notice of a prior equitable interest affecting a vendors title took legal title to the vendors land free from the equitable interest.

Where does that leave you the final owner of the land?

You need to be able to evidence the integrity of your chain of title. You could lose title to your land or to accommodate other interests, if an issue was found in the chain

Result

An enormous mess

In the usa most landowners also hold title insurance basically insureance against anyone finding an issue in the chain title

Australia did not follow America in insurance on home instead

Remedying the problem with torren title and was developed to avoid the issues in chain of title integrity

Interests:

Can be held in thepresent(a life estate currently enjoyed)

Can befuture interests(a lease that will grant you posession in 6 months)

Can bereversion(arise when you grant a lessor estate to someone - eg: if you grant a lease for three years, the lease holder has apresentinterest in the lease which lasts for three years and you hold areverionary rightto posession at the end of the three years)

Can beremainders(created when the holder of an estate grants a lesser estate in possession to some other person and grants the residue of their interest to a third person - eg: seeAsher v Whitlock)

Week 4: Systems of title & introduction to Torrens system title

Title by registration

Old system land: title derived from the original grant of land.

Torrens title: you have title because your interest is registered

RPA s 41 Dealings not effectual until registered

Prior defects dont matter (with exceptions of course!)

Once you have completed the contract for a sale of land (addressed in module 8), and your interest is on the registry then your title is indefeasible

The concept of indefeasibility

a title that cannot be set aside on the ground of a defect existing in the title before the interest was registered.

In defeasibility is the foundation of the torrens system

Peter Butt, Land Law (Lawbook Co, 6th ed, 2010 at 752)

Summary of key indefeasibility sections of the real property act

s 40 folio to be conclusive of title

s 42 estate of the registered proprietor paramount (with certain exceptions)

s 43 purchaser from registered proprietor not affected by notice (see sldo d 432A later)

Protection from actions provisions: section 24 and 118

In addition to the paramount provision of s 42 note also:

s 45 Bona fide purchasers and mortgagees protected in relation of fraudulent and other transactions

no action to recover damages of action for possession or recovery of land against the purchaser/mortgagee because the vendor/purchaser was registered through error/fraud/ etc.

s 118 protection for RP in relation to proceedings for possession or recovery of land.

The paramountt provision: s 42 (1)

42 Estate of registered proprietor paramount

Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except: [..]

(then follows the express statutory exceptions)

Why its important?

For example

A is the registered proprietor (RP) of the fee simple. As solicitor holds the certificate of title for safekeeping. The solicitor forges the RPs signature on a form of transfer and transfers the fee simple estate to B. B purchases the property without knowing or being involved in this fraud and obtains registration as proprietor of the fee simple interest. Bs title is now indefeasible. A cannot challenge B on the grounds that the transfer was forged.

What about other interests?

Protection from notice: s 43

Except in the case of fraud, no person dealing with the registered proprietor

Shall be required to inquire or ascertain the circumstances under which the registered proprietor was registered

Shall not be affected by direct or constructive notice of any trust or unregistered interest

Knowledge of any such trust or unregistered interest shall not of itself be imputed as fraud

To understand this section, you need to understand the doctrine of notice and how it worked in old system title.

Remedying harm

We recognise that indefeasibility of registered title may result in people suffering loss or damage (a person may lose their title to land) as a result of fraud, error, etc.

A person who suffers loss as a result of the operation of the Act may sue the person who caused the loss AND the Registrar General

The RPA provides a mechanism for claiming compensation from an assurance fund (see s 129).

Deferred vs immediate indefeasibility

When does the registered title become indefeasible?

What is the effect of registering a void instrument?

Whose interest should be better protected: the previous RP or the new RP (purchaser)?

Deferred

Unimpeachable title is deferred until one dealing away from the fraud (or otherwise void dealing)

Immediate

Only the fraud of the RP will mean that the title is defeasible (see Breskvar v Wall)

Frazer v walker [1967] 1 ALL ER 649

The Frazers were RPs of farm land in Auckland

Mrs Frazer gave a mortgage to Radomski by forging her husbands signature

Radomski registered the mortgage on the title

Frazers defaulted and Radomski exercised power of sale to Walker

Walker then became RP

Mr Frazer was still in possession and Walker commenced an action for possession.

What was Mr Frazers defence?

Privy Council applied immediate indefeasibility based on the NZ legislation:

Registration cures defects (title by registration)

Protection of RP against claims and proceedings

Fraud exceptions apply only to actual fraud by the registered proprietor or his agent

Registration of Radomskis mortgage conferred on them a title that was immune from other claims

NB exceptions in relation to in personam claims - we discuss in another class.

BRESKVAR V WALL (1917) 126 CLR 376

Who were the appellants and who were the first, second and third respondents?

What were the facts?

What were the Breskvars seeking?

What was the nature of Walls title?

What was the nature of the Breskvars title?

What was the nature of Albans title (the third respondent)?

So, who had the best title? (Or, as you will see, who has priority in a dispute between parties with competing claims).

Frazer v Walker correct

Paramountcy provision (s 42) is the most important

Title by registration - so registration of void instrument is effective to create the interest

Fraud is the fraud of the transferee

Whilst Wall on title, the state of the register is conclusive proof of Ws title (NB Walls title is defeasible for fraud)

Alban acquired equitable interest because of his right to be registered

Breskvars equitable claim - to have the transaction against Wall set aside for fraud

Priority in time lost because of arming conduct (see module 10: Priorities)

Scope of indefeasibility

What is protected?

The issue here is whether indefeasibility extends to all the matters contained within a registered instrument, eg, the covenants in a registered lease or a registered mortgage

Mercantile Credits v Shell Co (Australia) Ltd (1976) 136 CLR 326 registered lease

MERCANTILE CREDITS V SHELL CO (AUSTRALIA) LTD (1967) 136 CLR 326

Gibbs J:

The registration of an instrument does not in all cases give priority or the quality of indefeasibility to every right which the instrument creates.

Generally speaking, the Act would not appear to be intended to render indefeasible a personal right created by a covenant which, although contained in a registered instrument, in no way affects the estate or interest in land with which the instrument deals.

Here, the right of renewal is so closely connected with the term granted that it should be regarded as part of the estate or interest which the lessee obtains under the lease and upon registration, be entitled to the same priority as the lease.

Summary

Register is conclusive evidence of title: s 40

Estate of RP is paramount - subject to exceptions set out in s 42(1) and fraud (see later)

Registration cures defects in the title of vendor

On registration the purchaser will not be affected by any prior unregistered interest: s 43 (and limited extension in s 43A)

note when you review this material at the end of semester, we will look at the scope of indefeasibility for Mortgages in module 11.

Land law systems and old systems transfers

What do we mean by two systems?

These are systems for evidencing ownership

Old System land transfers the integrity of a claim of ownership depended on the ability of any new owner to identify issues in the chain of title.

Torrens title by registration was intended to remediate the issues in this system.

Old system property transfers

You have an estate, but you want to make some money. You decide to sell your land. How do you transfer ownership?

Find someone negotiate a price sell them the land, providing a document evidencing you transfer ownership.

The idea is to be able to trace the current ownership back to the original grant.

Land law systems

Doctrines of estates and tenure

Have a basic understanding of the the doctrine of estates and doctrine of tenure and their impact in Australia

Tenure

Derives from English Feudal system traced to the Norman Conquest. A legal fiction that all land titles were the result of a Royal Grant.

-Originally described the relationships between lord and tenant

-Historically there were many different tenures.

Estates

-Describes the extent of the rights in time or duration

-Heritable estates maintain family wealth

-Give rights to possession

-Provided a means of imagining abstract rights to land and for dividing present and future interests.

In the beginning

English land law is derived from a legal fiction that all land is owned by the monarch

Feudalism imported by normans after conquest of England in 1066

-administrative device to consolidate rule

-constrast allodial owenership not held of any superior

feudalism not only a system of land holding but integrally linked to medieval economies

doctrine of tenure involved reciprocal obligations (known as services and incidents) and hierarchical social/ economic structures based on land holding and primarily agricultural means of production.

The doctrine tenure

Monarch grants Tenure over land to a

Lord in return for $$ Lord to Minor lord

Minor lord to farmer

Farmer to serf etc...

THE ENGLISH MONARCH?

Section 36:

Land held of the Crown in fee simple may be assured in fee simple without licence and without fine and the person taking under the assurance shall hold the land of the Crown in the same manner as the land was held before the assurance took effect.

This section is the current version of the Statute of Quia EmptoresIMPACT OF MABO (NO 2)

Prior to Mabo (No 2), the interpretation of the doctrine of tenure denied recognition of common law native title as the Crown was considered beneficial (or absolute) owner of all land in Australia.

The Crown acquired this status because upon the acquisition of sovereignty the common law of England became the common law of the colony to the extent that it was applicable.This, of course, was based on the use of another legal fiction, terra nullius.

Mabo (No 2), reaffirmed that the doctrine was a skeletal principle of the common law.

WHAT DO EACH OF THESE PARTIES HAVE?

Everyone down the chain holds an ESTATE.

An estate is simply a word that defines the rights (in time) over a particular piece of land.

There may obligations owed to parties further up the chain (eg: rent payments)

TYPES OF ESTATE

Freehold estates:

fee simple: largest estate, potentially lasts forever

life estate : for the life of the grantee or for the life of another

fee tail -now obsolete (Conveyancing Act 1919, ss19 and 19A)

Leasehold estates duration is key difference with fee simple, however there can be legislative obligations on parties.

Week 5 exceptions to torrens indefeasibility

Exceptions to Indefeasibility: (statutory) Fraud

Distinguish between fraud as a legal term of art for the purposes of the Real Property Act 1900 (NSW) sufficient to render a registered proprietary interest defeasible and other forms of fraud in other fields of law.

Identify the circumstances expressly excluded from the fraud exception e.g. negligence and notice

Recognize the inherent limitations upon the scope of fraud by reference to timing, attribution and objective.

Understand the effect of RPA s56C upon the operation of the Fraud exception in the context of the grant of mortgage interests by a mortgagor to a mortgagee.

Indefeasibility: general rule

General Rule: Registered proprietary interests are paramount over all unregistered proprietary interests

42 Estate of registered proprietor paramount

(1) the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded

Real Property Act 1900 (NSW) s42(1)

Indefeasibility: exceptions

Exceptions: Indefeasibility (i.e. paramount status) conferred by Registration of Proprietary Interests is subject to exceptions articulated in statute and common law:

Fraud

Other Interests recorded in the Folio

Prior Folio

Omitted or Misdescribed Easements

Omitted or Misdescribed profits a prendre

Wrong description of parcels

Short Term Tenancies

Overriding Statute

Registrars Power to Correct the Register

Adverse Possession

In Personam rights (against the RP)

Volunteers (?)

Exception: fraud

RPA s42 recognizes that registered title is defeasible for fraud (i.e. fraud is an exception to indefeasibility)

Fraud substantively defined by Common Law NOT statute.

Fraud: definition origins

[B]y fraud in [this Act] is meant actual fraud, that is, dishonesty of some sort, not what is called constructive or equitable fraud Further the fraud which must be proved in order to invalidate the title of a registered proprietor 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. The mere fact that he might have found out fraud if he had been more vigilant and had made further inquiries, 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 inquiries for fear of learning the truth, the case is very different and fraud may be properly ascribed to him.

per Lindley LJ in Assets Co Ltd v Mere Roihi [1905] AC 176 at 210

Fraud definition

Fraud (concept)

= dishonesty of some sort [per Assets Co Ltd v Mere Roihi [1905] AC 176 at 210] or personal dishonesty or moral turpitude [per Griffith CJ in Butler v Fairclough (1917) 23 CLR 78 at 90] including:

Wilful Blindness i.e. But if it be down that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different and fraud may be properly ascribed to him per Assets Co Ltd v Mere Roihi [1905] AC 176 at 210; OR

Actual Knowledge of Fraud perpetrated by person from whom proprietary interest is claimed i.e. Fraud by persons from whom he claims does not affect him unless knowledge of it is brought home to him or his agents. per Assets Co Ltd v Mere Roihi [1905] AC 176 at 210

Fraud (i.e. actual personal dishonesty / moral turpitude)

Negligence i.e. failure to exercise additional care or reasonable care (i.e. precautions / diligence) which would have thwarted fraud perpetrated by another party (i.e. other than RP or agents) is NOT tantamount to Fraud required to render transaction defeasible per Assets Co Ltd v Mere Roihi [1905] AC 176 at 210; Pyramid Building Society v Scorpion Hotels Pty Ltd [1998] 1 VR 188; Grgic v ANZ Banking Group Ltd (1994) 33 NSWLR 202 at 222E

Exception RPA s56C(1) requires the Mortgagee to take reasonable steps (i.e. 100 point ID check) to prevent identity fraud in the grant and registration of a mortgage interest in favour of a Mortgagee and RPA s56C(6) permits the Registrar General to cancel the registration of a Mortgage in the event of fraud accompanied by a failure of the Mortgagee to take reasonable steps thereby creating a de facto exception for Fraud by Negligence of the Mortgagee.

Fraud (i.e. actual personal dishonesty / moral turpitude):

Notice (i.e. actual or constructive knowledge) of existence of prior unregistered proprietary interest or trust (i.e. equitable fraud under common law OST) per Real Property Act 1900 (NSW) s43(1) no person shall be affected by notice direct or constructive of any trust or unregistered interests, and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud

Exception: Notice accompanied by additional conduct (e.g. an additional assurance or acknowledgment by RP to preserve a pre-existing equitable interest per Loke Yew v Port Swettenham Rubber Co Ltd [1913] AC 491)

FRAUD: DEFINITION & SCOPE

Fraud is conceptualised broadly as personal dishonesty or moral turpitude but defined narrowly (excluding Negligence and Notice) [i.e. the What? or How? Of Fraud] and is then operationally confined by parameters:

Attribution (i.e. Who?)

Objective / Purpose (i.e. Why?)

Timing (i.e. When?)

SCOPE OF FRAUD: ATTRIBUTION

Attribution (i.e. Whose Fraud?):

Fraudulent conduct must either be:

actually perpetrated by the present Registered Proprietor or their Agents (i.e. NOT by any party other than RP or agents); OR

(perpetrated by another Party) with the actual knowledge of the Registered Proprietor or their Agents

fraud must be brought home to the person whose registered title is impeached or to his agents. per Assets Co Ltd v Mere Roihi [1905] AC 176 at 210]

E.g. In Breskvar v Wall (1971) 126 CLR 376 the title of Alban Pty Ltd would not be defeasible for fraud because Alban Pty Ltd did not perpetrate the fraud against the Plaintiff (i.e. Breskvars) and did not have any actual knowledge of the fraud (i.e. they were described as a Bona Fide Purchaser For Value Without Notice) unlike Wall whose title was defeasible as he and his grandfather Petrie (i.e. a third party) perpetrated / had knowledge of the fraud against the Breskvars.

Attribution (i.e. Whose Fraud?):

Fraud arises by Agent where either:

The Registered Proprietor obtains registration through conduct of the Agent which involves requisite fraud and transpires within the scope of the agents actual or apparent authority thereby binding the principal (i.e. the Registered Proprietor) in accordance with respondeat superior to render the principals title defeasible for fraud provided that the connection between the task for which the agent was engaged and the commission of the wrong is characterized as a materialization of the risk inherent in the task per Dollars & Sense Finance Ltd v Nathan [2008] 2 NZLR 557; OR

The Registered Proprietor obtains registration in the course of a transaction involving fraud in circumstances in which the Agent has knowledge of the existence of fraud to render the Principals (i.e. the Registered Proprietors) title defeasible for fraud as the Agents knowledge in imputed to the Principal by law per Schultz v Corwill Properties Pty Ltd (1969) 90 WN (Pt 1) (NSW) 529

SCOPE OF FRAUD: PURPOSE/OBJECTIVE

Purpose / Objective (i.e. Why?):

Fraudulent conduct must either be perpetrated (i.e. directed) against either the:

Plaintiff (i.e. either a previous Registered Proprietor or a party holding an unregistered equitable interest); OR

Test: Conduct of the Defendant must operate on the mind [of the plaintiff] thereby inducing detrimental action by that person per Brennan CJ, Gaudron, McHugh, Gummow and Kirby JJ in Bank of South Australia Ltd v Ferguson (1998) 192 CLR 249.

E.g. Forged signature and inflated valuation report by different employees of the Defendant Bank of South Australia Ltd were undertaken to expedite the Banks internal approval process and not to cheat / harm / affect the state of mind of the Plaintiff Ferguson in Bank of South Australia Ltd v Ferguson (1998) 192 CLR 249.

Registrar-General (i.e. officer administering the Torrens Title Register);

Test: Conduct of the Defendant misrepresented to the Registrar General that the statutory formalities required for executing the dealing were satisfied or was recklessly careless about whether or not they were satisfied per Australian Guarantee Corp Ltd v De Jager [1984] VR 483; Westpac Banking Corp v Sansom (1995) NSW Conv R 44-733 [substantially broadens reach of fraud to encompass instances of failure to discharge statutory formalities (i.e. attestation requirements) for the purpose of avoiding inconvenience rather than defrauding the Plaintiff]

E.g. To lodge an instrument of 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 per Tadgell J at 498 in Australian Guarantee Corp Ltd v De Jager [1984] VR 483 where the Defendant banks presentation of the instrument of mortgage for registration in the knowledge (of its employees) that the Mortgagors signature had not been executed in the presence of the Witness was regarded as an instance of fraud (against the Registrar General). BUT where misrepresentation to Registrar General is not accompanied by dishonesty and moral turpitude then fraud not established per Russo v Bendigo Bank Ltd [1999] 3 VR 376 where the false attestation of a Solicitors 19 yr old conveyancing clerk Rita Gerada to witnessing execution of mortgage was insufficient to establish fraud as the employee was unaware of the legal significance of attestation clauses to the registration process.

SCOPE OF FRAUD: TIMING

Timing (i.e. When?):

Fraud must transpire in the circumstances preceding Registration (i.e. ex ante Registration) of the present Registered Proprietor of a Proprietary Interest

A majority of the High Court (Wilson and Toohey JJ and Brennan J) did NOT endorse the minority proposition of Mason CJ and Dawson J in Bahr v Nicolay (No 2) (1988) 164 CLR 604 that the repudiation of obligations undertaken prior to Registration by an RP subsequent to Registration may be characterized as Fraud.

NB in contrast the In Personam exception may arise from conduct of RP subsequent to Registration (i.e. ex post Registration)

FRAUD: TYPOLOGY

Fraud = actual / personal dishonesty or moral turpitude prior to Registration perpetrated by RP or RP agents or by another party with actual knowledge of RP or RP agents directed against either Plaintiff or Registrar General (e.g. forgery of RPs signature or knowledge of forgery of RPs signature)

Fraud Negligence

Fraud mere Notice (actual or constructive) alone of prior equitable proprietary interest.

Fraud dishonesty neither affecting mind of Plaintiff RP/prior equitable interest holder nor Registrar General. Fraud dishonesty transpiring after Registration.

Fraud dishonesty by a third party to transaction without the knowledge of the RP / RP agents.

FRAUD: CASE LIST

Assets Co Ltd v Mere Roihi [1905] AC

Pyramid Building Society v Scorpion Hotels Pty Ltd [1998] 1 VR 188;

Grgic v ANZ Banking Group Ltd (1994) 33 NSWLR 202 at 222E

Loke Yew v Port Swettenham Rubber Co Ltd [1913] AC 491

Bank of South Australia Ltd v Ferguson (1998) 192 CLR 249

Australian Guarantee Corp Ltd v De Jager [1984] VR 483

Westpac Banking Corp v Sansom (1995) NSW Conv R 44-733

Russo v Bendigo Bank Ltd [1999] 3 VR 376

Dollars & Sense Finance Ltd v Nathan [2008] 2 NZLR 557

Schultz v Corwill Properties Pty Ltd (1969) 90 WN (Pt 1) (NSW) 529

Bahr v Nicolay (No 2) (1988) 164 CLR 604

Week 6

Exceptions to Indefeasibility - Part II

This Module examines the remaining exceptions to Indefeasibility (including the 'In Personam' exception) as well as separately reviewing the legal position of (Registered) Volunteers regarding Indefeasibility.

OBJECTIVES

Recognize the effect of Registration upon title to a proprietary interest acquired by a Volunteer (rather than a Purchaser for Value) in NSW.

Identify the fact patterns in which the in personam exception to indefeasibility operates unaffected by registration of a proprietary interest.

Understand the operation and effect of the in personam exception to Indefeasibility upon the scope of indefeasibility.

Apply the other express statutory exceptions in RPA s42 to indefeasibility (i.e. other than fraud) to a broad range of dealings in registered proprietary interests.

INDEFEASIBILITY: GENERAL RULE

General Rule: Registered proprietary interests are paramount over all unregistered proprietary interests

42 Estate of registered proprietor paramount

(1) the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded

Real Property Act 1900 (NSW) s42(1)

INDEFEASIBILITY: EXCEPTIONS

Exceptions: Indefeasibility (i.e. paramount status) conferred by Registration of Proprietary Interests is subject to exceptions articulated in statute and common law:

Fraud

Other Interests recorded in the Folio

Prior Folio

Omitted or Misdescribed Easements

Omitted or Misdescribed profits a prendre

Wrong description of parcels

Short Term Tenancies

Overriding Statute

Registrars Power to Correct the Register

Adverse Possession

In Personam rights (against the RP)

Volunteers (?)

VOLUNTEERS: DEFINITION

Volunteer = recipient of proprietary interest for either no consideration or nominal consideration (i.e. title not received / purchased in exchange for value)

E.g. Donee (i.e. recipient of a gift) or Devisee (i.e. title conferred via last will and testament)

(REGISTERED) VOLUNTEERS: EXCEPTION TO INDEFEASIBILITY

VOLUNTEERS: DEFINITION

Defeasible?

Inference arising from some provisions of the Real Property Act 1900(NSW) which specifically either confine protection of indefeasibility afforded by Registration to a Purchaser or alternatively deprive a Registered volunteer in certain circumstances of the protection against an action to recover possession of land afforded to a purchaser for value see ss RPA 43(1), 45(1) and 118(1)(d).

Public policy imperative to prioritise the rights of prior unregistered (i.e. equitable) proprietary interest holders in exchange for value over the rights of subsequent registered proprietary interest holders as Volunteers (i.e. not in exchange for value) as the former is vulnerable to greater loss in the event of non-recognition (i.e. the loss of the value given) than the latter (i.e. mere loss of expectations than value given).

Victorian approach endorsed in King v Smail [1958] VR 273; Rasmussen v Rasmussen [1995] 1 VR 613 and Valoutin Pty Ltd v Furst (1998) 154 ALR 119

Coldrey J in King v Smail [1958] VR 273 that Victorian position on the one hand recognizes the desirability of commercial certainty in property transactions and on the other allows full play to equitable precepts

Indefeasible?

Doctrine of Immediate Indefeasibility endorsed unequivocally in Fraser v Walker and Breskvar v Wall

Real Property Act 1900 (NSW) draws no distinction between the consequences of registration for Purchasers for Value and Volunteers under key provisions ss 40(1), 40(1A) and 42(1) and that s43(1) terms are unambiguous in themselves thereby rendering any reference to extrinsic material (i.e. section heading) unwarranted.

RPA s42 unequivocally confirms that interest of Registered Proprietor is paramount and does NOT identify Volunteers as an exception to Indefeasibility (i.e. statute is silent)

NSW approach endorsed in Bogdanovic v Koteff (1988) 12 NSWLR 472; Gerard Cassegrain & Co Pty Limited v Cassegrain [2011] NSWSC 1156; Arambasic v Veza (No4) [2014] NSWSC 1109 and Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 8

VOLUNTEERS: NO EXCEPTION

Rule: Registered Volunteer acquires an Indefeasible Title that is not subject to prior equitable (i.e. unregistered) interests. (i.e. a registered proprietor who acquired title as a volunteer would receive the same protection from indefeasibility provisions as a proprietor who has taken for value.)

Per Bogdanovic v Koteff (1988) 12 NSWLR 472

VOLUNTEERS: POSTSCRIPT POTENTIAL EXCEPTION?

Potential exception to indefeasibility in NSW for Registered Volunteers with actual Notice of prior equitable interest ?

In Bogdanovic v Koteff Priestley JA (with whom Hope and Samuels JJA agreed) left open (at 480) the question whether a volunteer who knows of a third partys equitable interest before he (the volunteer) obtains registration would take the legal title free from the outstanding equitable interest. [i.e. only constructive notice to Koteff and no actual notice in Bogdanovic v Koteff]

Sackville AJA in Arambasic v Veza (No 4) [2014] NSW SC 1109 at [165]

IN PERSONAM: DEFINITION

In Personam right (concept)

= personal right enforceable in law / right in person / personal equity / any right enforceable in (and arising from) law or equity by a legal person against another (particular) legal person (e.g. in tort / contract / equity etc.) NB the reference to a personal equity can be misleading as it encompasses both rights arising at law and equity.

right against an object/thing (e.g. land) enforceable against the world (i.e. any legal person) [i.e. right in Rem and a Plaintiffs in personam right against a Defendant affecting the Defendants registered interest in land will thereby be extinguished in that land in the event that the proprietary interest in land is subsequently transferred and registered to a third party not subject to the original cause of action and not expressly taking subject to the claim]

IN PERSONAM RIGHTS AGAINST THE REGISTERED PROPRIETOR: EXCEPTION

In Personam Exception to Indefeasibility

= enforceability of personal claims at law / equity against the legal person presently Registered as Proprietor of an interest in land which arise from the conduct of the presently Registered Proprietor or their agents and that consequently require the award of a remedy affecting the whole or part of a Registered proprietary interest in land (e.g. amendment of the Register) notwithstanding the indefeasibility of the Registered interest.

NB: ideally in personam rights are more appropriately characterized as rights outside the scope of indefeasibility rather than as an exception to indefeasibility as indefeasibility was never intended to obstruct the enforcement of these rights.

IN PERSONAM EXCEPTION: RATIONALE

Where the establishment of legal or equitable causes of action against a person consequently requires orders which deprive that person as Registered Proprietor of rights which registration would otherwise confer (i.e. the In Personam exception to Indefeasibility) this does not infringe the indefeasibility provisions [for the reason that] [t]hose provisions are designed to protect a transferee from defects in the title of the transferor, not to free him [i.e. the transferee] from interests with which he has burdened his own title.

per Brennan J in Bahr v Nicolay (No 2) (1988) 164 CLR 604 at [13]

this principle [i.e. immediate Indefeasibility] in no way denies the right of a plaintiff to bring against a registered proprietor a claim in personam, founded in law or equity for such relief as a court acting in personam may grant.

per Wilberforce LJ in Frazer v Walker [1967] 1 AC 569 at 585

[the Torrens system in no way destroyed] the fundamental doctrines by which Courts of Equity have enforced, as against registered proprietors, conscientious obligations entered into by them.

Per Griffith CJ in Barry v Heider (1914) 19 CLR 197 at 213

IN PERSONAM EXCEPTION: PREREQUISITES

In Personam Exception to indefeasibility of registered interest will operate when:

i) A known legal or equitable cause of action exists against the (present) Registered Proprietor (i.e. does not provide an open-ended pathway to challenge indefeasibility on basis of novel causes / abstract principles); AND

ii) cause of action arises from conduct of either Registered Proprietor or its Agents

Per Powell JA in Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222-3

In Personam Exception to indefeasibility is not necessarily predicated upon the Registered Proprietors conscience being affected [i.e. availability of In Personam exception is not confined to circumstances involving unconscionability]

there is nothing in Fraser v Walker and Breskvar v Wall to suggest that, for there to be a personal equity, as well as the existence of a recognized legal or equitable cause of action against the registered proprietor, there is a superadded requirement of unconscionability.

Per Brereton J in Harris v Smith [2008] NSWSC 545 at [66]

IN PERSONAM EXCEPTION: FACT PATTERNS

Circumstances in which the In Personam exception applies include:

Purchasers right to Specific Performance by registered Vendor of executory contract for sale of interest in land (i.e. Doctrine of Conversion applies against registered Vendor where land has not been transferred and registered to a third party) per Isaacs J in Barry v Heider (1914) 19 CLR 197 at 213

Doctrine of Part Performance (i.e. Part Performance permits party relying on equities arising from conduct in part performance of parol contract with present Registered Proprietor to prevail over present Registered Proprietor where land has not been transferred and registered to a third party)

Circumstances in which the In Personam exception applies include:

Beneficiarys Right to compel the Trust against the Trustee

Unilateral and Common Mistake

Non Est Factum defence

Unconscionable Dealing

Undue Influence

Imposition of Constructive Trust - Purchaser acquires Title contingent upon a condition subsequently repudiated per Wilson and Toohey JJ and Brennan J in Bahr v Nicolay (No 2) (1988) 164 CLR 604

Circumstances in which the In Personam exception DOES NOT apply include:

Bare fact of forgery by a third party involved in the dealing (i.e. NOT the RP) alone (without the knowledge of the RP or its agents) is insufficient to establish unconscionability required for an in personam right against the RP per Vassos v State Bank of South Australia [1993] 2 VR 316

Unknown causes of action (i.e. novel causes of action outside those already recognized by law) are insufficient to establish an in personam right against the RP per Grgic v ANZ Banking Group Ltd (1994) 33 NSWLR 202

An in personam claim will not arise due to some general notion of inequality of bargaining power unless it satisfies the formal requirements recognized in equity for a transaction to be set aside on the grounds of unconscionable dealing per Beazley, Ipp and Basten JJA in Australia and New Zealand Banking Group Ltd v Karam [2005] NSWCA 344 at [63]

OTHER EXCEPTIONS TO INDEFEASIBILITY

Other Exceptions to Indefeasibility include:

Other Interests recorded in the Folio

Prior Folio

Omitted or Misdescribed Easements

Omitted or Misdescribed profits a prendre

Wrong description of parcels

Short Term Tenancies

Overriding Statute

Registrars Power to Correct the Register

Adverse Possession

Other Exceptions to Indefeasibility include:

Other Interests recorded in the Folio

In RPA s42(1) the registered proprietor of an estate or interest in land recorded in a folio of the register holds that estate or interest subject to such other estates and interests and such entries if any, as are recorded in that folio.

An interest is sufficiently recorded in the folio of the register for the land if the folio states the registration number of the dealing creating it and identifies the interest (even if only in generic terms) or where the recording refers to another folio of the register where the registration number of the dealing is stated and the nature of the interest identified as a prudent purchaser encountering the reference on the folium would inspect the transfer to ascertain the nature of the rights it conferred (i.e. discoverable by anyone who cared to pursue the information on that folium) because it was not intended that the [folium of the Register] alone should provide a purchaser with all the information necessary to be known to comprehend the extent or state of [the] proprietors title to the land per Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 but now codified in RPA s40(1B).

Prior Folio

two folios issued and are partly or completely incompatible - interest on folio issued first has priority

e.g., Registrar issues by mistake no known NSW authority on this point

Other Exceptions to Indefeasibility include:

Omitted or Misdescribed Easements

Omitted or Misdescribed profits a prendre

Wrong description of parcels

e.g. where a portion of land is included that wasnt intended to be included by transferor or transferee

e.g. as a result of survey mistakes

e.g. bona fide purchaser or mortgagee for value protected where boundaries misdescribed

Other Exceptions to Indefeasibility include:

Short Term Tenancies

RPA s42(1)(d) expressly provides that registered interest is subject to certain unregistered short-term tenancies where:

Term (calculation including additional duration included in any options to renew) does not exceed 3 years; AND

Tenant must be in possession or entitled to possession; AND

Registered Proprietor must have had either actual or constructive notice of the tenancy against which he or she was not protected. Constructive notice of a particular interest is established where the purchaser has notice that someone other than (or as well as) the vendor is occupying the property per Hunt v Luck [1902] 1 Ch 428.

Other Exceptions to Indefeasibility include:

Overriding Statute

other legislation / statute may override the operation of the principle of indefeasibility in the RPA by express provision or necessary implication i.e. based on general rule about later legislation overriding earlier legislation regarded as Achilles heel of Torrens System Title.

See RPA s42(3) which requires an express statement that later legislation prevails over s 42.

Examples: legislation creating charges over land that might not be noted on the register.

Registrars Power to Correct the Register

The Registrar-General and the Courts have (limited) powers to correct the Register

RPA s12 deals with the Powers of the Registrar-General including the power to correct (s 12(1)(d) and 12(3))

RPA s138 Court may direct cancellation of folios and other actions related to folios

Adverse Possession [see Module 3 & RPA Pt 6A]

EXCEPTIONS TO INDEFEASIBILITY: TYPOLOGY

Exceptions to Indefeasibility operate to recognize unregistered interests via three different mechanisms:

Fraud in RPA s42 renders the title of the registered proprietor defeasible and so vulnerable to challenge by the person defrauded (eg, previous RP or holder of a prior unregistered interest) per RPA s118 permitting a defrauded party to bring proceedings to recover possession of land.

Other express exceptions in RPA s42 protect particular interests (e.g., a tenant in possession under a short term lease) and thereby merely diminish the extent of the indefeasible interest obtained i.e. title of RP remains indefeasible but subject to the rights protected in the exceptions.

In Personam exception (at law / equity but not noted in statute) operates to clarify/ diminish the scope of indefeasibility conferred by R