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Real Property

Substantive Requirements What rights does A intend to vest and is there recognition under common law, statute or equity?

• Legal fee simple- a right to exclusive possession of land 'forever', i.e., an uncertain amount of period -- close to absolute ownership of land.

• Life estate- a right to exclusive possession for the duration of the grantee's life

• Legal remainder- an interest given to a person that is capable of becoming possessory upon the natural end of a prior estate created by the same instrument (so is a future interest), like where the owner grants a legal life estate to A with the remainder to B.

• Legal contingent remainder- where there is a condition attached to the legal remainder (like graduation with a university qualification), with associated rules against perpetuities

• Lease- a right to exclusive possession for a certain period of time

• Easement- a right accommodating (benefitting) the dominant tenement (land benefitted by an easement) to use or restrain servient land (the land subject to an easement) in a manner that is not inconsistent with the servient owner's continued ownership, where there must be proximity and a benefit connected to the normal use and enjoyment of the land; for example, a right to travel

• Profits à prendre- a right to land in order to take natural resources (including soil, minerals, natural vegetation and wild animals) from the land belonging to another person

• Restrictive covenants- rights to prevent neighbours from using their own land in certain ways

• Pastoral rights- rights to use land for agricultural purposes

• Mineral rights- rights to explore for or remove minerals from another person's land

• Old System mortgage- where a mortgagee (bank) gives a legal mortgage to a mortgagor (homeowner), so that the mortgagee receives legal title and has a right to possession and the mortgagor has an equitable interest, so can demand the return of the land upon the performance of an obligation of repayment, as an 'equity of redemption'

• Torrens mortgage- where the mortgage operates as a 'charge' or encumbrance' so that there is no transfer of legal title and the mortgagee does not receive legal title nor a right to possession (but the mortgagee does have a legal charge through the registered mortgage, i.e., an encumbrance on the mortgagor's right to possession), as provided by s 57(1) of the RPA.

• Trust- a mechanism for the holding and use of property by the trustee for the benefit of the beneficiary, as recognised by equity

• Native title- "the interests and rights of indigenous inhabitants in land, whether communal, group or individual, possessed under the traditional laws acknowledged by and the traditional customs observed by the indigenous inhabitants", as a common law right from Brennan J in Mabo and constituting the basis of the definition in s 223 of the Native Title Act 1993 (Cth). 1

Formal Requirements for Obtaining Legal Interest in Land Old system land: CA. 2 -- Deed is required: s 23B.

Elements of a deed -- a mixture of common law and statutory requirements
✓ Must be made in writing on paper (or vellum or parchment).
✓ Must be delivered.
✓ Must be signed, sealed and attested by one witness not a party: s 38(1);
✓ Sealed if signed and attested: s 38(3);
✓ Indenting is not necessary: s 38(2).
✦ Exceptions to deed requirement: --No deed is required where
✓ For short-term oral lease or tenancy: s 23B(2)(d)
➡ Short-term lease no more than three years, market payment rent and immediate possession: s 23D(2)
✓ Not apply to Torrens title land: s 23B (3) Torrens Title land: RPA.3

• Interest passes upon registration: s 41

Formal Requirements for Obtaining Equitable Interest in Land Order of specific performance The right to specific performance arises only when the right to compensation is regarded in equity as an inadequate substitute for performance of a contract.
✦ Equity can help to recognise an interest as proprietary despite the failure of formal requirement by ordering specific performance of a contract because equity regards as done that which ought to be done: Lysaght. 4
✦ Element of specifically performance:

• Substantive requirement must be satisfied.

• Formal requirement: CA

1

Mabo v Queensland (No 2) (1992). Conveyancing Act 1919 (NSW). 3 Real Property Act 1900 (NSW). 4 Lysaght v Edward (1876). 2

1

Real Property Formal requirement of specific performance

Query whether there is an instrument made in writing? s 23C(1)(a)
➡ Instrument must in writing and signed by the transferor or the lawfully authorised agent in writing, by will or by operation of law.
✴ This section allows creation of an equitable interest in Old System land by a written and signed instrument (not in the form of deed) even without consideration.
‣ This is because the two fold test in Corin may be satisfied in an Old System land.
✴ However, this section does not allow the creation of an equitable interest in Torrens title land by an unregistered written and signed instrument.
‣ This is because if the instrument is unregistered, the first limb of the test in Corin is not satisfied.
✦ If not, then look at whether there is a writing contract -- must in writing and signed s 54A(1)
➡ Agreement, memorandum or note in writing and signed by the party or authorised agent.
✦ If the writing requirement is not satisfied, query whether there is any exceptions, i.e., no writing requirements

• Part performance: 54A(2)
➡ Required that the acts relied upon as part performance be unequivocally referable to such agreement: Cooney. 5
➡ (e.g., rent + repair the fence=>combined will be enough, but one alone will not)
✦ If there is part performance, then there is a specifically enforceable contract.

Other possible exceptions:
- s 23D(2) short-term lease
- Constructive trust: s 23C(2)
- Equity will not allow a statute to be an instrument of fraud: Ciaglia;6

Injunction

• An order issued by a court of equity to stop someone from interfering with the rights of another.

Trust

• A trust exists when a person has some right and is required by equity to use it for the benefit of another person or for a particular purpose.

Equity interest Problem Question Contract to transfer fee simple: Lysaght -- person died before the property transferred.

• It is unlikely the purchaser can obtain relief under common law because....

• So equity will decree specific performance of the contract because equity regards as done that which ought to be done: Lysaght.

• Purchaser's equitable interest arises at the moment the contract becomes enforceable.

• Formality requirement.

• Before the money is fully paid, the beneficial ownership passes to the purchaser and the vendor has a right to the purchase-money, a charge or lien on the estate for the security of that purchase-money and right to retain possession of the estate until the purchasemoney is paid.

• At the moment the money is fully paid, a constructive trust arises -- vendor hold the assets as trustee for the purchaser.

• Risk of damage to the property passes to the purchaser at the moment when he has the beneficial ownership.

• But vendor must take reasonable care of the land as a trustee and must not wilfully damage the estate.

• In addition, it matters not either party dies because property rights survive the death of either party.
✦ Contract to grant lease: Walsh -- Landlord request payment of lease in advance as prescribed in the contract.7

• It is unlikely the purchaser can obtain relief under common law because....

• So equity will decree specific performance of the contract because equity regards as done that which ought to be done: Lysaght.

• Tenant's equitable interest arises at the moment the contract becomes enforceable.

• Formality requirement.

• Under equity, the tenant has the same rights and obligation as if the lease had been legally created by a deed.
✦ Part performance: Cooney -- Lots of preparatory acts constituted part performance. Agent not authorised in writing.

• It is unlikely the purchaser can obtain relief under common law because....

• So equity will decree specific performance of the contract because equity regards as done that which ought to be done: Lysaght.

• It is not enough that an act done should be a condition of, or good consideration, or preparatory action for a contract: Cooney.

• Therefore, payment alone is not a sufficient act that amounts to part performance, but it may be taken into account in combination with other facts: Cooney.

• Therefore, the act that .....may be regarded as a part performance of the contract because it relates to possession, use or tenure of the land, which amounts to a part execution as to change the parties' relative position as to the land. -- or say it affects the possession or right to possession of the land, affects the use of the land....etc: Cooney.
‣ A deposit of title-deed by way of security affects the title to the land, alters the position of the parties as to the land itself: Theodore.8
‣ The laying out money in improvement on the land changes the position of the parties in relation to the use of land.

5

Cooney v Burns (1922). Ciaglia v Ciaglia (2010). 7 Walsh v Lonsdale (1882). 8 Theodore v Mistford Pty Ltd (2005). 6

2

Real Property

Property Rights v Personal Rights Property rights

• Property rights are Rights concerning particular things and treated as a bundle of rights:Yanner, including: 9
‣ the right to use and enjoy;
‣ the right to exclude;
‣ the right to alienate and transfer.

• Therefore, it can be enforced against a wide range of persons in the absence of a contract.

• Under some circumstances, property rights is not exclusive, for example: native title rights:Yanner.
✦ Personal rights

• Unlike property rights, personal rights are enforced against particular persons.

Property Rights v Contractual Rights Property rights

• Property rights can be enforced against person in general.

• Content of property rights a limited by rights recognised by the common law.

• Property rights always relate to and depend on the existence of some particular things.
✦ Contractual rights

• Contractual rights can only be enforced against specific person who is a party to the contract, limited by the doctrine of privity.

• Content of a contractual right is governed by the terms of the agreement.

• Contractual rights always relate to and depend on the existence of a contract.

There is a contract between A and B which creates nothing but a personal obligation. No proprietary interest has been created because none of the characteristics of the recognised category of proprietary interests is satisfied. Not a lease because there is no right of exclusive possession. Not a profit a prendre, because there is no taking of natural resources, its just racing club, unlike hunting or fishing club.... Not an easement, no no benefit seems available to the land, no dominant tenement. It is only a licence given for good and valuable consideration: King v David.10 Accordingly, B obtain no interest in the estate but can only sue A for breach of the contract . And with respect to C, since he is not a party to the contract, he is not bound by the contract and therefore he can exercise his exclusive possession over the land to refuse B's access.

Incorporeal Hereditaments Profits a prendre

• Profit a prendre refers to rights to take things, such as sand, timber from another person's land.

• It can be an exclusive right or a shared right.

• Any one who wrongly interferes with the profit holder's right is guilty of nuisance for interfering with a right to land.

• However, it is restricted to the taking of the natural produce of the land, including soil and minerals, natural vegetation, and wild animals.

• Therefore, it cannot be granted with respect to the fruits of industry, such as farm crops, garden vegetables, or domestic animals.

• Nevertheless, it is possible to have a profit prendre to harvest trees that were planted by human, as provided by s 88AB of the CA

• In addition, a right to take minerals can be a profit prendre: EQI v COH.11
✦ Easement

• Easement refers to rights to use a neighbour's land without possessing it.

• Easement in gross is usually unavailable except for those rights conferred by s 88A of the CA

• There is no requirement that the dominant tenement must be adjacent to the servient tenement, just nearby is sufficient.

• However, in order to be qualified as an easement, there must be some benefit to the dominant tenement.

• And more importantly, the benefit must be connected to the normal use and enjoyment of that land
‣ rather than the benefit that is unconnected to the land, -- for example, winning profit is insufficient.

Corporeal Hereditaments

Fee simple (Freehold estate)

• Fee simple refers to a right to exclusive possession of land 'forever'.

• A fee simple creates an estate so long as the tenant and any of her or his heirs survived.

• While the tenant lives, the estate can be dealt with as he or she pleased.

• In addition, a fee simple estate will not come to an end when the tenant died without heirs, so long as it passed to a beneficiary of the tenant's will -- by virtue of State of Wills 1540 and Tenures Abolition Act 1660.

9 Yanner

v Eaton (1999). King v David Allen and Sons, Billposting Ltd [1916]. 11 Emerald Quarry Industries v Commissioner of Highways (1976). 10

3

Real Property Fee tail (Freehold estate)

• The difference between fee simple and fee tail is that the present tenant is not free to deal with the land without regard for her or his heir with respect to a fee tail estate.

• Not exist in NSW now by virtue of the application of ss 19 and 19A of the CA
✦ Life estate (Freehold estate)

• Life estate refers to a right to exclusive possession for the duration of the grantee's life.

• The life tenant may grant the estate to someone else, however, the estate will come to an end on the death of the original life tenant.
✦ Leasehold estate

• Leasehold estate refer to a right to exclusive possession for a certain period of time.

• Associated with "leasehold covenants" as rights and obligations expressed in the contract or implied by common law or statute.

• Compared with freehold estates, a person has leasehold estates has lesser property right than those who have a freehold estate.
‣ A life tenant can grant a lease, but a leaseholder cannot grant a life estate even if the lease is set to last for more than a lifetime.

• Tenant in a leasehold estate has right to possession the land, while the landlord has a reversionary interest, i.e., the right to possess the land when the lease ends.

Future Interest Reversion

• Before the interest were passed to B, A had the possession. After B dies, the right to the possession will come back to A.
✦ Legal Remainder

• An interest given to B that is capable of becoming possessory upon the natural end of a prior estate (A) created by the same instrument -- like where the owner grants a legal life estate to A with the remainder to B
✦ Legal contingent remainder

• When the condition attached is satisfied (like graduation with a university qualification), an interest given to B that is capable of becoming possessory upon the natural end of a prior estate (A) created by the same instrument.

• Rules against perpetuities
‣ Common law: the perpetuity period is a perpetuity period of perpetuity period of a life in being plus 21 years plus a gestation period.
‣ Statute: the perpetuity period is 80 years: s 7 of the PA. 12

Old System Title Land and Torrens Title Land Old system title land In old system, the grantee / transferee gets no better interest or title than that of the grantor / transferor. Further, if the signature of the transferor is forged, the instrument is void and nullify, so it passes no right in either law or equity.
✦ On the other hand, if the instrument is signed by the grantor / transferor, despite the execution may be induced by the fraud of the transferee, the instrument can be effective to pass a legal interest.
‣ But equity allows the grantor / transferor to have the instrument set aside.
✦ Registration of valid instrument in old system land was provided in s 184G of the CA

• All instruments affecting or intending to affect any lands in NSW are duly executed or made bona fide and for valuable consideration and are duly registered shall only take priority according to the priority of the registration.

Torrens title land Torrens title land system provides title by registration rather than registration of title: Breskvar.13 Accordingly, unlike old system title land, there is no need to confirm the validity of a chain of title.
✦ Unregistered interests in Torrens title land can exist and are usually treated as equitable interests, while registered interests are legal interests: Barry v Heider.14
✦ Indefeasibility of registered interest:

• Registered interest is not subject to any adverse claim, thus carries immunity from attack and has priority over unregistered interest: RPA, s 42(1)

• Exceptions is where the holder of the registered interest is personally guilty of fraud through 'actual dishonesty': Frazer.15

• The reason is that in a Torren title land system, where a transfer is forged, its registration is effective to give the transferee the relevant interest and to deprive the defrauded party of his previously registered interest, despite the transferee / grantee is guilty of fraud.

• So when a holder of the registered interest is personally guilty of fraud through 'actual dishonesty', he only has a defeasible title with respect to the property, (can be defeasible by the original transferor, defrauded party), but he can effectively pass the registered interest to another party: Breskvar.

• When there is a competition between the equitable interest of the defrauded party and the bona fide purchaser, priority depends on who has the earlier equitable interest: Breskvar.

12

Perpetuities Act 1984 (NSW). Breskvar v Wall (1971). -- B mortgaged his estate in Old System land system, transfer executed in blank. Mortgagee later fraudulently secured his grandson as the registered proprietor. Grandson sold the land to a third party, but the party did not register the land in Torrens title system. -- competing equitable interest. 14 Barry v Heider (1914). 15 Frazer v Walker [1967]. 13

4

Real Property
‣ Usually the priority of the title will belong to the defrauded party because he has the earlier interest.
‣ But in the case where the defrauded party contributed to the fault made by the cheating party, the priority of the defrauded party as against the bona fide purchaser will be lost: Breskvar.

• In addition, knowledge of the fraud is not 'actual dishonesty' constituting fraud in itself: RPA, s 43(1)

Mortgage Old system mortgage: Figgins.16




A mortgage of old system title land transfers the legal interest of the mortgagor to the mortgagee with the proviso that the mortgagee will reconvey that interest to the mortgagor when the debt is repaid: Figgins. Therefore, the mortgagor does not have a legal interest of the land, only have and equitable interest called 'equity of redemption'. The legal interest of the land -- right to possession -- is passed to the mortgagee. There can only be one legal mortgage of an interest in old system title land .

• Any subsequent mortgage must necessarily be equitable, due to a mortgage of the 'equity of redemption'. Enforceability

• Through common law the 'decree of foreclosure' forecloses the 'equity of redemption' and converts the mortgagee into the beneficial owner of the land, once the fixed period of time to raise money in order to redeem the land expires.

Torrens title mortgage:

Unlike the old system title mortgage, the mortgage of Torrens title land does not involve the transfer of the mortgagor's title, but gives the mortgagee a charge (an equitable interest) over the land: RPA, s 57(1)
✦ So the mortgagee of a Torrens title land does not receive a legal estate, but only has a charge on an estate: Figgins.
✦ Therefore, the mortgagor, as the owner of the mortgaged estate, holds the right to possession.
✦ Enforceability

• Unlike old system mortgage, in Torrens title system, the legal fee simple is transferred from the mortgagor to the mortgagee by cancellation of the mortgagor's certificate of the title and the issue of a new certificate to the mortgagee.

Doctrine of fixtures

A fixture is a chose in possession (chattel) that has been attached or is resting on land in such a way that it has lost its legal identity as a separate object, and has become a part of the land.

Tenant's property At common law, tenants have a right to remove tenant's property at the end of the lease (or a reasonable time thereafter): Re CCIOA. 17
✦ Whether a fixture is a tenant's property or a permanent fixture depends more on the object of annexation rather than the degree of annexation: Re CCIOA.

• Therefore, fixtures installed for domestic, trade or ornamental purposes, rather than for the permanent improvement of the land, are tenant's property: Re CCIOA.
✦ To remove the fixture, the tenant must be able to remove the article without destroying the essential character or value of the fixture and without doing irreparable damage to the land: Spyer.18

• In such a case, where this is impossible, the chattel becomes a landlord's fixture.

• If the damage is not so substantial, tenants are responsible for any damages caused by their removal, as waste.

Doctrine of Fixture Degree / mode of annexation

In terms of fixture, there is a presumption that goods merely resting on land continue to be goods and that any degree of attachment (by bolts, nail, cement, etc) turns them into fixtures: Belgrave. 19
✦ Burdens of proof: Belgrave.
✓ In the case where a goods is merely resting on land
‣ Burdens of proof on the party alleging it is a fixture to prove it is a fixture by looking into its purpose.
✓ In the case where a goods is attached to the land
‣ Burdens of proof on the party alleging it is not a fixture to prove it is merely a chattel by looking into its purpose.

Purpose / object of annexation

The issue is whether the possible fixture was jointed to the land for its better use as a chattel or in order to improve land: NH Dunn. 20

• New stove -- fixture, purpose was to form part of the premises ... supported by his anticipated entitlement to indefinite enjoyment of the benefit of such items in his character as prospective owner of the premises: Palumberi. 21

• New carpet -- fixture, purpose was to form part of the premises, ....: Palumberi.

16

Holding Pty Ltd v SEAA Enterprises Pty Ltd (1999). Re Cancer Care Institute of Australia Pty Ltd (2013). 18 Spyer v Phillipson (1931). 19 Belgrave Nominees Pty Ltd v Barlin-Scott Air Conditioning (Aust) Pty Ltd (1984). 20 NH Dunn Pty Ltd v LM Ericsson Pty Ltd (1979). 21 Palumberi v Palumberi (1986). 17

5

Real Property

• Venetian blinds -- chattel, essentially a form of furnishing installed for the greater comfort and convenience of the occupants for the premises...: Palumberi.

• Television -- chattel, purpose was for the better use and enjoyment of the television set rather for any purpose related to the land itself...: Palumberi.
✦ It can be inferred from all the surrounding matters and circumstances including: Belgrave.

• Nature of the chattel;

• Relation and situation of the party making the annexation vis-a-vis the owner of the freehold or person in possession

• Degree/mode of annexation as indicative of intention

• Apparent purpose of the annexation
✦ Generally speaking, the purpose of annexation is more important than the degree of annexation: Palumberi.

Waste




A person with a reversion or remainder has a right to possession of land in the future, following the end of a prior estate, so the value of the right can be adversely affected by the person in possession. Therefore, tenants in possession may be liable for waste if they deal with the land in a manner with adversely affects the interest of those who (for example, B) have a right to possession in the future. A person with a right to future possession need not wait until her or his estate vests in possession, but can bring an action against the tenant in possession for waste, seeking damages for the waste already committed and an injunction to prevent future waste. At common law, there are three kinds of waste:

• Voluntary waste: doing some act of damage to the premise which is not permitted by the possessor.

• Permissive waste: failure to take action to keep the premises in good repair. (Query the term of the contract for life tenant).
‣ For life tenant: query the term of the lease agreement if there is an obligation to repair attached.
‣ For leasehold tenant: leasehold tenant's obligation to repair is set in s 84 of the CA

• Ameliorating waste: an act which does not harm the land, but fundamental changes the character of the land.
‣ A leasehold tenant's right to commit ameliorating waste is restricted by ss 51 and 66 of the RTA:22 The tenant is not allowed to alter the premises without the consent of the landlord...must restore them to their original condition at the end of the lease of pay the landlord for the cost of doing so, unless the covenant provides otherwise. In addition, a court of equity would also intervene to prevent wastes where the tenant in possession (life estate) was "unimpeachable for waste" because equity regards as done that which ought to be done: Lysaght. Therefore, by statute, a life tenant can now be liable for equitable waste: s 9 of the CA.

Doctrine of Tenure The doctrine of tenure asserts that the Crown is the formal owner of all land and grants estates to private owners who are tenants of the Crown, due to the radical title acquired by the Crown through its sovereignty over Australia: Mabo.
✦ Character of feudal property:

• Conditional on the performance of a social obligation;

• Limited with concurrent interest;

• Inalienable;

• For the purposes of ensuring social order, through the entrenchment of power in particular families.
✦ By contrast, character of capitalist property:

• Unconditional on the performance of a social obligation;

• Unlimited;

• Freely alienable;

• For the purposes of ensuring the efficient allocation of market resources.

Nature of the Crown's title to land: Mabo.

The Crown's right to land is called radical title which did not entitle the Crown to prevent the holders of the existing property rights from exercising those rights:
✦ Therefore, if land has been already subject to property rights, for example, native title, the Crown has no right to possess that land unless it exercises its sovereign power to claim that right and thereby the existing rights are extinguished.
✦ However, if the land is desert and uninhabited, that is, truly a terra nullius, the Crown would have an absolute beneficial title to the land.

Doctrine of Estate An estate is the right to possess a volume of space, for a period of time.

• Coupled with the concept of tenure, that people do not own the land themselves, but have estate in land.
✦ Unlike the doctrine of tenure, which recognises that a number of persons could have a proprietary interest in the one piece of land at the same time; the doctrine of estate allows for the creation of successive interests, present and future, in the same piece of land: Mabo

22

Residential Tenancies Act 2010 (NSW). 6

Real Property

Therefore, in essence, the doctrine of estate reflects the idea that a person should be able to have an interest in land giving rise to a present right to possession, while at the same time other persons would also have interests in the land giving them future rights to possession: WA v Ward. 23

Native Title

The term 'native title' conveniently describes the interests and rights of indigenous inhabitants in land, whether communal, group or individual, possessed under the traditional laws acknowledged by and the traditional customs observed by the indigenous inhabitants: Mabo.

Main Characteristics It is a property right and possessed by a community, a group or an individual: Mabo. It is a right to land or water rather than a right to chattels or intangible thing:Yanner.
✦ It is a common law right and not an equitable or statutory right: Mabo.

• Only has statutory recognition: Native Title Act 1993 (Cth)
✦ Subject to being extinguished by an interest granted by the Crown: Mabo.

Elements of Native Title: Mabo.

The plaintiff had property rights today according to their traditional laws and customs. Those same property rights were held by indigenous people when the Crown acquired sovereignty over the land.
✦ The plaintiff acquired those rights from those indigenous people.
✦ The continuous existence of the rights over a very long period of time.

Loss of native title Abandoned by the Aboriginals:Yorta. 24 The Aboriginals may no longer observe the traditional laws and customs under which the native title existed: Mabo.
✦ The Crown may lawfully exercised its sovereignty to grant inconsistent rights to itself or others: Mabo.

• The native title is distinguished to the extent of the inconsistency between the native title and the statute: Wik Peoples v Queensland (1996)
✴ Need to identify and compare the two sets of rights objectively: WA v Brown. 25
‣ By looking into the legal nature and content of the rights -- Whether the right conferred is an exclusive possession?
‣ At the time of their creation, not how the rights are subsequently exercised -- Query the purpose of the legislation -- particular purpose, such as mining, pastoral, or other purposes?
✦ However, there won't be an extinguishment of a native title, where the appropriation and use is consistent with the continuing concurrent enjoyment of native title over the land: Mabo,WA v Brown
✦ Once native title is extinguished or expires, the Crown becomes the absolute beneficial owner upon expiry, because there is no proprietor other than the Crown: Mabo.

23 Western Australia

v Ward (2000). Members of the Yorta Yorta Aboriginal Community v State of Victoria (2002). 25 WA v Brown (2014). 24

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