LAND LAW

VOCAB LIST
Pastoral
Lease
Doctrine of
Tenure

Socage
tenure
Torren
Title
System
Doctrine of
Estate
Seisin
Radical
title
Easement
Restrictive
covenant
Profit a
prendre
Lien/charge

equitable
vendor
liens

Allodial
title
Indefeasibil
ity
Joint
tenancy

Particular type of leasehold that allows Crown land to be used for

grazing stock.
Doctrine of tenure refers to a mode of holding land whereby one person
holds lands from another subject to the performance of certain
obligations. The roots of the doctrine lie in the feudal system. (Who is
in possession?)
Still in Aus. Law but not without issues Mabo (No 2)
Agricultural labour obligations
The State maintains and guarantees the Torrens Title Register. The
Torrens title tells us the current state of ownership and list any
encumbrances affecting the land.
Doctrine of estates permitted interests in land to be carved out on a
temporal basis. (How is it divided?)
Feudal term for having both possession and title of real property
The ultimate ownership is vested in the Crown
A right to do something on someone elses land
a right to stop someone doing something on their land
the right to gather naturally occurring materials from anothers land
Interest in land equivalent to an amount of money owed to the owner of
the lien. It is like a mortgage, but does not include the right to sell the
land.
An equitable security interest held by a seller of land who has conveyed
or transferred to the purchaser without yet being paid the full purchase
price. It may be excluded by implication from the nature and terms of
contract and the surrounding circumstances e.g. Davies v Littlejohn
(1925)
The vendor is entitled to an equitable lien where he or she has
completed the contract without receiving all or part of the purchase
price. The vendors lien will support a caveat e.g. Barry v Heider (1914)
Other e.g. Lawyer has lien over client files (through potentially
exceptions and in case of another lawyer acting for the client after you
have been discharged they may offer a guarantee to get the records)
where the bill has not been paid
Absolute property of their owner and not subject to any rent, service, or
acknowledgement of superior. It is the opposite of the tenurial system
Conclusiveness of the register
The co-owner have a right of survivorship when the other co-owner(s)
dies.
Joint tenancys interest is not capable to being divided by will.

Tenants in
common
attestation
Caveat
Beneficial
ownership
Legal
ownership
Full
beneficial/l
egal title
Mesne
profits

The ownership rights are severed and can be transferred to another

person separately.
To affirm to be correct, true or genuine
Proviso of specific stipulations, conditions, or limitations
An owner that has the right to use the land.
An owner that has the right to alienate the land.
An owner that has both the right to alienate and use the land.

profits of land taken by a tenant in wrongful possession from the time

that the wrongful possession commenced to the time of the trial of an
action of ejectment brought against him.

CASE LIST
W1A INTRODUCTION
Email of the lecturer: julian.laurens@unsw.edu.au
Effort ability to engage with the material, opinion.

Difference between property and contract

o You can sue a third party
Statutory interpretation
o 1. Look for the objects of the act
o 2. Project Blue Sky
Source of law
o Common law
o equity
o Statutes
Conveyancing Act
Real Property Act
o Regulations
What is property?
o Tangible and intangible property
o Closed list of rights (bundle of rights)
Rights attached to a thing
Relationship between people and things (it is also a relationship
with others rights on things)
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.
Property is a description of a relationship between a
person and a thing.
o Three aspects
Right to dominion
Right to exclusion

Ability to exclude other

Right to alienate (transfer to someone else)
Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 this case
was overturned in Mabo (No.2)
Things to bear in mind
o Difference between registered and unregistered interest
o Joint tenancy and tenancy in common

W1B NATIVE TITLE AND CROWN GRANTS (DOCTRINE OF TENURE,

DOCTRINE OF ESTATES, MABO)
Land title system in NSW

Three dimensions of property law

o Analytical
What do we mean by the term property things, relationships,
etc.
o Philosophical
What are the justification of the system we have
John Locke labour theory of property treatise of government
(during the time of industrial revolution) they enclosed the land
and tried to maximize efficiency which was breaking the doctrine
of tenure.
Individualism adding more than something that nature
has done to improve the land itself and stated that
hunting and other types of activities did not have a direct
relationship with the land.
This philosophy was carried in the Australian colonialism
and also when native title was initially denied.
o Doctrinal
What are the legal rules and defining the boundaries of property
rights
We are not always sure what the right or the law is
because it is not just about things but the relationship of
things and people
What are some property rights
o Right to possession (present and future equitable right)
o Right to use
Beneficial ownership
o Right to exclude
o Right to income
o Right to the capital of the property
o Right to the security
o Right to transfer (alienation)
o Absence of a term
Duties and responsibility?
o Duty to exclude harmful use
Tension between public and private property
In NSW there are three land titling systems: Crown land, old system title
(common law) and Torrens title (Real Property Act).

Crown land
o When Australia was colonized by the British colony, all of the land
became Crown land which the King has the ultimate ownership of the
land.
o The recognition of indigenous ownership of land by the non-indigenous
legal system did not occur until 1992 in the Mabo case.
Old System title
o Since the registration of the first grant of Crown land in Feb 1792 until
the introduction of the Torrens Title System in 1863, land ownership in
NSW was based on the English common law system of title.
o Old system land title is a matter of quality: the title is good if it trumps
over lesser titles. In the Old system, a separate deed is prepared every
time land is dealt with. This means, as time passes, the number of
documents requiring safe storage increase and the chance of error
increases.
Torrens title
o Under the Torrens Title System the State maintains and guarantees the
Torrens Title Register. The Torrens title tells us the current state of
ownership and list any encumbrances affecting the land.

Crown Grants

Between that period, lands were grants to citizens known as Crown grants.
Crown grants are consistent with the English land law doctrine of tenure,
which assumed that all citizens titles to land can be traced back to an initial
grant from the King.
Once a citizen has a land title, they are free to deal with the land as they
please. The Crown can only retain freehold titles back before the end of the
lease, by compulsory acquisition, that ism through a formal legislative
process, which requires the payment of money to citizens.
Crown grants are normally issued subject to various exceptions, reservations
and conditions and the title that develops from the grant will inherit these.
These conditions are not written out.
Exceptions
o Reserves of coal, gold, silver and other minerals
Reservations rights to:
o Construct roads, bridges, etc.
o Take or remove indigenous timber and other natural produce and repair
purposes
Conditions
o Obligations such as maintenance
Quit rents

DOCTRINE OF TENURE [3.3 3.6]

Doctrine of tenure refers to a mode of holding land whereby one person holds
lands from another subject to the performance of certain obligations.
The roots of the doctrine lie in the feudal system.

All land are presumed to be ultimately owned by the Crown, and a royal
grant is required to use the property of the King
Doctrine of tenure was also about the relationship between people the
obligation between one level with another in relation to the possession and
ownership of land.
These tenants who held directly from the Crown were known as tenants in
chief. It followed that only the Crown owned land absolutely, as it alone held
of no other.
The obligations of tenants generated complex feudal ties between the King
and his tenants in chief in the form of services and incidents.
o A service - an obligation on the part of the tenant owed to the landlord.
Socage tenure agricultural labour
Subinfeudation the process of creating tenures out of a
tenanted land
o Incidents were circumstances, most commonly on the death of the
tenant
E.g. death of a tenant in fee simple the heir of the tenant had to
pay a sum of money known as relief to the overlord before he
could succeed to the land.
Escheat: the land of the tenant by tenant in chiefs being
convicted of a felony.
Pyramid of feudal relationships: there were number of persons with rights:
o 1. Tenant in demesne with possessory rights
o 2. Mesne lord to whom the tenant owed services
o 3. Tenant in chief to whom the mesne lord owed services
o 4. Crown who received services directly from the tenant in chief
It allowed for a number of overlapping sets of rights to subsist over one
particular parcel of land. A simplified version of this fragmentation exists in
the case of contemporary tenancy.
In 1290, the Statute of Quia Emptores was passed.
o 1. It permitted every free man to alienate his interest in the whole or
part of his land without his lords consent.
o 2. It prevented further subinfeudation from taking place.
With the process of subinfeudation abolished, the feudal pyramid
began to shrink.
Today the doctrine of tenure has no practical significance in Australian land
law. Its influence still lingers, however, in three areas.
o 1. No person can, in the technical sense, own land, since all land is
held of the Crown. This proposition is till formally part of Australian law.
o 2. The modern landlord-tenant relationship bears some resemblance to
the early tenurial relationship.
o 3. The traditional doctrine of tenure operated until Mabo to obstruct
recognition of native title.
o

No services
Council of the Municipality of Randwick v Rutledge
o It was noted that tenurial holding was marked by obligations of
services and incidents, and that in the case of Socage tenure.

Payments were not in any sense representative of the value of any

continuing service to be performed in relation to land as was the case
in England. It therefore appears to be inaccurate to see them as
evidencing tenurial holding of the Crown.

No incidents

In Australia, the feudal overlord was the Crown. In the case of Socage tenure,
escheat occurred in two kinds of cases:
o 1. Where the tenant in fee simple was convicted of a serious criminal
offence, or left the realm to avoid conviction.
o 2. Escheat arose on the death of a tenant in fee simple intestate and
without next of kin.
Where a tenant in fee simple dies intestate without next of kin, the Crown
now takes the realty and personalty of individuals dying intestate without
next of kin as bona vacantia in the majority of Australian jurisdictions.
It therefore seems that any reference to landholders holding of the Crown
appears to have been overtaken by a gradual process of legal evolution,
rendering the term now quite misleading.

DOCTRINE OF ESTATES [3.7 3.20]

(divisible element) Land has certain special characteristics which differentiate

it from other forms of property. Its location is permanent and it may be
capable of generating income forever. The term estate means, for
present purposes, the fullest set of rights of enjoyment of land:
namely, the right of possession.
Doctrine of estates recognised fragmentation of ownership where multiple
people have rights over a single piece of land.
Allodial title vs tenurial title
(Temporal element) The doctrine of estates permitted interests in land to
be carved out on a temporal basis. One person might be granted rights to
present possession while allowing a person who had a right to
possess the land in the future. Each would have separate bundles of
rights, each of which could be disposed of separately.

The estates general

(1) Freehold (Fee simple, Fee tail and Life estate)

(2) Leasehold - They were regarded as mere personal contracts between the
landlord and tenant. They were accordingly regarded as inferior interests and
classified as personalty.
Elements (alienation, etc.) in recognised proprietary interest rights
Fee simple
o Gumana v NT (2007): An estate in fee simple is for almost all practical
purposes the equivalent of full ownership saves to the extent that any
such right has been arrogated, qualified or varied by statute, by the
owner of the fee simple or by a predecessor in title.

Under the modern law the estate continues indefinitely regardless of

the existence of heirs generally
Fee tail (no longer applicable)
o Although the rights of enjoyment conferred by the fee tail resembled
that incident to the fee simple estate, the rights of disposition were
more limited. The estate was given to a person and then to specified
descendants of that person, with the intention that it should last only
while this line of specified descendants continued.
o NSW the estate has virtually been abolished. Not only can fees tail no
longer be created, but existing interests were converted to fee simple
estates.
Life estate
o A life estate was created when an interest in land was granted to a
person for life and terminates on the death of the tenant. It is created
by an express gift (to B for the life of A)
o Special difficulties arose if B died before A. Since the estate was not
one of inheritance it could not be devised nor would it devolve upon an
intestacy. The common law solved the problem by creating the doctrine
of occupancy. Bs heir did not take simply because he was the heir but
because of the special mention of heirs in the grant. Today, statutory
provisions have swept away the common law doctrine of occupancy.
Under these provisions estates pur autre vie may be disposed of by will
and, on an intestacy.
o

Leasehold estates

In general, leasehold estates are distinguished from freehold estates on the

basis that their duration is certain or capable of being rendered certain.
A lease for a fixed term of years
o A lease for a fixed term of years is a lease for a fixed period which
expires automatically at the end of the period. Despite the phrase
fixed term of years the lease may be for any specified period.
A periodic tenancy
o Periodic tenancy does not terminate until appropriate notice is given.
Periodic tenancies may be created on a monthly or weekly basis or by
reference to any other agreed period and the notice required to
terminate the tenancy will vary accordingly.
o The periodic tenancy can be accommodated within orthodox doctrine
by regarding it as a tenancy for a definite term of one year with a
superadded provision that it will continue for another term of the same
period unless determined by notice.
A tenancy at will
o May be determined time by either party subject, in appropriate case, to
a packing-up period: Landale v Menzies
o A tenancy at will differs from licence in that a tenant at will is able to
maintain an action against third parties while the licensee cannot.
A tenancy at sufferance
o Possession of land lawfully pursuant to a lease, but continues
wrongfully in possession after termination of the lease. The landlord

from institute proceedings for recovery of possession of land from the

tenant, but cannot maintain an action for trespass, at least until
objection is made, since the tenants initial entry on to the land was
lawful.
SYSTEMIC FRAGMENTATION OF INTERESTS IN LAND: THE COMMON LAW,
TENURE AND NATIVE TITLE (3.75 3.97)
Introduction

Decisive differences between the system of Australian land law and its
English forbear lies in the recognition of indigenous rights native title.
o Different indigenous groups may exercise their native title over the
same land.
o Mabo concludes that native title is not a common law title but is
instead a title recognised by the common law.
Common law does not protect native title right it simple recognises native
title rights existence

Mabo v Queensland (No.2) (1992) HCA

FACTS
The appellant emphasised on gardening on the land to prove that the
land has been worked. The land was not the subject of the public
ownership but owned to individuals. Notion of radical title radical in
this context does not mean certain groups, just a word for the latin
root the question in the case was when the British Crown acquired
sovereignty over the NSW, did it radical title involve full Crown
ownership?
If it did, what follows?
ISSUES
Mabo did not challenge the radical title of the land (sovereignty) but
argued that the Crown did not acquire absolute beneficial ownership of
the land.
DEFENDAN the Imperial Crown acquired sovereignty over the Murray Islands. The
TS
plaintiffs accept these propositions but challenge the final link in the
ARGUMENT chain, namely, that the Crown also acquired absolute beneficial
ownership of the land in the Murray Islands when the Crown acquired
sovereignty over them
OUTCOME
RATIO
The Crown did not acquire absolute beneficial ownership because
the basis of terra nullius is untrue.
DICTA
The proposition that, when the Crown assumed sovereignty over an
Australian colony, it became the universal and absolute beneficial owner
of all the land therein, invites critical examination.
In discharging its duty to declare the common law in Australia, this court
is not free to adopt rules that accord with contemporary notion of justice
and human rights if their adoption would fracture the skeleton of
principle which gives the body our law its shaped and inherit
consistency.

If the land were desert and uninhabited, truly a terra nullius, the
Crown would take an absolute beneficial title to the land for the reason
given in AG v Brown: there would be no other proprietor. But if the land
were occupied by the indigenous inhabitants and their rights and
interests in the land are recognised but the common law, the radical
title which is acquired with the acquisition of sovereignty cannot
itself be taken to confer an absolute beneficial title to the
occupied land.
It would be wrong, 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.
The nature and incidents of native title
Native title though recognised by the common law, is not an institution
of the common law and is not alienable by the common law. Its
alienability is dependent on the laws from which it is derived.
1. Unless there are pre-existing laws of a territory over which
Crown acquires sovereignty which provide for the alienation of
interests in land to strangers, the rights and interests which
constitute a native title can be possessed only by the
indigenous inhabitants and their descendants.
It follows that a right or interest possessed as a native
title cannot be acquired from an indigenous people by
one who, not being a member of the indigenous people,
does not acknowledge their laws and observe their
customs
o 2. Native title, being recognised by the common law, may be
protected by such legal equitable remedies as are appropriate
to the particular rights and interests established by the
evidence, whether proprietary or personal and usufructuary in
nature title relating to inheritance.
o 3. Indigenous people as a community, are in possession or are
entitled to possession of land under a proprietary native title,
their possession may be protected or their entitlement to
possession may be enforce by a representative action brought
on behalf of the people
Extinguishing of native title
o Sovereignty carries the power to create and to extinguish
private rights and interests in land within the Sovereigns
territory.
They can voluntarily extinguish by surrender to the Crown. They can also
be lost by the abandonment of the connection with the land or by the
extinction of the relevant tribe or group.
o

Deane and
Gaudron JJ

NOTE

Have the consequence that any legislation extinguishment would result

in the expropriation of the
The judgment Mabo (No 2) made a radical title acquisition of
the crown and overturned the doctrine of terra nullius.

The doctrine of tenure after Mabo

While the HC was of the view that the theory of tenure remained a central
pillar of the land law in Australia and that it was too late in the day to rule
otherwise, the majority of the court held in favour of the continued
application of a modified theory of tenure.
o Distinction was made between the radical title acquired by the Crown
on the acquisition of sovereignty and the absolute beneficial ownership
that was held to follow rom the traditional doctrine of tenure.
The Crown only acquired absolute beneficial ownership in respect of land
which was not in the occupation of the Indigenous inhabitants at the time of
acquisition of sovereignty.

Is native title a proprietary interest?

Milirrpum v Nabalco
o Even if the common law recognised some form of communal native
title it was necessary for the plaintiffs. Either as individuals or as
representatives of particular clans, to show that their predecessors had
held a recognizable proprietary interest in the land.
o It makes little sense to say that the clan has the right to use or enjoy
the land of their own clan and other land also.
A legislative response to the Mabo decision was necessary for three principal
reasons.
o 1. Necessity to validate titles issued after the commencement of the
Racial Discrimination Act
o 2. Requirement to make provision for permitted future development of
land affected by native title
o 3. The need to provide a regime for the speedy and efficient
determination of issues of native title including whether or not native
title existed over a parcel of land.
Native Title Act 1993 (Cth)

S 3 objects
o (a) Recognition and protection of native title
o (b) establish ways in which future dealings affecting NT
o (c) mechanism for dealing claims to NT
S 10 recognises the concept of native title
S 11 provides that it cannot be extinguished contrary to the Act
S 20 compensation
S 223 (IMPORTANT) defines native title as a communal, group or
individual rights and interests of Aboriginal peoples or Torres Strait

Islanders in relation to land or waters

Broader purposes of the act include:
o Traditional laws must predate sovereignty; not enough to demonstrate
o Validating past grants
o Set up national Native Title Tribunal to determine the existence of such
interest
o Provide for a register
o Determine claims for compensation
S 225 determination of NT
o (a) persons, or each group of persons, holding the common or group
rights comprising the native title
o (b) the nature and extent of the native title rights and interests (do you
get possession, hunting rights, fishing rights, etc.?)
o (e) land and water

Note

S 223 the first step is to know what their laws and customs and traditions
are.
Then it is assessed to whether the customs are connected to the claimed
area.
There must also be continual existence of rules that have a normative
content rather than a certain observable behavior Yorta-Yorta This is a
question of fact.

The nature and incidents of native title

Though native title generally encompasses the kinds of usages of land typical
of a hunter-gatherer society, it may nonetheless be so expansive as to
amount to exclusive possession of land and full beneficial ownership, as the
order in Mabo (No2) in favour of the Meriam people demonstrates.
De Rose v South Australia (2003) Apart from the requirement in s 223(1)(c)
that the rights and interests must be capable of recognition under the
common law, s 223(1) does not impose limits on the content of traditional
laws and customs

Western Australia v Ward (2002) HCA

Gleeson CJ, Gaudron and Hayne JJ:
It is, however, of the very first importance to recognise two critical points:
that s 11(1) of the NTA provides that native title is not able to be extinguished
contrary to the NTA and that the claims that gave rise to the present appeals
are claims made under the NTA for rights that are defined in that statute.

Definition in s 223(1) of native title and native title rights and interests
have remained constant.

1. Rights and interests may be communal, group or individual

2. Rights and interests consist in relation to land or waters
3. Rights and interests must have three characteristics:
(a) Rights and interests which are possessed under the
traditional laws acknowledged
(b) The peoples have a connection with the land or water
(c) Rights and interests must be recognised by the common law
of Au
The question in a given case whether: (a) is satisfied present a question of
fact. It requires not only the identification of the laws and customs said to be
tradition laws and customs, but no less importantly, the identification of the
rights and interests in relation to land or waters which are possessed under
those laws or customs
The issue which then arises is whether, by those laws and customs, there is a
connection with the land or waters in question. Para (a) and (b) of s 223(1)
indicate that it is from the traditional laws and customs that native title rights
and interests derive, not the common law.
Mabo (No 2) that native title may be protected by such legal or equitable
remedies as are appropriate to the particular rights and interests established
by the evidence is yet to be developed by decisions indicating what is
involved in the notion of appropriate remedies.
o
o
o

What rights does the native title bundle of rights contain?

Native Title Act 1993 (Cth) s 223(2) offers the examples of hunting, gathering
and fishing as possible native title rights.
1. Territorial sea (12 nautical-mile stretch of water from the low-water mark
over with Australia exercises sovereignty.)
o The HCA held that the Crown have sovereignty rights and interests
over it, and that title, not being a creature of the common law, could
exist alongside such rights as long as it was not inconsistent with them.
2. Inland waters
o Yanner v Eaton (1999) CLR : HCA held that hunting of estuarine
crocodiles with harpoons was a valid exercise of native title.
3. Cultural Knowledge
o Western Australia v Ward: we do not think that a right to maintain,
protect and prevent the misuse of cultural knowledge is a right in
relation to land of the kind that can be the subject of a determination of
native title.
4. Other ways of protecting cultural knowledge
o Ward affirmed that native title does not extend to the protection of
intellectual property rights associated with the land; but they also
emphasised that the law governing confidential information and
copyright might afford suitable protection.
5. Mineral and petroleum

Ward: HCA held that the relevant legislation had extinguished any
possible native title rights to minerals with the possible exception of
ochre.
6. Is native title alienable?
o Native title is in general inalienable. However, there are two
exceptions.
(I) Native title may be surrendered to the Crown
(II) It may be acquired by a clan, group or member of an
indigenous people in accordance with the laws and customs of
that people.
7. Membership of claimant group
o Ngalakan People v NT (2001): the determining factor was whether the
traditional laws acknowledged and the traditional customs observed by
the group allowed a person to identify as a member of a group.
o Gumana v NT (2007) (issue of spouses): the key question was heather
a particular individual was a member of that community. The spouses
were members of the community that established a communal title to
the land in accordance with s223(1).
7. Can native title evolve over time?
o It is not yet clear how much change is acceptable for there to be a
continuing connection to the land.
o Harrington-Smith on behalf of the Wongatha People of WA (No 9): the
question is what to make of all the evidence concerning hunting. I think
it shows that there is a connection between claimants and the land in
general of a kind and degree that non-Aboriginal people do not have
o According to Mabo (No 2): native title can evolve. The question is
the degree of change that is acceptable for the common law to be
recognised.
o

W2A NATIVE TITLE (3.98 3.120)

Assignment Strata law, will be released this week.
Connection with the land

Mabo (No2) offered various formulations:

o 1. Brennan J identified the need for a traditional connection with the
land
o 2. Gaudron JJ emphasised occupation or use
o 3. Toohey J appeared to adopt the more stringent requirement of
physical presence.

Yorta-Yorta Aboriginal Community v Victoria (2002) CLR

FACTS
Feb 1994 application was made to the NTA. All were said to be
public lands and waters. The primary judge (Olney J) made a
determination of native title under the NTA that native title does
not exist in relation to the areas of land and waters accepted

ISSUES

by the NTR.
By special leave, the claimants appealed to the HCA.
Whether there is a native title.
1. Did the claimants demonstrate that they were descended
from those who were indigenous inhabitants of the claim area in
1788?
2. What was the nature of the entitlement which the indigenous
inhabitants enjoyed in relation to their traditional lands in
accordance with their laws and customs and what was the
extent of those lands?

OUTCOM
E
Gleeson
CJ,
Gummow
and
Hayne JJ

The proper construction of section 223 of NTA

Concluded that the group did not fish before the colonial settlement.
Therefore it could not be a custom and no native title ca be given.
To speak of the common law requirements of native title is to invite
fundamental error. Native title is not a creature of the common law,
whether the Imperia common law as that existed at the time of
sovereignty and first settlement, or the Australian common law as it
exists today.
NTA, main objects to provide for the recognition and protection of native
title it follows that the reference in par (c) of s 223(1) to the rights or
interest being recognised by the common law of Australia cannot be
understood as a form of drafting by incorporation, by which some preexisting body of the common law of Australia defining the rights or
interests known as native title is brought into the Act.
How then, does the definition of native title take account of whether
there has been some modification of or adaptation to traditional law and
custom.
Demonstrating some change to, or adaptation of, traditional law or
custom or some interruption of enjoyment or exercise of native title
rights or interests in the period between the Crown asserting
sovereignty and the present will not necessarily be fatal to a native title
claim.
The key question is whether the law and customs can still be seen to be
traditional law and traditional custom. Is that change or adaptation of
such a kind that it can no longer be said that the rights or interests
asserted are possessed under the traditional laws acknowledged and the
traditional customs observed by the relevant peoples when that
expression is understood in the sense earlier identified?
Continuity in acknowledgment and observance of the

normative rules in which the claimed rights and interests are

said to find their foundations before sovereignty is essential
because it is the normative quality of those rules which rendered the
Crowns radical title acquired at sovereignty subject to the rights and
interests then existing and which now are identified as native title.
It is a qualification that must be made in order to recognise that proof of
continuous acknowledgement and observance over the many years
Substantially uninterrupted, land and water prohibit native title of
sea

Gaudron
and Kirby
JJ

What is required by ss 223(1)(a) and (b) of the Act is the

acknowledgment of traditional laws and the observance of traditional
customs. There is nothing in that para or any other part of the definition
of native title or native title rights and interests which that traditional
connection with the land be substantially maintained.

NOTE
De Rose v South Australia (No 2) (2005) 145 FCR 290
FACTS
Group of Y and P people claimed native title over De Rose. The
traditional laws and customs relied on by the claimants were those of
the Western Desert Bloc. One of the claimants, Peter de Rose, was born
under an ironwood tree.

ISSUES
OUTCOM
E
Wilcox,
Sackville
and
Merkel JJ:

The trial judge dismissed the claim of native title on the basis that de
Rose had abandoned their connection with the land.
Whether the abandonment is relevant to constitute a failure to claim
native title.
In view of these findings the effect of those laws and customs is, in
our opinion, plainly to constitute a connection between Peter De Rose
and the claimed area.
The correct inquiry would have required the primary judge to ascertain
the content of the traditional laws and customs, to characterise
the effect of those laws and customs and then to determine
whether the characterisation constituted a connection between
the appellants and the claim area.
The primary Judge seems to have been influenced by his view that Peter
De Rose and the other appellants had not provide satisfactory reasons or
excuses for their failure to discharge their responsibilities as Nguraritja
or to maintain contract with the claim area.
While this may be true, it is not apparent why the appellants reason for

leaving the Station necessarily denies the presence of a continuing

native title connection with the claim area. Movement from traditional
lands in search of regular food or shelter, as the evidence in this case
shows, is not a new phenomenon or one unknown to traditional laws and
customs of the Western Desert Bloc. It may well be possible for
Aboriginal people to maintain a connection with land
notwithstanding that they ceased to reside there because of the
influence of European social and work practices.
Peter De Rose has acknowledged and observed the traditional laws and
customs of the Western Desert Bloc by which a person becomes
Nguraritja for country.

The right to live on their country to collect food,.

The right to erect shelter. (NEED UPDATE)

NOTE

Jango v NT (2006)
o The evidence did not show a consistent pattern of observance and
acknowledgment of laws and customs by members of that society.
Thus the claim failed.
Bennell v WA (2006)
o FCA endorsed the view that a connection may exist regardless of a
physical presence on the land.
Risk v NT [2006]
o Demonstrates that where interruptions affect the presence of a
claimant in an area and such an interruption subsequently affects the
continued observance and enjoyment of traditional laws and customs,
the necessary connection will not exist.
Harrington-Smith on behalf of the Wongatha People v Western Australia (no 9)
[2007] FCA 31 (individuals and small groups claims)
o It may be conceivable that there may be individuals who could
establish that they have individual rights or interests in smaller,
personal my country areas. No individual has applied for a
determination of native title on that basis. The rights and interests
claimed would apparently be different from the group rights and
interests presently claimed.

The extinguishment of native title

In Mabo, Brennan J held that at common law native title could be extinguished
without the consent of Aborigines and without the payment of compensation.
To do so, its exercise must reveal a clear and plain intention to extinguish a
native title.
o 1. By legislative provision expressed to extinguish native title
o 2. By an inconsistent grant of an interest in land over a native title
Fee simple by definition has exclusive possession
o 3. By acquisition by the Crown

Native title cannot be revived once it is extinguished

Grant of a freehold estate

Fejo v Northern Territory (1998) 195 CLR 96
FACTS
The appellants argued that their native title rights survived the grant of
a fee simple estate in 1882 that ultimately re-vested in the Crown. They
contended that even if it had effect on the native title rights, it was a
suspension and not an extinguishment.
ISSUES
Whether grants intention was clear and plain enough to
extinguish a native title
OUTCOM
E
RATIO
Native title is extinguished by a grant in fee simple. And it is
extinguished because the rights that are given by a grant in fee simple
are rights that are inconsistent with the native title holders continuing to
hold any of the rights or interest which make up native title.
Incompatibility
DICTA
Fee simple. Easements and profits a prendre are creatures of the
common law finding their origins in grant or presumed grant. Native title
right is a a right owing its existence to one system of law may be subject
to other rights crated by that same legal system. But very different
considerations arise when there is an intersection between rights
created by statute and rights that owe their origin to a different body of
law and tradition.
NOTE
Native title to the land cannot be revived when the land came to be held
again by the Crown.
Pastoral leases and extinguishment
Wik Peoples v Qld (1996) 187 CLR 1 (IMPORTANT)
FACTS
Appellants claimed native title over land which, some years before, had
been the subject of grants of pastoral leases under the Land Act 1910
(Qld) and the Land Act 1962 (Qld).
ISSUES
1. Whether the pastoral leases conferred exclusive possession upon the
grantees and,
2. If so, whether the leases necessarily extinguished all incidents of
Aboriginal title.
OUTCOM At common law, the grant of a pastoral lease does not necessarily
E
extinguish native title.
RATIO
There was no clear and plain intention on part of the
government to extinguish rights when granting pastoral leases,
which is what is required to extinguish any native title rights.
Gummow The court is called upon to construe statutes enacted at times when the
J
existing state of the law was perceived to be the opposite of that which
it since has been held then to have been.
People in Australia and England were adamant (unyielding) that the

Aboriginal people should not be pushed into the sea in this backdrop,
its unlikely that leases was to exclude Aboriginal people from them.
Hence, it was not about exclusive rights with respect to pastoral leases.
There was no clear and plain intention on part of the government to
extinguish rights when granting pastoral leases, which is what is
required to extinguish any native title rights.
His Honour concluded that none of the grants necessarily extinguished
all incidents of native title.
DICTA
NOTE
Leases conferring rights of exclusive possession
Western Australia v Ward (2002) 191 ALR 1 (HCA)
FACTS
Concerned three separate native title claims.

ISSUES

OUTCOM
E

RATIO
DICTA

This engaged the definition of native tile in s 223 of the NTA.

Criterion for extinguishment of native title which was adopted by the
primary judge and rejected by the Full Court
Pastoral Leases conferring rights of exclusive possession
The lease did not confer the rights to exclusive possession because the
claimants could pass over the land and therefore not necessarily
inconsistent with the continued existence of all native title rights and
interests.
A lease conferring right to exclusive possession would confer rights
which are inconsistent with native title rights, and thus extinguish it.
Adverse dominion test (Lee J in Delgamuukw v British Columbia) HC
concluded the test should not be adopted.

1. There be a clear and plain expression of intention by parliament to

bring about extinguishment
o Problem: The subjective thought process is irrelevant. The
question is whether the rights are inconsistent with the alleged
native title rights and interest.
2. an actual use made of the land by the holder of the tenure which
is permanently inconsistent with the continued existence of
aboriginal title or right and not merely a temporary suspension
o Problem: The meaning of permanent (whether it mean
unlimited in time or a long term) there are obvious difficulties
in identifying a satisfactory criterion.

North Js approach in Delgamuukw Whether the degree of

inconsistency is sufficient enough to extinguish native title HC
concluded the test should not be adopted.

Problem 1: Two rights are inconsistent or they are not.

Problem 2: It is a mistake to assume that what the NTA refers to as
native title rights and interests is necessarily a single set of rights
relating to land that is analogous to fee simple.

NOTE

The common law did not recognise a concept of partial

extinguishment of native title.
HCs inconsistency of incidents test the various elements of
native title can be extinguished piece by piece from the
bundle. It follows that native title can be partially
extinguished.

QUESTIO
NS

Native title land is extinguished to the extent of the

inconsistency between titles.
Lee Js permanent adverse dominion test vs HCs inconsistency of
incidents test: which is more in line with Wik?

Land is susceptible of ownership Pearson, HCA Centenary

Court has concluded that the NTA has transmogrified the common law
meaning of native title, that the starting point and ending point for the
definition of native title. As a result, in Ward and Yorta-Yorta, the entire
discussion of native title is treated as an exercise in statutory interpretation
rather than an articulation of the common law.
Now that the HC has contradicted this position of following the common law
rights, it would seem to me that the most urgent reform to the Australian law
on native title is to amend the definition of native title to make clear that
native title means whatever the common law of Australia says that it means.

Leases containing reservations in favour of indigenous inhabitants

Griffiths v Northern Territory [2006] FCA 903
o Weinberg J held that native title is extinguished to the extent that the
grant of a pastoral lease involves granting rights inconsistent with
native title rights
Jango v Northern Territory (2006) 152 FCR 150
o Argued Ward should be interpreted as such that a pastoral lease
extinguishes only an absolute native title right to control the use of or
access to land, as distinct grom a right to control access by other
Aboriginal persons in accordance with traditional laws and customs
Statute

As is clear from Mabo, a statutory provision that demonstrates a clear and

plain intention to extinguish native title will be effective to bring native title

to an end. Mabo and Wik demonstrate that statutory provisions that regulate
the use of land will not necessarily extinguish native title.

Yanner v Eaton (1999) 166 ALR 258

FACTS
Yanner was charged under the Fauna Protection Act for killing two
crocodiles without a permit. Crocodiles were a protected species under
the Act. The appellant defended his actions on the basis that he had a
native title right to hunt these animals.
ISSUES
Does a statute regulating the use of chattels, and vesting ownership of
those chattels in the Crown, demonstrate a clear and plain intention to
extinguish native title?
OUTCOM Yanner had the right to hunt the crocodiles.
E
RATIO
DICTA
The court held that though the statue declared that the State of
Queensland had property in property fauna, this assertion of
rights did not confer full beneficial ownership of the states
fauna. A statute directed to regulating an activity, even if expressed in
terms that regulation is to proceed through ownership, does not
necessarily demonstrate a clear and plain intention to extinguish native
title.
NOTE
Commonwealth of Australia v Akiba [2012] FCAFC 25
FACTS
The respondents claimed native title in relation to water on the basis
that the right to fish and trade their catch was part of their traditional
law and custom and that the relevant Commonwealth and state
legislation spanning 130 years governing commercial fishing.
ISSUES
Whether the fishing right and commercial right to trade fish did
extinguish native title.
OUTCOM Appeal allowed fishing right has not been extinguished, but fishing for
E
trading purposes is prohibited.
RATIO
The licensing regimes expressed a clear intention to extinguish
the common law right to take fish for commercial purposes
DICTA
The licensing regimes expressed a clear intention to extinguish
the common law right to take fish for commercial purposes. To
accept that an expression of legislative intention to extinguish all
common law rights in a particular field is not apt to extinguish native
title rights recognised by the common law in the same field is to elevate
native title above other rights under common law. That course is not
supported by the authorities
To say that the overall purpose of a piece of legislation is the regulation
of commercial fishing is distinctly not to say that specific provisions
which are, in terms, inconsistent with anyone being at liberty to engage
in commercial fishing save pursuant to a licence granted under the

legislation, not apt to extinguish native title.

The concession acknowledges that the legislative prohibition on fishing
for commercial purposes without a licence is indeed directed at
everyone who might otherwise be engaged in taking fish for commercial
purposes. Once it is accepted that the statutory prohibition include those
who engage in that activity pursuant to native title, it becomes
impossible to contend that this incident of native title is consistent with
the statute.

NOTE

This case has been appealed to the HCA.

Akiba v Commonwealth of Australia [2013] HCA 33

FACTS
Above
ISSUES
Extinguishment of water native title in relation to a licence of
commercial fishing
OUTCOM The native title was not extinguished.
E
RATIO
In Yanner, "[r]egulating particular aspects of the usufructuary
relationship with traditional land does not sever the connection
of the Aboriginal peoples concerned with the land (whether or
not prohibiting the exercise of that relationship altogether
might, or might to some extent)".
DICTA
As the plurality in Yanner held, "saying to a group of Aboriginal peoples,
'You may not hunt or fish without a permit', does not sever their
connection with the land concerned and does not deny the
continued exercise of the rights and interests that Aboriginal
law and custom recognises them as possessing" (emphasis
added). Likewise, telling the native title holders in this case,
"You may not fish for the purpose of sale or trade without a
licence", did not, and does not, sever their connection with the
waters concerned and it did not, and does not, deny the
continued exercise of the rights and interests possessed by them
under the traditional laws acknowledged, and traditional customs
observed, by them. The repeated statutory injunction, "no commercial
fishing without a licence", was not, and is not, inconsistent with the
continued existence of the relevant native title rights and interests.
NOTE
The Native Title Amendment Act 1998 (Cth)

A higher threshold test for the registration of a native title claims.

Any native title rights to exclusively control use or access to the claim area
would be extinguished

Significant restrictions were imposed on the right of Indigenous persons to

negotiate in relation to mining projects.

W2B FUNDAMENTAL CONCEPTS IN LAND LAW

1.1 Possession

If someone has possession, it means that they are entitled to be in control of

land and to use and occupy it. In the past, physical possession of land had a
greater significance than it does today.
Limitation of actions the time limit to bring an action to recover land is 12
years. When someone is in possession of land, adversely or contrary to the
rights of the plaintiff who wants it back.
To show adverse possession:
o 1. Sufficient degree of physical custody and control (factual possession)
o 2. Intention to exercise such custody and control on ones own behalf
and for ones own benefit (intention to possess)

1.2 What are the recognised interests in land? The numerous clauses
principle closed list of rights of using land

Fee simple largest interest that anyone can have in land.

Lease time-limited interest in land. (possession but not ownership)
o As a lessee (tenant), you will be entitled to possession of the land, to
the exclusion of everyone else, including the landlord. While the lease
is running, the landlords interest is referred to as the reversion.
o A lessee can also carve out a shorter interest from their lease and
grant it to another. This is called sublease.
Mortgage a small interest in land that the owner of a fee simple gives to
another in return for money. The owner of the land is the mortgagor and the
person who gives the money is the mortgagee
Easement a right to do something on someone elses land. Outside statute,
easements always affect two piece of land the land benefited (the dominant
tenement) and the land burdened (the servient tenement)
Restrictive (or freehold) covenants a right to stop someone doing
something on their land. Like easements, restrictive covenants affect more
than one piece of land; they affect land that is benefited
Profit a prendre the right to gather naturally occurring materials from
anothers land
Lien or charge this is a little interest in land equivalent to an amount of
money owed to the owner of the lien. It is like a mortgage, but does not
include the right to sell the land. However, if the land is sold for any reason,
the owner of the lien has a right to be paid directly out of the proceeds of sale

1.3 Contract vs Property

Property rights are enforceable against the world (in rem)

Contracts are only enforceable between the parties to the contract (privity of
contract). The disadvantage of property is that only certain rights can be
recognised as property.

1.4 Fixtures the boundary between chattels and land

A chattel ending up part of land. When they are assembled in a way that is
intended to be permanently attached to the land, thus becoming part of it.
To avoid confusion, the standard contract of sale for residual land in NSW
allows vendors to tick boxes to make it clear whether these items are
included in the sale of the land.

1.5 How does Contracts connect with Land law?

Writing s 54 Conveyancing Act 1919 (NSW) special rules apply to contracts

for land contracts for the sale of land must be in writing.
o Either the agreement to be in writing or some memorandum or
note thereof
S 54A applies to all contracts that relate to land
o You will have noticed that s 54A does not mention fee simple interests.
It applies to all agreements in relation to land. So
Lease
Agrees to grant you an easement
A lender a mortgage
Contracts do not transfer legal title
o It is commonly misunderstand is that contracts do not transfer the legal
title to land
o A contract is an agreement to do something at some point in
the future.
Specific performance
o A court with equitable jurisdiction can grant specific performance
through judicial discretion.

1.6 How does Equity and Trusts connect with Land Law?

The clients legal rights or remedies are inadequate. The legal remedy of
monetary damages is inadequate because land is unique and so specific
performance can be sought in the court as a equitable remedy.
Equitable estoppel can be sought even if there is no legal title, nor did they
even have legally enforceable contract. Equity is prepared to step in when
there is a common intention or a detrimental reliance.
Sometimes a client is a beneficiary and can only claim under equity.
A legally complete contract for the sale of land + in writing = the purchaser
getting an equitable interest in land.
o The purchaser does NOT get the equitable interest because the vendor
intends to give the purchaser the equitable interest, but rather because
equity regards as done what ought to be done.
S 54A and s 23(1)(c) of CA 1919 (NSW)

o
o

S 23(1)(c) is for assignment of equitable interest, whereas s 54A is for

sale of land
S 54A requires writing to show the actual sale of land, whereas s 23(1)
(c) requires writing to show that the equitable interest has been
transferred from one person to another.

W3A TORREN TITLE

1.1 Torren Title

The Torrens system is the system of land registration that is used in all
Australian states regulated by the Real Property Act 1900 (NSW).
The Torren system replaced Old System Title, which had a number of
problems.
There are two basic principles that underpin Torren title:
o 1. all parcel of land (lots) have had their boundaries defined by a
professional, accurate survey
o 2. There is a publicly accessible government register that definitively
records who owns that parcel of land and who else may have rights to
it.

Old System title

Acquisition of sovereignty over Australia by the British, colonial and then

statement government made fee simple or leasehold land grants to citizens.
Then, the citizens were free to deal with them as they pleased.
This required a serious, formal process for its ownership to change from one
person to another and was publicly visible, preventing secret transactions in
relation to land.
English and then NSW land law stipulated that a legal interest in land could
only be transferred during someones lifetime by the execution of a formal
document called a deed. In keeping with the seriousness of its function, a
deed had to be signed (by the parties), sealed and delivered.
o A deed is not a contract. In Old System title, it was the execution of a
deed that conveyed the legal title, carrying out the vendors
contractual promise.
Issues with old system title Certainty issues
o Forgery
o Boundaries
o Equitable interests

The chain of title

In the Old System Title, it was required by the vendor to prove their
ownership by producing a series of documents (deeds) from previous
purchasers of the land.
Example 1:

Deed 1-3 shows that V had a valid legal title and Deed 4 conveyed that
legal title from V to P.

Weak link in the chain

A deed could only transfer a legal title if the person executing it actually had
legal title. This meant that if there is a weak link in the chain of deeds the
subsequent owners may have acquired nothing.
nemo dat quod non habet rule you cannot give what you dont
have.
o It created a system of derivative title, that is, Ps title derived from V
is no better than V or Cs.
Example 2:

One protection for subsequent purchasers was the limitation period.

Competing or incompatible interest in land priority rules

(i)

Earlier legal interest vs later legal interests

Example 3

By applying the nemo dat rule: Ps title transferred from Vs title transferred
from Cs title = a legal fee simple burdened by Xs 25 year lease.
o ABOLISHED
(ii)

In contrast to 3, C did not execute a deed of lease in favour of X, but only

contractually promised to grant a lease to X, this would have created an
equitable lease in X.
Bona fide purchaser rule
o P would have priority if he or she was a bona fide purchaser for value
without notice of the earlier equitable interest.

In this example. P will have notice of the lease since X is in possession. It is

assumed that any remotely sensible purchaser will physically inspect land
and thus see that someone other than the vendor is in possession and inquire
about their rights.
o Result: earlier equitable interest has priority, the bona fide purchaser
rule did not apply.
o ABOLISHED
(iii)

Earlier legal interest vs later equitable interest

The legal owner would only lose if they have behaved recklessly with the title
deeds.
(iv)

Earlier equitable interests vs later legal interest

earlier equitable interest vs later equitable interest

the earlier prevailed unless there was postponing conduct

o GO TO 7A

Conclusion

Bona fide purchase rule and nemo dat rule no longer applies to land in NSW.
The deeds registration system was introduced in early 19 th century to make
conveyancing more secure.

1.2 Deposited plans

There are two certainties that are essential in relation to ownership of land
o 1. WHAT is the land we are dealing with; and
o 2. WHO owns it and has rights to it
1. What is the land
o Plan of survey defines its boundaries. The process of drawing surveys
involves practical, legal knowledge and professional judgment to
determine where to draw the boundaries.
Individual Torrens title are included on a deposited plan, which is essentially a
map of an area defining the boundaries of multiple parcels of land. New
deposited plans will be drawn up when
o 1. new Crown grants are made to citizens; OR
o 2. Old System land is converted; OR
o 3. An existing Torrens title is subdivided into multiple new Torren titles.
The plan will be given a number (e.g. DP76543), as will each lot on the plan
(e.g. lot 1, 2, 3, etc.). The number 31/76543 is known as the folio identifier.
In addition to ordinary plans of subdivision there are also strata and
community plans of subdivision. Strata plans are needed to subdivide the
airspace in high rise buildings into individual Torrens lots (apartments, offices,
etc.) and common property (halls, lifts, foyers, etc.)
Registered plans of subdivision are extremely important in strata and
community title because they define the boundaries of privately owned lot
property and common property. Individual owners are responsible for their
own lots, and the body corporate (all owners) is responsible for common
property.

1.3 What is the Torrens register?

The Old system title was rotten from the ground up and an entirely new
system was needed.
The page was called a folio and it recorded all information about ownership
of that particular parcel of land. It recorded the current owner of the fee
simple lease if it was a leasehold grant from the Crown, as well as any
encumbrances that affected the land.
The folio is referred to as the certificate of title (CT), and it completely
replaces the old deeds system as a way of demonstrating ownership of land.
For every parcel of land there are two CTs: the page in register itself (the
original CT) and a single copy, called the duplicate CT, which is given to the
current owner of the land.
What is effect of registration?
o It is recordation on the registration that transfers or creates
legal title to land.
o The Torrens system is not a system of derivative title, that is,
purchasers do not derive their title from their vendor by the execution
of deeds.
A typical Torrens land sale will start with signing and exchange of identical
copies of a written contract (s 54A Conveyancing Act 1919). This is a promise
by the vendor to transfer legal title and a promise by the purchaser to pay the
full purchase price, the contract will be completed; i.e. the parties will carry

out their promises. This is referred to as settlement of the sale. The

purchaser and vendor will meet and the purchaser will hand over the cheques
and the will hand over a signed transfer form and the duplicate certificate of
title.
The purchaser (transferee) will then take the signed transfer and certificate of
title and lodge them for registration at LPI.
Registration creates or transfers legal title because s 42 Real Property Act
1900 (NSW) replaced s 23B Conveyancing Act 1919 (NSW).

What constitutes the register?

Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73; ALR
551
FACTS
S 42(1)(b) of the Real Property Act 1900 (NSW) the registered
proprietors title was subject to an interest notified on the CT. The CT
acquired by Bursill mentioned that there is an existing easement created
by previous owner.
The neighbouring lands CT of Berger, stated that there is are more
rights than a mere easement in Bursills land right to build along the
easement stratal interest (interest of airspace).

ISSUES

OUTCOM
E
RATIO

WINDEYE
RJ

DISSENT

Berger argued that the easement thus gave him rights to the exclusive
use of that part of the land
Whether the rights (in respect to the building) created by the
transfer document were sufficiently notified on the register to
bind Bursill.

Concept of constructive notice does apply to references on the

registry - no prudent person seeing such a reference would
neglect to search the transfer document and ascertain the
rights it transferred.
But surely no prudent person, seeing the reference to a right of way,
would neglect to ascertain what exactly was the nature of the right of
way, the land subject to it, the persons who could avail themselves of it,
for what purpose in what matter and at what times. The need to make
such a search seems the more obvious if the intending purchaser had
become aware that there was a building over part of the land which was
in the occupation of his neighbour Whether he was so or not the
reference on the CT was I think constructive notice of what it
provided, that is the land was subject not only to a right of way
but also to an interest of the adjoining landowner in the building
above the way.
I consider that the owner of the land that is now Bergers has, and has
had, in law a right to the exclusive use and occupation of this building.
Menzies:

Constructive notice does not apply to such references - purchasers

cannot be expected to make reasonable searches.
All interests must be described on the registry itself in order to be
binding, and references to other documents are not sufficient.

NOTE

Thus, the creation of rights here was insufficient and not binding on the
Defendant, who, when he registered, became indefeasible to the
Plaintiff's claim.
You cannot just rely on the legal document to ascertain all the rights of a
title. A prudent person is presumed to check other documents
reasonably depending on the circumstances.
S 164 restriction on constructive notice
A purchaser shall not be prejudicially affected by notice of any
instrument, fact, or thing, unless:
(a) it is within the purchasers own knowledge
(b) as ought reasonably to have been made by the solicitor or other
agent.

The principle of indefeasibility

Torrens saw the inadequacies of the deeds registration system flowed from
the dependent nature of old system titles; that is, from the principle that one
weak link in the chain of title was sufficient to destroy or impair the title of the
last person in the chain.
The scheme he proposed was based on the idea that the state should
authoritatively establish title by setting up a register.
In short, Torrens attempted to make titles to land independent by making
the register conclusive and by barring retrospective investigation of title
The conclusiveness of the register is, in general, what is meant by the
principle of indefeasibility.
The objects of Torren system
o 1. persons who propose to deal with land can discover all the facts
relative to the title.
o 2. Ensure that a person dealing with land which is subject to the
system is not adversely affected by any infirmities in his vendors title
which do not appear on the register
o 3. provide a guarantee by the State that the picture presented by the
register book is true and complete.
The Torrens system is a variant of the system known internationally as a
system of registration of title.

W3B

The indefeasibility provisions

S 40 of the NSW Act(s 41of Vic. Act) grant or certificate of title registered
under this Act shall be conclusive evidence that the person named in such
grant or certificate as the proprietor of or having any estate or interest in
the land. (???)
The NSW legislation most clearly emphasises that the conclusive evidence
provision is not a major source of indefeasibility, but is designed to assist in
relation to the proof of title.
Doctrine 1: The indefeasibility provision provides as follow
o (1) held to be paramount except in the case of fraud Crown
grant or certificate of title but absolutely free from all other
incumbrances whatsoever, except
(a)[ interests under a prior registered Crown grant or certificate
of title];
(b) [land included in the Crown grant or certificate of title by
wrong description],
o (2) shall be subject to [a number of matters to be considered]
notwithstanding the same respectively are not specially notified as
incumbrances on such grant certificate or instrument
Doctrine 2: The paramount provision is accompanied by the so-called
notice provision to prevent certain equitable principles applying to
registered land and to narrow accordingly the definition of fraud
Doctrine 3: the protection of purchasers provision protection
extends to a purchaser bona fide by providing that nothing in the Act is to be
interpreted so as to deprive a bona fide purchaser for valuable consideration
open to an action for recovery of damages or to an action of ejectment (s
45(2) RPA 1900); or to deprivation of his or her estate or interest (s 42(1) RPA
1900)

Real Property Act Indefeasibility provision

s 40 Manual folio to be considered evidence of title, and that the
land has been duly though under the Act
s 42 Estate of registered proprietor paramount
(1) Notwithstanding the existence in any other person be held to be
paramount or to have priority, the registered proprietor 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:
o (a) estate or interest recorded in a prior folio of the Register by
reason of which another proprietor claims the same land
o (b) in the case of the omission or misdescription of any profit
prendre created in or existing upon any land
(3)This section prevails unless the inconsistent provision expressly
provides that it is to have effect despite anything contained in this section.

Note
Gives a registered proprietor an "indefeasible" title to land.
It is important to remember that s42 RPA refers to the registered proprietor
of "any estate or interest in land recorded in a folio of the Register". Thus,
a mortgage, easement or lease etc. can be indefeasible, not just fee simple
interests.
S 42 is applied in Frazer v Walker
Legislation could in fact be worded so as to evince a strong intention that
the indefeasibility provisions in the RPA would be overridden (note s42(3))
Real Property Act Notice Provisions
s 43 Purchaser from registered proprietor not to be affected by notice
(1) Except in the case of fraud no person contracting or dealing with or
taking or proposing to take a transfer from the registered proprietor of any
registered estate or interest shall be required or in any manner concerned
to inquire or ascertain the circumstances in or the consideration for which
such registered owner or any previous registered owner of the estate or
interest in question is or was registered, or to see to the application of the
purchase money or any part thereof, or shall be affected by notice direct or
constructive of any trust or unregistered interest, any rule of law or equity
to the contrary notwithstanding; and the knowledge that any such trust or
unregistered interest is in existence shall not of itself be imputed as fraud.
s 43A Protection as to notice of person contracting or dealing in
respect of land under this Act before registration
NOTES

Under s 42, P is subject to such other estates and interests and such entries.
When P registered, Xs lease was already on the register and thus Ps title was
subject to it. P has to let X stay for the full 25 years.

In the case where the lease is unregistered, P will not be bound for the
equitable lease even though he would have constructive notice. This is
because s 42 says that if P is the registered proprietor of an estate or interest
in land, he is only subject those interests that are on the register and; s 43
says that it makes no difference if P knew about an unregistered interest.
Deferred vs immediate indefeasibility
E.g. A bona fide purchaser (or mortgagee) (P1) registers an instrument to
which the signature of the registered proprietor (O) has been forged by a rogue
(F). F forges Os signature on a mortgage or transfer, pockets the loan advance
or proceeds of sale, and absconds with the money. P1 registers the forged
instrument, ignorant of the forgery. Both O and P1 are innocent parties.
P1 then passes the subsequent purchaser (P2).
Immediate indefeasibility
Deferred indefeasibility
Good title is conferred on P1
Title of the purchaser (P1) who
immediately on registered of the
registers a forged instrument is
forged instrument. Thus, P1s
defeasible.
registered title cannot be set aside,
even though it was procured by
If, before P1s title is set aside, P1s
registration of a forged instrument,
passing of title to P2 (bona fide)
provided of course that P1 has acted
makes P2s title indefeasible.
without fraud.
Dynamic security interest of the
Static security interest of existing
purchaser is protected
owners
RPA registered-generals role

S 118 Registered proprietor protected except in certain cases (i.e. fraud)

S 126 Registrar-General may intervene in certain proceedings (i.e. if
compensation is to be payable)
S 135 Registrar-General may settle claims (note establishment of Torrens
Assurance Fund - s 134)
S 138A Registrar-General may take step to rectify Register in case of fraud

(and note s 138 Supreme Court can direct)

Demogues Dynamic and Static Security

Static security
o protects the interests of existing owners in a third part property
dispute with purchasers
o Owners should not be deprived of their property by the act of
another without their consent.
o A rule that awards the land to O promotes static security.
Dynamic security
o Incentive to acquire assets for productive purposes. It protects the
reasonable expectations of purchasers that they will acquire a title
free of unknown prior claims and defects.
o This promotes dynamic security, by upholding the reasonable
expectations of purchasers that they will gain an indefeasible title if
they register an instrument in good faith. Owners of land are now at
risk of losing their title to land as a result of an invalid instrument.
It has long been said that the objects of the system are twofold: security of
title and ease of transaction.
o (1) Facilitate the transfer of property rights, or to make
conveyancing quicker, cheaper and easier, but these are merely the
consequences of enhancing security of transfer and acquisition.
o (2) Title registration can therefore be reformulated as follows: to
reduce transaction costs, and thereby to make conveyancing
quicker. cheaper and easier, by providing dynamic security
The dilemma for the law is that it is sometimes impossible to provide both
forms of security when the rights of a prior owner conflict with these of a
good faith purchaser
Where a purchaser in good faith registers an unauthorised disposition, the law
must still provide an adjudication rule to determine who gets the land.

The adaptation of immediate indefeasibility

Frazer v Walker [1967] 1 AC 569; [1967] 1 All ER 649 PC (from NZ) (AUTHORITY)
FACTS
The appellant, Frazer (O) and his wife (W), were in 1961 the
registered proprietors under the land Transfer Act 1952 of a farm
property subject to a mortgage to one Bailey on which 1732 was owing.
In 1961, W, professing to act on behalf of herself and the appellant,
arranged to borrow 3000 from the 2nd respondents (P1).

ISSUES
OUTCOME

The mortgage document and the CT were forwarded by the solicitors to

the solicitors of the 2nd respondent. As no payment of principal or
interest was made, the 2nd respondents exercised their power of sale,
the property was sold by auction to the 1st respondent (P2).
The adoption of indefeasibility immediate or delayed
Immediate indefeasibility is adopted 2nd respondent had lawful title.

RATIO

Following Assets Co ltd v Mere Roihi and Boyd Mayor, their

lordships have accepted the general principle that registration
under the Land Transfer Act 1952 confers upon a registered
proprietor a title to the interest in respect of which he is
registered which is (under ss 63 and 63) immune from adverse
claims, other than those specifically excepted.
That is, a registered proprietor who registered a void
instrument also gained indefeasibility immediate
indefeasibility.
WILBERFOR Reference to provisions of the Land Transfer Act 1952:
CE
s 62 secures that a registered proprietor, and consequently anyone
who deals with him, shall hold his estate or interest absolutely free from
incumbrances, with three specified exceptions
s 63 protects him against any action for possession or recovery of land,
with five specified exceptions.

NOTE

It is these sections which together, with those next referred to, confer
upon the registered proprietor what has come to be called
indefeasibility of title.
Before this case, static indefeasibility was applied, but this was
changed.
NSW parliament gave legislative recognition to the decision in
Frazer by amendment to NSW, s 135:
any purchaser or mortgagee bona fide for valuable consideration
of land under the provisions of this Act on the plea that his vendor
or mortgagor may have been registered as proprietor, or procured
the registration of the transfer to such purchaser or mortgagee
through fraud or error, or under any void or voidable instrument,
or may have derived from or through a person registered as
proprietor through fraud or error, or under any void or voidable
instrument.

The policy debate over deferred and immediate indefeasibility

Australia, NZ, PNG, Singapore, and the Canadian province of Saskatchewan

are among the minority of registered title systems which use the rule of
immediate indefeasibility.

Breskvar v Wall (1971) 126 CLR 376; [1972] ALR 205 (AUTHORITY)
FACTS
Breskvars, the appellants, were the registered proprietors of certain land
in Qld. They executed a memorandum of transfer for an expressed
consideration of $1200, the name of the transferee being omitted.

S 53(5) of the Stamp Act 1894 (Qld) provided that no transfer was to be
valid either at law or in equity unless the name of the transferee
(was) written at the time of execution.
1. Trial judge found that the transfer was executed to afford security for
a loan of $1200 provided by Petrie (2nd respondent), who took the
possession of transfer and duplicate CT from the Breskvars.
2. 1968 Petrie inserted the name of his grandson, Wall.
3. Oct 1968, Wall was selling the land to Alban (the 3 rd respondent), a
good faith purchaser without notice. The trial judge found that Petrie and
Wall were acting fraudulently, in an attempt to cheat the Breskvars out
of their land.

ISSUES
OUTCOM
E
RATIO

The Breskvars (the appellants) sought a declaration that the transfer

was void by reason of s 53(5) of the Stamp Act, an order that the entry
of Walls transfer in the register be cancelled, and damages.
The application of the doctrine of indefeasibility and its
interaction with fraud, conclusiveness of CT

There is immediate indefeasibility of title by the registration of the

proprietor named in the register. The stated exceptions to the prohibition
on actions for recovery of land against a registered proprietor do not
mean that the indefeasibility is not effective.
The Torrens system is a system of title BY registration not OF registration
of title.

Barwick
CJ

There is thus a competition between the respective interests of

the appellants and of the 3rd respondent to be resolved on
equitable principles priority.
S 44 complements these provisions by providing that the registered
proprietor hold the land absolutely free from all unregistered interests
except in the case of fraud
There is immediate indefeasibility of title by the registration of the
proprietor named in the register. The stated exceptions to the prohibition
on actions for recovery of land against a registered proprietor do not
mean that the indefeasibility is not effective.
The purchase by the third respondent bona fide for value and without
notice intervened before that equitable right of the appellants was
fulfilled. The 2rd respondent thus acquired an equitable interest in the
land.
Here the appellants armed the 2nd respondent with the means of placing
himself or his nominee on the register. They executed a memorandum of

transfer, without inserting therein the name of a purchaser. It can

properly be said that the case becomes one of an agent exceeding the
limits of his authority but acting within its apparent indicia The
appellants therefore lose the priority to which the prior creation of their
interest in the land would otherwise have entitled them. The conduct
for the appellant created the opportunity for the fraudulent action and
equitable interest. Therefore the appellant lose their right if a protective
caveat is not lodged.
The right of the appellants to recover their land from the 1 st respondent
should be postponed to the equitable interest therein of the 3 rd
respondent as a purchaser bona fide for value and without notice.

Menzies J

NOTE

There is thus a competition between the respective interests of

the appellants and of the 3rd respondent to be resolved on
equitable principles priority.
It seems to me to follow that, where there is fraud or one of the other
statutory exceptions to indefeasibility, a transferee does, by registration
of a void transfer, obtain a defeasible title.
Danger of forged mortgage.
The case on immediate indefeasibility the case was established that
the appellant would have been defeated with deferred indefeasibility.
The court then discussed the area of equity and priority.
The Court held that fraud within the meaning of the Act required actual
fraud or moral turpitude (Assets Co v Mere Roihi (1905) AC, Bahr v
Nicolay (1988) HCA)

Instruments void for defects other than forgery

Effect of registration in rendering void instruments indefeasible is not

confined to forgeries: Story v Advance Australia Bank (1993) 31 NSWLR 722
at 736.
Voidable instrument (alternation of mortgage) where an unauthorised
alteration by the mortgagors solicitor did not affect the rights of the
mortgagee
o Morton v Black (1986) 4 BPR 9164
Mortgage wrongly executed by a person without the power under power of
attorney to do so
o Spina v Conran Associates Pty Ltd (2008) NSW ConvR
mortgage given by a minor intended to secure moneys owing under a loan
contract that was void by force of statute was held to be indefeasible
Contrast this with common law for example in the case of altering a deed
materially after execution: Pigots Case (1614)
o Conveyancing Act 1919 s 184 Abolition of rule in Pigots case. (2):
a material alternation to a deed, does not, by itself, invalidate the

deed or render it voidable. Or otherwise affect any obligation under

the deed.
But the CL position is not, at least in regards to such a class of instruments
which would have been invalidated by the rule (a material alteration) that
registration cures the defect in the absence of fraud: Karacominakis v Big
Country

What does not attract indefeasibility?

Personal covenant:
o Mercantile Credits v Shell Co of Australia
Securing enforcement of the performance of the mortgagor of every covenant
of a mortgage is not an effect of infeasibility provisions
o Carazo v Total Australia
Particularly covenants in a mortgage which are illegal and void will not be
improved by registration
o Duncan v McDonalds (NZLR)
Has been said that registration only validates invalid provisions which delimit
or qualify the estates or interest or are otherwise necessary to assure that
estate or interest to the registered proprietor: PT v Maradona
o Where a mortgage specifies the amount of the debit registration
confers indefeasibility on that amount because qualifying the debt
delimits the interest registered:
Perpetual Trustees Victoria v English
Also an encumbrance the covenants of which may be otherwise void for
uncertainty will not be cured by registration:
o Handarf Golf Club v John Nitscheke Nominees
What attract indefeasibility? Example of leases:
Consents, approvals or anything else given by a previous owner pursuant to a
registered lease will bind the assignee: Salon Today v MNIR a subsequent
lessor was bound by the previous owners consent for the lessee to display
signage pursuant to a clause in the registered lease
o Whats in the lease is whats in the lease, whats in the lease thats
registered is what you will get notice of as well
S 42(1) RPA
Indefeasibility of the terms in a registered instrument
Mercantile Credits Ltd v Shell Co of Australia (1976) 136 CLR 326
FACTS
1969 Registration of the lease: The Respondent was the lessee of a
property. Under the lease, he had a covenant on renewal.
1974 Lease renewed.
After the registration of the lease, the lessor executed a mortgage with
the Appellant, and then defaulted on payment. The Appellant tried to
exercise his power of sale.

The Respondent claimed that there is no power of sale because of the

registered lease which contained the covenant of renewal (as the sale
would abrogate this covenant).

ISSUES

OUTCOM
E
RATIO

DICTA

NOTE

Note that there is nothing which allows the separate registration of a

covenant - only the lease (of which the covenant is a term) can be
registered.
Doctrine of Indefeasibility Does the covenant for renewal,
which was not separately registered but merely incorporated in
the registered lease, take priority over the mortgage?
Appeal dismissed. There appellant had no power of sale because of the
indefeasibility of the covenant and the lease.
Covenant of renew is concerning the tenancy and its terms,
therefore it is so intimately connected with the interest created
by the lease that it should also be protected by indefeasibility
The right of renewal is so intimately connected with the term granted
to the lessee, which it qualifies and defines, that it should be regarded
as part of the estate or interest which the lessee obtains under the
lease, and in registration is entitled to the same priority as the term
itself.
The lease which was registered before the mortgage, takes priority over
the mortgage and is indefeasible. The question is whether this priority
also extends to the incorporate term the covenant.
If the covenant touches upon the estate or interest (i.e., it is a part of
the interest), the priority will extend to the covenant.
Statutes strongly support this view. Such options are often quite
valuable unjust and inconvenient options in a lease are
indefeasible.
Stephen J: what will be registered, and protected by that registration, is
a right conferred by covenant which touches and concerns the
land and runs with the land; it is an incident of the lease creating an
interest in the land and forming a part of the lessees interest in that
land.
Barwick: a question which on occasions can arise, namely, whether,
upon its proper construction the covenant is merely personal to the
covenantee or runs with the land. Here, the right of renewal is not
personal and does run with the land
When you register the lease check the options (covenants)

What is indefeasible in a void mortgage?

the indefeasibility of a forged mortgage on registration does NOT extend to a

personal right created by a mortgage covenant: Mercantile Credits v Shell Co
of Australia (1976) 136 CLR 326
o mortgagors obligations under a deed of guarantee
full indefeasibility approach the indefeasibility of a registered mortgage was
so connected with the mortgagees property interest that it would attract the
benefit of indefeasibility
o PT v Maradona (1992) 25 NSWLR 643 at 681.
No indefeasibility approach while the mortgagees security interest is
indefeasible the covenant to pay is not.
o Grgic v ANZ Banking Group (1994) 33 NSWLR 202 at 224
Limited indefeasibility approach the personal covenant to pau is made
enforceable by registration only to the extent necessary to make the
mortgagees security interest effective (NZ approach)

W4A EXCEPTIONS TO INDEFEASIBILITY

Exceptions to indefeasibility

1. express Torrens legislative exceptions

2. the Registrars power to correct the register in certain
circumstances
3. specific exceptions imposed by other statutes
o the compulsory acquisition of land by public authorities
o dealing with encroachment of buildings
4. overriding statutes
o on general principles of statutory interpretation affect the Torrens
legislation by subjecting the registered proprietor to interests not noted
on the register
5. exceptions permitted by the courts (common law and equitable
principles)
o In personam
The is a blur line between the fraud exception and the in personam exception

(A) VOLUNTEERS (NOT EXCEPTION IN NSW)

A volunteer is one who does not give valuable consideration for his or her
title. Under the general law a person who acquired a legal estate as a
volunteer was subject to the equities which affected the donor or predecessor
in title whether or not the donee had notice of those equities: Re Nisbet and
Potts Contract [1905] 1 Ch 391
The effect of denying indefeasibility to a volunteer is that the volunteer
obtains a registered title that is as good as, but no better than that of the
transferor this is an exception in some states
o if the transferors registered title was defeasible for fraud, the
volunteer too would take only a defeasible title
CURRENT POSITION: HC arguably dealt with this issue through some obiter
dicta in Farrah Construction v Say-Dee, which indicated that volunteers do

obtain indefeasibility, and no distinction is made between volunteers and

purchasers, unless a fraud is found.
Bogdanovic v Koteff (1988) 12 NSWLR 472
FACTS
The appellant (B) and her late husband were friendly with S Koteff. The
appellants husband died in 1977. B continued to live in SKs house, as
did he. SK did in 1982. By his will he made NK his sole beneficiary.

ISSUES
OUTCOM
E
RATIO

DICTA

NOTE

NK began proceedings by which he sought possession of the land from

the appellant. She defended the proceedings, claiming that the property
was held on constructive trust for her on terms that she was entitled to
reside there for the rest of her life, alternatively that she and NK were
each beneficially entitled as tenants in common in the property in
proportions to be determined by the court and alternatively again that
she had a licence at law or in equity to remain living in the property until
she died
Whether B had a life interest or the son, NK, should be the sole
beneficiary of the house.
Bs claim was dismissed. Respondent wins.
The volunteer has derivative title from donor. SK had
indefeasible title, therefore NK should also have indefeasible
title.
The case was decided on the basis of the leading authority Frazer v
Walker and Breskvar v Wall
B v W: I say that only to emphasise that the doctrine of an indefeasible
title arising by registration was seen as the very essence of the Torrens
system from its beginning. In the present case, the decision of the PC in
Frazer v Walker recognises that the registered proprietor has the legal
property in the land, subject only to equities and such interests as the
Act expressly preserves.
NSW followed Frazer and Breskvar and reached the conclusion that
volunteers do also obtain indefeasibility. However, the opposite decision
was made in Victoria.
Different states have different application on the doctrine of
indefeasibility.

Rasmussen v Rasmussen (1995) 1 VR 613

FACTS
The plaintiff argued that some of the defendant property (which he
received as a volunteer) was held on constructive trust for him (the
plaintiff). The court accepted that a constructive trust existed.
ISSUES
Whether volunteers are protected by the doctrine of
indefeasibility
OUTCO
Applicant wins.
ME
RATIO
The volunteers title is defeasible.

DICTA

NOTE

Bogdanovic is rejected, and King is still good law. In Vic, indefeasibility

only applies to purchasers for value, and volunteers are not protected.
Therefore the defendant, as a volunteer, was not protected from the prior
claim of the plaintiff.
Overriding principle of fairness. The facts of Bogdanovic was seen to be
unfair by the NZ court.

(B) FRAUD
Loke Yew v Port Swettenham Rubber (1913) AC 491 PC
FACTS
Eusope was the owner of a lot of land. The plaintiff (LY) acquired some
land off Eusope, but did not complete registration. Eusope entered a
contract to sell the rest of the land to the defendant, who agreed that
they were only buying the land which did not belong to the plaintiff.
Agent assured the validity of the registration when it was not completed.
Despite their understanding that they are not buying the unregistered
land belonging to the plaintiff, the defendant registered all of the land in
their name and thus became the registered proprietors of the plaintiffs
land as well.

ISSUES
OUTCOM
E
RATIO

DICTA

LK lodged an action in ejectment for their indefeasible title from paying

a valuable consideration and
Whether fraud is an exception to the principle of indefeasibility

So long as the right of third parties are not implicated a wrong-doer

cannot shelter himself under the registration as against a man who has
suffered the wrong
Fraud is clearly an exception.
A clearly stated in the legislation, fraud is an exception to indefeasibility.
A registered proprietor who has acted fraudulently will not enjoy the
protection given by the legislation (indefeasibility).
As a principle of general application that where the rights of third parties
do not intervene no person can better his position by doing that which it
is not honest to do, and in as much as the registration of this absolute
transfer of the whole dof the original grants was not an honest act under
the circumstances
A type of fraud: where a party promises that an unregistered interest will
be preserved (in order to induce another party to agree to a transaction)
and then goes back on that promise, that party will be guilty of fraud.

NOTE
Fraud Must Be Operative

It is important to note that an exception will only be made for fraud if the
fraud is 'operative' - in other words, if the fraud actually caused a person to
act in a way that is detrimental to himself. If the fraud resulted in no harm, it
won't affect indefeasibility.

Rectification
s 138 RPA (NSW) Court may direct cancellation of folios and other
actions related to folio
(3) A court may order the Registrar-General to do one or more of the
following:
o (a) cancel or amend a folio of the Register,
o (b) cancel, amend or make a recording in a folio of the Register,
o (c) create a new folio of the Register,
o (c1) create a new edition of a computer folio,
o (d) issue a new certificate of title.

Fraud distinguished from carelessness

Assets Co Ltd v Mere Roihi [1905] AC 176 at 2010 (AUTHORITY, important

case): A person who fails to discover the fraud of another because of lack of
inquiries is not guilty of fraud.
o Fraud that will impeach the registered title must be brought home to
the person whose registered title is impeached or to his
agents.
o However, if you had suspicion (!!!!!!! SEE NOTE ON MOODLE)
o This means that the fraud is actually committed by the person whose
title is impeached or his agent: Schultz v Corwill Properties (1969)
Fraud must be operative in the sense that it operated on the mind of the
person said to be defrauded and to have induced detrimental action by that
person: Bank of SA v Ferguson
Negligence or want of due care in making inquiries or wilful blindness or
indifference to the truth (on its own) is not sufficient to find statutory fraud:
Pyramid Building Society v Scorpion Hotels Pty Ltd; Macquarie Bank v SixtyFourth Throne

Fraud and agency

Schultz v Corwill Properties [1969]

o 1. Agent himself has acted fraudulently
If the agent was acting within the scope of his actual or
apparent authority (given to him by the principal) then the
principal will be guilty of fraud.
o 2. Agent have knowledge that a fraud has been committed by
another

If the agent has actual (as opposed to constructive) knowledge

of fraud, then the agent will be presumed to have communicated
to the principal all information that he gained in the course of
carrying out the transaction

Statutory provisions to impose a duty on mortgagees

s 56C (1): a mortgagee must before lodging a mortgage for registration take
reasonable steps to ensure that the person who, or on whose behalf, the
mortgage was executed is or will become the registered proprietor.
s 56C (2): A mortgagee is considered to have taken reasonable steps if the
mortgagee has taken the steps prescribed by the regulations
s 56C (6): Cancellation if RG is of the opinion:
o (a) that the execution involved fraud against the registered proprietor,
and
o (b) that the mortgagee:
(i) has failed to comply with subsection (1), OR
(ii) had actual or constructive notice that the mortgagor was not
the same or was about to become, the registered proprietor of
the land that is security for the payment of the debt to which the
mortgage relates.
SCOPE: actual authority??? (check moodle!!)
Assuming the principal is not aware of a fraud but the agent is that is not
enough (- there must be

False attestation of instruments

Presumption? (Moodle!)
o The presumption is rebuttable an excceotion in the case of the
agent themselves being the person undertaking the fraudulent
conduct, or being involved in a fraudulent scheme.
Grgic v ANZ Banking Group (1994) 33 NSWLR 202
o bank officer held not to be fraudulent because the impersonator had
the CT and other documents relating to the land and had been
introduced to the bank officer in the name of the registered proprietor
by an established customer.
Officer believed the person
Westpac Banking Corporation v Sansom (1995) NSW
o Fraud found Officer attested that husband had signed when it was the
wife who signed.

Russo v Bendigo Bank (1993) 3 VR 376

FACTS
Rs son, H, forged her signature on a mortgage on her home to secure a
loan. G, working for the mortgagees solicitor Reichman, falsely attested
Rs signature on the mortgage. Reichman instructed G to never attest a
persons signature unless she saw the person sign.
G was unaware of the forgery. The bank obtained an order for possession
of the property and R appealed that the mortgage was defeasible for

ISSUES

OUTCOM
E
RATIO
DICTA

fraud.
Whether the law clerks unawareness of the forged signature
should be held as fraud to the effect that the mortgage is
defeasible. Whose actions constitute as fraud?
Principle of imputed notice (not applied?)
Appeal dismissed. The banks mortgage is valid.
Mere false statement does not amount to fraud. The term fraud
means dishonesty.
Waimiha Sawmilling case The term fraud means dishonesty
a wilful and conscious disregard and violation of the rights of
other persons.
Law Clerk:
There was no direct evidence of dishonesty or moral turpitude on the
part of G. G knew that what she said was false but she has not shown to
be dishonest. She had nothing to gain from her false statement.

NOTE

The Bank:
The bank was also not aware of the forgery and it was not party to any
scheme to obtain a mortgage from the appellant contrary to her wishes.
If it were to be held responsible for the circumstances under which the
appellant lost her interest in the land, then it could only be because the
bank itself put the mortgage on the path to registration.
In Davis v Williams: false representation intending to induce the
Registrar-General would be sufficient dishonesty to be held as fraud.
J Wright Enterprise v Port Ballidu [2002]: misrepresentation that has a
insubstantial consequence is not sufficient to render a title defeasible.
RPA s 56C(1) contravened (?)

Fraud against the holder of a prior unregistered interest

In Australia, it is not fraud for a purchaser to register with knowledge that a

prior interest will be defeated by the registration: Mills v Stokman (1967) 116
CLR 61.
Means ACTUA fraud, not constructive or equitable fraud: Bahr v Nicolay (No2);
Assets Co; Farah Construction
Courts in Australia maintain that the fraud exception requires personal
dishonesty or moral turpitude: Russo; Farah Construction; Latec Investments

W4B IN PERSONAM EXCEPTION

Action in rem

A proprietary action taken against the object that is the subject of the dispute
rather than against a person
Order made in an action in rem determine rights as against the entire world,
not just between the parties: McGovern v Victoria [1984] VR 570

Rights in personam (the personal equities exception)

Binds only the parties, action occurring between persons.

But it can also arise out of conduct of agent or employees of registered
proprietor and conduct can pre-date or post-date registration: Lague v
Shoalhaven Shire
Actions in personam include actions in contract and for debt; negligence;
trespass to the person, actions on the case (international infliction of harm);
deceit; and injurious falsehood.
In Frazer v Walker, indefeasibility in no way denies the right of a plaintiff to
bring against a registered proprietor a claim in personam. Exception created
by the statutes, like the fraud exception, but arises outside the statutory
scheme. Claims in personam arise from a dealing or relationship between the
plaintiff and the registered proprietor, as distinct from a claim in rem, which Is
a property right that the plaintiff can assert against all the world.
In personam principle is not a statutory but common law principle.
Butt to call it an exception to indefeasibility itself may be misleading

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

FACTS
Bahrs were unable to pay. They decided to finance the development by
selling the land to the 1st respondent, Nicholay, on terms that they might
lease it for a number of years and then repurchase it an amount
specified in cl 6. Nicholay sold the land to Thompson, 2 nd respondent. Cl
4 was an acknowledgement of the agreement between Nicholay and
Bahrs.

ISSUES

RATIO

MASON
CJ and
DAWSON
J

When Bahrs attempted to repurchase, Thompson refused to sell.

Whether Thompsonss acknowledgement of Bahrs
repurchasement agreement with the previous owner (Nicholay)
created any interest in the land to compel Thompson to sell the
land when it is unregistered and with the adoption of the
indefeasibility doctrine.
The 2nd respondents acknowledgement of the transfer on terms
agreed by 1st respondent and the appellant creates an equitable
interest (trust).
An acknowledgment of an antecedent agreement in an
appropriate context may amount to an agreement or
undertaking to recognise rights arising under that antecedent
agreement. (PRINCIPLE)
Was there clear intention? In absence of this could impose a
constructive trust: Bannister [1948] 2 All ER 133.

Can a trust be inferred in the case where the parties intended to create
or protect an interest in a third party and a trust can protect or create
that interest in a third party and a trust can protect or create that
interest or give effect to the intetntion then there is no reasons
Looks at Loke Yew: the repudiation is fraudulent because it has its object
the destruction of the unregistered interest notwithstanding that the
preservation of the registered interest was the foundation or assumption
underlying the execution.

WILSON
and
TOOHEY
JJ

Contract scarcely seems to give sufficient effect to what the parties had
in mind. A trust relationship is much more accurate and appropriate
reflection of the parties intention The present can is an express
trust.
Appellants interest under cl 6 constituting an equitable interest in the
land, the 2nd respondents became subject to a constructive trust in
favour of the appellants.
Act would not preclude the enforcement of the estate or equity because
both arise, not by virtue of notice of them by the 2 nd respondents,
because of their acceptance of a transfer on terms that they would be
bound by the interest the appellants had in the land by reason of their
contract with the 1st respondent.

BRENNA
NJ

Found a constructive trust

A purchaser who takes with notice of an antecedent interest but who
becomes registered under the Act without fraud takes free of that
interest
However, the title of purchaser who not only has notice of an antecedent
unregistered interest but who purchases on terms that he will be bound
by the unregistered interest is subject to that interest. Equity will compel
him to perform his obligation

NOTE

Equity will compel him to perform his obligation. A fraud? Constructive

trust can prevent this.
*whether in personam exception only applies to conduct on the part of
the registered proprietor after having become registered but extends to
equities arising a result of conduct on the part of the registered
proprietor or to which he or she was privy prior to registration.
*what constitutes acceptance? Can silent be taken to signal assent?

Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32

FACTS
The respondents husband forged her signature on a variation of
mortgage instrument relating to her property. Acting without fraud, the

ISSUES
RATIO

DICTA

NOTE

appellant bank registered the variation, using the respondents CT which

it already held as mortgagee under the previously registered mortgage.
The appellant was not in fact authorised by the respondent to use the
certificate for the purpose of registering the variation.
Whether there is a personal equity to deprive a mortgagee of its
interest acquired by the registration of a forged mortgage.
The personal equity arose from the mortgagees breach of its
obligations to the respondent as custodian of her CT. It is clear
from the authorities that no personal equities arises from the
bare fact that the instrument was forged: s 52.
The respondent had a personal equity against the appellant bank
requiring it to grant a discharge upon the payment of the moneys owing
under the original, valid mortgage.
Gosper has been distinguished in later cases:
Ginelle Finance Pty Ltd v Diakakis [2002] NSWSC: distinguished on the
ground that the first and second mortgages were registered one
immediately after the other and there was no pre-existing relationship
between the plaintiff, the defendant and the solicitor.

The types of causes of action that can be asserted against a registered

proprietor

A plaintiff can only bring an in personam claim if there is a known cause of

action (e.g., breach of contract, misrepresentation etc.).
The following are some examples of when an in personam claim could arise:
o When a registered proprietor has agreed to sell the property to
another, but before registration decided to deny the agreement - he
will be susceptible to an in personam claim raised by virtue of breach
of contract.
o A trustee cannot deny a beneficiary's interest because of registration an in personam claim would be brought based of breach of trust.
o A purchaser who has bought a house under a contract affected by a
vitiating factor (misrepresentation, undue influence, duress etc.) will be
susceptible to an in personam claim raised by virtue of one of those
causes of action.
o Registered under a dealing materially altered without the knowledge of
the other party
o Registered under a dealing as a result of As breach of trust or fiduciary
obligation
o Or through As unconscionable or unconscientious conduct

The unconscionability requirement the important indicator of in

personam principle
Vassos v State Bank of SA (1993) 2 VR 316
FACTS
Plaintiffs were the registered proprietors as tenants in common that was
subject to a registered mortgage to Sandhurst Trustees to secure money.

ISSUES
RATIO
DICTA

OUTCOM
E
NOTE

The plaintiffs subsequently discovered that their signatures had been

forged to a registered mortgage in favour of the defendant bank. The
defendant bank was not a party to the fraud.
Whether the plaintiffs had an in personam right against the
defendant bank.
The registered proprietor is not susceptible to an in personam
action unless he or she is acting unconscionable.
The limits may be on such personal equities the very language
used to describe the right and the reference to the remedies
being in personam remedies is a clear reference to the remedies
being available in circumstances where equity would act, i.e., in cases
which equity would classify as unconscionable or
unconscientious.
There was no misrepresentation by it, no misuse of power, and no
improper attempt to rely upon its legal rights, no knowledge of
wrongdoing by any other party.
The bank may have been neglected but not unconscionable, the claim
was dismissed.
The case was endorsed by appellant courts in Grgic v ANZ Banking
Group Ltd (1994), Story v Advance Bank Australia (1993)
However, in Queensland Court of Appeal there were criticism about the
universality of the requirement.

Special equity cases

special vulnerability or disability

o Commercial Bank of Australia v Amadio (1983) 151 CLR 447
married women has to set aside a surety given to a third party to secure the
debts of her husband
o Yerkey v Jones (1940) 63 CLR 649, Garcia v National Australia Bank
[1998] HCA 48
Breach of trust/ fiduciary duty
o Registered proprietor who obtains registration of a transfer in breach of
fiduciary duty to the transferor cannot set up his or her registered title
to escape liability: Tataurangi Tairuakena v Mua Carr [1927] NZLR 688.
o breach of trust involve the element of unconscionability
mistake
o in absence of fraud, common mistake does not make a registered title
defeasible: Merrell Associates Ltd v HL (Qld) Nominees [2010] SASC
155
o A personal equity can also arise where a transferee unconscionably
retains land transferred under a mutual mistake: Lukacs v Wood
(1978), Majestic Homes v Wise [1978]
Lease lessee registered a lease knowing that it contained a
option to renew which should not have been included option
inserted by mistake by lessors solicitor

Personal equity and unlawful action by public authorities

o Irregularities gave him an equity which prevailed against the council.
The irregularities did not invalidate the sale and, even if they did, the
invalidity did not create a personal equity of a kind that could prevail
against the registered proprietor.
easements
o Prescriptive easement was enforcement against the registered
proprietor who held title during the period of long user and was not
inconsistent with the notion of indefeasibility of title: Golding v Tanner

Final thought on in personam

The scope has been narrowed since Bahr v Nicholay.

W5A EXCEPTION: SHORT-TERM TENANCIES, OVERRING

STATUTES, CAVEATS
Short-term tenancies

No requirement to register those kind of lease.

An exception to indefeasibility for the unregistered interest for a short-term
tenant in possession of the land. This reasons for this is:
o 1. the expense and inconvenience of requiring registration outweigh
the advantages
o 2. purchaser can be expected to discover the tenants occupation and
ascertain the existence of the lease
The duration of unregistered leases protected is less than 3 years (includes
time of option): s 42(1)(d)

Overriding Statutes

South-Eastern Board (SA) v Savings Bank of South Australia (1939) 62 CLR

603: the High Court held that certain registrable drainage charges took
priority over registered mortgagee.
o If there is an inconsistency between one statute and a later statute, the
later statute prevails.
Implied partial repeal may arise where a later statute overrides a registered
interest or creates an interest in land or a charge which is enforceable against
the registered proprietor:
o Miller v Minister of Mines [1963] AC 484

Horvath v CBA (1999) 1 VR 643

FACTS
1987, the appellant, then a child aged 15 years, bought a property
together with his parents. He suffered judgment in the SC in favour of
the respondent bank for possession of the land over which he had joined
with his parents during his minority to give a mortgage. On appeal, the

ISSUES
RATIO

DICTA

OUTCOM
E
NOTE

appellant argued that the mortgage was unenforceable against him,

relying on the minors relief provisions in s 49(a) of the SCA which
provided that loan contracts entered into by a minor are void.
Whether the statute is inconsistent with the indefeasibility
doctrine to the extent that one overrides another.
The relief provision deals with the binding nature of loan
agreements with minors, whilst the indefeasibility provisions
deal with the effect of registered documents relating to land neither deals directly with the subject matter of the other, and
they are therefore not inconsistent
If the relief provision can be given effect to without the need to conclude
that there has been an implied repeal pro tanto of the indefeasibility
provisions of the Act, then the problem is resolved without the need to
set at nought those earlier provisions which would otherwise apply
The only inconsistency which would be relevant would arise from a
provision which directly or by implication denied the consequence of
indefeasibility to registration wither generally or in a specified
circumstance.
The instrument is voided but the registration is indefeasible thus the
mortgage applies.
Consistent with Breskvar v Wall held that registration is
effective to vest an indefeasible title even if the instrument
used to procure registration is void.

Dichotomy of approaches
o 1. Sequential approach entails reading the provisions of later statutes
in a restrictive manner so as to avoid abrogating the indefeasibility
provisions.
o 2. Broader interpretation of later statute and impliedly repeals the
indefeasibility provision.

Statutory entrenchment of indefeasibility doctrine

s 42(3) indefeasibility doctrine prevails over any inconsistent provision

unless expressly repealed.

Caveatable interest

It is still possible to create interests in land without registration. These

unregistered interests are equitable. (not implied leases and easements
legal interests)
Caveats are used to protect unregistered interests in land merely a
mechanism which prevents the registration of other interests which would
then defeat the unregistered interest. Caveats can be lodged quickly and
efficiently, without a certificate of title which the unregistered interest holder
may not be able to obtain.

only in respect of land: Valerica Pty Ltd v Global Minerals (2001) NSW
ConvR
A Caveatable interest need not be a registrable interest, nor one that gives
the holder a right to compel the registered proprietor to deliver a registrable
interest, so long as the interest is one in respect of which equity will give
specific relief against the land: Composite Buyers Ltd v Soong (1995) 38
NSWLR 286 at 287.
o

Does a registered proprietor have a Caveatable interest?

The registered proprietor of land to lodge a caveat against dealings where the
registered proprietor fears an improper dealing because of the loss of a
certificate of title or for some other reason: NSW s 74F(2)
Mortgagors interest as an equity, not an equitable interest in property: Latec
Investment v Hotel Terrigal (in liq) (1965) 113 CLR 265.
o *This case is often distinguished and not followed.

Requirements for caveats

While the Registrar does not scrutinise caveats to determine whether there is
evidence to support the factual basis of the claimed interest, the registered
proprietor may apply to have the caveat removed and the Registrar is
generally empowered to require the Caveatable to show cause why the
caveat should not be removed.
o NSW s 74F(5) RPA
s 74L RPA Act provides that if, in any legal proceedings, a question as to the
form of a caveat is raised, the court shall disregard any failure of the caveator
to comply strictly with the formal requirements

Application for removal of caveat

Most jurisdictions provide for the registered proprietor to apply to the court
for the removal of a caveat: NSW: s 74MA
A court may remove a caveat because the prohibition on registration of
dealings is stated too widely. Where a dealing has been lodged for registration
and an application is made for removal of caveat, the court will order removal
of the caveat if the claimed interest would not entitle the caveator to the
assistance of the court
The power of the court to order the removal of a caveat is not confined to
cases where the caveat is bad in form: Kerabee Park v Daley [1978] 2 NSWLR
222.
ABC v ONeill (2006) 227 CLR 57 HC clarified the burden of proof imposed
on an applicant for injunctive relief under the 1 st limb of the test: Eng Mee
Yong v Letchumanan, which requires a serious issue to be tried
o a sufficient likelihood of success to justify in the circumstances the
preservation of the status quo pending trial

Caveats lodged without reasonable cause

it is not the role of the Registrar to test the validity of the claimed interest. To
have reasonable cause the Caveatable must have believed on reasonable
grounds that he or she had the interest claimed.
I think the foundation for reasonable cause must be, not the actual
possession of a Caveatable interest, but an honest belief based on reasonable
grounds that the caveator has such an interest.
On the facts as I have found them, the defendant did not have any
reasonable grounds for believing that it had what it claimed in the caveat,
namely an agreement giving it the right to an instrument of mortgage.

Adverse possession can it overriding indefeasibility (nope)

W7A COMPETING EQUITABLE INTERESTS

Recap

Fragility of equitable interest easily defeated

As a general principle equity defers to the common law maxim where the
equities are equal, the law prevails
o There is a discretionary element in equity
E.g. discretionary trust the beneficiary has no equitable
interest, but can compel the trustee to exercise power
o E.g. of equitable interest when a person purchase an interest in land
under a contract. The vendor has legal interest in the land until the
valid registration (completion of the transfer).
An equitable interest subject to and often destroyed by the interest of the
purchaser who bought a legal interest in the property without notice of the
equitable interest: Worthley v Birkhead (1742) 28 ER 364.
Caveat a way to lodge an equitable interest in land.
In some cases, it is not needed to lodge a caveat to protect the equitable
interest in a land.
Priority
o Where competing equitable interests exists in the same parcel of land
an earlier interest generally has a stronger claim than a later

The significance of notice in equitable priorities

GENERAL PRINCIPLE: The proper application of the maxim qui prior
est temper, potior est jure (he who is earlier in time is stronger in
law) to a resolution of competing equitable interests in land is not
without uncertainty: Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965)
113 CLR 265
o Applied flexibly a court of equity is a court on conscience can be
free to determine priority by seeking the best equity

Rice v Rice (1854) 2 Drew 73; 61 ER 646, the VC was of the view that
the maxim was applied as a device of last resort
EXCEPTION: postponement
o An earlier equitable interest will be postponed to a later one
where the conduct of the earlier interest holder has led or
allowed the later interest holder to acquire that interest in the
mistaken belief that the earlier interest did not exists: Barry v
Heider (1914)
o Only occurs where the earlier holders act or neglect contributed in
some way to the later holder acquiring its interests without notice of
the earlier interest: Lapin v Abigail, or where it was reasonably
foreseeable that, as a consequence of the acts or omissions of the
earlier owner, a later equitable interest might be created and that the
owner of that later interest would assume the non-existence of the
earlier: Heid v Reliance
o

Abigail v Lapin [1934] AC 491; All ER Rep 720

FACTS
Lapins executed a transfer of Torrens Title land to Mrs Heavener. The
transfer was intended to be security for a loan and was therefore
supposed to be redeemable on repayment of the loan. H registered in
breach of authority and then mortgaged them to Abigail. QUESTION: Did
Lapin give H the means to do it.
Because Abigail also had not lodged a caveat, Abigail was not aware of
the Lapins interest. However, the mortgage between H and Abigail had
not been registered.
ISSUES
Two competing unregistered interest in a land. Whose interest
prevails?
RATIO
Failure to lodge a caveat is just one factor among many that will
be relevant to determining whether postponement has occurred
from the conduct of the prior interest holder.
DICTA
the effect of the caveat is that no instrument will be registered while the
caveat is in force affecting the land, estate or interest until after a
certain notice to the person lodging the caveat.

Prima facie test:

the first interest holder has priority
Is there any postponing conduct?
o when by act or omission, the prior interest holder induced
or contributed to a belief that the prior equity was not in
existence
Lapin armed H to go into the world under false colours
The effect of a failure to caveat
o Abigail did not search the register, so he could not
say that he had relied on clear title before giving the
mortgage

The focus should be on the vendors they held themselves

out as registered proprietors and that there was no
encumbrance their conduct (from Shropshire)
o Ultimate the case then become one of an agent exceeding
the limits of his authority but acting within its apparent
indicia
The failure to caveat can lead to a loss of priority regardless of
whether or not the later claimant searched and relied on the state
of the register
POSTPONEMENT
The Lapins had armed Heavener with the means of representing
that she had authority to deal with the land (this is so even if she
exceeded that authority)
In the present case the respondents on the one hand enabled the Hs to
represent themselves as legal owners in fee simple, while on the other
hand it cannot be said that Abigail did or omitted to do anything which
he should have done in lending the money on the security
o

OUTCOM
E
NOTE

Appeal allowed. Lapin bound by the natural consequences of their acts.

The interest was postponed and Abigails later interest prevails.
Templeton v Leviathan (1921) CLR: this case was not followed where the
purchaser was held to only gain statutory protection from prior
unregistered interests when he or she becomes registered.
If Abigail registered the mortgage, there would be a legal interest in the
land (?).
Rice v Rice: last resort look at all other circumstances. Only
then does the principle may apply.
Notice through
1. caveat
2. Conduct
3. possession (constructive notice)

Heid & Reliance Finance Corp (1983) 154 CLR 326

FACTS
Appellant Heid was registered proprietor of certain land registered under
the Real Property Act. He agreed to sell this land to Connell Investment,
one of group of companies controlled by a firm of mortgage brokers, NM.
The appellant was content to accept the advice of the principal of NM.
Unknown to Heid, Gibby was unqualified. Heid duly signed a contract
and a transfer and left these documents, together with the CT, in the
hands of Gibby. Heid discovered the fraud and took proceedings claiming
an equitable interest in the land paramount to that of the respondent.
ISSUES
Failure to lodge a caveat is not the only factor. What other
factors are relevant?
RATIO
The appellant armed Gibby and Connell with the ability to
represent to third persons that Connell was the unencumbered

owner of the land in fee simple.

OUTCOM
E
NOTE

The court took the view that it was not reasonable for the appellant to
believe that Gibby would act honestly in the best interest of the
appellant when the appellant knew that Gibby was an employee of a
company which controlled the purchaser.

J & H (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546
FACTS
Bank loaned money to Josephson. The bank obtained a mortgage in
registrable form as well as the CT but did not register the mortgage. J &
H Just advanced further money to Josephson about the CT and accepted
his statement that it was with the bank for safekeeping. J & H Just lodged
a caveat.
ISSUES
Whether the bank maintained its priority according to time.
RATIO
The fact that a caveat discoverable by a search of the title is
notice to all the world of the interest claimed does not mean
that the absence of a caveat is a notice to all and sundry that no
interest is claimed.
Other than the existence of caveat - The conduct of the parties
must be examined (especially on the conduct on the first
encumbrancer).
DICTA
To say that would, it seems, be to equate the noting of a caveat in the
register book with the registration of a dealing: it would make competing
equitable interests depend not upon priority of creation in time and
other equitable considerations, but upon priority of the lodgment of
caveats.
OUTCOM
E
NOTE

Ruled in favour of the bank.

Osmanoski v Rose [1974] VR 523, Gowans J held that a failure to caveat
a purchasers interest under a contract of sale warranted the
postponement of a prior to a later purchaser. Gowans J cited the
observations of Barwick CJ as to the nature and purpose of caveats.
Jacobs v Platt Nominees [1990] VR 146: took into account of fairness

Moffett v Dillon (1999) 2 VR 480 (SC of Victoria, Court of Appeal)

FACTS
Plaintiff entered into a terms contract of sale of his land to the
defendant. The contract was later rescinded. The plaintiff lodged a
caveat. The bank took mortgage with notice of the plaintiffs
earlier charge. Bank mortgage registered BY MISTAKE. But
proceedings on basis of competition between unregistered
interests.
ISSUES
Priority of a prior interest that is unregistered.
The decisiveness of a notice.
RATIO
If later equitable titleholder had notice of the prior equitable

BROOKIN
G JA

interest, the prior equitable interest would win.

The present case is one of admitted actual and full knowledge. This is
either to be regarded as actual notice, or to be treated as having the
same consequences as notice.
AUTHORITY a later equitable interest can never prevail over an earlier
one where the holder of the later interest had at the time of its
acquisition notice of the earlier interest.
Effect of notice on priorities concerns, the bona fide purchaser for value
of the legal estate: the distinction that has been drawn between mere
equities and equitable interests. This applies regardless of whether
estate or interest is legal or equitable.
I do not regard the question whether did so with notice as no more
than a consideration to which regard is to be had in determining whether
one of the equities is better than the other. I regard the rule about
notice as a distinct and fundamental one.

ORMISTO
N JA

[If there is notice, there is no need to apply the test in Heid

(first in time rule)]
Moffett as holder of equitable interest first in time should be preferred
unless and until the bank established that it had the better equity in the
sense of a better equitable interest, and that is what the bank failed to
do
Applying more of the first-in-time rule than the issue of notice.

OUTCOM
E
NOTE

[Second interest holder to take an interest by only subject to the earlier

equity. The later holder would have to show why he or she should
be preferred over the earlier equitable interest holder.]
The charge had not lost its priority over the subsequent mortgage.
Appeal allowed, the bank lost.
This was a case of actual notice, but
1. constructive notice that would have come to their attention if they
had made the proper enquiries; and
2. imputed notice of facts known to their agent
also applies
Julians comment: it might be a bit too simplified to just look at notice,
you should still look at other circumstance if the existence of notice is
found. He did agree that notice is very important.

Perpetual Trustees Co Ltd v Smith (2010) 186 FCR 566 (FCA)

FACTS
Respondents sold their homes to Money for Living (MFLPH) in
consideration of a lump sum, an annuity and a lease for lift over the
property. The retirees did not lodge caveats. Perpetual made a

TRIAL

ISSUES
RATIO

MOORE
and
STONE JJ

number of loans to MFLPH.

1. P subject to retirees interest as tenant IN POSSESSION appealed by
P (made P hard to sell the properties)
2. P mortgage was not subject to retirees equitable vendor liens (an
equitable security interest held by a seller of land who has conveyed or
transferred to the purchaser without yet being paid the full purchase
price. It may be excluded by implication from the nature and terms of
contract and the surrounding circumstances e.g. Davies v Littlejohn
(1925)
Priority of equitable interest.
In the absence of an obligation to caveat and in light of their
actual possession, there was no postponing conduct on the part
of the retirees.
(The conduct of the companies give inference that P did have
notice of the retirees interest)
In the case of all the respondents, the equitable interest of the tenants
preceded the interests of the mortgagees.
Prior equity principle does not apply where the merits between the
parties are not equal. The conduct of the retirees in giving MFLPH the
ability to create the subsequent mortgages to Perpetual would indicate
that the merits would be with Perpetual (postponement) unless P had
constructive notice of the retirees interests.
Disagreed with trial judges that not lodging a caveat was not important
say that a caveat has capacity to give notice to the world (applying
Butler v Fairclough (1917))
Inference is that P did have notice P entered into many
mortgages with MFLPH and made extensive funds available. P
would not have done so without having any idea of the nature of
their business.
CAVEAT
There is no obligation to caveat, also not so relevant if there is
another way to give a later interest holder notice

DOWSET
TJ
(DISSENT
)
OUTCOM
E

AUTHORITY (Heid) in the absence of a caveat it is necessary

to consider all the relevant circumstances in determining the
issue of notice
Had the retirees stablished that Perpetual took with notice, it would not
have been necessary to consider the respective merits of the competing
equities. However, the case seems not to have been decided on the
basis that Perpetual took with notice, but rather upon comparison of the
merits.
Appeal dismissed. The tenants have priority over the mortgagees.

NOTE

W7B CO-OWNERSHIP
CO-OWNERSHIP

Includes ownership whether at law or in equity in possession by two or more

persons as joint tenants in common; and co-owner includes an encumbrance
of the interest of a joint tenant or tenant in common: Conveyancing Act 1919
(NSW) s 66F; Darrington v Coldbeck (1990) 20 NSWLR 212
Why does it matter a client holds as JT or TIC:
o Type of property interest they have in the land. This has implications
for how that person may deal with the property: e.g.
Wills devise beneficiary or rules according to intestacy.
Two modern forms of co-ownership are the joint tenancy and the tenancy in
common.
o apply to realty as well as personalty
Allow for joint enjoyment of the property, give rights of free alienation to each
co-owner, and impose duties in relation to the use of the common property
and fair dealing with co-owners.
History
o early attempts company title
o late 1950s strata title
unit owners do not have the right to place restriction on the sale
of individual units. The effect of this distribution of rights is to
allow owners to mortgage, lease or otherwise deal with their
property quite freely.
Creation
o the legal and equitable position must be considered separately in the
creation of joint tenancy or a tenancy in common.
o Registration of persons as joint tenants conclusively determines the
nature of their interest, so far as third parties are concerned. However,
even in states with Torrens legislation which provides that if two or
more persons are registered as joint proprietors, they are deemed to be
entitled as joint tenants, this does not prevent joint tenants
establishing that in equity, the parties hold as tenants in common
between themselves: Re Foley [1955]

JOINT TENANCY

Definition of joint tenancy: where two or more persons simultaneously

hold an interest in the same parcel of land or item of personalty, they do so
either as joint tenants or tenants in common.

Joint tenants are said to hold per my et per pour tout (for nothing and for all)
meaning that no joint tenant has any individual share, but that each has a
right, with the other joint tenant, to the whole of the property.
Severance sever a joint tenants
o unilateral agreement
o course of dealings
o unilateral act an action that cannot
(A) Right of survivorship (no individual share)
When one joint tenant dies, the hole of the estate remains with the surviving
joint tenant(s). The survivor is not regarded at the time of transfer. The effect
of the death is simply as the survivor acquired that interest at the time of
transfer. The effect of the death is simply to free the property from the control
of one of its owners.
Prevents a joint tenant from disposing of his or her interest in the property by
will.
If die at the same time presumption in favour of seniority I no other
evidence (Conveyancing Act 1919 (NSW) s 35))
(B) Four Unities
1. Unity of possession: each co-owner is entitled to possession of the
whole of the property, not exclusively form himself or herself but to be
enjoyed together with the other joint tenants
o (Thrift v Thrift)
2. Unity of Interest: The interest of each joint tenant must be the same in
nature, extent and duration
3. Unity of Title: All the joint tenants must derive their interests from the
same document or the same act
4. Unity of Time: The interests of all joint tenants must vest at the same
point in time.
o Exception 1: conveyance executed to a trustee
o Exception 2: Any disposition in a will may give rise to a joint tenancy in
the grantees
Mortgage
o Note that if one joint tenant gets a mortgage and then passes away
before it is discharged, survivorship tales priority over the mortgage (a
mortgage is a charge over land, not a transfer thus does not affect the
four unities): Lyons v Lyons
Corporation
o Can a corporation be a joint tenant?
At common law . No (a corporation cannot die)
At statute YES can be an individual equates the winding up
of a corporation with death
A valid joint tenancy cannot be defeated (by a third party)
Registration a JT conclusively determines the nature of the interest.
But still parties to a JT can still argues that in equity the parties hold as
tenants in common between themselves: Calverley v Green (1984) 155 CLR
242
TENANCY IN COMMON

Tenants in common each have a distinct yet undivided share in the property,
which can generally be dealt with by each tenant in common at their liberty.
There is no right of survivorship. Upon his or her death, the share of a tenant
in common passes to the beneficiary or beneficiaries nominated in his or her
will, or descends to the persons entitled to his or her property under the rules
governing intestate succession.
The only unity which is essential for there to be a tenancy in common is unity
of possession.
o other three may or may not exist
Tenants in common is growing because of dual income couples where both
has the power to contribute and maintain their shares of the land.
Divorce rate increasing also contribute to this.
In general at law a tenants in common exists by:
o Absence of one of the four unities
o Use of words of severance
o Indication of intention to create a TIC: Surtees v Surtees (1871) LR 12
EQ 400
Transfer can be does inter vivos (during your lifetime)

In equity

equity traditionally favoured tenancies in common

1. Business partners: leading case Lake v Craddock (1732): Although joint
tenants at law, were tenants in common in equity. The main reason for his
conclusion was that it would be unfair to permit the principle of survivorship
to operate in an undertaking designed to produce a profit, since the partner
that dies first would lose all his investment
2. Money advanced on mortgage: where two or more persons advance
money on mortgage whether in equal or unequal shares: Re Jackson (1887).
3. Unequal contributions to the purchase price: equity assumes to hold
as tenants in common in proportion to their respective contributions:
Robinson v Preston (1858)
o applies to joint liability under a mortgage: Ingram v Ingram [1941]
o mother and son bought a house , son put up most of the money Ball v
Ball

Malayan Credit v Jack Chia-MPH (1986) 1 AC 549

FACTS
United Overseas Land bought a building from Malayan United Credit
Property, which was subsidiary. Pursuant to a clause in the agreement
for sale, United leased the 7th floor of the building to Malayan Credit the
agreement for sale. They arranged between them how the floor space is
allocated and apportioned the rent.
ISSUES
What was the nature of their titles?
RATIO
Equity may infer that a tenancy in common was intended
because of any other (other than the 3) circumstances as well
when there are several individual purposes.
Therefore, presumptions are not exhaustive.
DICTA
There is no fundamental distinction to be drawn for present purposes

between joint tenants who acquire a term of years on payment of a

premium and at a token rent, and joint tenants who acquire a term of
years on the payment of no premium but at a rack rent.

OUTCOM
E
NOTE

In the opinion of their Lordships, one such case is where the grantees
hold the premises for their several individual purposes.
Plaintiff lost. There was a TIC.

Statutory reform (Presumption)

Common law presumption favours joint tenancy was reversed by

legislation. Equity will not follow, even though specific provisions
may not strictly apply
o Courts however preferred TIC at any chance of severance
Conveyancing Act s 26(1): disposition of a beneficial interest for two or more
persons together beneficially shall be deemed to be made to or for them as
tenants in common, and not as joint tenants.
o Presumed TIC if silent
Exceptions (s 26(2)): does not apply to executors, administrators, trustees, or
mortgagees, or where the instrument expressly provides that person are to
take as joint tenants
o The commission recommended that the presumption in favour of a
tenancy in common

RIGHTS OF ENJOYMENT INTER SE OF CO-OWNERS OF LAND

Rights of occupation
o Right to possess and enjoy the whole of the land. Therefore, no
trespass against another co-owner except where exclusions applies
o Right to include the right to invite someone to live on the premise.
Occupation rent (Forgeard v Shanahan)
o not entitled to claim compensation from occupying co-owners
sole occupation not normally chargeable: Luke v Luke
Doctrine of proprietary estoppel can modify the relationship
between co-owners.
o Exception at common law 1: co-owner was ousted by a co-owner
o Exception at common law 2: If the parties agreed on the payment
Leigh v Dickeson: rent for management of the property
Ouster (exception 1)
o if one co-owner prevents another from exercising right to possess, the
ousted party may sue for an occupation rent
o Biviano v Natoli
Biviano v Natoli
FACTS
The Appellant [Biviano] was in a relationship with the Respondent
[Natoli]. They shared a property as tenants in common.
The relationship broke down and the Appellant took out a restraining

ISSUES
RATIO

DICTA

order (AVO) against the Respondent coming near her daughter (who also
lived with them).
The Appellant, who could no longer live on his property, sought
occupation rent as a result of being ousted.
Occupation Rent ousted owner
The denial (some kind of force, trespass) of the respondents
interest in the property amounted to an express denial of his
rights as co-tenant and constituted an ouster. There should be
occupation rent.
Express statutory power (AVO) is not an ouster.
The true nature of ouster is that it constitute a trespass by one cotenant of another co-tenants rights in respect of the property
Ousting is 'an express denial of the title and the right to possession of
fellow tenants, brought home to the latter openly and unequivocally'.
'The respondent's removal from the property and the continuance of
that removal did not constitute a legal wrong...it occurred pursuant to an
express statutory power'.
Thus, obtaining the restraining order did not constitute ousting the
respondent (because it is pursuant to an express statutory power).
Neither did the fact that the Appellant ignore the Respondent's letters in
which he tried to sell the house.

OUTCOM
E
NOTE

However, throughout the trial, the Appellant did deny that the
Respondent has title, and only gave it up after the trial judge decided so.
This did amount to a denial of the Respondent's rights as a co-owner and
thus an act of ousting.
The Respondent wins - entitled to occupation rent from the beginning of
the proceedings.

The quantum of occupation rent

Common law equitable principles regulating the right of co-owner inter se

should also be applied by a court exercising its statutory powers to order a
sale and division of the proceeds under s 66G.
This is because 'he who seeks equity must do equity' - if one seeks equity in
the form of an allowance for improvements, he must do equity by paying
occupation rent.
An allowance can be made for a payment of joint-debt, but this is under the
equitable doctrine of contribution and not property law. Such an allowance
would not make one liable for an occupation fee.

Forgeard v Shanahan
FACTS
The parties were joint tenants and lived in a property until the
relationship broke down.

ISSUES
RATIO

DICTA

Forgeard moved out whilst Shanahan remained in the property, paying a

variety of expenses such as rates, insurance, pest control, mortgage
payments etc. The parties wished to sell the property, but Shanahan
argued that she should receive an allowance from Forgeard to recognise
her expenses.
Is Shanahan due an allowance for the mortgage payment, etc.
and she liable for occupation rent in return?
An occupation fee can only be claimed if:
(a) the co-owner was deprived of its right to possession
(ousting) or
(b) if the co-owner in possession is claiming allowance for
improvements. Thus, allowances for improvements make one
liable to an occupation fee - a co-owner can't claim one without
becoming liable to the other.
Improvements are more than mere repairs and maintenance repairs and maintenance do not justify an allowance. Allowance
can only be requested in a partition claim.
It should also be noted that the parties may not be just co-owners, but
also often 'joint-debtors' (in relation to mortgages etc.). In such a case, if
one of the parties pays the debt in full, it is to be compensated by the
other party accordingly.
This right for compensation rises from the equitable doctrine of
contribution, not property law.

OUTCOM
E
NOTE
Callow v Rupchev [2009]
FACTS
Parties were living together in a relationship. They bought a house in
joint names, but the relationship fell apparat, and Callow left the place.
The premises were ultimately sold in Nov.
ISSUES
The distribution of the proceeds of sales (Is there an ouster?)
RATIO
An occupation rent is payable by a co-tenant whose sole
occupation was achieved by the intentional ouster or violent
exclusion of another co-tenant or where termination of a
personal relationship made it unreasonable to expect
continued joint occupation.
DICTA
A plaintiff seeking contribution cannot avoid equitable defences by
invoking a common law remedy.
Respondents denial of Ms Callows title was not at her legal title but her
beneficial title
Part of the issue with Biviano concerned the quantum of the occupation
fee chargeable to the appellant.

Ouster it is not necessary to identity violence or a threat of violence

sufficient to justify a finding that the departure of one co-tenant was
involuntary, the findings discussed above will not be critical.
Actual ouster and constructive ouster.
The law changed because of the dynamics of modern relationship and
marriage.
The basi principle that a TIC is not liable to pay an occupation rent by
virtue merely of his being in sole occupation of the property does not
apply in the case where a matri ??????
Constructive ouster - An occupation fee is chargeable, inter alia,
where it is unreasonable to expect co-owner to continue to live
under the same roof after a domestic relationship has collapsed,
and one party moves out.

OUTCOM
E
NOTE

Occupation rent the figure of $210 per week which had been proposed
by C was accepted.
The court held that the occupation fee should accrue during the period
of Rs sole occupancy.

Accounting for rents and profits

The statute of Anne

o In F v S, Meagher JA referred to the Statute of Anne which allowed a coowner to bring an action of account against the other co-owners for
receiving more than comes to their just share or proportion; of rents.
o By contrast, Kirby P took the view that the principle of the statute could
still be applied in proceedings for sales under CA s 66G and it is now
the law of NSW.
Statute of Anne not applicable
o Court of Exchequer Chamber held that the Statute of Anne did not
apply to the case of a tenant in common who worked the land himself.

Compensation for repairs and improvements to land by one co-owner

compensation for improvements was a defensive or passive equity which

could only be exercised in actions involving the rights of other co-owners:
Brickwood v Young (1905) CLR
o not persona, but an equitable charge attaching to the land which can
be exercised but a successor in title to the person originally entitled to
it.
Co-owner who has improved the property cannot obtain more than his outlay,
therefore a decrease in value must be accounted in the compensation. The
same applies when increasing.
???

Boulter v Boulter

Liability for waste

A co-owner bring an action against another to prevent him from 'wasting' the
property (destroying it etc.).
In Ferguson v Miller, an injunction was granted to stop the removal of
ornamental trees (which was considered waste), but not for re-sealing and
widening the driveway (which was considered repair).

Disposition of interests by co-owners

Joint tenant or tenant in common may sell or give his or h8er interest to
another person, provided this does not interfere with the right of the other coowner to possession of the land.
Easement A joint tenant can encumber his interest in the land to compel his
co-owner to submit to the encumbrance if the encumbrance does not
interfere with the right of that co-owner to possession of the land.

W8A CO-OWNERSHIP (2)

Severance

Note that at CL a creation of co-ownership would create a TIC where

o 1. One of four unities was not present
o 2. By using words of severance
o 3. By otherwise evincing ???
Can always be severed on severance severed share is held as a TIC
Principle no unfairness or hardship can flow from the right of survivorship if
it can be readily avoided by severance: Croy v Wilis
How to sever?
o Unilateral act by joint tenant on their share by transferring to a third
party, by transfer to self- or by declaration of trust (Corin v Patton)
o Mutual agreement to terminate even oral: Calabrese v Miuccio
o Course of dealings between the parties which demonstrate an intention
that they have treated the JT as at an end: McGill v McGill (1997)
o Declaration of trust
o Court order e.g. Family Law Act 1975 (Cth) s 79
o Unlawful killing
Can always be severed on severance

Severance by unilateral act

Corin v Patton
o H and wife JT
o Wife terminally ill wanted to sever JT assumption to provide an
interest in the property to her children
o Executed deed of transfer to brother Corin

Executed deed of Trust Corin to hold for Mrs Patton as she directed (or
a court)
o Was an unregistered mortgage Mr Patton solicitor could not register
the transfer because she did not get. ???
Relevant severance principle: severance by an individual operating upon his
own share 2nd and 3rd principle would imply Patton knew he did not
ISSUE: does the mere declaration of intention or other inconsistent act by an
individual suffice? English authority it could be but only if the other party
knew about it. No evidence of that here. Similarly cannot impose a trust in
equity there was no express or ipled agreement to sever between the
parties
And as a matter of history and principle
Per Deane J:
o It has long been settled that one joint tenant can by an appropriate
instrument act of legal transfer and in the absence of applicable
statutory restraint, alienate his legal interest
Equity will no perfect an imperfect gift the mere execution of an instrument
in favour of the donnee will not be enough to confer an equitable interest.
For Torrens land ???
RPA 1900 (s 97)
o Provides that a joint tenant may register a transfer to himself or herself
in order to sever the JT also there is no need for an accompanying CT
E.g. Anderson v ODonnell mum and daughter home unit as JT mum filed
under s 97 RPA daughter tried to resist severance said was an agreement
not to sever
o Windeyer J said that was not on the evidence implication though that if
there was an agreement like that it would have prevented the
severance
In fact in Goyal Chandra [2006] NSWSC 239 Brereton J held that an
agreement
Severance by declaration of trust
Conveyancing Act 1919 (NSW) s 23C(1)(b) holding the property on trust for
designated beneficiaries
o

Severance by agreement

JT will be severed if co-owners agree

Do the statutory formalities apply re for the enforceability of contracts to
create or transfer an interest in land?
General trend now is that they do not: Abela v Public Trustee [1983] 1 NSWLR
308
o However they will remain tenants in common at equity until the
requisite statutory formalities are complied with

Severance following homicide

Forfeiture rule
Equity imposes a constructive trust on wrongdoer for benefit of victims
beneficiaries

Rasmanis v Jurewitsch
Rules does not apply in a number of cases
Does not apply in cases of self-defence of extreme provocation?

Other methods of severance

Severance by court order

Severance upon bankruptcy
A granting of a lease by a JT normally DOES NOT sever a JT does not fracture
any of the four unities.

Termination of co-ownership

RPA ss 100 101

o Allows registration of surviving joint tenant as sole proprietor of fee
simple estate
Termination of co-ownership
o 1. By the actions of the parties I,e transfer to a thirs party, transfer to
one co-ownr, subdivision
o By the Court ordering partitioning or sale of the land, e.g.
Conveyancing Act 1919 (NSW) s 666

Land (The partition Acts (not in NSW)

The partition Act (not in NSW)

o ????

W8B FULL REVISION

You have been asked to advise a commonwealth nation state as to whether it
should adopt a Torren system of land ownership like that operating in NSW
pursuant to the RPA 1900. Assume the states property system is currently
similar to old system title. Also, would you advise adoption of an immediate or
deferred indefeasibility model, and why?

Old system title

Torren system
Immediate or deferred infeasibility model
o Immediate infeasibility is the best because
Legal protection
Economic
o However, problems

W9A LEASES FORMATION

ASSIGNMENT FEEDBACK

1st thing when you see a problem question

o as an alternative there are 2 issues
1. Lot owners to garden
2. Third party to garden
can I have whether the option can be done, but NOT HOW
Part 1: Can the lot owners make a garden?
o The short answer is YES
o What are the issues?
Maintenance of the gardening
How to I allow third party into the premise few options which
may be available.
o IT IS NOT ABOUT THE SPECIAL RESOLUTION!
o Maintenance of the gardening
o Passing exclusive use by-laws
o 65B licence
o Whether it is fairly, equitable
o S 65A FIXTURES no need for resolution if they are
freestanding
Part 2: Can the caf owner make a garden?
o Transfer a lease
Is a transfer of common property the best interest of the lot
owners?
NO
o Pros and cons of a lease
Pro
Creates a proprietary interest but you want to avoid it as
much as possible
Cons:
Exclusive possession (got this)
o BUT YOU DONT STOP HERE
o Some cases are relevant here!!
o License: 65B
WHY DID NOT YOU MENTION IN THE FIRST PART!!!!!!!
Licence only for lot owners BUT:
Check empowering by-law OC create a by-law that
grants the power to give licence to third party
Coles and Noon cases!!! to not give exclusive possession to the
owners
Licence is preferred over a lease, but there are still contentious
issues existing
o Caretakers agreement
Section 40A
Possibility
o Easements
It is usually for a right of way or access, it is not for plantation
NO unless if there is a lease, and then a right of way is needed
to attach to that lease.
o Covenants
Burden or refrain or obligation to do something but it is only for
lot owners

NO

Miscellaneous notes + students work + comments

FINDING CASES!!!! MORE about cases summarise it and relating it

back to the issues
Be brief with MINOR ISSUES
USE FOOTNOTES BETTER

W9B LEASES
INTRODUCTION

The lessees rights essentially comprise an estate carved out of the larger
estate of the freeholder, but limited in time. Gives the tenant exclusive
possession of land for a maximum fixed duration.
As leases conventionally arise in contracts; it is therefore a curious hybrid
which hovers between the worlds of property and contract
Common law principles that assume equal bargaining power between the
contracting parties are now widely acknowledged to cause hardship when
that assumption is inaccurate.
Printed contracts that are in no sense the product of negotiation and are
presented to consumers on a take-it-or-leave-it basis.

Types of tenancies

1. Residential tenancies
o Reform of residential tenancy law constitutes only one element in a
housing policy designed to improve the quality of accommodation for
poorer people. An important part of that policy is an expansion of the
role of public authorities responsible for providing public housing.
2. Retail tenancies
o Consumer protection and other reforming legislation have also affected
commercial tenancies. The Consumer and Competition Act 2010 (Cth)
has made a significant impact on commercial leases by proscribing
unconscionable conduct, misleading and deceptive conduct and certain
kinds of false representation.
3. Agricultural tenancies
o The states and territories have according enacted statutes regulating
such relationships. A particular area of vulnerability for agricultural
tenants is fixtures.
4. Leases under the Crown Lands Act
o Wik Peoples v Queensland legislation introduced a number of
concepts unknown to the common law of landlord and tenant such as
the perpetual lease. It also blurred the distinction between the lease
and licence

5. Other tenancies
o This reduced sphere of operation should not be taken to imply that the
principles of the common law of landlord and tenant to be considered
in this chapter are of marginal importance.

THE GENERAL LAW OF LANDLORD AND TENANT

Terminology

Lessor landlord
Lessee tenant
reversion - The lessors interest in the land during the currency of the lease
Assign the reversion The disposes of this interest, usually by transferring
the estate in fee simple.
Instead of assigning the lease the lessee may decide to sublet the premises
for any period less than the duration of the lease. Thus a lessee holding a
lease with 10 years to run may sublet to a sublessee for a term of nine years.
The lessee continues to pay rent to the lessor, but is now entitled to receive
rent from the sublessee instead of remaining in occupation of the premises.
Sublease for a period equal to or in excess of the balance of the full term of
the lease is considered at law, an assignment of the lessee regardless of
description : Milmo v Carrenas
term of years six months to 999 years
periodic tenancy lasts for the designated period, which might be a week,
month, quarter or year, and continues thereafter for a further period unless
the appropriate notice is given by either party.
o one for a definite period, with a superadded provision that it is to
continue for another definite term of the same period, unless
terminated by proper notice to quit at the end of the first period
o If the landlord wishes to increase the rent and the tenant is not
prepared to agree, the landlord must give the tenant appropriate notice
to terminate the periodic tenancy and offer a fresh tenancy at the
proposed new rent.

Creation of leases

landlord-tenant relationship
o (A) usually created by means of certain documentary formalities
o (B) implication of law notwithstanding the absence of a concluded
agreement between the parties
Substantive requirements
o Certainty of duration
o Another observation from case law from Wilson v Meudon [2005]
Clause in lease tied exclusive occupation to ownership in shares
the lease was not terminable at will and did not expire at
any ascertainable date found no valid leasehold interest, only
a contractual, not proprietary right

Substantive requirements

Certainty of duration

Fixed-term tenancies
o common law rule valid lease must be of a duration that is certain,
or at least be capable of being rendered certain:
1. certainty in the commencement of the term
2. certainty in the continuance of the term
3. certainty in the end of term
As long as the maximum period of the lease is certain, the
lease is not invalid.
Lace v Chantler flexible lease where fixed term of years
may be made determinable before the end of the term on
a given period of notice.
4* - must not be ambiguous re terms of dates (especially ending)
i.e. duration of war: Lace v Chantler or the end of the
harvesting period: Bishop v Taylor or when the lessor finishes
building a new house: Mangiola v Costanzo

Berrisford v Mexfield Housing Co-operative [2012] 1 All ER 1393 (special case)

FACTS
Mexfield was founded by a bank as part of a mortgage rescue scheme
buying mortgaged properties from individual borrowers who are in
difficulty, and then letting the properties back to them.
Cl 6 (a) if the rent reserved hereby or any part thereof shall at any time
be in arrear and unpaid for 21 days
THEN in each case it shall be lawful for M to re-enter upon the premises
and peaceably to hold and enjoy the premises.
B fell behind with her rent, M however did not rely on 6(a) and sent a
notice to quit
Berrisford claimed that M owned for commercial reasons and was not a
lease.
ISSUES
Is such an arrangement capable of being a tenancy as a matter
of law?
Certainty in the end of the duration of a lease
RATIO
Periodic tenancy

DICTA

Tenancy of life: It was intended that B enjoy the premises for life
subject of course, to determination pursuant to cl 5 and 6. I
have in mind in particular cl 6(c), which will apply on Bs death,
the fact that her interest is unassignable, and the fact that it
was intended to ensure that she could stay in her home
Prudential [1992]: an agreement could not give rise to a tenancy as a
matter of law if it was for a term whose maximum duration was
uncertain at the inception; a fetter on a right to serve notice to
determine a periodic tenancy was ineffective if the fetter is to endure for
an uncertain period, but (b) a fetter for a specified period could be valid.
The law is not in a satisfactory state. There is no apparent practical
justification for holding that an agreement for a term of uncertain

duration cannot give rise to a tenancy, or that a fetter of uncertain

duration on the right to serve a notice to quit is invalid.
OUTCOM
E
NOTE

Will all attempted leases of uncertain terms be construed as leases for

life?
No.
In Berrisford, it was found that there is a lease for life when there
were uncertainty of duration.
The court claimed that there is no practical reason for the
certainty of duration but was unwilling to overrule it and therefore
held that it was a tenancy for life

TYPES OF TENANCIES

1. Fixed term lease

2. tenancies for life
o Berrisford v Mexfield recognition of tenancy for life
3. periodic tenancies
o While considered exception to certainty of duration, the
requirement of certainty is met because the periodic tenancy is
deemed to be a fixed-term lease with a superadded condition that it is
to continue unless brought to an end by notice
o combine the features of a term of years and those of a periodic
tenancy
o note that a lease term which states that a periodic tenancy can only be
determined by the lessee is VOID: Centaplot v Matlodge
no one party has exclusive power to determine the
4. tenancies at will
o Full exception to the certainty of duration
o a tenancy at will lasts until terminated by notice by either party, death
of party, tenant at will must pay for their use and occupation of the
land: Zegir
o still require a period of reasonable notice to be given before it is
effectively determined: Landale v Menzies
tenancies at sufferance
o the tenant holds over without the assent or dissent of the landlord
o

2. Key feature of a lease - exclusive possession

o

In order to create a valid lease there must be a grant of exclusive

possession, where the occupant is granted less than exclusive
possession, they will not be able to enforce their rights against third
parties, and they will not have a property right.
Curious hybrid leasehold estate as a way to use and develop the
land particularly agricultural land/ plots after enclosure its

applicability to Australia and our very large open agricultural rural

areas? Development of Crown leases
No exclusive possession - licence

Radaich v Smith (1959)

FACTS
Smith (called therein the Licensors) and R (the licensee) provided that
the Licensors hereby grant to the Licensee for a term of five years the
sole and exclusive Licences and privilege to supply refreshments to
certain premises on a variety of terms.

ISSUES
RATIO

Price of the rent was above market value

Whether there was a licence or a lease
McTiernan J:
The true test of a supposed lease is whether exclusive
possession is conferred upon the putative lessee.
1. Preamble to carry on the business of a milk bar could
only be carried out reasonably by a person with exclusive
possession
2. Cl 5 Upon the expiration of this licence the Licensee shall
immediately give up possession of the said building
3. Windows, door keys, locks, etc. were paid by the tenant.

DICTA

OUTCOM
E
NOTE

The agreement contemplates that the so-called licensee is to

have control of the premises, and of the persons entering them,
during business hours and, indeed, at all other times.
Windeyer J: (regarded the factor of exclusive possession as decisive, but
added a qualification exceptional cases which may arise in which it
will be seen that a right to exclusive occupation or possession has been
given without the grant of a leasehold interest
It was found to be a lease. Went to fair rents board.

Formal requirements

Torrens title
o For leases in excess of three years, in NSW by RPA s 53(1) leases of
three years or more must be registered.
When any land under the provisions of this Act is intended to be
leased or demised for a life or lives or for any term of years
exceeding three years, the proprietor shall execute a lease in the
approved form
Old system
o at common law, a leasehold, interest could be created without
formality

To prevent abuse, the Statute of Frauds 1677 required all leases to be

in writing except certain leases not exceeding three years in duration:
Property Act 1925 ss 52-54
o s 23B(1)
no assurance of land shall be valid to pass an interest at law
unless made by deed.
o s 23C(1)
Creation of interests in land by parol no interest in land can be
created or disposed of except in writing signed by the person
creating or conveying the same, or by his agent thereunto
lawfully authorised in writing, or by will, or by operation of law
o Where a provision such as NSW, s 23D(2) applies, any special terms
agreed on by the parties
Agreement for a lease (enter into a lease in future)
o Such an agreement for a lease is enforceable at law as a contract,
provided it is in writing as required by the Statute of Frauds, but does
not of itself crate a legal leasehold estate.
o The doctrine of Walsh v Londale applies only if the agreement for a
lease is complete and enforceable on usual contractual
principles: The usual contractual principles require the parties to have
reached final agreement and to have expressed the terms of their
agreement with reasonable certainty.
o But the mere fact that an agreement for a lease contemplates the
execution of a more formal document in the future does not of itself
deprive the agreement of binding effect.
o Equitable remedy specific performance
Implied tenancies at law (formal requirement?)
o Where no valid lease was executed by the parties, but a person went
into possession of land as a tenant and paid rent, an implied tenancy
arose at common law
1. where the parties have made no agreement or arrangement
at all;
2. where the parties have entered into a void lease;
3. where the parties have entered into an agreement for lease or
a lease that does not comply with the statutory formalities; or
4. where the lessee holds over upon the expiration of a fixedterm lease and where there is no holding-over clause.
Yearly periodic leases
o No tenancy from year to year shall, after the commencement of this
Act, be implied by payment of rent; if there is a tenancy, and no
agreement as to its duration, then such tenancy shall be deemed to be
a tenancy determinable at the will of either of the parties by one
months notice in writing expiring at any time.
o

Leitz Leeholme Stud v Robinson (1977)

FACTS
Plaintiff company was the registered proprietor. There was an
unregistered lease for the period of six years between the plaintiff and
the defendant (appellant). After about three years into the term, the

lessee vacated. The lessor treated the abandonment as a repudiation of

the agreement for lease and tried to claim their right to damages for
loss of the bargain the agreement took effect as a month to month
tenancy at will.
At trial, the court held that there was no legal right because an
unregistered lease only protected by equity.

ISSUES

RATIO

The memorandum of lease, though executed, was never

registered.
On 14 September 1973 the memorandum of lease was executed by the
plaintiff company.
On 16 Dec 1974 the plaintiffs solicitors lodged the memorandum with
the Registrar-General, together with duplicate certificates of title. For
various reasons which are not material, the memorandum was never
registered.
Between 11 July 193 and 8 March 1976 the defendant remained in
occupation of the property and paid the rent reserved by the lease. On
that date the defendant wrote a letter in the following terms:
On 11 July 1973 the defendant executed the memorandum of lease and
went into In view of my being at present in arrears in relation to the
payment of rent and in view of my not having the capability to pay
additional rentals it is with regret that I will be vacating the property.
Memorandum of lease not register is there a valid lease or an
implied lease?
Would common law rights destroy equitable lease?
A lease of land under the RPA for a term exceeding three years creates
no legal term unless it is both registrable and registered. But the
informal instrument may be treated as evidencing an agreement for a
formal leases
The unregistered memorandum of lease operates merely as an
agreement specifically enforceable in equity, but not itself creating a
legal term in the land. equity equitable compensation for the
Entry into possession and payment of rent bring into existence a
common law tenancy (implied tenancy at will) upon such terms of the
unregistered memorandum as are applicable to the tenancy at will.
common law damages under contracts

DICTA

Tenancy at will and agreement are independent sources of rights.

Common law tenancy at will does not destroy equitable interest.
At no stage do they merge, so that the termination of the estate
automatically extinguishes the agreement. The relevant principles are,
in my view, as follows.
Accordingly, when these decisions allude to an informal lease operating

OUTCOM
E
NOTE

as an agreement for a lease enforceable in equity, they affirm, not only

the availability of equitable relief, but also the existence of a contract a
law.
Appeal dismissed the defendant (appellant) had to pay the rent for the
rest of the period.
The relationship between the parties was primarily contract based and,
therefore, a legal relationship. Registration of the lease under the RPA
1900 would have conferred a legal lease upon the lessee but would not
have qualified or augmented the legal rights and obligations of the
parties derived from the contract.

W10A IMPLIED COVENANTS; ASSIGNMENT

COVENANTS
Introduction

With the exception of leases governed by specific legislative schemes, the

parties are generally free to agree on such terms as meet their requirements
Covenant may be derived from:
o 1. implied by law
o 2. implied by statute;
o 3. by necessary implication; or
o 4. covenants the subject of express agreement between the parties

Covenants implied by law

certain covenants are implied by the common law as a result of the landlordtenant relationship.
(A) quiet enjoyment
o obligation requires the landlord to ensure that the tenant can occupy
and enjoy the premises without disturbance or interference from the
lessor or those for whom he or she is responsible: Hudson v Cripps
[1896] 1 Ch 265
o act breaking this constitutes trespasses
o disturbance must be more than trivial
writing letters demanding to vacate is not a breach: David Jones
v Leventhal
o the right to quiet enjoyment can be modified by agreement between
the parties. A lease provided that the landlord would have reasonable
access to the premises in order to exhibit the premises to prospective
purchasers. The lease also contained an express covenant for quiet
enjoyment. It was held by the Supreme Court of New South Wales that
the particular right conferred upon the landlord by the access clause
qualified the right conferred upon the tenant
(B) not to derogate from grant

Whats its difference with covenant of quiet enjoyment and obligation

not to derogate from the grant
Argument that they are basically the same (at least the same
result): Glasshouse investments v MPJ Holdings [2005] NSWSC
456 per Young CJ in Eq, which is where acts or omissions are
such as to render the demised premises unfit for the purpose for
which the leased premises are intended to be used per Hill J in
Hawkesbury Nominees v Battik
It can be said that there is a difference in the nature of the
interference; or the purpose of the premise is not so important in
quiet enjoyment whereas in derogation
In the end, it is all based on the circumstances
When a landlord leases a part of the premises to a tenant (the grant)
Lend Lease Development v Zemlicka; and uses the remaining premises in a way
which makes the leased premises unfit (or less fit) for carrying out the
business it was intended for.
In other words, it is when a landlord uses the rest of his property
in a way which undermines the business of his tenant.
A landlord will be at fault for breach of this covenant if this two part
test is satisfied:
1. Landlord must own adjoining premises
2. Landlord must have knowledge at the time of the lease that
the demised (leased) premises were to be used for some special
purpose and the use of the retained (his own remaining)
premises interfered with this special purpose.
Acts which have been held to break the covenant include:
Where landlord granted a lease for the purpose of storing
explosives, and then granted a lease over adjoining premises for
a purpose which jeopardized the tenants statutory license.
Harmer v Jumbil (Nigeria) Tin Areas Ltd

If landlord uses retained premises in a way which blocks the flow

of air to the adjacent tenants premises, if the tenant requires
ventilation for the ordinary conduct of his/her business. Cable v
Bryant [1908] 1 Ch 259.

If landlord demolished buildings on adjacent land and tenants

have goods stolen because the work has rendered the tenants
vulnerable to burglary. Lend Lease Development v Zemlicka (1985) 3 NSWLR
207.

(C) a covenant that certain furnished dwellings are fit for habitation.
o NOW OVERRIDEN BY STATUTE (residential tenancies legislation)

Liability for acts of others

The question arises whether a landlord is liable for the actions of his other
tenants (i.e., is a landlord liable if one tenant disturbed the other's right to
quiet enjoyment/made the other's premises less fit for the intended
business).

Aussie Traveller v Marklea (1988) 1 Qd 1

FACTS

ISSUES
RATIO

DICTA

The plaintiff leased premises off the Defendant to manufacturing

canvasses. The defendant leased the adjacent property to Top Flight,
who did a lot of carpentering. Top Flights business activities resulted in a
lot of sawdust and debris, noise, etc., which consistently blew into the
plaintiffs premises and destroyed its business.
The plaintiff alleged that the defendant is liable for the actions of Top
Flight, and thus broke the covenant for quiet enjoyment owed towards
the plaintiff.
Is the carpentering and sawdust, etc. sufficient to constitute a
breach of implied covenant?
A landlord will be responsible for acts done on his land if they
were reasonably foreseeable. The landlord knows the nature of
the business of the lessee. He knew about the problem and was
told and did not do anything about it. Also, there was a clause
on this
The two questions are 1. Whether there was a breach of covenant and, if
there was, 2. Whether the landlord is liable for that breach despite the
fact that it came from another tenant.
There was definitely a breach of the covenant - the noise and debris
from Top Flight's premises substantially interfered with the Plaintiff's
occupation.
It is well settled that under a lease of land, whether it is a formal
demise or a mere tenancy agreement, there is on the part of the lessor
an implied covenant or agreement not to derogate from the grant, and a
further such covenant or agreement for quiet enjoyment
(EVEN WITHOUT THE CLAUSE, it is still likely that the lessor would be
held liable because the covenant is IMPLIED).

OUTCOM
E

The problem was NOT caused by the defendant and capable of being
rectified by active intervention of them this aspect of intervention has
been held to be an important distinguishing feature
In this particular case, there was actually a clause in the lease to Top
Flight where "the lessee undertook not to do or permit any act or thing
which might be a nuisance or cause damage or disturbance to any other
tenant or to the lessor".
This clearly empowered the Defendant to do something about the
nuisance and disturbance, yet he did not do so, even after the repeated
requests of the Plaintiff. The evidence also indicated that the Defendant
was clearly aware of the sawdust problem, making it reasonably
foreseeable.

NOTE

the Defendant can justifiably be held liable for the actions of Top Flight.
IMPORTANT:

This principle was qualified in Fanigun Pty Ltd v Woolworths Ltd,

which held that the landlord will only be responsible if he is in a
position to take some remedial action against the covenantbreaking tenant (i.e., no liability if there is nothing the landlord can
do).
This is only applicable to landlord owing obligation to a tenant; a
landlord is NOT liable in nuisance to third parties for unruly tenants:
Smith v Scott
Does not have to be a physical interference of the enjoyment of the
premises though there was one here (sawdust) physical interference
from sawdust and noise was found here.
Was their interference with P? it is one of fact but still look at all the
matter including trial judge comments and evidence presented there
substantial interference, premises substantially less fit evidence used
in that trial i.e. workplace inspectors etc. Was found plaintiffs
occupation was substantially interfered.
Obligation to repair

at common law, the landlord has no obligation to repair

o there has been, however, an increasing tendency to imply obligation to
repair where this is seen to be necessary to give business efficacy
to the agreement
it is not enough that it is reasonable to imply a term; it must be
necessary to do so to give business efficacy to the contract:
Homebush Abattoir Corp v Bermria Pty Ltd
Codelfa Construction v State Rail Authority
o the landlord may be under an implied obligation to repair the common
areas of the building which have been reserved for the use of all
tenants such as common access ways and stairs Liverpool City
Council v Irwin

Duty to take reasonable care for the safety of occupants

Although there is no general duty for landlord to provide premises fit for the
purpose of the lease or to provide premises fit for habitation, the landlord is
under a duty to take reasonable care for the safety of the tenant
It is said that the duty is found in tort and not in covenants
Appellant landlord had breached its duty to the plaintiff to take reasonable
care for the safety of occupants of the demised premises. The appellant had
conceded that it owed such a duty and all justices of the court appeared to
accept that such a duty arose, in the form of a duty in tort rather than a duty
arising from an implied covenant in the lease.

Jones v Barlett (2000) 205 CLR 166

FACTS
The Appellant walked into a glass door and it shattered, injuring him
severely.
The glass door was very thin. It complied with regulations when it was
installed (50 years before), but the regulations have since changed and
it did not presently comply.
The Appellant alleged that the Respondent (the landlord) was negligent
in failing to have an expert examine the premises (and replace the glass
door) when the lease commenced.
ISSUES
Whether there was a breach of duty to take reasonable care for
the safety
RATIO
The landlord has a duty to repair defects that are known or that
should reasonably have been known. the duty has been
narrowed

DICTA

Per Gummow and Hayne JJ:

Reasonable fitness requires 3 inquiries:
Presence of dangerous defects not just a normal defect,
but a dangerous defect - if it is dangerous when being
used in a regular fashion, and ordinarily would not be
dangerous when so used.
Taking or reasonable care to ascertain them or should an
ordinary person in landlords position know there was any
risk
Exercise of reasonable care to remove them or otherwise
make premises safe
The landlord does not need to make regular inspections for defects
during the tenancy. The steps a landlord is required to undertake are
only those that would be taken in the course of "ordinary reasonable
human conduct".
In regards to dangerous defects of which the landlord had known or
reasonably should have known, the landlord will be responsible not only
for tenants but also third parties.
In this case, the glass door cannot be seen as a dangerous defect.

OUTCOM
E
NOTE

Duty is not one of strict liability, and there is no obligation to remove all
defect and therefore no duty to make the residential premise absence of
defects or that reasonable are is taken by another in respect of existing
defects.
Lessor was not liable because the defect was not dangerous.
(IMPORTANT) Hume narrowly confine the scope of the duty
to take reasonable care to avoid foreseeable risk of injury, but
not to make the premises as safe as reasonable care to avoid
foreseeable risk of injury, but not to make the premises as safe
as reasonable care could make them.

not liable to install handrail where the respondent fell from the
steps

Virgona v Lautour not liable to fix when fell from roof cavity because it
is not a reasonably foreseeable place for a person to go
Loose Fit v Marshbaum [2011] NSWCA
FACTS
Patron of a fitness centre was injured when she fell down stairs where no
handrail was present, in contravention of the local building regulations.
The stairs had been installed by the owners of the building without
council permission. The tenants, who owned and ran the fitness centre,
took possession of the premises some weeks before the patron fell down
the stairs.
ISSUES
Whether the landlord was liable for breach of reasonable care
for safety of invitees
RATIO
DEPENDS ON FACTS OF CASE:
General proposition tenant is in possession and has control
and can determine who enters and therefore held liable.

DICTA

OUTCOM
E
NOTE

The Owners were in a good position to prevent the hazard as

the tenants because of how obvious the risk is.
In particular, the Owners created the risk by renovating the premises
using an unlicensed builder and neither seeking nor obtaining Council
approval for the renovations. The renovations undertaken did not
comply with the applicable safety standards which created the very
hazard which later resulted in the plaintiff's injuries.
the Owners were in at least as good a position as Loose Fit to appreciate
that the absence of a handrail on the upper level created a risk to the
safety of entrants and that the risk was simple and inexpensive to
eliminate. This particular case therefore could be distinguished from
cases where the risk to safety was only ascertainable by a landlord from
careful inspection of the premises prior to the lease being entered into.
Owners held liable.
It is possible that the standard for commercial premises is higher than
residential premise.
The standard will be depended on the circumstances of each case.

Covenant to use the premises in a tenant-like manner

This is not a general repair responsibility, but rather about simply taking care
of the house in an ordinary manner (e.g., keeping it clean, not damaging it
etc.).
*However, this covenant appears to be overridden by s 84 (1)(b) of the
Conveyancing Act 1919 (NSW)

implies a covenant in every lease, subject to any contrary agreement

between the parties, for the tenant to keep the premises in good and
tenantable repair.

Covenant to yield up possession

At the expiration of the term, the lessee is bound to deliver vacant possession
to the lessor.
This obligation extends to subtenants and other occupiers and thus the
tenant must see that all such persons have vacated the premises.

W10B COVENANTS

Express covenants
o Covenant to repair
o Covenant against assignment or subletting
o Covenant as to user
o Covenant to pay rent
Covenant to repair
o Factors taken into assessing the obligation:
Nature and locality of the premises
The age of the premises and value
The condition of the premises at the commencement of the
lease
The terms of the lease
Nature of the defect and the cost to remedy
See list at Holding & Management v Property Holding &
Investment
o Distinction between a repair and a renewal
Unless lease is clear a covenantor who covenants to repair not
liable for renew.
Covenant to repair does not extend to the covenantee
o Covenant to KEEP IN repair is more extensive than a covenant TO
repair. In some cases repair WILL entail replacement of the damaged
item
Chandos Developments v Mulkarns [2008] NSWCA
Roof was in such a bad state that you can only replace it
o What is the standard? There is no requirement to put premises into a
better condition than what they were when leased it appears in NSW
statutory interpretation standard form repair covenant in schedule to
conveyancing Act 1919 (NSW) the standard of repair relates to the
premises condition at demise (to lease): Callaghan v Merivale CBD
(2006) NSW ConvR

o
o

Common law position was along the lines that a landlord who has
covenanted to repair had to put things into fit condition thorough
repair when demised if they were not already: Lurcott v Wakely &
Wheeler
Proudfoot v Hart
Tenant covenanted to keep premises on good tenantable repair
and leave them in such at end of tenancy
Per Lord Esher MR where the premises are not in repair when
the tenant takes them, he must put them into repair in order to
discharge his obligation under a contract to keep and deliver
them up in repair
Implication? If the premises burnt down or hit by earthquake tenant
liable to rebuild: Mathew v Curling
You could be responsible for fixing the problem of a previous tenant
even if the precious tenants structural alterations constituted a breach
of repair covenant (which it would): Bailey v J Paynter (Mayfield)
Lord Esher MR in Proudfoot highlighted some qualifications i.e. the
age of the premises
Thus the NSWCA has applied the caveat that with an obligation
to repair, regard must be head to the age, character and locality
of the building and to the type of tenant likely to lease the
building: Abrahams v Shaw
fair wear and tear exception: Haskell v Marlow
Reasonable conduct do not let minor things that are related to
far wear and tear spiral into problems that go beyond that
reasonable use by the tenant and the ordinary operation of
natural forces
Fair and wear principle applies where the ordinary operation of
natural forces results in a condition which could be regarded as
something to be delat
Further limits
No obligation to renew or improve the premise: Graham v Market
Hotel (1943)
A repair covenant does not impose a duty to repair an inherent
defect in the premises: for what is an inherent defect see
Graham v Markets Hotel (1942)
NOTICE
No notice, no liability
OBrien v Robinson [1973] a lessee and wife were injured when
a ceiling collapsed on them landlord held not liable as he had
no notice of the disrepair (7-Eleven Stores v United Petroleum)
BUT landlord must repair within reasonable time EVEN if notice is
given to them by a person other than the tenant: McGreal v
Wake
Lease is a property right have an inheret right to transfer in whole or
part: Keeves v Dean [1924] includes weekly or periodic tenancy:
Commonwealth Life Assurance v Anderson
But lease can provide otherwise landlord likes to be in control
quality of the tenant

TWO categories of covenants against assigning or subletting:

Absolute
Prohibits any dealing with lease by tenant but courts
have developed practice of consulting such covenants
strictly against the landlord: Field v Barkworth
o I.e. covenant not to assign does not restrict right to
sublet: Sweet & Maxwell v Universal News
o Covenant against subletting not breached if tenant
only sublets part of premises: Cook v Shoesmith
o Covenant aginst assigning or subletting nt breached
where the tenant merely parts with possession
pursuant to the grant of a revocable license:
Stening v Abrahams
o
Qualified
i.e. the tenant may only assign or sublet with the prior
written consent of the landlord
if the landlords consent is required, s 133B of the
Conveyancing Act provides it cannot be withheld
unreasonably
cannot contract out of this but effect can be limited by an
agreement that as a condition of
Re unreasonableness 2 considerations held to be relevant: the
effect the transactions might have on future lettings of the
property
Whether a reasonable person in the landlords position would
anticipate an adverse impact from the transactions on his or her
property interests: J A McBeath Nominees v Jenkins Delopment
Corp
Reasonablenes
Covenant as to user
Generally lessee free to use demised premises in any way
thought fit (subjects to local controls etc of course) unless
the lease restricts the use of premises: Direct Factory
Outlets v Westfield Management (No2)
Most leases contain such as restriction clause
But lease could have covenant that use can be changed
with consent thus o to s 133, etc. Conveyancing Act
Covenant to pay rent
Landlord has a right at CL to recover a reasonable sum from a
person occupying the land for the use and occupation of that
land: Gibson v Kirk
Note statutory implied obligation to pay rent: NSW s 84(1)(a)
and like all statutory implied obligations this can be varied by
express agreement between the parties
Note options on renew and rent review clauses from 8.118-8.120

The enforceability of covenants after assignment privity of Contract

1. A lease is a contract privity of contract tenant states that only parties to

the original contract are bound by it
2. Privity of estate upon assignment of the lease the burden and benefit of
covenants which touched and concerned the land passed to the assignee.
Thus the assignee of the lease could enforce covenants answering this
description against the original landlord (Spencers Case)
o Privity of estate allows the enforcement of covenants in the lease that
touch and concern (Spencers case) the land, even where no privity of
contract exists
o If the landlord assigns the reversion, privity of estate exists between
the assignee and the tenant
o If the tenant assigns the lease, privity of estate exists between the
landlord (or their assignee) and the tenants assignee
o However if the tenant grants a sublease, there if no privity of estate
between the landlord and the sublessee
EXCEPTION: The requirement that covenants must touch and concern the land
to be binding upon successor in title no longer apply in the case of Torren
title land Karacominakis v Big Country Development
o Upon the registration of any transfer, the state or interest of the
transferor as set forth in such instrument, with all rights thereto
belonging or appertaining, shall pass to the transferee, and such
transferee shall thereupon become subject to and liable for all and
every the same requirements and liabilities to which the transferee
would have been subject and liable
o In discussion of the liability of the assignees: the effect of s 51 is that
the transfer of a lease creates privity of estate and privity of contract
between the lessor and the transferee of the lease
Touch and concerned
o Renew the lease: Weg Motors v Hales
o Supply premises with water: Jourdain v Wilson
o To pay rent: Parker v Webb (1693
o To repair: Williams v Earle (1868)
o To insure against fire: Vernon v Smith (1821)
o to use as a dwelling house: Wilkinson v Rogers (1864)
o not to assign without consent: Cohen v Popular Restaurants [1917]
Not touched and concerned
o Option to purchase the reversion: Woodall v Clifton [1905]
o Requiring landlord to compensate the tenant for non-renewal: Denham
Bros v Freestone Leasing
o Repair chattels: Williams v Earle (1868)
o Pay an annual sum to a third person: Mayho v Buckhurst
Assignment v sublease (IMPORTANT)
o Assignment privity of estate between the assignee & the landlord
NO privity of estate between the landlord and the assignor
o Sublease privity of estate between landlord and SUBLESSOR (original
lessee)
NO privity of estate between landlord and sublessee
Landlord can enforce rights on sublessee through right of
forfeiture

A squatter who bars the title of a tenant by a period of adverse possession is

not an assignee of the tenant (since the tenants interest is extinguished and
not conveyed to the squatter) and is accordingly not liable for breach of the
terms of the original lease: Tichborne v Weir (1892)

Parties bound to the express covenants even after assigning of lease or

reversion:
THERE ARE 4 ELEMENTS OF IN A INTEREST THAT TOUCHES AND CONCERN
An exhaustive list
2. Privity of estate
o Relationship that exists between landlord and tenant and their
respective successor in title
Only covenants that touch and concern the land will both bind and be
enforceable by successors in title to the original lease and reversion because
they run with the
*** registered assignee of Torrens title land
HOW DO YOU ASSIGN
WHAT IS ALLOWED TO BE ASSIGNED
WHAT ARE THE OBLIGATION THAT MAY BE A PROBLEM
o REMEDY IF YOU CANNOT ACTUALLY ASSIGN

Moule v Garrett (1872) Court of Ex Ch

FACTS
The plaintiff was LESSEE of premises. He assigned the lease B
defendants.
Assignees expressly covenanted with the assignors to indemnify
them against all subsequent breaches covenant to repair.
Defendants breached the covenant.
The lessor recovered damages from the plaintiff for this breach.
The plaintiff brought an action against the defendants to recover
the damages he had paid.
ISSUES
Whether the assignees (defendants) are liable to recover for the

RATIO

DICTA

OUTCOM
E
NOTE

lessee
There is a common law duty to indemnify lessees damages. This
is applicable where the plaintiffs payment to the landlord has
discharged a liability owed by the defendant.
Both the lessee and the defendants were liable to the lessor for
the breach of the covenant, which ran the land, the former by
contract and the latter by the privity of estate.
The premises which are the subject of the lease being in the possession
of the defendant as ultimate assignees, they were the parties whose
duty it was to perform the covenants which were to be performed upon
and in respect of those premises. It was their immediate duty to keep in
repair, and by their default the lessee, though he had parted with the
estate, became liable to make good to the lessor the condition of the
lease.
Original tenant has rights of recoupment against the assignee
This is extended in Teparyl Pty Ltd v Willis [2010] VSCA:
Original tenant also has rights of recoupment against assignees
guarantor.

Assignment of the reversion (disposing interest by transferring land)

[fee simple]

The benefit and burden of covenants having reference to the subject matter
of the lease should run with the reversion.

Re Hunters Lease; Giles v Hutchings (1942) Ch 124; 1 All ER 27 Chancery Division

FACTS
Defendant was a lessee whose original lessor covenanted to pay him
money if he (the lessee) decided to not renew the lease. The lessor later
assigned his reversion, and the assignee claimed he is not bound by that
covenant. The lessee argued that it should be viewed the other way, as
a right to renewal which the lessor can avoid by paying a sum.
ISSUES
Whether the burden of that obligation passes on the assignment
of the reversion
RATIO
Both the covenant to compensate for non-renewal as well as the
right to renewal do not constitute covenants which touch and
concerned.
DICTA
OUTCOM No obligation on the assignee.
E
NOTE
Ashmore Developments Pty Ltd v Eaton (1992) 2 QD R 1
FACTS
Ashmore was the lessor of a premises. The lessee of that lease assigned
the lease, and that lease was then assigned again, to the defendant
(Eaton).

ISSUES

RATIO

DICTA

During the period of the lease, the defendant owed the plaintiff money
(arrears of rents and outgoings, etc.)
With that money still owing, the plaintiff assigned its reversion (i.e., sold
the fee simple) to another party.
The plaintiff is now seeking to claim those rents.
Does the right to recover arrears even before an assignment of
a reversion transfer to the assignee (and thus is forfeited by the
assignor?)
Assignee of the reversion acquires the right to sue for breaches
of covenant committed before the assignment, and the assignor
loses that right.
Until notice be given the assignment is an equitable
assignment, but it is an assignment which requires nothing
more from the assignor to become a legal assignment. The
assignee may himself give notice at any time before action
brought
However, in this case, the contract of sale between the Plaintiff and the
purchaser of the reversion specified that the Plaintiff could recover
arrears which existed before the assignment. This constituted another
assignment - the equitable assignment of that debt (note: the assignor
of the reversion has now become the assignee of the debt, and the
assignee of the reversion has become the assignor of the debt).

OUTCOM
E
NOTE

W11A REMEDIES

Basically, a landlord has two ways to get a lease forfeited through privity of
contract (breach of contract), and privity of estate (breach of covenants).
Forfeiture in generally immediate loss of all interest in property, including
the right to possession: Whim Creek Consolidated NL v Colgan

Forfeiture of lease by landlord

The landlords primary remedy forfeiture of lease by landlord

o His or her capacity to bring the lease to an end prior to the expiry of
the term.
Procedural requirements
o 1. There must be an express right to forfeit in the lease itself, or a right
to forfeit implied by statute
o 2. The tenant must have breached the lease.
o 3. Landlord must serve a notice on the tenant unless the lease or
breach comes within an exception to the notice requirement
o 4. The breach must still be current at the expiry of the notice period

o 5. The landlord must effective forfeit the lease

o 6. Tenant must not have been granted relief against forfeiture
Stator requirement for rental covenant breach and non-rental covenant
breach is different.
o Landlord and Tenant Act s 8 or CA s 85(1)(d) rent only has to be more
than one month in arrears.
No CL right to forfeit without formal demand except if it was in a
clause in lease dispensing with notice.
o Non-rental protection of notice through section 129.
o notice allows the tenant to remedy the breach: Fox v Jolly [1916]
o required even if irremediable: Horsey Estate v Steiger [1899]
o landlord reasonably believes that the tenant will be incapable of
affording the repairs is no justification for not serving the notice:
Primary RE v Great Southern Property Holdings [2011]
Sufficient notice: Macquarie v Area Health Authority
o must specifying the particular breach complained [129(1)(a)]
o Enable the tenant to understand with reasonable certainty what it is
which he is required to do that the tenant should be informed of the
particular condition of the premises which he is required to remedy
Knows about the nature of the breach
o must be given a reasonable time to remedy the breach [s 129(1)]
GENERALLY: 3 months: Penton v Barnett [1898]
EXCEPTION: 14 days was held sufficient because the tenants had
disregarded all prior warnings indicating no intention whatsoever
to remedy the breach: Billson v Residential Apartments
EXCEPTION: 14 days if irremediable breaches, a shorter period is
allowed: Civil Service Co-op v McGringors
o Assignment without consent the notice must be directed to the
assignee, since the assignment is effective despite the breach: Old
Grovebury Manor Farm v M Seymour
o May be the case though that such breaches may actually be capable of
being remedied could harm to lessor be averted by lessee then
complying and paying any monetary compensation? Expert Clothing v
Hilgate
o Equitable leases: s 128 the notice requirement extends to equitable
leases. However where the breach is such as to disentitle the tenant to
an order for specific performance, no notice is required, on the basis
that there is no longer an equitable lease: Marshall v Council of the
Shire of Snowy River
Enforcement of the right of re-entry

Common law landlord has NO implied right to bring the lease to end prior to
its natural determination by effluxion of time
It is the invariable practice of landlords to include a clause in the lease
dispensing with the requirement of a formal demand.
Section 129 applies to both forfeiture and re-entry

No right to forfeit if breach waived

Landlord needs to act unequivocally to forfeit a lease.

If the landlord elects to treat the lease as still in force the landlord is said to
waive the breach. The waiver may be express or implied.
o Implied if the landlord is aware of the tenants breach of covenant and
performs some act clearly recognising the continuance of the tenancy,
such as accepting rent after learning of the breach.
Waiver of a breach occurs when a landlord is:
o 1. aware of the breach; and
o 2. perform an act clearly recognising the continuance of the tenancy
Conducts amounting to waiver
o Accepting of money regardless of what you call it that appears to be
rent: Lindale Nominees v Ekharadly
o Acceptance of rent
o Lessor seeking access:
Mesne profits (a form of damages):
o Damages due to a lessor form a lessee, where the lessee commits a
trespass by remaining in occupation following termination of the lease:
Progressive Mailing House
This is only after the fact and sought order from court
Manner of forfeiture
o 1. Court proceedings writ served on tenant demanding possession:
Moore v Ulcoats Mining Co
o 2. Re-entry (self-help)
Reasonably force Imperial Acts Application Act 1969 (NSW) s
18

Relief against forfeiture (equitable remedy)

Remedy granted by a court of equity against the loss of an estate or interest

in land or other proprietary interest: Legione v Hately

Stieper v Deviot Pty Ltd (1977) 2 BPR 9602 NSWCA

FACTS
Appellant is the lessee under an unregistered lease for five years,
commencing 1 Jan 1976, of premises used by it for the construction of
fibreglass boats. The respondent lessor forfeited the lease for breaches
of the covenant to pay rent. The tenant repaid the rent. The proceedings
at first instance were by the lessor for an order for possession and a
cross-claim of the lessee for relief against forfeiture.
ISSUES
What circumstances warrant a refusal of relief when breaches
concerning rent are remedied?
RATIO
There is a practice of the court of equity to grant relief against
forfeiture for non-payment of rent whenever a debt is repaid.
However, the court can refuse this if there are any equitable
bars to relief.

DICTA

The conduct of the appellant is important. A person who

mistreats the property could be refused relief (ie when it is
inequitable).
The mistreatment of the property by the appellant amounted to

OUTCOM
E
NOTE

sufficient conduct to warrant the refusal of relief against forfeiture

(storage of dangerous and inflammable liquids) causing the landlord to
pay more insurance.
Appellant failed and relief against forfeiture was refused.

Remedies of landlord and tenant in contract

Progressive Mailing House v Tabali Pty Ltd (1985) HCA
FACTS
Appellant was the LESSEE under an unregistered memorandum of lease
of land under the provisions of the RPA 1900 (NSW) (equitable lease and
legal contract). The appellant did not pay rent for two months. The
respondent commenced proceedings by statement of claim seeking an
order for possession, judgment for outstanding rent and interest, mesne
profits and damages.
ISSUES
Does repudiation apply to leases?

RATIO

The question which arises is the extent, if at all, to which the

relevant rights, duties and liabilities of the parties to the
memorandum of lease fall to be determined by reference to the
ordinary principles of contract law?
On the balance of authority, it is clear that the principles of
(contract law) repudiation apply to leases as well.
When a lease is forfeited, there are no expectation damages
(the lease merely ends). However, if the circumstances are such
that allow termination (ie, repudiation, breach of condition etc.)
then the lessor will be entitled to expectation damages (loss of
profits etc.).
Mere breaches of covenants do not amount to repudiation - it must be
the same situation as in contract; ie, an intention not to abide by the
contract or insisting on a substantially inconsistent interpretation of it.

DICTA

OUTCOM

What is a fundamental breach?

In the sense that the party at fault, though wishing to perform the
contract, was guilty to such default in performance that the breach went
so much to the root of the contract that it made commercial
performance of it impossible
The mere continuance of the lease pending forfeiture is not an election
either way. The election to be made by a lessor is between continuing to
bind the lessee to performance of his executory obligations and putting
an end to those obligations so that the substitutionary liability in
damages will arise. Enforcing a forfeiture may be an effective means of
accepting liability in damages will arise.
There was a repudiation.

E
NOTE

Where the tenant has repudiated the obligations under the lease, the
landlord may accept the repudiation as discharging both parties from
further performance, terminate the lease and recover loss of bargain
damages for the loss of the lease.
Normally, not paying rent is not enough it must be demonstrated that
there was an intention to act in a manner substantially inconsistent with
his obligation under the lease?
Fact that a use of unprofitable is not sufficient for frustration: Maori
Trustees v Prentice
This case put an end to the question in Shevill, which stated a line of
authority which specified that mere forfeiture because of a covenant (as
opposed to a breach of a condition or repudiation etc.) does not entail
expectation damages unless the lease says so.
Anti-Shevill clauses specified that certain covenants are conditions
(essential terms) which would entitle the landlord to terminate and
receive expectation damages if breached. This is common today.
agreement prior describing the clause as an essential term, and its
breach will be repudiatory

Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market

FACTS
Landlord granted the tenant a lease for 15 years. Obligation to pay
rent was an essential term (expressed). By 1999, the tenant was in
arrears with rent. Parties entered into a deed which varied the lease,
allowing the landlord to grant a sublease to secure a reduction of the
rent payable by the tenant. The deed required the tenant to pay the
arrears of rent, the rent payable under the sublease and a reduced rent.

ISSUES

RATIO

Subtenant assigned its interest to Woolworths. Woolworths paid only half

the rent payable under the sublease, which resulted in the tenant being
in breach of the deed. The landlord terminated the lease for this breach
and claimed the unpaid rent and damages for loss of bargain (from the
tenant?)
Whether the landlord can claim unpaid rent for loss of bargain
for the subtenant assignees breach.
Usage of Anti-Shevill clause (?)
Under general contractual principles, an innocent promisee can
terminate the contract, and recover loss of bargain damages,
where there is repudiation, or a fundamental breach, or a
breach of condition ie a breach of an essential term.

DICTA
SUBMIS.

Looking at the whole construction of the terms it is possible to

make paying rent an essential term (Anti-Shevill clause is
effective)
Rent is a covenant that touches and concerns demised land.
1. failure to pay rent is not necessarily repudiatory rejected because
the essentiality of the obligation is reinforced by several provisions. This
is also explicitly mentioned in the clause.
2. interdependency of grant of possession and right to rent: If the
landlord decided to terminate the lease for reasons other than
repudiation or fundamental breach, the damage flowing from loss was
not causation by the tenants breach, but by the landlords decision to
terminate. causation argument.
However, if the lease clearly provided that whenever a lessor exercised
the right of re-entry conferred by the lease he was able to recover such
loss. Therefore, the causation argument fails.
3. Repugnancy of the landlord Rejected. There is no true repugnancy. If
landlords obtain possession, they can only recover loss of bargain
damages if they have tried unsuccessfully to obtain a new tenant at the
rent stipulated in the terminated lease. The monetary equivalent of what
they would have got if they had not taken possession of the property

OUTCOM
E
NOTE

Tenant had to pay for the loss of bargain to the landlord.

Marshall v Council of the Shire of Snowy River (1994) SCNSW (CA)

FACTS
Appellant entered into an unregistered agreement to lease. The
agreement provided three options to renew. The appellant purported to
exercise the first option under the agreement for lease. Subsequently,
and after continuing disputes between the parties, the council notified
the appellant that he was required to vacate the relevant land within
seven days of the notification, The appellant did not vacate the land and
on 24 May 1994 and the council sent to the appellant a notice of
termination of the statutory tenancy at will effective on 30 June 1994
requiring him to vacate the property on that date.
ISSUES
What notice needs to be given on termination of a lease through
contractual principles (as opposed to forfeiture)?
RATIO
One-month notice is all that is necessary to terminate a
statutory tenancy at will for an unregistered lease (under
Conveyancing Act s 127)
No registered lease means s 129 is not applicable.
No equitable lease pursuant to principle in Walsh v Londale
DICTA
Since there was no lease (only a tenancy-at-will), there was never any
requirement to abide by s 129 of the Conveyancing Act. All that was
required was a notice which complies with s 127 (1 month notice), and

Respondent's notice complied with that.

In any case, s 129 is only required where a lease is forfeited as per an
express or implied right to forfeit, as opposed to when a lease is
terminated because of normal contractual principles (as was the case
here).
Furthermore, there is an exception in s 129 (8) which states that the
notice requirement of s 129 does not apply in the case of forfeiture etc.
because of the non-payment of rent. So once again, the Respondent
never had to give a notice under s 129.

OUTCOM
E
NOTE

Relies on repudiation s 129 applies, relies on the latter right

fundamental breach of essential term s 129 does not apply.
The notice was sufficient and the appeal is dismissed.
The case effectively outflanked the policy behind s 129 which is to give
reasonable notice to the tenant.

Repudiation, notice and relief against forfeiture

where a lease has been terminate (as opposed to forfeiter), there will be no
relief against forfeiture

Batiste v Lenin (2002) SCNSW (CA)

FACTS
The defendant (lessor) and the plaintiffs (lessee) entered for a term of
six years with an option to renew for a period of six years and an option
to purchase. At the time the lease was granted the hotel was in a
severely deteriorated stated.

ISSUES

RATIO

It required substantial refurbishment to be suitable for use as a hotel.

There were significant breaches of the lease; and a long continuing
pattern of arrears of rent, commencing soon after 1 Jan 1999. The trial
judge concluded that the lessee had repudiated the lease. The plaintiffs
commenced proceedings against the lessor seeking relief from forfeiture
of the lease and of the option to purchase. The trial judge rejected the
lessees claim as there was no evidence that outstanding debts could be
paid and the relationship between the parties was such that it should not
be continued.
Can the breaches of the non-rental covenants be relied upon
though no notice was given?
Should the court refuse relief against forfeiture because of the
repudiation of the agreement?
1. Generally no. But further authority says that this does not
mean that these breaches are not to be taken into consideration
of the court in awarding relief against forfeiture in all cases.

DICTA

OUTCOM
E
NOTE

2. It would be quite unjust to the lessor to ignore such breaches

in considering whether to exercise the discretion to grant relief.
The claim to possession was based not merely on breaches of
conditions in the lease but also on the lessees repudiation of
the lease.
No notice given to the other breaches (from rental).
The appellant did not pay rent and also other breaches (breach of
repudiation and breach of essential terms)
No relief against forfeiture.

W11B MORTGAGE
There is a difference between old system mortgages and Torren system
mortgages
56C Confirmation of identity of mortgagor

[1] Mortgagee must confirm identity of mortgagor before presenting a

mortgage for lodgement under this Act, the mortgagee must take reasonable
steps to ensure that the person who executed the mortgage, or on whose
behalf the mortgage was executed, as mortgagor is the same person who is,
or is to become, the registered proprietor of the land that is security for the
payment of the debt to which the mortgage relates.

Definitions

Mortgage include a charge on any property for securing money or moneys

worth; and
o *remember it is not a TRUST!!
Mortgagee includes any person from time to time deriving title to the
mortgage under the original mortgagee; and
Mortgagor includes any person from time to time deriving title to the equity of
redemption under the original mortgagor,
Torren
o Charge over land of the creditor ith statutory rights (if mortgage is
registered) in favour of the mortgagee on the mortgagors default t
take possession of the and sell it or to foreclose
o Note that unlike old system mortgages a Torrens mortgage does not
o CREATION OF THE MORTGAGE
RPA s 56
RPA s 42 must be registered to attract indefeasibility
Can have an equitable mortgage under Torrens but must meet
requirements for the creation of equitable leases
Old system
o By deed (?)

Basic overview of rights of mortgagee

1. Sue on personal covenant a mortgage is a contract this right operates

independently of other remedies could sell property, but if not enough to
meet debt can sue for the balance.
2. Power of sale often express but also implied in Conveyancing Act s 109(1)
(a), (5) and s 111
There is a notice requirement for this and procedure must be followed see
RPA ss 57, particularly s 57(2) and 58. Mortgagee must continue to act in
good faith while the power is being exercise: Kennedy v de Trafford
3. There is protection or the purchases where the a sale is in breach of any
statutory or equitable duties so long as it is not fraudulent: Latec v Terrigal
and see Conveyancing Act 112(3)(a), (b)
4. Other powers include: right to appoint a receiver; the right to possession
RPA s 60; the right to lease; the right to foreclose RPA s 61
Note that in the case of foreclosure this used to be very important
but is not often used today as foreclose prevents the mortgagee from
them suing on the personal covenant once foreclosure is effected:
Conveyancing Act s 100
o You dont take the title but only a power of sale. It prevents from suing
on personal covenant after foreclosure.
o Foreclosure get full title and its over.
Right to have property returned unburdened after debt paid: Noakes v Rice (in
equity)
Right to assign mortgagor may assign the mortgage and can also create
further mortgages
Note Conveyancing Act s 11
Priority
o Under Torrens determined by registration an earlier registered
mortgage takes priority over a later one: RPA s 36

Remedies of the mortgagee

1.
2.
3.
4.

power of sale
right to sue on the personal covenants in the mortgage
foreclosure
right to possession

Power of sale

most commonly exercised remedy

conveys the fee simple estate to the purchaser free of the mortgagors right
of redemption.
o In the event of the sale not realising sufficient funds the mortgagee
may sue the mortgagor on personal covenant
S 111 regulation of exercise of power of sale
o (1) in case of a mortgage or charge registered under the RPA, the
mortgagee or charge shall only exercise the power of sale conferred by
this Act in the events and subject to the conditions contained in s 57,

58, and 58A of that Act, and the provisions of s 59 of that Act shall
apply to any transfer executed for the purpose of such sale.
o
Statutory duty: notice to the mortgagor
Websdale v S & JD Investments Pty Ltd (1991) 24 NSWLR 573
FACTS
Mortgagee may exercise the power of sale conferred by s 58 of the RPA.
The notice correctly state that there had been default in the payment of
interest but incorrectly stated that the full amount of the principal was
due and payable.

ISSUES
RATIO

DICTA

The mortgagee submitted that the notice was invalid

Whether the notice is wholly or partly invalid if it states a sum
that is not yet due and payable.
Given the purpose of the notice is to bring to the mortgagors
attention the existence of particular defaults and to give it the
opportunity of remedying that default I do not think it can be
said that a notice which requires the mortgagor to remedy a
non-existent default can be regarded as complying with the
section. [invalid]
Notice which demands payment of principal not then due denies the
mortgagor the very privilege the section was intended to give Jaffe v
Premier Motors
S 57(5) no force until power of sale had arisen and this has not occur
when notice was given.
OBITER: Although I am of the view that the differences between s 57, 58
and the relevant statutory provisions under consideration in Campbell
are sufficient to require the exercise of caution in the application of the
decision in Campbell to a notice given under s 57, I would myself be
inclined to the same view simply as a matter of construction of s 57
itself. That is, that in the absence of a requirement that the notice
identify with particularity the precise amount outstanding, it will be good
so long as it identifies correctly the defaults which the mortgagor is
given the opportunity of remedying.

OUTCOM
E
NOTE

Mir was distinguished: authorities applied only in the case of a

misstatement of an amount of principal or interest otherwise due and
should not be held to extend to a case In which a claim is made for a
payment of principal not then due.
Whild v GE Solutions [2012] followed this case: It is clear that a notice
that correctly identifies the event of default relied upon but which
overstates the amount owed is nevertheless valid for the purposes of
the Transfer of Land Act provisions.

Wongola Holdings v Mulingelbar (1994): the ground of invalidity in a

mortgagees notice is either an unwarranted demand by the mortgagee
calling upon the mortgagor to remedy a non-existent default or an
unequivocal insistence by the mortgagee to pay a specified sum and
nothing less when that sum has been erroneously calculated and
exceeds the true amount due.

Equitable duty conduct of sale

Once the notice period has expired, and the notice has met the statutory
requirements, the mortgagee becomes subject to a separate duty:
o The equitable duty to ensure that the sale is conducted in a way that
fairly balances the interests of mortgagors and mortgagees.
Mortgagee may NOT sell the property to himself or herself or to someone
acting on the mortgagees behalf: Farrar v Farrars (1999)
o this is not so clear for associates/ related parties (DISFAVOURS IT)
Difficult arise from the conflict of interest
o mortgagees interest lies in a quick sale
o mortgagor is entitled to any excess and therefore is interested in the
best possible price
s 111A duties of mortgagees and charges in respect of sale price of land
o must take reasonable care to ensure that the land is sold for:
o if the land has an ascertainable market value when it is sold not less
than its market value, or
o In best price that may reasonably be obtained in the circumstances

Sale to associate

Courts disfavour a sale by a mortgagee to a related individual or corporation,

although there is no absolute prohibition on such a transaction
In ANZ v Bangadilly Pastoral: major purpose behind the purchase was to allow
the Halls to preserve their investment in the property and the HC ordered to
set aside the sale.
o The trial judge placed too much emphasis on the need for conscious
planning
o The background shows a conflict of interests even greater than in
other circumstances might exist from the mere fact that the mortgagee
and purchaser companies were associated through common
directorship and shareholding, the bare facts which I have stated are
sufficient in themselves to lead to a conclusion that the sale cannot be
allowed to stand.
Benzlaw and Associates v Medi-Aid Centre Foundation [2007}
o place the property in the hands of a company which shared the same
directors and shareholders as the mortgagee. The sale was set aside,
following Bangadilly.

Auction sales
Southern Goldfields Ltd v General Credits Ltd (1991) Supreme Court of Western
Australia
FACTS
Appellants, as 1st mortgagee, exercised its power of sale and sold the
security by public action. The respondent, 2 nd mortgagee, brought an
action alleging that it was sold in bad faith and recklessly sacrificed the
respondents interest because:
1. failed to take account of two valuations
2. Reserve price had been set too low.
ISSUES
Whether or not the conduct of the defendant in setting the
reserved price at 360k in the light of the valuations which were
available to it and then allowing the sale to be made at that
price amounts to wilfully or recklessly sacrificing the interest of
the mortgagor and the plaintiff.
RATIO
Test was only held to be one of bona fides, not a duty to get the
best price possible.
If the defendant acted bona fide, and certainly, if it took
reasonable precautions to obtain a proper price the plaintiff
must fail even if the price obtained was below market value and
even if, by waiting or by spending more money on the property,
a better price could have been obtained: Porter v Associated
Securities Ltd

DICTA

IMO the evidence does not show that the appellant confined his
attention to his own interest, nor that he conducted the sale in
complete disregard
Pendlebury: ???
What appears clear is that the sale price being at the amount of the
highest bid, was the best price obtainable on the day and that such was
so regardless of what the valuers considered the value of the property to
be. Consequently it is clear in my view that the setting of a reserve price
in itself could not amount to the willful or reckless sacrificing of the
interests of the mortgagor and the plaintiff.

OUTCOM
E
NOTE

There was no evidence of any reason to suggest that the highest or any
bidder would be prepared to increase his offer.
Appeal allowed. The auction was valid.
The closer the mortgagee and the purchaser, the greater the risk and
burden (one of circumstances)

Timing of sale
Westpac Banking Corporation v Kingsland (1991)
FACTS
The plaintiff bank, pursuant to an equitable charge, appointed receivers

ISSUES

RATIO

OUTCOM
E
NOTE

and managers. Neither the bank nor the receivers exercised a power of
sale over the mortgagors principal asset. The defendant as guarantor
alleged the bank should have accepted an offer for the purchase of the
principal asset, alleging that had the bank exercised its power of sale,
the liability of the guarantor would have been extinguished.
Duty to obtain the best price or the assets of the company
Principal issue - Whether there a breach of duty because of a
failure to consider offers received and to sell property so as to
extinguish the liability of the mortgagor and thus that of the
guarantors.
The mortgagee can decide when he wishes to exercise the
power of sale, there can be no liability attaching to him for
failure to exercise it at any particular point of time.
The mortgagee was not in breach.
The general trend of recent case law is to impose an objective
requirement of reasonable diligence on the mortgagee.

Statutory duties in the exercise of the power of sale

Vasiliou v Westpac Banking Corporation [2007] Victoria
FACTS
V made a gift to his daughter of a property The bank had a policy that
a tenant was permitted to make a single offer to purchase the property.
If the offer was acceptable, it would be sold to the tenant. The appellant
challenged the sale, and sought to have the register rectified in her
favour.
ISSUES
Whether the sale was done in good faith and with regard to the
interests of the mortgagor.

RATIO

DICTA

OUTCOM
E

The effect of having no advertisement.

Whether advertising is required in such a case depends on the
circumstances. By itself, the presence, or absence, of
advertising will rarely be decisive. What matters is the price
obtained. If the price is satisfactory, a failure to advertise will
be immaterial.
There were independent valuations and the price paid by the
tenant was fair and even higher than the valuations. The
consistency of those prices meant it was bona fide.
Conversely, if the price is unsatisfactory as a result of the mortgagees
acts or omissions, the fact that the property was advertised would be
unlikely to be an answer to the allegation that the duty as been
breached.
Therefore valuation is paramount.
The price was satisfactory. The failure to advertise was immaterial.
There was also no collusion between the Bank and the tenant.

NOTE
Court-ordered sale

12A EASMENTS
Introduction

right attached to a piece of land giving the owner or occupier rights over
another piece of land, the exercise of which interferes with the normal rights
of the owner or occupier of that other land: Concord Municipal Council v Coles
(1906) 3 CLR 96
o servient tenement is where the easement is (?)
known historically as incorporeal hereditaments, they are not rights to the
land itself, but represent rights over the land
Corporeal hereditaments and the various security interests such as
mortgages.
An easement only gives the owner of the dominant tenement limited rights in
relation to the servient tenement, in accordance with the terms of the
easement. This may be positive or negative in nature. A positive easement
gives the owner of the dominant tenement the right to do something on his or
her neighbours land (that is, the servient tenement)
o Walking over it or running a drainage pipe across it.
Positive easement allow grantee to make positive use of the land burdened
by the easement
o Right of way
o Right to use the toilet: Miller v Emcer Products
o Right to use cattle yeards: Clifford v Dove
o Fix advertising signs
Negative easements give grantee the right to restrict certain lawful usages
of the servient property
o Easement of light
o

The characteristics of easements (FOUR ELEMENTS OF EASEMENTS)

1. There must be a dominant and servient tenement.

o Dominant benefit (?)
o Servient burden (?)
2. The easement must accommodate the dominant tenement.
3. The dominant and servient tenement must not be held and
occupied by the same person
o Only for common law
o This is modified in statutory law
4. The right must be capable of forming the subject matter of a
grant.

1. Dominant and servient tenements

Gas & Fuel Corporation of Victoria v Barba [ 1976] VR
FACTS
The plaintiff corporation, which was constructing a natural gas pipeline,
negotiated with V, the registered proprietor of land, for the grant of an
easement for the pipeline. He agreed to grant the corporation an option
to acquire a pipeline easement.

ISSUES

RATIO

DICTA

OUTCOM
E
NOTE

In the option agreement, reference was made to the dominant

tenement, but no land of the corporation was identified. After the
defendant entered into possession under the terms contract of sale on 3
Nov, they refused entry to the corporations employees and contractors.
On commenced proceedings seeking a declaration that it was entitled to
have the instrument creating the easement registered. The corporation
also claimed injunctive relief and damages. By the time the action was
heard, the easement had been registered.
Whether there is a dominant tenement in the grant for there to
be an easement.
Did the option create an interest in land?
Shannon Ltd the court not only agreed that extrinsic evidence
was admissible to prove both the intention that there should be,
and the identity of, a dominant tenement but also held that the
easement may, when the dominant tenement is not specified in
the grant, be appurtenant to other land besides that conveyed
by the deed.
The interest came about with the option was exercised.
Failure to specify the dominant tenement in the instrument is
not necessarily fatal as extrinsic evidence is admissible to
identify the tenement. (as long as there is an intention to create
an easement)
Gapes v Fish [1927] (distinguished) The court was of the view that a
reservation which the way might be reserved imposed no servitude on
the defendants land. The judgment, however, went on to deal with the
extent that evidence to prove identity of appurtenant land may be
admitted.
Dominant tenement was found there was an easement.
In HCA, the court held that the option agreement conferred upon the
corporation only a contingent equitable interest in the subject land, so
that the corporations servants and contractors had no right to enter
prior to the execution of the creation of easement.

Formal requirements for creation of easement

In general, easements are created in the same way as other interests in land
by means of the execution of formal documents. Easements over land under
the Torrens legislation may be expressed granted by registration of an

instrument in the appropriate form, and expressly reserved in an instrument

of transfer by which the land is transferred.
S 88(1) which provides that an easement is not enforceable against a
person interested in the servient tenement, not being a party to its creation
unless, inter alia, the instrument clearly indicates:
o (a) the land to which the benefit of the easement is appurtenant,
o (b) the land which is subject to the burden of the easement or
restriction
o (d) the persons (if any_ whose consent to a release, variation or
modification of the easement is required

Easements in gross

Statutes changed in the common law in regards to easement in gross (no

dominant tenement)
Easement in gross may be created, usually in favour of the Crown or local and
public authorities
S 88A (1A) an easement without a dominant tenement may be created in
favour of a prescribed authority, and any such easement may be assured to a
prescribed authority.
(1B) However, an easement without a dominant tenement may only be
created in favour of, or assured to a corporation prescribed by the
regulations if the easement is for the purpose
Conveyancing Act 1919 (NSW) s 88A(2) and (2A) allow drafters to use short
forms of words to create various types of easements.
S 88B(3)(a) and (b), an easement in gross permitted by s 88A may be created
by registering a plan of subdivision with the Register-General

2. Accommodation of dominant tenement

Hill v Tupper (1863) 2 H & C 121
FACTS
Objects of a company included the construction and maintenance of a
navigable canal. The company leased land on the bank of the canal to
the plaintiff. The lease provided that the plaintiff was to have the sole
and exclusive right or liberty to put or use boats on the said canal, and
let the same for hire for the purpose of pleasure only.

ISSUES

RATIO

At trial, the jury found that the defendant had obtained a pecuniary
advantage from hiring pleasure boats for use on the canal. A verdict was
entered for the plaintiff. Counsel for the defendant obtained a rule nisi to
enter.
Whether there is accommodation of dominant tenement
sufficient connection between the right and the dominant
tenement.
It is argued that, as the owner of an estate may grant a right to
cut turves, or to fish or hunt, there is no reason why he may not
grant such a right as that now claimed by the plaintiff. The
answer is, that the law will not allow it. So the law will not

permit the owner of an estate to grant it alternately... A new

species of incorporeal hereditament cannot be created at the
will and pleasure of the owner of property.
It was only a license to use the canals, there was no interest in
the land nor dominant tenement thus no easement.

DICTA

OUTCOM
E
NOTE

Cannot create rights unconnected with the use and enjoyment

of land and annex them so as to constitute a property in the
grantee this operates only as a licence or covenant.
To admit the right would lead to the creation of an infinite variety of
interest in land, and an indefinite increase of possible estates.
(numerous clauses)
There can be no exclusive and possessive right in an easement
Proposition that a licensee, being without any possessory interest in the
land, has no remedy against a third party who disturbs him in the
exercise of his licence.
No easement, only license.
Todrick v Western an easement may accommodate the dominant
tenement even where the dominant and servient tenements are not
contiguous, provided they are sufficiently close.
Leading case in Australia of the numerous clauses principle.
If rights are given which include benefits for the dominant tenement and
also rights unconnected with that tenement, e.g. rights to pass along a
rod for all purposes, no easement will arise: Achkroyd v Smith (though
this finding has been questioned by some academic writers it may well
be a right annexed to the land such uncertainty may actually simply
provide further support for reform in the area)
Contrast with situation if Hill had a right to go back and forward across
the canal for the purposes of access to leased land would have an
easement.

Re Ellenborough Park [1956] Ch 131

FACTS
In 1855 D and W owned a large area of land which they began to
subdivide into lots. As part of this subdivision, an inner portion of the
land, known as Ellenborough Park, was to be maintained as a pleasure
ground for the enjoyment of the purchasers of the surrounding.
During the war years, the park had been requisitioned by the War Office,
and could be use by the surrounding landowners. The War Office paid
the trustees a yearly compensation rent, and also an amount for

ISSUES

dilapidation. The trustees were concerned to distinguish these sums in

the accounts which they kept in respect of receipts and payments for
the upkeep of the park.
Whether the alleged easement can be said in truth to
accommodate the dominant tenement in other words,
whether there exists the required connection between the one
and the other

RATIO

Whether there is sufficient nexus between the enjoyment of the

right and the use of the house
The question whether or not this connection exists is primarily
one of fact, and depends largely on the nature of the alleged
dominant tenement and the nature of the right granted.
There was attached precisely for the purpose of enhancing the
enjoyment of the house owners.

DICTA

OUTCOM
E
NOTE

The recreation and the type of recreation is important in this

case.
(Application) As it seems to us, is the case of a man selling the freehold
of party of his house and granting to the purchaser, his heirs and
assigns, the right, appurtenant to such part, to use the garden in
common with the vendor and his assign. In such a case, the test of
connection or accommodation, would be amply satisfied; for just as the
use of a garden undoubtedly enhances, and is connected with, the
normal enjoyment of the house to which it belongs, so also would the
right granted, in the case supported, few closely connected with the use
and enjoyment of the part of the premises sold.
The test should constitute in a real and intelligible sense the garden of
the houses to which its enjoyment is annexed. But we think that the test
is satisfied as regards these few neighbouring, though not adjacent
houses. We think that the extension of the right of enjoyment to these
few houses does not negative the presence of the necessary nexus
between the subject matter enjoyed and the premises to which the
enjoyment is expressed to belong
There was a sufficient connection between the use of the garden and the
residential premises for there to be an accommodation.
The fee simple of this land was owned by someone else but an
easement was granted during the subdivision.

Clos Farming Estates v Easton (2002) NSWCA

FACTS
The appellant developed land on the south bank of the Hastings River
near Wauchope. Each lot in the estate comprised two parts: Part A, a
residential component; and Part B a farming component. The Deposited

ISSUES
RATIO

Plan covering the estate was registered by the Land Titles Office in
1989, as was the section 88B instrument setting out a number of
restrictions. One of these restrictions, the Fourteenth Restriction, was
known as the Easement for Vineyard allow the owner of the benefited
land to enter the burdened land and carry out harvesting and
agriculture.
Whether the right granted accommodated and served the
dominant tenant
The respondent acknowledged that a right benefitting the trade
carried out on the dominant tenement may in appropriate
circumstances be a valid easement. But this is provided that the
conduct of the trade is a necessary incident to the normal
enjoyment of the land, not merely an independent business
exercise.
The appellant was unable to establish that the connection
between the land and industry carried out on the land was more
than just a mere convenience as required to establish the
requisite accommodation
pure commercial interests of themselves, though not
necessarily incompatible with an easement, are not sufficient to
justify, and may even militate against, the creation of such a
right in rem

DICTA

OUTCOM
E
NOTE

No value easement where the owner of the servient tenement

retained no more than a nominal ownership of the land
The agreed statement of facts, there was no evidence which indicated
that farm management, as distinct from storage, was actually carried
out on that lot. The supposed connection was thus not a real one.
No easement.

3. The dominant and servient tenements must not be owned and

occupied by the same person

This rule has been largely abrogated by statute.

o S 88B(3)(c)(ii) an easement may be created by registration of a plan
of subdivision in the office of the RG, even though at the time of
registration both the land benefitted and the land burdened are in the
same ownership
o S 46A RPA a person may create an easement despite owning both the
benefitted and burdened land, if both parcels are Torrens title, and an
easement will continue to exist if dominant and servient tenements
come to be held by the same person: s 47&7).

Creation of easement

Express grant
o 1. Under old system by deed: CA s 23B(1)
o 2. Torrens by registration or transfer: RPA s 46, s 47(1), s 42
(indefeasible)
Registration of a plan of subdivision
o S 88(1) CA where an easement expressed to be created by an
instrument, the easement is not enforceable against a person
interested in the servient land who was not a party to creation unless
the instrument clearly indicates:
(a) the land to which the benefit of the easement or restriction is
appurtenant
(b) the land which is subject to the burden of the easement or
restriction
Provided that it shall not be necessary ro indicate the sites of
easements intended to be created in respect of existing tunnels,
pipes, conduits, wires
3. Implication
o 1. Easement implied by law on the conveyance or transfer of a parcel
of land, in favour of the purchase, where the parties have omitted
expressly to grant one
o 2. Commonly arise under the second and third limb of the rule in
Wheeldon v Burrows at time of severance the quasi easement is
continuous and apparent [ second limb] and necessary for the
reasonable enjoyment of dominant land [third limb] on severance [first
limb] and [see Daar Pty v Ltd Feza Foundation Ltd [2001] NSW ConvR
55-996.
o 3. By necessity where severed land becomes landlocked, or needs
support: Union Lighterage v London Graving Dock
o 4. Via common intention of the parties: Richards v Rose and also via
the description of the land in the conveyance or transfer: Dabbs
4. Prescription
o (bit like adverse possession)
o 1. Means of acquiring an interest in land by long use
o 2. Long user of 20 years, if without force, without secrecy and without
permission, generates a presumption of a lost modern grant of an
easement: Delohery v Permanent Trustee (1904)
o 3. Common law prescription does not apply in Australia? Note s 179 CA
no prescriptive easement over light or air
o 4. In NSW, LPI say a prescriptive easement cannot be created over
Torrens title land. Any prescriptive easement which is in existence
when the servient tenement is converted to Torrens title will remain
effective even though not recorded on the title
o **It might not apply in Australia
5. Court appointed easements
o 1. Conveyancing Act s 88K if reasonably necessary for the
development of other land
o 2. Reasonably necessary means something more than reasonably
desirable or preferable over the alternative means
o 3.

Extinguishment

Five ways
o 1. Express release RPA s 47(6) Torrens
o 2. Abandonment: Treweele v No 36 Wolseley Rd (1973) CA s 89(3) for
declaratory orders
1. 2 step test for abandonment owner must have ceased to use
the easmenet and they must have positively intended to
abandon the easement: Re Marriot [1968]
o 3. Alteration to dominant tenement: Jebert v Davis
o 4. Unity of dominant and servient tenement: James v Plant
o 5. By statute e.g. Conveyancing Act s 89(1) it is discretionary: Pieper
v Edwards

Two remedies available for infringements:

1. Abatement
o 1. Self-help
No more force than is necessary: Logan v Lamberg Bleaching
2. Not likely to be a breach of the peace
3. No injury to third parties or the public: Roberts v Rose
o Thus if a right of way obstructed the owner of the dominant tenement
may break open a locked gate or may even pull down a dwelling if
necessary: Lane v Copsey
2. Action
o 1. An owner of an easement is entitled to sue for damages, a
declaration or an injunction or a combination of these in cases of
interference with their rights: Leeds Industrial Co-operative Society Ltd
v Stock
o 2. The relevant tort is nuisance not trespass: Paine & Co v St Neots
Gas & Coke Co

The easement must be capable of forming the subject matter of a grant

At common law, the easement must be of a type recognised in law

o Right of way
o Right of support
o Fencing easement

Re Ellenborough Park [1956] Ch 131

FACTS
Above
ISSUES
Whether there is a right that is capable of forming the subject
matter of a grant whether the right is too wide and vague; or
inconsistent with the proprietorship or possession of the alleged
servient owners; mere right of creation without utility or benefit
RATIO
No doubt a garden is a pleasure but in our judgement, it is not
a right having no quality either of utility or benefit as those
words should be understood. The right here in suit is, for
reasons already given, one appurtenant to the surrounding
houses as such, and constitutes a beneficial attribute of

residence in a house as ordinarily understood.

DICTA
OUTCOM
E
NOTE

MR refers to the principle that a right cannot amount to an easement if it

confers on the owner of the dominant tenement the power to co-occupy
part of the servient tenement.
AG of Southern Nigeria v John Holt Ltd (1915): the right to use anothers
land for the purposes of storing goods might exists as an easement.

Moncrieff v Jamieson [2007] 1 WLR 2620 (HL)

FACTS
In 1973, the owners of a servient tenement on the isle of Shetland
granted a right of way over their land to the owners of Da Store, a
property situated between the sea and a cliff. The question arose as to
whether the owners of the dominant tenement were entitled to park
their car at the end of the driveway, or on a separate small are of the
servient tenement holders land.

ISSUES

RATIO

DICTA

Jamieson wanted to build a wall that will block Moncrieff from parking
cars. Jamieson argued that there was only a right of way and no right to
park cars.
Whether parking was part of the subject matter in a right of way
easement.
Whether right to park can be done in an easement.
The effect of parking does it exclude possession of the
servient tenement owner.
Lord Scott of Foscote: test which asks whether the servient
owner retains possession and, subject to the reasonable
exercise of the right in question, control of the servient land (of
the whole)
The right must be such that a reasonable use thereof by the owner of
the dominant land would not be inconsistent with the beneficial
ownership of the servient land by the servient owner
I do not see why a landowner should not grant rights of a servitudal
character over his land to any extent that he wishes

OUTCOM
E
NOTE

reject the test that asks whether the servient owner is left with any
reasonable use of his land
There was a right to park cars.
Is the use of the right of the easement means that the servient
tenement owner cannot retain possession and control? if so, there
cannot be an easement.

Ryan v Sutherland [2011] SCNSW

FACTS

ISSUES

RATIO

DICTA

OUTCOM
E
NOTE

Defendant owned Lot 1 which had the benefit of a restriction as to user

over Lot 2, owned by the plaintiff. The purported restriction gave the
defendant full and free exclusive use of by the registered proprietor of
the dominant tenement of that area noted as area subject to restriction
as to user within the above-mentioned plan with which right shall be
capable of enjoyment. And every person authorised by the registered
proprietor of the dominant tenement [Lot 1].
Whether the easement is invalid because it gave exclusive and
unrestricted use of a piece of land would not satisfy the fourth
requirement.
The essential question is one of degree. If the right granted in
relation to the area over which it is to be exercisable is such
that it would leave the servient owner without any reasonable
use of his land, whether for parking or anything else, it could
not be an easement though it might be some larger or different
grant. The rights sought in the present case do not appear to
approach near that degree of invasion.
It cannot be too broad or imprecise. It can still be invalid if it is
subject to inconsistent conditions. The uncertainty of conditions
1. Re Ellenborough Park well defined and understood, 2. If
it conveyed exclusive possession no easement (it can be some
possession, but not all of it)
Weigall v Tomall [2006]: invalid if it robs the servient owner of the
reasonable use of his land proportionality between the servient
tenement as a whole and that part of it over which the exclusive right is
given, the extent of the exclusivity claimed; whether the easement
arose by prescription of by express grant; and practicalities.
The use permitted by the restriction as to user would also satisfy the
alternative test set out in Moncrieff v Jamieson, referring to the part of
the land which is the subject of the easement rather than the whole of
Lot 2. The use permitted by the restriction as to user is limited to the
specified purposes of (1) recreation, (2) the maintenance and
establishment of plantings and gardens (3) establishment of or erection
of facilities.
The right was limited enough to be granted in an easement
Clos Farming was distinguished.
Moncrieff test satisfied

More readings for w 9 (about assignments)

demonstrate basic knowledge

analysis
number of perspectives and the interactions

Perpetual Trustees Co Ltd v Westfield Management Ltd (2007) 12 BPR 23, 7983
(NSWCA) (S&N p 575)
Four-corner rule (?)
Per Hodgson JA:

an issue the appellant raised was the admissibility of certain evidence to aid
in the construction of the easement
takes care in applying principle from Gallagher could imply two related
propositions that are incorrect
in my opinion, there is just one question, what does the grant authorise; and
that question is to the determine by construing the grant
in determining this question, regard may be had to surrounding
circumstances, including the physical circumstances of the dominant and
servient tenements and the use actually being made of them at the time of
the grant
Communications between the parties prior to grant potentially relevant and
consistent with authority but at the lease should be objective otherwise not
relevant is this the case with Torrens easements?
Three principles in determining whether a use of the servient tenement is
authorised
o For a grant of an easement to bind the servient tenement rather than
merely to operate as between the parties, the use authorised must be
such as to benefit the dominant tenement;
o Form the law of nuisance is the principle that unreasonable use of land
causing unreasonable damage to other land is actionable thus while a
use of the servient tenement may be within that which was granted, if
it is carried out unreasonably and causes unreasonable damage it may
be constrained.
o Rule that if there is ambiguity in an instrument creating an easement it
will be construed against the grantor but this is a rule of last resort.
Look at the words what indication of intention
o Focused on the use intended and contemplated by the grant itself for
the benefit of the dominant tenement only

Creation of easement by court order

Abandonment of easement
Treweeke v Wolseley Road Pty Ltd
Its relying upon things done by herself with led to the obstruction

There is no evidence of any acquiescence, no intention was to abandon the right

of way.
The threshold is quite strict it seems like it is a position where a positive act is
needed for there to be an abandonment.
The suggestion is that potentially what they are saying there is that first one is
understand the torren system is determinative until something is done to the
register (???) if you have come and buy the property and bought the transfer on
the basis of the fact that you get along this property and it is blocked, then you
have the right to sue for nuisance. You cannot say that you have
You only bound to the extent to the objective and that should be suggested in
the register, they can turn around (The Treeweeke case they did not take the
previous owners conduct into consideration)

1039

13A FREEHOLD COVENANT

Freehold covenants are a difficult intersection of contract and property law

E.g. A landowner decides to subdivide the land into four parcels, seeling three
parcels (lots 2, 3 and 4) and retaining the land with the original Federation
home (lot 1). A could agree with the purchaser of lot 2 B, for a restriction. This
would be a matter of contract.
A needs to turn the contractual agreement with B into a property right that is
enforceable not only against B, but against anyone who subsequently owns
the land; e.g. B1, B2, etc.
o The burden of the covenant (the promise not to build above two
storeys) must run with burdened parcel (lot 2) and
o The benefit of the covenant (not having a view blocked) must run with
the benefited parcel (lot 1).
o In practice freehold covenants only come into existence at the point
when someone like A, or a professional developer, is subdividing a
larger parcel of land and selling the new, smaller parcels.
Positive covenant
o A covenant over land obliges the owner to perform actions that require
the doing of work or expenditure of money. Unless authorised by
statute, a positive covenant over freehold land does not run
Restrictive covenant
o A formal agreement which limits the use to which a parcel of land may
be put for the benefit of another parcel of land. Equity allows the
burden of a restrictive covenant to run with the land, thus binding
successors in title: Tulk v Moxhay.
o Formal requirement: s 88 CA.
Creation of Freehold Covenants

o Old system instrument in writing Conveyancing Act s 23C(1)

o Torren registration?
Remember from leases the idea of privity of estate developed in order to
extend enforceability beyond the original parties to the contract
o This in regards to covenants in a lease, where a parties are in a
relationship of landlord and tenant, the common law permits certain
covenants

The Legal Technicality

Judges have been extremely reluctant to allow restrictions or obligations to be

imposed on freehold land and have only allowed them in narrow
circumstances.
While courts took a relatively relaxed approach to the validity of leasehold
covenants because it only last as long as the lease itself, in contrast, freehold
covenants theoretically go on forever. This is potentially extremely
detrimental
o 1. Economically inefficient; what seems like a good idea today, what
seems like a good idea today, might be a very bad idea in 50 or 100
years time.
o 2 Socially covenants are a kind of private legislation affecting a line of
future owners. Limiting such legislative powers to an objective
purpose land planning eliminates the possibility of creating modern
variations of feudal serfdom.
Double edged sword: might increase the value of land by ensuring that
development antithetical to its current use does not occur around it, over the
passage of time, they can be outdated, and amount to a quasi-legislative
power in the hands of private citizens.

The common law

Has aversion to freehold covenants.
Benefit
o A (benefit) enters into agreement with B (burden) in which B covenants
not to build a house more than one story high
o Contract A can enforce against
o A sells to A1
o Can A1 enforce against B?
DEPENDS does the benefit of the covenant run with the land?
Annexed to the land, or if the benefit is expressly assigned
by the agreement that creates the covenant
ANNEXATION
o 1. Touch and concern the land
(a)Covenant must benefit the land and not merely the
covenantee personally; AND
(b) the covenant must benefit the land either because it enables
the covenantee to better enjoy the land or because it enhances

the value of the land: McGuigan Investments v Dalwood

Vineyards [1970]
E.g. preservation of character, not only about financial sense
o 2. There must be intention it should run with the land
Smith and Snipes Hall Form v River Dougan Catchment Board
Now generally considered to be implied by s 70(1) CA, though
the precise scope of intention (i.e. whether or not it remains
factual) has still not been decidedly determined in Australia:
o 3. The land is identified
S 88(1) requires instrument creating covenant to clearly
indicate which land is benefited
Not so necessary
Burden (no common law enforcement)
o If B sells to B1, can A enforce successors in title enforce covenant
against B1?
o At common law the burden does not run with the land an immutable
rule except where there is privity of estate between the parties
o Can be abrogated by state but in NSW there is no rule though it has
been recommended
o Though is noted it has been abrogated in some very specific
circumstances, Enforcement
o Some examples of where the rule has been abrogated exist under the
SSMA for example which permits obligations of a positive nature to run
with lots in a strata scheme binding successive lot owners
o Pay attention to s 70A(1) of the CA
o At common law, A can sue B for damages, nothing against B1(slides
wrong)
Covenantee can sue covenantor for assignees breach
damages
Implications if you are a Covenantor (B) the contract should
stipulate that a covenantors obligations will cease on
assignment for continuing liability to be avoided
Equity

Took a broader view and freehold covenants was extended to be enforceable

outside the privity of contract
Burden of covenants (4 requirements)
o 1. The covenantor (burdened) must have notice of the covenant
Tulk v Moxhay if an equity is attached to the property by the
owner, no one purchasing with notice of that equity can stand in
a different situation from the party from whom he purchased
Covenant must be negative
Covenant must benefit the land of the covenantee
The burden must have been intended to run
There is also generally a fourth the purchaser must have
notice of the covenant
o 2. Section 88(3) CA is only concerned with restriction (covenant must
be negative)

Only restrictive covenants are enforceable Pirie v RegistrarGeneral [1962] HCA

Easy way to work out positive or negative whether covenantor
is required to incur expenditure in performing the burden of the
covenant positive (Haywood v Brunswick Building Society)
o 3. Must touch and concern the land/ benefit the covenantees land
In Clem Smith Nominees v Farrelly, this requirement was not
fulfilled because the covenant was for the purpose of the
business rather than the land.
o 4. Covenant must be intended to run with the covenantors land
Something that is burdened onto the land
* s 88(1) prescribed formalities for creating covenants apply specifically
Benefit of covenants
o Benefit must be annexed to the land itself
o Issue: generally, can only practically assign benefit to a land currently
owned, not the ones that were sold. (last lot to be sold would then
theoretically get all the benefit)
o Equity doctrine of schemes of development (rejected in HCA)
o S 88 instrument allows a plan of subdivision to set out any easements
and covenants that are intended to affect the various lots in the
subdivision. Rather than being created one at a time, they are
simultaneously created by the registration of the pan of subdivision
with the s 88B instrument.
o Follows common law (?)
1. The covenantee has retained some part of the land for the
benefit of which the covenant was taken: Palm Beach Lands v
Marshall
2. That the covenantees land is in fact benefited by the
covenant: Land Cove Municipal Council v ??
o Covenantees successors in title? Can they enforce against the original
covenantor and also against covenantors successor?
YES
o Benefit of covenant runs in equity where the benefit has been annexed
to the covenantees land; or I not annexed, assigned (both those are
like at law)
o A third way a benefit will run with the land that is different than
common law
Restrictive covenants are anomalies in the Torrens system. They are equitable
interests that are noted in the register and their validity depends on the
equitable rules we have just considered.

3. Enforceability of freehold covenants (remedies)

If a breach of covenant is threatened, it can only be restrained by someone

who has the benefit of the covenant, the original coventantee and/or their
successors in title. Remember that restrictive covenants are equitable
interests and thus the remedies granted will be equitable.
o Injunction
o Equitable damages in lieu

o Specific performance
S 89 CA gives the Court a power to modify or wholly or partially extinguish
an easement, profit a prendre or freehold covenant if satisfied of certain
conditions Courts do not readily grant s 89 applications for modification or
extinguishment.

The intersection of freehold covenants with public planning regimes

The purpose of enabling development to be carried out in accordance with an

environmental planning instrument or in accordance with a consent granted
under this Act, an environmental planning instrument may provide that.
o If freehold covenants are successful in maintaining the character of an
area for some time, that area may eventually be publicly protected by
council or state heritage provisions.
Whilst it is not a conservation area it is a special precinct and the history of
the area must be taken into consideration in the assessment of this
application. Furthermore, it is relatively intact, in fact the whole of Rippo Way
is intact in terms of the presentation of the subdivision pattern which can be
seen from the cadastral boundaries located on the aerial photograph.
2. Many of the technical limitations of freehold covenants, in particularly their
limitation to restrictions and not positive obligations, have been overcome by
the strata and community title legislation.
The content of by-laws and manages statements must simply relate to the
use or enjoyments of a lot or common property, without the more stringent
requirement that the provision touch and concern the land. Finally, there is
no requirement that by-laws or management statements only contain
restrictions; they can impose positive obligations. The strata and community
title legislation has facilitated the development of large swathes of residential
and commercial land burdened by detailed obligations and restrictions that it
would not be possible to replicate with freehold covenants.

Modification and extinguishment of covenants

4 ways
o 1. Express agreement
o 2. Implied agreement: Chatsworth Estates Co v Rewell
o 3. Merger: Kerridge v Foley
But doctrine does not apply to covenants over Torrens land
where those covenants are noted on the title: Post Investments v
Wilson note RPA s 47(7)
Also does not apply to restrictive covenants created by the
registration of a CA s 88B plan
Building schemes an exception in case of acquiring benefited
and burdened land covenant is suspended till resale
o 4. Order of the SC under s 89(1) CA obsolete, etc.

13B REVIEW

Areas
Brainstorm

Indefeasibility
o Extent of indefeasibility in joint tenancy where one party committed
fraud without another party knowing.
o S 42 RPA
Fraud
In personam
Whether there was a creation of a further exception of the indefeasibility
o i.e. whether the registered joint tenants title was defeasible
fact transfer of property, number of proceeding, estate in fee simple,
consideration of $1
The company said that the Clauds claim was fraudulent, Felicity had derived
an interest in the land through fraud.
HELD:
o Para 16 Torren title it is a system of title by registration, not a
registration of title
o 118(1)
o Because Joint tenant, section 100, 2 or more persons who registered
o Not only in breach of fiduciary duty but also fraudulent
o Primary judge held that indefeasibility applied with Felicity free from
any other interest, however, felicity registered as a sole
proprietorship and was not a transferee of valuable interest. But she
was covered in the protection from 118(1)(d)(i) (???)
Primary judge dismissed the proceeding from the company
The company and Claud appealed to HCA,
o Felicity held the farm on trust absolutely for the benefit of the company
HCA said not absolutely (?)
o 3 different reasoning/matter
Agency (p 30)
Joint tenancy
Registration through fraud
o What is relevant
The key aspect is that the fraud must be brought home where
the registration through fraud was brought to his agents
Felicity was an agent of Claud and was fraudulent
Para 36 long been recognised that no word is more commonly and
constantly abused than the word agent. Close attention
Para 38 - It is important, however, to keep at the forefront of consideration
that GC&Co did not allege, and the courts below did not find, that Felicity
knew of Claudes fraudulent conduct. Yet the conclusion that Claude was
Felicitys agent was treated by the majority in the Court of Appeal as a
sufficient basis for concluding that the fraud exception provided by s 42(1) of
the RPA applied and that her title as registered proprietor was defeasible.
That is, what was seen as a factual inquiry about whether Claude brought
about the transfer to Claude and Felicity as joint tenants with her knowledge
(but without her knowing of the fraud) was treated as concluding the legal

issue presented by s 42(1). But why that step should be taken was not
explained. Rather, the word agent was used as a statement of conclusion.
The reference to fraud being brought home in should be understood as
posing the agent had knowledge
o Scope of the authority of the agency (one aspect)
o Outline with the judgment that
o Those question of WHY Claud should be imputed with ??
Para 44 joint tenancy (KEY)
o Cant sell it, cannot alienate it
o In the Court of Appeal, Beazley P held43 that, even if the title which
Felicity had held jointly with Claude was defeasible, it did not follow
that the title she took on registration of the transfer of Claudes interest
to her was. There was, in her Honours view,44 no relevant fraud of
which Felicity had knowledge such as to impugn her indefeasible title
as the sole joint tenant. By contrast, as already noted, Macfarlan JA
held45 that Felicity was infected with Claudes fraud because she and
Claude took title from [GC&Co] as joint tenants [and] joint tenants
are treated by the law as in effect one person only (emphasis added).
Basten JA held46 that it was preferable in principle to treat the shares
of the joint tenants, holding title under the [RPA], prior to any
severance, as differentially affected by the fraud of one, to which the
other was not party.
45 (KEY)
o Why should a joint tenant held responsible for the actions of someone
else
49
o Therefore the barely statement of the principle cannot stand as a
deductive argument
Does not entail for all purpose that they are the one person
51
o It is wrong to begin from fraud exception
53 (KEY)
o This idea that joint tenants are treated as entity is inconsistent with
statutes
o In fact, it is consistent with principle that joint tenants should be seen
as separate entities ( s 118)
Under
o S 42 provides protection, assuming one party has done fraud, s 42 is
protective in the sense that
o Section 118 generally should not (1)(d)(i) should not be read
directly/only for fraud (?)
o Fraud does not apply to felicity
66
o The interest from and or derived from Claud may be recovered by the
company. The part of the interest was created by fraud and
unfortunately and because Felicitiy was not a bona fide purchaser FOR
FULL VALUE and therefore the title was defeasible (the consideration
was $1)

The implication is almost that you may be able to get a property

for half the value through joint tenancy
There was 2 transfer 1 is the 4mil transfer and the court said it was
protected beause she did not know it was fraud and the second transfer was
the transfer and it was not protected because of fraud and she was not a BF
purchaser of full value
o In conclusion she had half from her

REVISION

List of recognised property interest

o Fee simple
o Mortgage
o Leases
o Charges
o Easement
o Covenant
Problem question with a fact scenario
o
Writing component
o Contract vs property
Leases
Ordinary contract
o Relationship between interest conflict of interests
Lessor vs lessee
o Management of interests between parties
o Torren vs old system
o Exceptions to indefeasibility
Do the exceptions uphold or promote the aims
o Comparing static and dynamic security
Immediate indefeasibility vs deferred indefeasibility
o Native title
Benefit and implications of native title
o Freehold covenant
Whats good and whats bad
Should we expand them
o Joint tenancy and tenancy in common
Equity vs common law and statute
The idea, what are the implications
o Remedies in land

Property 2010

Identify interests of parties

Lease