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Real Property, Autumn 2012 Order of Topics, Reading Guide, Tutorial Questions, Practice Exam Questions

Running Order Date and Lecturer Feb 27, Feb 29, 5 March (SD) Lecture Topic Introduction to Course and Real Property Topic 1: Estates, Tenures, Native Title Topic 2: Fixtures / airspace trespass Topic 3: Torrens Title: Indefeasibility and Exceptions to Indefeasibility Topic 4 Torrens Title: Priorities between Unregistered Interests Topic 5: Mortgages Topic 6: Old System and Possessory Title Faculty Non-Teaching Week Mid-semester Break Topic 7: Co-ownership Topic 8: Easements Tutorial 4 - Week beginning 7 May: Mortgages Tutorial 5 - Week beginning 14 May: Co-ownership Tutorial 6 - Week beginning 21 May: Easements/Covenants Tutorial 1 - Week beginning 12 March: Tenures & Estates and Native Title Tutorial 2 - Week beginning 26 March: Fixtures Tutorial 3 - Week beginning 2 April: Torrens Tutorial Topics (note there are 6 tutorials)

7 March (GM)

12 March, 14 March, 19 March (GM)

21 March, 26 March, 28 March (GM) 2 April, 4 April (GM) 11 April (GM)

Week of 16 April Week of 23 April 30 April, 2 May (SD) 7 May, 9 May (SD) 14 May (SD)

Topic 9: Covenants

16 May, 21 May, 23 May

Topic 10: Leases (including in class problems)


Topic 1 (Lectures 1-3) Tenure and Estates and Native Title In this section we will consider the foundational doctrines of Tenure and of Estates. These doctrines are fundamental to any understanding of Australian land law. We will particularly consider the way that tenure is understood in a legal system which has been transplanted to New South Wales from England, and which thus has to reconcile itself with the law of the indigenous inhabitants. This will allow us to begin our examination of native title. We will look at the nature of native title as a legal concept, and how, if at all, it fits within the framework of Australian real property law. Key concepts: tenure; estate in fee simple; life estate; pastoral lease; native title; bundle of rights metaphor; inter-subjective rights; exclusive possession; alienation; reversion; terra nullius; extinguishment Required reading Moore Chapters 12-16 Note that where paragraphs of cases are indicted, you are assumed to have read these, going beyond the textbook to the cases themselves where necessary. Attorney-General v Brown (1847) 1 Legge 312 (SCNSW) (on blackboard) Mabo v State of Queensland (No. 2) (1992) 175 CLR 1 Yanner v Eaton (1999) 201 CLR 351 Fejo v Northern Territory (1998) 195 CLR 96 Wik Peoples v Queensland (1996) 187 CLR 1 Western Australia v Ward (2000) FCA 191 For lecture 1 read: Attorney General v Brown Mabo at [23] [52] per Brennan J For lecture 2 read: Mabo at [53] [85] per Brennan J Fejo at [93] [112] per Kirby J Yanner v Eaton at [72] - [77] per Gummow J For Lecture 3 read The Wik Peoples at [5]-[35] per Brennan CJ Western Australia v Ward at [88] [112] per Beaumont and von Doussa JJ **************

Topic 2 (Lecture 4) Fixtures and Trespass to Land If the estate if fee simple is the most ample form of ownership in our tenurial system, what exactly is it we own? What is the relationship between an estate in fee simple and land? What is land? This section considers some quite practical issues such as airspace (do you have to put up with that overhanging crane?), encroachment (those overhanging trees, garages across the boundary of two properties), and fixtures (can I take my dishwasher, my carpets, my light fittings, my garden shed, my car

port and my above ground swimming pool when I sell my house?) Key concepts: fixture; chattel; encroachment; airspace; trespass; waste Required reading Moore chapters 1 and 2: The Meaning of Land and Fixtures and Waste, pp. 1-40 In class we will be concentrating on the cases marked with a *. Students are expected to have fully considered these cases. Students are expected to be familiar with the others as far as they are covered in the text. Fixtures *Dunn v L M Ericsson (1980) ANZ Conv R 300 *NAB v Blacker (2001) 104 FCR 288 Palumberi v Palumaberi (1986) NSW Conv R 55-287 *Holland v Hodgson (1872) LR 7 CP 328 Hobson v Gorringe [1897] 1 Ch 182 Standard Portland Cement v Good (1982) 47 AGR 107 *Webb v Frank Bevis [1940] 1 All ER 247 *Leigh v Taylor [1902] AC 157 *Spyer v Phil1ipson [1931] 2 Ch 183 Reid v Smith (1905) 3 CLR 656 DEyncourt v Gregory (1866) LR 3 Eq 382 Bain v Brand (1876) 1 App Cas 762 Ex parte Brook: re Roberts (1878) 10 Ch D 100 NZ Govt Property v H M and S [1982] 1 QB 1145 Waste - Ameliorating; Voluntary; Permissive; Equitable Vane v Lord Barnard (1716) 23 E.R 1082 Trespass to Land Rodrigues v Ufton (1894) 20 VLR 539 *Kelson v Imperial Tobacco Co [1957] 2 QB 334 *Bernstein v Skyviews [1978] 1 QB 479 Woollerton & Wilson v Costain [1970] 1All ER 483 Graham v KD Morris and Sons [1974] QdR 1 *LJP Investments v Chia (1991) 24 NSWLR 490, 499 Pickering v Rudd (1815) 171 ER 70 *Bendal v Mirvac Project (1991) 23 NSWLR 464 Davies v Bennison (1927) 22 Tas LR 52 Cliflon v Viscount Bury (J887) 4 TLR 8 *Conveyancing Act, s.88K Encroachment of Buildings Act, 1923 (NSW) *********************

Topic 3 (lectures 5-7) Torrens Title: Indefeasibility and Exceptions Torrens Title is the predominant system of land ownership throughout Australia. Originating in South Australia and adopted by each of the other States of the Commonwealth, Torrens Title has been

embraced in many other countries. Torrens Title is a system of land ownership whereby title, in New South Wales, is obtained by registration from the State of New South Wales. Key Concepts: Torrens title; indefeasibility; register; fraud; overriding statute; possessory title; in personam, personal equities; key terms; caveat; Assurance Fund; nemo dat; notice; valuable consideration; volunteer Required Reading Torrens Indefeasibility Moore Chapter 3: Torrens Title: Indefeasility and Exceptions 41-82 (1) Two systems of land ownership Breskvar v Wall (1971) 126 CLR 376 Tanwar Enterprises v Cauchi (2003) 217 CLR 315 (2) Indefeasibility of title Real Property Act ss 41, 42, 43 Commonwealth v NSW (1918) 25 CLR 325 Breskvar v Wall (1971) 126 CLR 376 Mayer v Coe (1968) 88 WN (NSW) (pt 1) 549 Frazer v Walker [1967] 1 AC 569 Clements v Ellis (1934) 51 CLR 217 Gibbs v Messer [1891] AC 248 Black v Garnock [2007] HCA 31 Perpetual Trustees Victoria v English [2010] NSWCA 32 Sabah Yazgi v Permanent Custodians [2007] NSWCA 240 (3) The register Bursill Enterprises v Berger Bros (1971) 124 CLR 73 Fels v Knowles (1906) 26 NZLR 604 Koteff v Bogdanovic (1988) 12 NSWLR 472 State Bank v Berowra Waters (1986) 4 NSWLR 398 Torrens Exceptions to Indefeasibility Moore pp 54-87 (1) Prior folios Real Property Act, s 42(1) (a) (2) Omitted Easements Real Property Act, s 42(1) (a1) James v Stevenson [1893] AC 162 James v R-G (1967) 69 SR (NSW) 361 Beck v Auerbach (1986) 6 NSWLR 454 Dobbie v Davidson (1991) 23 NSWLR 625 Australian Hi-Fi v Gehl [1979] 2 NSWLR 618 Delohery v Permanent Trustee (1904) 1 CLR 283 (3) Profits a prendre Real Property Act, s 42(1) (b) (4) Misdescribed parcels

Real Property Act, s 42(1) (c) (5) Short tenancies Real Property Act, s 42(1) (d) Marsden v Campbell (1897) 18 LR (NSW) (Eq) 33 Mills v Renwick (1901) 1 SR (NSW) (Eq) 173 Clyne v Lowe (1968) 69 SR (NSW) 433 United Starr-Bowkett v Clyne (1967) 68 SR 331 (6) Fraud Real Property Act ss 42, 43 Wicks v Bennett (1921) 30 CLR 80 Stuart v Kingston (1923) 32 CLR 309 Loke Yew v Port Swettenham [1913] AC 491 Breskvar v Wall (1971) 126 CLR 376 Schultz v Corwill Properties (1969) 90 WN 529 Assets Co v Mere Roihi [1905J AC 176 Bahr v Nicolay (No 2) (1988) 164 CLR 604 Leros v Terara (1992) 174 CLR 407 National Bank v Hedley [1984] NSWConvR 55-211 Bank of South Aust v Ferguson (1998) 192 CLR 248 (7) Personal equities Frazer v Walker [1967] 1 AC 569 Barry v Heider (1914) 19 CLR 197 Bahr v Nicolay (No 2) (1988) 164 CLR 604 MML v Gosper (1991) 25 NSWLR 32 Tanzone v Westpac (1999) unreported, Windeyer J, Supreme Court, 26 May 1999 Grgic v ANZ Banking (1994) 33 NSWLR 202 Real Property Act s 56C Story v Advance Bank (1993) 31 NSWLR 722 Snowlong v Choe (1991) 23 NSWLR 198 (8) Overriding statutes Pratten v Warringah SC (1969) 90 WN (pt 1) 134 Hillpalm v Heavens Door [2004] HCA 59 E P & A Act, 1979, (NSW) Family Law Act, 1975 (Cth) Bankruptcy Act, 1966 (Cth) (9) Possessory Title Real Property Act, pt VIA Limitation Act 1969, ss 27, 38 Mulcahy v Curramore [1974] 2 NSWLR 464 Kirby v Cowderoy [1912] AC 599

Tutorial 1 - Tenure and Estates and Native Title Skills Question Read Attorney-General v Brown. Compare the way in which the Court in this case characterises and describes the doctrine of tenure with Brennan Js approach in Mabo (No. 2). In particular, how was the Crowns interest in land characterised in each decision? How similar were the underlying arguments presented to the Court?

1. Describe the doctrine of tenure. What is an allodial system of land holding? How does it differ from land held under the doctrine of tenure? 2. How does the doctrine of native title relate to that of the doctrine of tenure? To what extent is the former reliant on the latter? 3. What does it mean to say that native title is not of the common law, but recognised by the common law? Do you agree with this statement? If not, why not? 4. According to the doctrine of estates, one does not own the land, but an estate in land. A fee simple estate is considered the most ample or complete estate in land. What does it mean to have an estate in fee simple? What are the characteristics of an estate in fee simple? What can the owner of a fee simple estate in land do with the land? What kind of restrictions are there on ownership? Given these restrictions, do owners still have exclusive possession? 5. Why does an estate in fee simple extinguish native title? 6. Do you think native title can be characterised as a proprietary interest? What incidents of property does native title have? What are the consequences of recognising or not recognising native title as property?

********************* Topic 4 (lectures 8 - 10) Torrens Title: Priorities between Unregistered Interests Notwithstanding the centrality of the Register and title by registration there is a place for unregistered interests. Priority between unregistered interests will be examined in detail. Key Concepts: caveat; who has the better equity; postponing conduct; notice Required Reading Moore Chapter 4, pp 83-137
(1) Unregistered mortgages - Equitable interests, the Equity of Redemption and Foreclosure Cooney v Burns (1922) 30 CLR 216 ANZ Banking Group v Widin (1990) 26 FCR 21 Conveyancing Act ss. 99A, 100 Real Property Act ss. 61, 62 Kreglinger v New Patagonia Meat [1914] AC 25 (2) Caveats (a) Lapsing Notices Real Property Act ss 74J, 741 (b) Withdrawal of Caveats Real Property Act, ss 74M, 74MA (c) Right to caveat Real Property Act, s 74F Sinclair v Hope lnvestments [1982] 2 NSWLR 870 Swanston Mortgage v Trepan [1994] 1 VR 672 (d) Formal requirements Real Property Act, ss 74F (5), 74L Kerabee Park v Daley [1978] 2 NSWLR 222 (e) Effect of lodging caveat Real Property Act, ss 36(6), 74H





Re Rush and the RP Act [1963] NSWR 78 Godfrey Constructions v Kanangra (1972) 128 CLR 529 (f) Caveats by Registrar General Real Property Act, 82(1) (g) Caveats lodged without reasonable cause Real Property Act s 74P Beca Develop. v Idameneo (1990) 21 NSWLR 459 Hillpalm v Wilson [2009] NSWSC 362 - Ward J (h) Injunctions to restrain further caveats Real Property Act, s 74O Priorities between unregistered interests (a) Successive legal interests: Nemo dat quod non habet (b) Prior legal interest, subsequent equitable interest Northern Counties v Whipp (1884) 26 Ch D 482 (c) Prior equitable, subsequent legal interest Wilkes v Spooner [1911] 2 KB 473 (d) Successive equitable interests: Qui prior est tempore Shropshire Union v R (1875) LR 7 HL 496 Walker v Linom [1907] 2 Ch 104 Lloyds Bank v Bullock [1896] 2 Ch 192 Heid v Reliance Finance (1983) 154 CLR 326 Latec v Hotel Terrigal (1965) 113 CLR 265 Notice (a) Actual notice (b) Constructive notice Marsden v Campbell (1897) 18 LR (NSW) (Eq) 33 Mills v Renwick (1901) 1 SR (NSW) (Eq) 173 Conveyancing Act, s 164 (c) Imputed notice Unregistered legal interests (a) Unregistered leases Conveyancing Act, s. 23D (b) "Dealing registrable" & "Successive effect" Real Property Act, ss 36, 43A * IA C Finance v Courtenay (1963) 110 CLR 550 * Jonray v Partridge (1969) 89 WN (NSW) 568 Meriton v McLaurin & Tait (1976) 133 CLR 671 Wilkes v Spooner [1911] 2 KB 473 The effect of postponing conduct on priorities between unregistered interests (a) Failure to take possession of title deeds Walker v Linom [1907] 2 Ch 104 (b) Failure to retain possession of title deeds Northern Counties v Whipp (1884) 26 Ch D 482 (c) Premature release of title deeds Reliance Finance v Heid [19821 1 NSWLR 466 Heid v Reliance Finance (1983) 154 CLR 326 Lloyds Bank v Bullock [1896] 2 Ch 192 (d) Receipt clause where money not received Reliance Finance v Heid [1982] 1 NSWLR 466 * Heid v Reliance Finance (1983) 154 CLR 326 Lloyds Bank v Bullock [1896] 2 Ch 192 (e) Holding out



(9) (10)

* Breskvar v WalI (1971) 126 CLR 376 (f) Failure to caveat * Butler v Fairclough (1917) 23 CLR 78 Lapin v Abigail (1930) 44 CLR 166, 204-5 J & H Just v Bank of NSW (1971) 125 CLR 546 Person-to-Person v Sharari [1984] 1 NSWLR 745 Avco Financial v Fishman [1993] 1 VR 90 Osmanoski v Rose [1974] VR 523 Jacobs v Platt Nominees [1990] VR 146 Black v Garnock [2007] HCA 31 When are beneficiaries bound by conduct of trustees? * Lloyds Bank v Bullock [1896] 2 Ch 192 Walker v Linom [1901] 2 Ch 104 Shropshire Union Railways v R (1857) LR 7 HL 496 Cave v Cave (1880) 15 Ch D 639 Unregistered leases generally Real Property Act ss 42(i) (d), 53 Conveyancing Act, s. 23D Chan v Cresdon (1989) 168 CLR 242 Leitz Leeholme Stud v Robinson NSWLR 544 Snowlong v Choe (1991) 23 NSWLR 198 Walsh v Lonsdale (1882) 21 Ch D 9 Volunteers Bogdanovic v Koteff (1988) 12 NSWLR 472 Assurance Fund Real Property Act, ss 129, 130, 135 Registrar General v Behn (1981) 148 CLR 562

Tutorial 2 - Fixtures

In Class Skills Question. Read National Australia Bank v. Blacker (2000) 104 FCR 288. In groups you will read the case, prepare a succinct ratio for comparison with other groups. In particular you will consider the following question: At 294, Justice Conti observed that the Court should have regard to all the facts and circumstances when determining whether or not an item of personal property is a fixture or a chattel. What is the relationship between this test and the test of degree and object of annexation? Is this a new test for determining whether an item is a fixture or a chattel? As a result, does Justice Conti think the test for determining the object of annexation is objective or subjective?

1. Ebenezer was the owner of Blackacre, a Southern Highlands property, which had been in the family for over 100 years. When he died, he left a life estate to his bachelor brother Henry with remainder in fee simple to his own son Stamford. Henry moved into the house with his partner, Ethel, and proceeded to make considerable alterations to the home. Henry built a large shed, ten metres long, to house his collection of vintage cars. To erect the structure, an area of land was levelled and a ten centimetre concrete base was laid with a number of brackets attached to it. There was then bolted to these brackets a steel framework on which was screwed aluminium sheeting.

Henry installed cedar panelling in the living room. The panelling was affixed to the wall by nails and glue. To make way for the panelling, an existing marble fireplace was removed and sold, together with a set of Italian walnut doors, which did not blend with the cedar. Henry drowned. In his will he left all property to Ethel and made her his executrix. Ethel, who is still in residence, has promptly advised Stamford that she intends to remove all additions from the property or seek compensation for them. Advise Stamford. 2. Andrew contracts with Ben for the purchase of a property in Fairfield. Andrew thinks that it is pointless to pay for a solicitor to help. As a result the included/excluded chattels section of the contract remains empty. When Andrew takes possession he find the following missing: a. b. a gas range connected to the gas supply by a pipe through the floor; valuable paintings fastened to the walls by fastening wooden strips to the walls, stretching the paintings over the wooden strips and holding the paintings in position by mouldings fastened to the wooden strips; a carport beside the house which was set into the slab two steel poles which support an awning attached to the steel poles on one side and the house on the other by clamps secured by nuts and bolts. The structure may be dismantled and removed without causing injury to the house, but some of the concrete around the steel poles must be broken up in order to remove them. a glass-house in the garden the glass-house has a concrete base into which are iron straps and the superstructure is bolted to the iron straps; an art deco light fitting in the dining room; wall to wall carpets in the bedroom;


d. e. f.

Advise Andrew whether he is entitled to any of these items. ********************* Topic 5 (lecture 11, 12) Mortgages A mortgage is one of the most common real property interests. A borrower of money, who owns property, creates a mortgage over land in favour of the lender to secure the loan. In the event of default, the lender has certain rights over the property. It is possible for there to be more than one mortgage over a property at a given moment of time. Key Concepts: mortgage; charge; bona fide; equity of redemption; foreclosure; tacking; penalty Required Reading Moore Chapter 7: Mortgages, pp. 181-217 (1) Equitable interests, the Equity of Redemption and Foreclosure Cooney v Burns (1922) 30 CLR 216 ANZ Banking Group v Widin (1990) 26 FCR 21 Conveyancing Act ss. 99A, 100 Real Property Act ss. 61, 62 Kreglinger v New Patagonia Meat [1914] AC 25 (2) Tacking Taylor v Russell [1892] AC 244

Hopkinson v Rolt (1861) 11 ER 829 West v Williams [1899] 1 Ch 132 Re OByrnes Estate (1885) 15 LR (Ir) 189 Credland v Potter (1894) LR 10 Ch App 8 Matzner v Clyde [1975] 2 NSWLR 293 (3) Penalties Conveyancing Act, s 93 Strode v Parker (1694) 32 ER 804 Wanner v Caruana [1974] 2 NSWLR 301 ODea v All States Finance (1983) 152 CLR 359 (4) Powers of mortgagee (a) Foreclosure see above (b) Personal covenant (c) Possession Real Property Act s. 60 (d) Receiver to collect rents Conveyancing Act s. 100 (e) Improvement of property Southwell v Roberts (1940) 63 CLR 581 (f) Sale Conveyancing Act, ss 109, 111, 111A and 112 Real Property Act, ss 57, 58, 58A and 59 (5) Duties of Mortgagee when selling (a) Sale necessary Farrar v Farrars Ltd (1881) 40 Ch D 395 ANZ v Bangadilly Pastoral (1978) 139 CLR 195 Belton v Bass, Ratcliffe [1922] 2 Ch 449 Palk v Mortgage Services [1993] 2 All ER 481 (b) Duty to act bona fide Warner v Jacob (1882) 20 Ch D 220 Kennedy v De Trafford [1897] AC 180 Porter v A S L (1976) 1 BPR 9279 Bourke v Beneficial (1991) ANZ Conv R 473 State Bank of NSW v Chia (2000) 50 NSWLR 587 Gomez v State Bank of NSW [2002] FCA FC 442 (c) Duty to take reasonable steps to obtain a proper price McHugh v Union Bank of Canada [1913] AC 299 Cuckmere Brick v Mutual Fin. [1971] 1 Ch 949 Conveyancing Act, s 111A Corporations Act s. 420A (d) Relevant High Court cases Pendlebury v CML (1912) 13 CLR 676 Forsyth v Blundell (1973) 129 CLR 477 ANZ v Bangadilly Pastoral (1978) 139 CLR 195 CAGA v Nixon (1981) 152 CLR 491 (e) Remedies Inglis v Commonwealth (1972) 126 CLR 161

Harvey v McWatters (1948) 49 SR (NSW) 173 Brutan Inv v Underwriting (1980) 39 ACTR 47 Latec Inv. v Hotel Terrigal (1965) 113 CLR 265 Allfox v Bank of Melbourne (1992) NSWConvR 55-634

Tutorial 3 Torrens Title 1. Equine is the registered proprietor in fee simple under the Real Property Act of Brownacre, which is situated in a country town. Upon Brownacre is erected an old four-bedroom house and a stable to the side, part of which is erected 4 metres above a 3 metre wide easement, benefiting the adjoining property and giving access to the back portion of the property. Equine is a veterinary surgeon, who holds the land on trust for himself and his two partners, although of course this is not disclosed on the certificate of title. The property was purchased some time ago with a view to the veterinary practice being moved to the property. Unfortunately there has been a falling out between Equine and his two partners over the splitting of profits and the fact that one of the partners is paying undue attention to Equine's wife. Unbeknown to the other two partners, Equine on 1 December leases Brownacre to Dr Fixit for a period of two and a half years. Dr Fixit intends trying to establish a medical practice there but is delayed in taking possession as he is waiting on certain equipment. Equine then sells the property to Oats, a hay dealer, for $760,000. Oats inspects the property prior to exchange and finds it vacant. After exchange of contracts and prior to settlement, Oats meets one of Equine's partners in the street. The partner tells Oats that the partners may be dissolving their partnership with Equine but that, in any event, they will shortly be moving their practice to Brownacre. Oats instructs his solicitor to immediately settle the contract. Settlement takes place on 2 February. The transfer is registered. After settlement Oats, while inspecting Brownacre, discovers Dr Fixit on the property, about to take possession of it for his surgery. Dr Fixit shows Oats the lease and insists on staying for the full two and a half years. It is also discovered that the adjoining owner claims the part of the stable erected over the easement. The easement is simply recorded on the title as "right of way created by transfer no 12345 dated 20-1-1917". An examination of the transfer shows that the dealing not only gives a right of way but also operates as a transfer of the buildings over the right of way, as it gives the adjoining owner the building plus the right to pull down or re-erect any other buildings over the right of way provided that such buildings be erected at least four metres from the ground. Equine's partners now give notice to Oats that they intend to claim rectification of the register or alternatively that Oats holds as trustee for them on the basis that he was fraudulent in settling the purchase of Brownacre, having had notice of their interest in the land. Advise Oats. 2. A is the registered proprietor of Blackacre under the provisions of the Real Property Act. He leaves the Certificate of Title for safe custody with his solicitor, S. There are two shops on the property, the first of which is occupied by A. The following events take place; (a) The second shop is leased to T for a period of two years, with an option to renew for a further one year. S acts for both parties in preparing an informal lease, which is not in registrable form. S also advises both parties that this is all that is required, and that there is no need to go to the expense of registration.

(b) S also acts for M, who has asked S to invest his money. S forges A's signature on a mortgage in favour of M. The Registrar-General registers the mortgage. S appropriates the money to his own use, pays the mortgage instalments out of his own pocket as they fall due, and later induces M to execute a discharge of the mortgage in anticipation of its discharge. (c) Whilst A is overseas. S without authority enters into a contract to sell the property to P and on settlement of the sale hands to P the Certificate of Title, the discharge of the mortgage to M, and a transfer from A to P: the latter purports to contain the signature of A but it is of course forged by S. These documents are lodged for registration but before registration is complete A returns from overseas and S disappears. A seeks advice as to whether he can prevent registration of the transfer to P, either by way of caveat or injunction, and whether his title is subject to the mortgage in favour of M. P seeks advice as to whether he is able to have the discharge of mortgage and transfer in his favour registered. M seeks advice as to whether he is able to prevent registration of the discharge of mortgage and maintain his security over the property. T seeks advice as to whether his rights as lessee are likely to be affected by the outcome of other claims. 3. Jim is the registered proprietor of an estate in fee simple in Blackacre under the provisions of the Real Property Act. Jim deposits the certificate of title to Blackacre with Brian as security for an advance. Brian places the certificate in his safe. Jim pays Brian's secretary a substantial amount of money to remove the certificate from Brian's safe. He then enters into a contract to sell Blackacre to Cynthia. Cynthia finances her purchase with money lent by the Down-home Bank. On settlement of the contract, Jim hands over a signed transfer and the certificate of title to Cynthia in exchange for the purchase price. Cynthia gives these documents to the bank, along with a mortgage in favour of the bank signed by her. The bank lodges the documents for registration on the day after settlement. The bank discovers that on the previous afternoon, Brian had lodged a caveat to protect an estate or interest as equitable mortgagee. A lapsing notice is served on Brian by the Registrar General at the request of the bank. Advise Brian of his rights, and what steps he can take to prevent Cynthia or the bank registering their dealings. Additional Questions for Exam Revision 4. Vance was registered as the proprietor of an estate in fee simple of land under the Real Property Act. He needed money to help his necessitous son, Ron. For this purpose he borrowed money from Bob, and executed a memorandum of mortgage in Bob's favour. However he could not find the certificate of title to give to Bob. Because he was waiting for Vance to find the certificate of title, Bob did not register his mortgage. Nor did he lodge a caveat against the title to protect his interest as mortgagee. In the meantime, Ron discovered the certificate of title amongst his father's papers. Without telling his father he purported to sell the land to Ian and, on settlement, gave Ian a memorandum of transfer upon which he had forged his father's signature. Rather than register his memorandum of transfer immediately, Ian sold the land to Sean. Ian himself executed a memorandum of transfer in favour of Sean. On settlement of the sale to Sean, Ian handed to Sean the certificate of title, the memorandum of transfer seemingly executed by Vance in favour of Ian and the memorandum of transfer executed by Ian in favour of Sean.

On the same day as Sean had lodged these documents for registration, but before any of them were registered, Ron confessed his fraud to his father and to Bob, Ian and Sean. Vance obtains an interim injunction from the duty judge in Equity of the Supreme Court of New South Wales restraining the Registrar General from registering any dealing lodged by Sean pending a final hearing in relation to the respective rights in the land (if any) of each of Vance; Bob; and Sean Please advise in relation to the respective rights in the land (if any) of each of: (a) Vance; (b) Bob; and (c) Sean? 5. Prince Abdullah, Crown Prince of the Land of Id, some years ago on a visit to New South Wales was so impressed by the Real Property system and laws of this State that he decided to accept them in his own Kingdom. Id is a small oil rich principality whose citizens enjoy a high standard of living. The only exception that was made to the land law of New South Wales was that mineral rights were not vested in the Crown but belonged to the owners of the land. Blackacre was owned in fee simple by Cretin and was situated in the non-oil producing southern part of the country, the property being used as a camel ranch. Prince Vlad had access to new secret seismic reports revealing vast quantities of oil under the land. Vlad negotiated for the purchase of Blackacre. Not wishing to arouse the suspicion of Cretin, he negotiated the purchase of the property in the name of a local estate agent and dealer, Ali Baba, in the sum of $150,000. Contracts were duly exchanged, the consideration being wholly supplied by his client, Prince Vlad. The Idian Registrar General duly registered the transfer to Ali Baba on 30 January. There was also registered at the same time a mortgage back to Cretin in the sum of $100,000, as Prince Vlad, being an impoverished member of the family, did not have sufficient funds. Cretin did not use a Solicitor but relied on Ali Baba and on registration the Title Deeds and mortgage were returned to Ali Baba, Cretin not knowing the procedure in these matters. As Blackacre had now been vacated by Cretin, the two farm houses on the property were rented to T 1 and T2 by Ali Baba. In each case there was a written lease; T1 leases a house for 18 months with an option of a further 18 months and T2 leases the other house for a period of 3 1/2 years. Both T l and T 2 went into occupation in February. Prince Vlad in the meantime had negotiated the sale of Blackacre with Oshkosh Oil in the sum of $1.5m. Oshkosh Oil was informed that Ali Baba owned the property in trust for Prince Vlad and on 30th April Contracts for Sale were exchanged between Oshkosh Oil and Ali Baba. The 10% deposit of $150,000 was paid direct to Ali Baba to be held in his real estate agent trust account. Ali Baba after having difficulty with a number of creditors decided that the Kingdom of Id was no longer to his liking. He then separately negotiated the sale of Blackacre with Taho Oil in the sum of $1.75 m.; contracts being exchanged between Ali Baba and Taho Oil on 17 June. Both Oshkosh and Taho Oil did not trouble themselves to inspect the property, which was mostly desert sand as they were only interested in what lay underneath. Last Friday week, settlement took place between Taho Oil and Ali Baba, the balance of the purchase money being handed over in exchange for an executed Transfer by Ali Baba together with the Certificates of Title, the mortgage to Cretin and a Discharge of Mortgage, Cretin's signature on the discharge being forged by Ali Baba.

Taho Oil's Solicitors immediately lodged the aforesaid documents with the Idian Land Titles Office. The practice of the Idian Land Titles Office is that documents generally take approximately one month to be registered. Ali Baba then promptly left for the south of France with the contents of his trust account and the purchase moneys. Last Monday morning Ali Baba's secretary came into find the office empty and the trust funds missing and she raised the alarm. Prince Vlad, in a panic, informed Oshkosh Oil. Taho Oil was also upset as Ti and T2 ordered their drilling crew off Blackacre because the latter said their camel raising was being interfered with. Cretin was also upset. It is also discovered that Cretin had previously sold Blackacre to a peasant and had executed a Transfer in favour of the peasant, which is now produced by him. Prince Abdullah, as the fountain of all justice, is now appealed to and consults you, a prominent Queen's Counsel at the Sydney Bar. You are asked to fly immediately to Id and give your opinion. Advise Prince Abdullah, setting out in your advice the legal position of each of the parties in accordance with the law prevailing in New South Wales.

********************* Topic 6 (lecture 14) (Note that there is no lecture 13 because of Easter Monday) Old System and Possessory Title Old System Title is one of the title systems to land in New South Wales. It is called old system land because it was in force before Torrens title was introduced on 1 January 1863. Since 1863 almost all land that was held under this system has been converted to Torrens title. Processes exist to convert old system title land to land held under Torrens title. Thus, old system land is a residual category, and as of 2010 there are only a tiny percentage of transactions each year which involve general law land. Many cases involving priorities between competing unregistered interests under Torrens Title involved priority disputes between competing old system title interests. Qualified Title is a creature of statute which facilitates the conversion of Old System Title to Torrens Title by creating a hybrid title known as Qualified Title, which in essence is Torrens Title subject to the qualification that it is subject to old system subsisting interests. Possessory title enables a person, (who as a trespasser or squatter,) has been in adverse possession of a property to become the registered owner of the property. Key Concepts: old system; qualified title; possession; possessory title; valuable consideration; Required Reading: Moore Chapter 5: Old System Title, pp. 138-150 (1) Legal interests Conveyancing Act, ss 23B, 23D (2) Equitable interests Conveyancing Act, ss 23C, s.54A Lysaght v Edwards (1876) 2 Ch D 499 (3) The Register of deeds Conveyancing Act, s. 184G

(a) Requirement that instrument be effective In re Cooper: Cooper v Vesey (1882) 20 Ch D 611 (b) Requirement that there is a competing instrument (c) Valuable consideration Bullen v ABeckett (1863) 15 ER 684 (d) Bona fides Marsden v Campbell (1897) 18 LR (NSW) (Eq) 33 Scholes v Blunt (1917) 17 SR (NSW) 36 Burrows v Crimp (1887) 8 LR (NSW) (L) 198 Moonking Gee v Tahos (1960) 80 WN (NSW) 1612 (4) The effect of registration Darbyshire v Darbyshire (1905) 2 CLR 787 (5) Effect of prior conveyance Fuller v Goodwin (1865) 4 SCR (NSW) 66 (6) Rules of Priorities see Torrens Title: Unregistered Interests (7) Primary applications- Real Property Act, pt IV (8) Qualified Title- RPA, pt IVA esp. ss 28J, 28M (9) Limited Title- Real Property Act, pt IVB Exam Revision Questions While there is no tutorial on old system or possessory title, these questions will help with revision. 1. Discuss with reference to relevant case law how s. 184 G of the Conveyancing Act operates to alter priorities under old system title. 2. Vivienne is the owner of an Old System Title property known as Grandview. Last month she exchanged contracts to sell Grandview to Paula for $200,000. Paula paid a $20,000 deposit and has possession of a contract for sale of land executed by Vivienne. Yesterday Vivienne in breach of contract with Paula executed a Deed of Conveyance with respect to Grandview in favour of Richard for the sum of $220,000. Richard paid the full amount of $220,000 and has been handed a Deed of Conveyance by Vivienne. Richard is NOT AWARE (nor has any reason to be aware) of Paula. Paula has just discovered what Vivienne has done. Vivienne is unaware that Paula is aware that Vivienne has sold to Richard. Advise Paula of the consequence if: (a) Paula completed her contract with Vivienne and registered the Deed of Conveyance from Vivienne before Richard registered his Deed; (b) Paula were to register her contract for sale of land before Richard registered his Deed; (c) Paulas contract for sale of land was actually a forgery signed by Viviennes husband, Harry; and (d) Richard was to register his Deed of Conveyance before Paula registered anything. *********************

Topic 7 (lectures 15, 16) Co-ownership Co-ownership refers to the ownership of property by more than one person simultaneously. Both real and personal property can be co-owned. Here we will be looking at co-ownership of real property. There are two main forms of co-ownership - joint tenancy and tenancy in common. We will look at both of these types, how they are formed, what the relationship of tenants is inter se, and how co-ownership ends. Key concepts: co-ownership; joint tenancy; tenancy in common; right of survivorship; severance; partition Required reading Moore Chapter 6 In class we will be concentrating on the cases marked with a *. Students are expected to have fully considered these cases. Students are expected to be familiar with the others as far as they are covered in the text. Types of Co-ownership and Creation Hickman v Peacey [1945] AC 304 Conveyancing Act 35 Conveyancing Act s 26 Real Property Act 1900 s 100 * Delehunt v Carmody (1986) 161 CLR 464 Severance * Wright v Gibbons (1949) 78 CLR 313 * Corin v Patton (1990) 169 CLR 540 Real Property Act s 97, 99 Frieze v Ungar [1960] VR 230 Lyons v Lyons [1967] VR 169 Rasmanis v Jurewitsch (1969) 70 SR (NSW) 407 Leneghan-Britton v Taylor [1998] NSWSC 218 Forfeiture Act 1995 Ending Co-ownership Conveyancing Act 1919 s 66G Pannizotti v Trask (1987) 10 NSWLR 531 Rights inter se *Brickwood v Young (1905) 2 CLR 387 *Ryan v Dries [2002] NSWCA 3 Luke v Luke (1936) 36 SR (NSW) 310 *Squire v Rogers (1979) 39 FLR 106 Forgeard v Shanahan (1995) 35 NSWLR 206 Hitchins v Hitchins (1999) 47 NSWLR 35 *********************

Topic 8 (Lectures 17, 18) Easements In some circumstances owners of land may wish to grant limited rights over their land to another person. For example, a fee simple owner might wish to allow another person a right of way (perhaps a driveway) across their land, or a right to lay water pipes/electricity cables/drains through their land. Such arrangements most commonly take the form of an easement, although similar results may also be achieved by means of other legal forms, such as a licence, a lease or in, some circumstances, a freehold covenant. Key concepts: easement; burden; benefit; dominant tenement; servient tenement; prescription; profit prendre; subject matter of the grant; easement in gross Required Reading Moore chapter 6 In class we will be concentrating on the cases marked with a *. Students are expected to have fully considered these cases. Students are expected to be familiar with the others only as far as they are covered in class or in the text. Conveyancing Act ss 23B, 67, 88, 88A, 88B, 88K, 89 Real Property Act ss 46, 42, 46A, 47, 49 *Re Ellenborough Park [1956] 1 Ch 131 *Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20, 605 *Bursill Enterprises Pty Ltd v Berger Bros (1971) 124 CLR 73 * Moncrieff v Jamieson [2007] 1 WLR 2620 Hill v Tupper (1863) 159 ER 51 Wheeldon v Burrows (1879) 12 Ch D 31 North Sydney Printing Pty Ltd v Sabemo Investments Corporation [1971] 2 NSWLR 150 *Australian Hi-Fi Publications v Gehl [1979] 2 NSWLR 286 *Delohery v Permanent Trustee (1904) 1 CLR 283 Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14, 638 McGrath v Campbell (2006) NSW ConvR 56-159 Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286 Todrick v National Western Omnibus [1934] 1 Ch 561 White v Grand Hotel Eastbourne [1913] 1 Ch 113 Jelbert v Davis [1968] 1 WLR 589 Bulstrode v Lambert [1953] 1 WLR 1064 In Kyren Pty Lt v Cinema Place Pty Ltd [2006] SASC 93. Owners Strata Plan 13635 v Ryan (2006) NSWSC 221 Treweeke v 36 Wolsely Rd (1973) 128 CLR 274 Piper v Edwards [1982] 1 NSWLR 336 Tutorial 4 Mortgages Skills Exercise Read Ryan v Dries [2002]. Can mortgage payments be considered improvements? What is the reasoning behind this?


Three years ago, Alexei borrowed $100,000 from Bianca. As security for the loan, Alexei gave Bianca a mortgage over Blackacre. The mortgage was for twelve years at an interest rate of 17.75%. Payments of the interest only are due each quarter with the principal becoming due and payable at the expiration of the twelve years. There is no provision in the mortgage to pay off the mortgage early. Furthermore there is a provision in the mortgage to the effect that where there is a default in an interest payment, the principal together with interest owed for the balance of the term shall become immediate due and payable. After three years, Alexei receives $100,000 from his grandmothers estate and wishes to pay Bianca. He has been told by a Real Property student that he will have to pay Bianca $100,000 plus nine times $17,750, i.e. $259,750. Advise Alexei.


El Diwany is the owner of Blackacre and Whiteacre, both of which are under the provisions of the Real Property Act. El Diwany mortgages Blackacre and Whiteacre to Bentham to secure an advance of $1,000,000. El Diwany defaults in the payment of the loan secured by the mortgages and Bentham enters into possession of these properties as mortgagee in possession. Blackacre is a corner site and is ideal for construction of premises for the sale of ready-cooked chickens and has a value of $1,000,000. Whiteacre has a value $750,000. Having given an appropriate notice pursuant to s 57(2)(b) of the Real Property Act in respect of both properties, Bentham purports to enter into two contracts, one for the sale of Blackacre and the other one for the sale of Whiteacre. Bentham's brother is the managing director of Chooks Limited, the proprietors of a chain of fastfood chicken shops and Brown has a shareholding in Chooks Limited. Bentham is also aware that Fried Chicken Limited, a competitor of Chooks Limited, is anxious to secure Blackacre for its own ready-cooked chicken outlet. Blackacre is situated in Penrith. Bentham arranged for a public auction to be conducted in Broken Hill on Christmas Eve. The auction was advertised in a weekly newspaper circulating in and around Wollongong. A representative of Chooks Limited was the only person present at the auction and Bentham as mortgagee exercising his power of sale entered into a contract for the sale of Blackacre with Chooks Limited as purchaser after Blackacre was knocked down to Chooks Limited at the auction for $500,000. The contract for the sale of Whiteacre was entered into with a purchaser introduced to Bentham by a real estate agent carrying on business in the area where Whiteacre is situated. The purchaser has no connection with Bentham. The price agreed was $650,000, although there is evidence that if Whiteacre had been kept on the market for several more weeks, another purchaser would have been prepared to pay $750,000. Advise El Diwany.


Vicky was the registered proprietor of land under the Real Property Act 1900. She sold the land to Paul for $1,000,000. On completion of the sale she was paid $750,000 in cash and given a mortgage over the land to secure the balance of $250,000, which was payable one year after completion. The mortgage was, in fact, a second mortgage. On completion of the purchase Paul granted a first mortgage to Michael in order to raise moneys to buy and develop the land. Both mortgages were registered, the second mortgages with the consent of Michael. Under the first mortgage Michael advanced to Paul $500,000 on completion of his purchase and covenanted to advance a further $250,000 to Paul if and when Paul finished stage 1 of his multistaged development on the land. The first mortgage also provided that Michael could, in his discretion, advance additional moneys from time to time.

Eighteen months after completion of his purchase Paul had still not paid out Vicky. Having finished stage 1 of his development, Paul called upon Michael to advance Paul more moneys. Michael, sensing that the land would be worthless if not fully developed, advanced Paul $1,000,000 (taking his total advance to $1,500,000). All this was to no avail. Paul was unable to finish all stages of his development. There was no more money. He was bankrupt. Discuss the priorities as between the mortgagees Vicky and Michael. ********************* Topic 9 (Lectures 19, 20) Covenants A covenant is an express or implied promise contained in an instrument. A covenant between parties is enforceable as a contract between the parties. However, in some situations, covenants in freehold land are enforceable by and against persons who are not parties to the original contract which created the covenant (third parties to the original contract and/or successors in title to the original parties). While covenants can import positive obligations, they are mostly used to restrict the use of land (usually referred to a restrictive or negative covenants) for example to ensure that one party does not build a house of more than one storey (thereby ruining the view!). They are sometimes thought of as a kind of private planning instrument. Students will learn the difference between covenants enforceable at Law and those enforceable in Equity and, in particular, the requirements of a valid/enforceable covenant under Torrens Title. Be wary of terminology here. A freehold covenant or a covenant affecting freehold land is a covenant entered into with respect to freehold land (as the name suggests!) and should not be confused with the leasehold covenant discussed in the next topic. A leasehold covenant is essentially an obligation, or promise, contained in a leasehold agreement. While some similar considerations relate to the enforceability of leasehold and freehold covenants it is best for students not to confuse or mix the two sets of rules. It usually leads to a problematic result, particularly in an exam situation! We will look at leasehold covenants in the final topic for the course. Key Concepts: instrument; freehold; covenant, restrictive; positive; enforceable; touch and concern; benefit; burden; building scheme; extinguishment; abandonment. Required Reading Moore Chapters 10 and 11 Conveyancing Act, ss 36C, 70, 70A, 89, 88, 88B Real Property Act, s 51 Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154 Austerberry v Corp of Oldham (1885) 29 Ch D 750 Frater v Finlay (1968) 91 WN (NSW) 730 Tulk v Moxhay (1848) 41 ER 1143 Ellison v ONeill (1968) 88 WN (NSW) 213 Rogers v Hosegood [1900] 2 Ch 388 Re Ballards Conveyance [1937] Ch 473 Lane Cove Municipal Council v W. H. Hurdis Pty Ltd (1955) SR (NSW) 434 Kerridge v Foley (1964) 82 WN (NSW) 293 Elliston v Reacher [1908] 2 Ch 374 Baxter v Four Oaks [1965] Re Mack [1975] 2 NSWLR 623 Pirie v Registrar-General (1962) 109 CLR 619 Re Martyn (1965) 65 SR (NSW) 387

Re Louis [1971] 1 NSWLR 164 Re Truman, Hanbury [1956] 1 QB 261 Re Poltava [1982] 2 NSWLR 161 Pieper v Edwards [1982] 1 NSWLR 336 Re Mason (1960) 78 WN (NSW) 925 Tutorial 5 - Co-ownership 1. Analyse the decision in Corin v Patton. Discuss the different ways in which the joint tenancy might have been severed (and why they were ineffective). 2. Discuss the relationships between A, B, C, and D. Are they joint tenants or tenants in common? A house was gifted to A, B and C (who were three sisters) in their mothers will. After the mothers death, C falls out with the other two sisters and purports to sell her share to D, who is not a relative. 3. Your client is a joint tenant of a valuable waterfront property. Your client's spouse is the other joint tenant. They are estranged. Your client, having being diagnosed as having a terminal illness, wishes to convert the joint tenancy to a tenancy in common. Advise your client 4. You act for a finance company. Your client wishes to lend money to one of two joint tenants of land, taking a mortgage over that joint tenant's interest in the land. Advise your client on the basis that the land is: Old system land; Torrens title land. 5. Max and Judy are registered proprietors of an estate in fee simple in Green Gardens, a property under the provisions of the Real Property Act, as tenants in common. Green Gardens is a residential apartment building containing six apartments. Judy has lived overseas for several years, and Max has occupied one of the apartments. He has received the rents from the remaining five apartments, and carried out maintenance work when necessary. Max has also erected at the front of the apartment building a single storey building containing two shops, from which he receives rent, and installed new plumbing in the apartments, following a statutory notice from the public health authority. Max has just died, and Judy seeks your advice as to whether Maxs executors are now entitled to claim any amount for the money expended on the shops, the plumbing, and general maintenance. She also wants to know whether she has any claim in respect of the income from the shops and the apartments. Advise Judy. In so doing, what authorities will you rely on? Why?

********************* Topic 10 (lectures 21, 22, 23) Leases Leases are one of the most common real property interests. They are a key way in which people occupy and use land belonging to others. Many people rent, rather than own their own homes. Shops in large scale shopping centres operate under leasing arrangements, as do many businesses. Each week in New South Wales thousands of leases are entered into, primarily for residential purposes. However, regardless of what kind of lease we are considering residential, shopping centre or business at heart they all have similar characteristics. We will be looking here the basic law of leasing. Key Concepts: leasehold estate; exclusive possession; assignment; privity of estate; residential tenancies; pastoral leases; landlord; tenant; reversion; waste; leasehold covenant.

Required Reading Moore Chapter 8 In class we will be concentrating on the cases marked with a *. Students are expected to have fully considered these cases. Students are expected to be familiar with the others as far as they are covered in class or in the text. Conveyancing Act ss 23B, 23C, 23D, s 54A, 67, 74, 84, 85, 117, 118, 129, 132, 133B Real Property Act ss 3(1)(a), s 51, 52, 53 *Radich v Smith (1959) 101 CLR 209 Penrith Whitewater Stadium Led v Lesvos Enterprises Pty Led (2007) 13 BPR 24, 799 (NSWCA). Brunton v London and Quadrant Housing Trust [2000] 1 AC 406 Street v Mountford [1985] AC 809 *Martins Camera Corner v Hotel Mayfair [1976] 2 NSWLR 15 *Southwark London Council v Mills (1999) 3 WLR 939 *Norden v Blueport Enterprises [1996] 3 NZLR 450 *Gordon v. Lidcombe Development Pty. Ltd. (1966) 2 N.S.W.R. 9 *Aussie Traveller v P/L v Marklea P/L [1997] QCA 2 *Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 Apriaden Pty Ltd v Seacrest Pty Ltd (2005) 12 VR 319 *Sakoua v Williams (2005) 64 NSWLR 588 Spencers Case (1583) 77 ER 72 P & A Swift Investments v Combined English Stores Group plc [1989] AC 632 *Progressive Mailing House v Tabali (1985) 157 CLR 17 *Shevill v Builders Licencing Board (1982) 149 CLR 620

Tutorial 6 Easements / Covenants 1. Alex was the registered proprietor of an estate in fee simple in Greenacre under the Real Property Act. In March 1962 Alex subdivided Greenacre into 10 lots subject to a covenant that any building erected upon a lot should be for residential purposes only. This covenant was referred to in all advertisements for the sale of Greenacre and, at the auction for the sale of the lots; the covenant was noted on the plan of subdivision which was prominently displayed. Alex sold Lot 1 to Bruce. Bruce agreed to enter into the covenant and the relevant documentation was prepared. Due to an error on the part of Alex's solicitor, the dealing creating Bruce's covenant did not indicate the land benefited by the covenant. Alex later sold Lot 2 to Cedric. Cedric agreed to enter into the covenant, and the dealing creating his covenant indicated that the benefit of the covenant was appurtenant to Lots 1, 3, 4, 5, 6, 7, 8, 9 and 10. Alex then sold Lot 3 to Dennis. Dennis agreed to enter into the covenant, and the dealing creating his covenant indicated that the benefit of the covenant was appurtenant to Lots 1, 2, 4, 5, 6, 7, 8, 9 and 10.

Greenacre is in a very pleasant suburban area. The surrounding homes are large, expensive and have well-developed gardens. There is a small commercial centre within half a mile of Greenacre, but this has not affected the "tone" of the neighbourhood. Advise Dennis in relation to the following: (a) Whether the covenant touches and concerns the land; (b) Whether Bruce can enforce the covenant against Dennis; (c) Whether Cedric can enforce the covenant against Dennis; (d) Whether Cedric can enforce the covenant against Bruce; (e) Whether Bruce can enforce the covenant against Cedric; and (f) Whether Dennis can enforce the covenant against Bruce; 2. Elises father has left her an expansive area of bushland out west, near a beautiful lake. She decides to maximise her inheritance by developing the land. This is Torrens land. The development is to consist of 8 lots, well spaced across the large area of the development. Seven will be individually owned and the final one, lot 8, will consist of a recreation area near the lake. She wants this development to reflect the pleasant, bush-like surroundings of the area. She is particularly concerned to protect the native wildlife. Elise sells lots 2-7. She keeps Lot 1. Lots 2-7 are sold to private purchasers. In each contract for sale there are the following clauses: 1) The owner of the land receiving the benefit of the easement (hereinafter called the Grantee) and guests of the Grantee from time to time authorised by him shall have the right to enter upon and use the land burdened by the easement (hereinafter called lot 8) for private recreational purposes. The covenantor and his or her successors in title and the persons deriving title under him or her or them will not keep any animals of any kind on the property.


Lot 7 was sold to Richard in July 2009. Lot 6 sold in August 2009 to George. In 2010 Richard sells lot 7 to Helen. All transfers are registered. After living there for almost a year Helen comes to you for advice. She has two concerns: 1) Her lot is next to the recreation area. It is very noisy. This is less of a problem for other owners, some of whom are up to a kilometre away. Some of the other owners are very noisy when they use the lake. They have small boats with outboard motors, surf skis and other equipment. Also, she is suspicious about the number of guests that the owner of Lot 6 (George) seems to bring to the lake. She wishes your advice as to whether the there is a valid easement and if so whether she has to put up with the consequent noise. She wants to keep a dog. She has always bred Labradors. She did understand from speaking to other residents that pets were not allowed, but had not really fully grasped that this was blanket restriction. George wants to stop her having a dog. He is concerned about the small native mammals in the area. Can he stop her?


Advise Helen. Look at the easements aspects first, and then, if there is time, at the remainder of the issues.

Extra problem for exam preparation 3. Blackacre and Whiteacre are adjoining lots, both under Old system title. A right of way existed over Blackacre in favour of Whiteacre. The right of way was a narrow strip of land fenced on both sides and leading to a road. The improvements on Blackacre consisted of three houses, each of which had its front entrance to the strip of land through a gate. On Whiteacre there was built a processing works, which was used to kill and process chickens for sale on the open market. The business was a small family concern, and the chickens were brought to the building on Whiteacre in wooden crates along the narrow right of way. In the course of time, Whiteacre changed hands a number of times. The present owner has conducted a market survey and found that there is more money to be made in large-scale ham production. He accordingly wants to convert the processing works into a slaughterhouse for the killing and processing of pork, and to drive large herds of swine along the right of way to Whiteacre to be slaughtered and processed. Advise the present owner of Whiteacre whether he is entitled to use the right of way in this manner, indicating in your answer whether there would be any difference if the easement had been created by express grant; or by implication; or by prescription. In Class Problem: Leases 1. Stuart lives in a half-way house which is run by a non-profit organization as a way of dealing with people with psychological or other problems but are able to live semi-independently for a few months, before being re-integrated into independent living. Every resident has a key to their door, which leads to a bedsit with an ensuite bathroom. There is a microwave and kettle, though alternatively there is a communal kitchen where meals are served, though for this the individual has to pay extra. (Stuart does not bother with this, as he just cooks with the microwave or eats at his job in a restaurant kitchen). Rooms are cleaned, and the cleaners and the managers have a key. There is also a resident manager and each resident has an emergency bell which they can ring. The agreement for the accommodation states that there is a monthly fee to be paid, and Stuarts family pay this for him to the managers. The agreement provides that the management retain a key, that there is to be no smoking or drinking in the rooms (there is a separate smoking, but alcohol is prohibited from the entire premises), lights are to be out by 10 pm every night. No pets are allowed. Lastly, there is a clause which says that the management reserves the right to move you to a different bedsit within the house at any time for operational reasons. Residents must follow the behaviour code and any breaches of the code may lead to eviction. The behaviour code is displayed all around the communal areas and in every room, and covers basic matters such as no fighting, loud music, clean up your dishes in the kitchen and no squabbling over the TV remote. Stuart has a problem that he constantly whistles Billy Joel tunes all night and his neighbour asks that Stuart be moved. They move Stuart to a different room three floors up, but there are no stairs and Stuart is scared of lifts. He demands to be moved back to his old room and claims that he has a monthly tenancy of that room. licence or lease?

Extra problem for exam revision: Leasing Maurice (a failed chef) decides to invest in real estate. He purchases a three story building in Glebe. Its a bit run down, but it will do for the meantime he thinks. Maurice leases out two stories to a small business. On the ground floor is Harvey. He handcrafts wooden toys. They are making a come back in an postconsumer, green-oriented world.

On the middle floor is Bethany. She intends to set up a small fashion label and sell from the premises. She spends quite a lot of money outfitting the premises for production and as a small, chic, salesroom. Maurice has retained the third floor. He intends to run his (hopefully) growing real estate empire from here. He is frequently away on business. Each of the tenants sign agreements with Maurice. These are expressed to be leases for a fixed period of one year. Each of the agreements contain the following clauses (4) Maurice will pay the electricity, but reserves the right, on two days notice, to enter and read the electricity meter; (5) the tenants may not undertake any other activities on the premises than the businesses already agreed to; (7) the lessor is entitled to keep keys to the properties, but will only enter if necessary. Rent is $1000 per month. After several months, all is not going very well. It seems that there is indeed a demand for small wooden toys. So Harvey has bought a lathe (a machine) which enables him to make toys faster. It is also quite noisy and can be clearly heard on the middle floor by Bethany. Maurice has gone away on a lengthy business trip. In his absence, water pipes on the top floor have begun to leak. The leak is getting worse, and the water is flowing into Bethanys floor, and downward to the ground floor. On at least two occasions the water has damaged expensive fabric bought by Bethany to make garments. In his absence, Maurice has also given instructions that renovations are to begin on the exterior. Scaffolding is put up. The scaffolding covers the signs to both Bethanys and Harveys premises. They cannot be seen by passers-by. Business is not good and they blame it on the scaffolding. Work is not progressing very quickly on the renovations to the exterior. a) b) c) d) Advise Maurice as to the nature of the agreements between himself and his tenants. 6 marks Advise Maurice as to whether he can validly end the agreements and on what basis. Advise Bethany whether she has any recourse on the grounds of the continual noise. If so, against whom? Advise Bethany and Harvey as to whether they have any recourse against Maurice for damange and/or loss of income.