Q

I am having some problems understanding the removal of fixtures when there is a third party.

If the owner of the land gives interest to a third party, what does that mean to the individual
who owns the chattel affixed to land owned by the owner?

Things become fixtures by operation of law in particular circumstances. A hirer of goods

might not want the goods to become part of the land, but the degree of annexation and other
circs in a particular case can still make the goods part of the land. As against the owner the
hirer has rights in contract to remove the goods. But as against the owner's mortgagee the
goods are part of the mortgage security, since the goods are part of the land.

In other words it is a process that acts by way of accession.

Sometimes the hirer/owner of goods may have an equitable interest in the land - see Butt
[314](1).

I just have a quick question I need some clarification on. Where the title deeds are given to a
mortgagee (A) as security for a loan then the registered proprietor gives (B) a fraudulent copy
of title deeds for another loan. How is priority determined? Does the register proprietors
fraudulent actions affect A's interest in the same way as the fraud exception? And would
postponing conduct affect A's interest ?(such as failure to register).

A mortgage by deposit can be effected by handing over any documents relating to the
property see Butt [1815]-[1818] and [1826], especially [1818]. What is important is that
there was an oral or written agreement to give the lender a security over the property. So
handing over a (forged) copy of the C/T will do to create a mortgage by deposit, since it is
clear that it is agreed that the lender is to have security, even though the borrower has misled
the lender about the genuineness of the documents.

Where there is a M by deposit by handing over the genuine C/T, and then a later M by deposit
by handing over a forgery, or vice versa, both lenders have an unregistered equitable interest
(see the last para). Then it is a Q of whether the earlier M should be postponed to the second:

1. There is a threshold question of whether the second lender has notice of the first.
See Butt [2054], [1955]. If yes, the first always wins.

2. Notice is as defined in [1973] ff, and includes constructive notice as well as actual
notice.

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3. Assuming the second does not have notice of the first, then all the circumstances are
considered, the conduct of each party, the nature of each interest, and how it was obtained, in
order to determine who in fairness and justice should get priority: see [2046] and [1949].

4. However, the first in time will not usually lose priority unless some conduct on their
part has prejudiced the holder of the second interest: see [2046] second para at the end,
[1949] third para, casebook p475 second para.

5. Failure of the first in time to caveat is not of itself postponing conduct: [2048] ff,
Shariris case casebook p455, and also see p 475. but failure to caveat together with other
circs can be postponing conduct, as in Shariri.

6. If after considering all the circumstances the court cannot favour one interest over the
other, then the earlier has priority: [2046] second para, [1949] first para.

Under Torrens as between unregistered equitable interests the old system priority rules are
used, and these are as outlined above.

But if the later interest is registered the above priority rules are not used, but instead we use
indefeasibility and exceptions thereto. The general rule is that a buyer who gets registered is
not affected by notice of an earlier unregistered interest, and is allowed to assume that the
earlier unregistered interest has been taken care of (see Butt [2075] and [2015]) unless the
circumstances give rise to an exception to indefeasibility: see [2076], [2068] ff (the fraud
exception), [2096], [20102], etc.

I just have a question about priorities for the exam. I read that the rules for competing
unregistered interests are the same for the rules for competing equitable interests. Do these
rules remain the same when there are competing equitable interests in old system and
competing unregistered interests in torrens system? The book seems to suggest that the rules
are slightly different. And will the exam question make it clear about whether it is in torrens
system or old system?

Unless the authors of the exam were having a really bad day, any priority question will be
about Torrens title, since there is hardly any OST land left in NSW. Assume it is Torrens
unless it clearly indicates otherwise. One indicator is the use in a question of Torrens
concepts and language, such as registered proprietor, certificate of title, folio of the
register, caveat, and so on; as an example see last years exam.

The rules are the same for Torrens unregistered equitable vs unregistered equitable as for
OST: see Butt [2025].

The Torrens chapter in Butt deals with the OST rules in [2046] [2054], which is the same as
the discussion of the same rules in the OST chapter at [1948] [1955], except that [2048]
[2051] deals with failure to caveat as an extension to the OST rules.

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Q

I have read everything but I cannot clearly answer this question if you could please just give
me a quick answer. In regards to the case of Breskvar v Wall the fact that they both acted
fraudulently made the title defeasible. Is the defeasible title then considered to be an equitable
interest and not a legal interest. Because the latter ended up winning the case due to the fact
that they had taken better steps to protect themselves.

So to make it short, does a defeasible title become an equitable interest?

In Breskvar the registered proprietor of the fee simple (Wall) was a party to fraud in
becoming registered under a transfer from Breskvar, and although Wall held a registered
interest, which normally is held absolutely free of unregistered rights (pursuant to RPA s
42(1) see Butt [2015]), fraud in getting registered is an exception referred to in s 42(1). (An
unresolved Q concerns whether fraud after regn can operate as an exception to indefeasibility
see Heid v Reliance).

Walls registered interest was a legal interest, but because of the fraud Wall held subject to
Breskvars rights.

The defrauded party (Breskvar) held equitable rights enforceable against the registered
proprietor (Wall), but the registered proprietor contracted to sell the land to Alban, and Alban
(innocently) paid the purchase price and received the transfer. Shortly afterwards Breskvar
lodged a caveat and so Alban could not get registered. Albans unregistered interest was an
equitable interest. Between Breskvar and Alban the priority rule for equitable vs equitable
was applied.

PS: the both you refer to were Wall who got registered, and his grandfather Petrie. Petrie
had received a transfer signed by Breskvar as security for a loan but with a blank space where
the name of the transferee should have been inserted, and Petrie fraudulently arranged for the
transfer to be completed with Walls name as transferee. Wall was a party to the fraud.

I am having some problems understanding the difference between tenancy in common and
joint tenants. If like in the case of Delehunt, they both agreed that the land would be owned
in equal shares and that at some time in the future it would be put in both names. Doesn't that
fall under the "unity of interest" in joint tenancy?

In Delahunt they agreed to contribute equally, but there was no express agreement as to
whether it was to be as JT or TIC.