Paper Code: LAWS307-13Y (HAM) THE UNIVERSITY OF WAIKATO 0) Te Whare Wnanga o Waikato 2013 B SEMESTER EXAMINATIONS DEPARTMENT PAPER TITLE TIME ALLOWED NUMBER OF QUESTIONS IN PAPER NUMBER OF QUESTIONS TO BE ANSWERED VALUE OF EACH QUESTION GENERAL INSTRUCTIONS SPECIAL INSTRUCTIONS CALCULATORS PERMITTED Te Piringa - Faculty of Law Land Law Three hours Four Answer all FOUR questions, and ALL PARTS of each question Each question is worth 25 marks, The value of each sub-question is indicated Restricted. Candidates may use statutes concerning Land Law, either in the form of official reprints of the Property Law Act 2007, Land Transfer Act 1952, Unit Titles Act 1972 (with amendments) , Maori Land Law 1993 and Unit Titles Act 2010 or Butterworths Property Law Statutes, or Thomson Reuters Brookers Property Legislation. No downloads, no photocopies. In statutes, highlighting and underlining are permitted, but no writing, notes or annotations. No extra material may be inserted except tabs (free of writing). Assume that all land is land under the Land Transfer Act 1952. No electronic devices are allowed TURN OVER2 Paper Code: LAWS307-13Y (HAM) QUESTION ONE (25 marks) a) In the case of Frazer v Walker [1967] NZLR 1069 (PC) Lord Wilberforce referred to “indefeasibility of title” saying it is central in the system of registration. Explain what is ‘meant by the terms ‘immediate indefeasibility’ and ‘deferred indefeasibility’, illustrating your answer by reference to case law. Comment on whether the law of New Zealand should be altered so as to accommodate deferred indefeasibility in some circumstances. (18 marks) b) Compare and contrast the benefits and disadvantages of the modern Torrens system, where land registration of title is effected by electronic means, with the system of registration of deeds. (7 marks) QUESTION TWO (25 marks) A registered mortgage is held by Gee Bank (GB) over a property owned by George and used as a hairdressing salon. George leased the salon to T-Clip two years ago with GB’s consent. a) At the time when George defaulted on his mortgage, T-Clip was running as a successful business so GB decided to enter into possession of the premises, having successfully completed all the required formalities under the Property Law Act 2007. Whilst in possession GB fixed a broken window and installed new sinks in the salon, at T-Clip’s request, paid for out of the rent that GB was collecting as mortgagee in possession. George seeks your advice as to the power of GB to utilise the rent money in this way, rather than applying it solely to the mortgage payments due. (6 marks) b) A few months later, GB served a notice that it intended to sell the salon, complying with sections 119 and 120 of the Property Law Act 2007. George, rather than remeding his default timely, entered into a sale and purchase agreement with his wife and lodged a caveat against his own title as an unpaid vendor, trying to stop the mortgagee sale, GB wants to clear the caveat off the title. George seeks your advice on: (i) if the caveat lodged will be sustained and, (i) if the caveat can effectively stop the purchaser of the mortgaged property from registering his/her ownership title. (9 marks) ) Will your answer to the above b) questions be any different if the mortgage instrument contains a clause that the Mortgagor may not lodge a caveat against dealing in any circumstances? (3 marks) TURN OVERPaper Code: LAWS307-13Y (HAM) 4) George also owns a farm in Tamahere. He mortgaged the farm to his old friend Amold in January 2011, for a loan of $600,000. Amold, relying on the “friendship” did not register the mortgage, nor did he lodge a caveat. In February 2012, George mortgaged the farm to Bob, who was not aware of anything about the mortgage held by Arnold, for a loan of $400,000. Bob did not register the mortgage, but lodged a caveat against George's title to the farm in May 2012, one month after George’s first default. In June 2012, Amold also lodged a caveat against George’s title to the farm, three months after George’s first default in paying his mortgage. Now, the market value of the farm is about $800,000. George wants to know if his old friend Amold can fully recover the loan, (7 marks) QUESTION THREE (25 marks) a) Charlie Prince owned numbers 20 and 20A Rata Street Raglan. 20A Rata Street is adjacent to number 20. It is accessible by a driveway down the side of number 20, but the house at 20A has no garage attached. There is, however, a large shed on the land belonging to 20 Rata Street, which has always been used as a garage by whoever lives in 20A. Hal Gore bought 20A Rata Street from Charlie. When Hal viewed the house he was shown the shed and told that it had been used by owners of 20A for fifteen years. Hal Gore drives a very noisy old taxi and Charlie dislikes being woken by it. Recently Charlie consulted his solicitor, Dan Under, and discovered that, contrary to what they had all believed, Hal had no legal right to use the shed. Yesterday Charlie told Hal Gore that Hal had must keep his car elsewhere. Has Charlie acted fraudulently? (6 marks) b) Dot owned a shuttle bus company which specialized in taking Waikato travelers to and from the airport. Dot bought her existing buses from Larry Lam, a commercial vehicle dealer in Hamilton, Larry offered to lend Dot the money to buy another two buses as long as she could offer security for the loan, Dot had already mortgaged her own house to set up her business but she had an elderly Aunt Alice who lived in a nursing home but who still owned a large house. Dot asked Larry what he needed her to do and Larry gave Dot a mortgage agreement and told Dot to get her aunt to sign it. Alice loved and trusted Dot so when Dot came to visit with flowers and chocolates Alice was happy to sign what Dot said was an authority for Dot to have some repair work done on Alice’s house. She sent the document to Larry and he sent it back because Dot had not had witnesses to the signature. Dot got her boyfriend and his mother to sign as witnesses. Once she had done everything Larry wanted, Dot was able to buy the extra buses from him and expand her business. Six months later, due to a serious outbreak of avian flu, people ceased to travel so much and Dot’s business failed. When she could no longer keep up her loan repayments to Larry he served notice that he intended to sell Alice’s house. However before the sale Alice died and her house was left to her daughter Maggie. Maggie has discovered the mortgage agreement and has come to you for advice. She knows it is no use asking Dot for the money as she is heavily in debt. Can Maggie proceed against Larry? (7 marks) TURN OVER4 Paper Code: LAWS307-13Y (HAM) ©) John owns a home at the end of a private road part of which runs alongside the Waikato River. The road is a registered easement of right of way created without special condition in 2011. In 2012, John bought a small section adjacent to the right of way that overlooks the river. He plans to access this section via the right of way to operate a jet ski business on the river. Pete who granted the right of way objects to this use of the private road by John. For Pete, an avid kayaker, jet-skis are obnoxious, smelly and noisy. Advise Pete. (6 marks) 4) John is also unhappy that a stone wall separating his property from Zoe’s — his neighbour - is crumbling in parts and is in need of serious repair. A covenant made in 1982 by Zoe's predecessor in title, in favour of John’s property, promised to keep the wall in good and substantial repair. Zoe says she is not obliged to comply with the covenant since she did not agree to it. Advise John whether he can require Zoe to repair the wall. How would your answer change if the covenant was made in 2001? (6 marks) QUESTION 4 (25 marks) a) Two friends, Art and Mark pooled their money to buy an apartment 18 months ago. They became joint tenants of a freehold apartment, on the top floor of a block of six, built in 2011 and subject to the Unit titles Act 2010. Skylights were fitted into the roof to give natural light on the stairs that served the upper floor but the skylights leaked. The owners of the ground floor apartments claim the cost of the repairs should be borne by the owners of the top floor apartments. Art and Mark did not believe this was true. Unfortunately Art died in a car crash a few weeks ago. In his will he left his interest in the apartment to his brother, Jonny. Jonny now claims he is joint owner of the apartment. Mark disputes this and also asks your advice as to the cost of repairs to the skylights. (6 marks) b) Len owns a retail property which he leased to Teresa in 2009, for six years. The lease provides that the tenant will not assign or sublet the premises without landlord’s consent. In 2010, with Len’s consent Teresa assigned the lease to Alex. On 1 October 2013, Len came to seek your advice, Len tells you that Alex has not paid rent since August 2013 and he wants to know if he can rely on a clause in the lease, which provides that the lessor may cancel the lease for non-payment of rent without giving the lessee notice. (6 Marks) ©) Before Len has a chance to cance! the lease mentioned in the above b), Len just found out that Alex had sub-let the premises to Susan in April 2013, without seeking Len’s consent. Susan has paid Alex the rent up to August 2013. Len wants to know if he can cancel the lease, and what Susan’s options may be if Len decides to cancel the lease? (6 Marks) TURN OVERPaper Code: LAWS307-13Y (HAM) 4) Shona is the registered proprietor under the Land Transfer Act 1952 of a fee simple estate in a block of land she bought in 2011. It turns out that this land is Maori frechold land and many years ago used to be customary land owned by the local hapu, Ngati Wai, Tama, a member of Ngati Wai and chair of the Ngati Wai trust board, seeks your advice. He understands that there are certain requirements under Te Ture Whenua Maori (Maori Land Act) 1993 relating to the sale of Maori land that were not complied with when Shona bought the land, including that the land should have been offered to Ngati Wai before sale to Shona. Advise Tama whether: (i) the land ought to have been offered to Ngati Wai before sale and on what basis and any other requirements under Te Ture Whenua Maori 1993; and (ii) assuming non-compliance with those requirements, whether Shona’s title is valid. NB — do not discuss solicitors’ liability and negligence. (7 marks)