LawBriefs - Property - Law - (PG - 30 134)
LawBriefs - Property - Law - (PG - 30 134)
LawBriefs - Property - Law - (PG - 30 134)
Copyright © 2015. Thomson Reuters (Professional) Australia Pty Limited. All rights reserved.
Dr, Kristy Richardson. LawBriefs: Property Law, Thomson Reuters (Professional) Australia Pty Limited, 2015. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/unsw/detail.action?docID=4985429.
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Copyright © 2015. Thomson Reuters (Professional) Australia Pty Limited. All rights reserved.
Dr, Kristy Richardson. LawBriefs: Property Law, Thomson Reuters (Professional) Australia Pty Limited, 2015. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/unsw/detail.action?docID=4985429.
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Chapter 1
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What Is “Property”?
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What Is “Property”?
[1.10] INTRODUCTION....................................................................... 4
[1.20] WHAT IS “PROPERTY”?............................................................. 4
[1.40] JURISPRUDENTIAL THEORIES.................................................... 5
[1.40] Labour theory............................................................... 5
[1.50] Social utility approach .................................................... 6
[1.60] Marxist approach .......................................................... 6
[1.70] Economic analysis approach ............................................ 6
[1.80] CLASSIFICATIONS OF PROPERTY............................................... 7
[1.110] LAND AND THE LIMITS OF LAND OWNERSHIP .............................. 9
Introduction
[1.10] Property is not an easy term to define precisely. What property is
has been the subject of judicial interpretation and jurisprudential writings.
Legislation also plays a role in defining certain aspects of property. Whilst
property is not able to be defined precisely, there seems to be agreement
that property is not simply a “thing”. Members of the High Court noted in
Yanner v Eaton (1999) 201 CLR 351 that property is not of “standard content
and invariable intensity”. The High Court considered that what is
important is the amount of control that a person exercises over the
property. It is that control that gives rise to enforceable legal relationships.
In turn, the extent of that control, that is, the ability to possess and deal with
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What is “property”?
Yanner v Eaton
[1.20] Yanner v Eaton (1999) 201 CLR 351
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CHAPTER 1 WHAT IS “PROPERTY”? / 5
without a licence or other authority issued under the Act. Yanner was not authorised under
the Act and was charged in the Magistrates Court of Queensland with taking fauna contrary
to the Act. The Magistrate held that s 211 of the Native Title Act 1993 (Cth) applied so as to
permit Yanner to hunt the crocodile for food and found Yanner not guilty. The decision was
appealed to the Court of Appeal of Queensland; that court set aside the Magistrate’s order.
Yanner appealed to the High Court of Australia, contending that the Magistrate was right; in
taking the crocodiles Yanner was exercising his right to enjoy his property (ie, his native title
rights and interests).
HELD • The appeal was allowed (per Gleeson CJ, Gaudron, Kirby, Hayne and Gummow JJ;
Callinan and McHugh JJ dissenting). The majority in their joint judgment discussed the
meaning of property (at [17]):
the word ‘property’ is often used to refer to something that belongs to another. But in the Fauna
Act, as elsewhere in the law, ‘property’ does not refer to a thing; it is a description of a legal
relationship with a thing. It refers to a degree of power that is recognised in law as power
permissibly exercised over the thing. The concept of ‘property’ may be elusive.
The court found that Yanner’s hunting rights and interests were native title rights as
“recognised by the common law of Australia”. Consequently, Mr Yanner’s rights and
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interests as a native title holder permitted the hunting and fishing of the crocodiles.
Jurisprudential theories
Labour theory
[1.40]
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6 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
natural right to that property. Locke asserted that nine-tenths of the value of anything
produced was due to a person’s labour.
However, the notion that people have proprietary rights in the product of their labour has
limited application to an industrial or service-driven society where something that is
produced may have been the subject of a number of people’s labours. What is the value of A
or B’s (or more people’s) labour in proportion to the final value of the good?
Marxist approach
[1.60]
workers were being deprived of the property that resulted from their labours. Marx called
for the abolition of private property rights so as to redistribute wealth equally.
Garrett Hardin
Hardin, through his seminal article, “The Tragedy of the Commons” (1968) 162 Science
1243 at 1244, highlights how resources can be misallocated where there are no property
rights:
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CHAPTER 1 WHAT IS “PROPERTY”? / 7
The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected
that each herdsman will try to keep as many cattle as possible on the commons. As a rational
being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously,
he asks, ‘What is the utility to me of adding one more animal to my herd?’ This utility has one
negative and one positive component.
(1) The positive component is a function of the increment of one animal. Since the herdsman
receives all the proceeds from the sale of the additional animal, the positive utility is nearly
+1.
(2) The negative component is a function of the additional overgrazing created by one more
animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the
negative utility for any particular decision-making herdsman is only a fraction of –1.
Adding together the component partial utilities, the rational herdsman concludes that the only
sensible course for him to pursue is to add another animal to his herd. And another; and another …
But this is the conclusion reached by each and every rational herdsman sharing a commons.
Therein is the tragedy. Each man is locked into a system that compels him to increase his herd
without limit — in a world that is limited. Ruin is the destination toward which all men rush, each
pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in
a commons brings ruin to all.
Richard Posner
In his text Economic Analysis of Law (2nd ed, Little Brown & Co, 1977), pp 27–31, Posner
argued that to overcome the “tragedy of the commons” three criteria are needed for an
efficient system of property rights:
• Universality — All resources should be owned by someone.
• Exclusivity — The greater the ability to exclude all others from the property right, the
greater the incentive to invest resources in the development of the property.
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Classifications of property
[1.80] Although property is not easy to define, it is capable of classification.
Property has historically been classified as being either real property or
personal property. Real property describes interests in land other than
leasehold interests. Real property interests are incorporeal hereditaments
(rights unable to be inherited, eg, an easement) and corporeal hereditaments
(things able to be inherited such as a fixture). Personal property describes
all property other than real property. Personal property comprises chattels
real and chattels personal. Chattels real refers to a leasehold interest whilst
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8 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
FACTS • The company, Victoria Park Racing and Recreation Grounds Co Ltd, carried on
the business of racing at Victoria Park. Mr Taylor owned land near the racecourse and
erected an elevated platform on his land. From that platform, Mr Taylor called the race via
telephone to a radio station, which broadcast his call. The company applied to the court to
have Mr Taylor’s broadcast of the races stopped. The company submitted to the court that
Mr Taylor’s broadcast discouraged people from paying admission to attend the races so
that its property rights were being affected by Mr Taylor’s actions. The question was: were
there property rights in the spectacle constituted by the horse races being held at Victoria
Park?
HELD • The court found that there was no property in a spectacle. Latham CJ commented
(at 496):
It has been argued that by the expenditure of money the plaintiff has created a spectacle and that
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it therefore has what is described as a quasi-property in the spectacle which the law will protect.
The vagueness of this proposition is apparent upon its face. What it really means is that there is
some principle (apart from contract or confidential relationship) which prevents people in some
circumstances from opening their eyes and seeing something and then describing what they see.
The court has not been referred to any authority in English law which supports the general
contention that if a person chooses to organize an entertainment or to do anything else which
other persons are able to see he has a right to obtain from a court an order that they shall not
describe to anybody what they see. If the claim depends upon interference with a proprietary right
it is difficult to see how it can be material to consider whether the interference is large or small —
whether the description is communicated to many persons by broadcasting or by a newspaper
report, or only to a few persons in conversation or correspondence.
I find difficulty in attaching any precise meaning to the phrase ‘property in a spectacle.’ A
‘spectacle’ cannot be ‘owned’ in any ordinary sense of that word. Even if there were any legal
principle which prevented one person from gaining an advantage for himself or causing damage
to another by describing a spectacle produced by that other person, the rights of the latter person
could be described as property only in a metaphorical sense. Any appropriateness in the
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CHAPTER 1 WHAT IS “PROPERTY”? / 9
metaphor would depend upon the existence of the legal principle. The principle cannot itself be
based upon such a metaphor.
[1.100] In other situations, legislation defines the property and who can
exercise control over it.
Jurisdiction Legislation
New South Wales Interpretation Act 1987, s 21(1)
Queensland Acts Interpretation Act 1954, Sch 1
South Australia Real Property Act 1886, s 3
Tasmania Acts Interpretation Act 1931, s 46
Victoria Interpretation of Legislation Act 1984, s 38
Western Australia Interpretation Act 1984, s 5
Jurisdiction Legislation
New South Wales eg, Coal Acquisition Act 1981, s 5
Queensland Mineral Resources Act 1989, s 8
South Australia Mining Act 1971, s 16
Tasmania Mineral Resources Development Act 1995, s 6
Victoria Mineral Resources (Sustainable Development) Act 1990, s 9
Western Australia Mining Act 1978, s 9
The depth to which a landowner does enjoy their land has not been
definitively settled and there is no “reasonable use and enjoyment test.”
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10 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
FACTS • The owner of land (Di Napoli) brought an action for trespass against the
adjoining landowner who had inserted rock anchors into her land for the purposes of
constructing their house. Di Napoli argued that the rock anchors constituted a trespass as
an incursion into her subterranean land boundary. In defence, the adjoining landowner
argued that the rock anchors were inserted below the usable depth subterranean space of
the land and so did not affect Di Napoli’s ordinary use and enjoyment of the land.
HELD • Young CJ held that there was a trespass. Whilst Young CJ considered that the
maxim “cuius est solum est usque ad coelum et ad inferos” was “not to be taken
literally” and that the maxim did not fully apply in the case of airspace, he considered “at
least for subterranean rights, a person has substantial control over land underneath his or
her soil for a considerable depth”. He deemed that the rock anchors were not so far below
the land as to be “beyond the reach of trespass”.
[SEE ALSO • De Pasquale Bros Pty Ltd v Cavanagh Biggs and Partners Pty Ltd [1999] Aust
Torts Reports 81-521; [1999] QSC 171. The common law has interpreted a limitation to the
landowner’s ownership to the “heavens above”. Above-surface ownership is generally
accepted to be limited to that which is reasonable and practical to the enjoyment of the
land.]
[1.130] LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490
FACTS • LJP Investments Pty Ltd sought an injunction against Howard Chia Investments
Pty Ltd, requiring it to remove scaffolding that was erected 4.5 metres above ground level
and protruding 1.5 metres into the airspace above LJP’s land.
HELD • Hodgson J of the New South Wales Supreme Court ordered the injunction, finding
that the scaffolding interfered with LJP’s reasonable use and enjoyment of the airspace
above its land. Hodgson J stated the test to be not whether the incursion interferes with
the occupier’s use of land at the time, but rather whether the incursion is of a nature and
at a height that may interfere with any ordinary uses of the land that the occupier may see
fit to undertake.
[SEE ALSO • Bernstein of Leigh (Baron) v Skyviews & General Ltd [1977] 1 QB 479.]
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CHAPTER 1 WHAT IS “PROPERTY”? / 11
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Dr, Kristy Richardson. LawBriefs: Property Law, Thomson Reuters (Professional) Australia Pty Limited, 2015. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/unsw/detail.action?docID=4985429.
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MindMap01
What is property? Not just a “thing” but a consideration Land
of control giving rise to different kinds
of enforceable legal relationships
Yanner v Eaton (1999) determined by reference to the law Land – defined by statute in
201 CLR 351 – “property” is a and societal conditions each jurisdiction
comprehensive term that can
be used to describe all or any of Physical boundary –
the very many different kinds determined by reference to the
of relationship between a registered Torrens system
person and a subject matter survey
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Chapter 2
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The Doctrine of Tenure and Native Title
[2.10] INTRODUCTION....................................................................... 14
[2.20] THE DOCTRINE OF TENURE...................................................... 14
[2.70] COMMON LAW NATIVE TITLE..................................................... 16
[2.120] NATIVE TITLE ACT 1993 (CTH) ................................................... 18
[2.130] VALIDATION OF ACTS............................................................... 19
Introduction
[2.10] The doctrine of tenure is a legal doctrine vesting ownership (title)
of all land in the Crown. The Crown, as the ultimate landowner holding
absolute title, then grants land to prospective landholders. The High
Court’s recognition of common law native title in Mabo v Queensland (No 2)
(1992) 175 CLR 1 modified the doctrine of tenure as it applies in Australia.
The High Court found that native title exists as a burden on the Crown’s
absolute title, leaving the Crown with radical title, that is, title that is
subject to native title. In 1993 the Commonwealth enacted the Native Title
Act 1993 to regularise the application process for native title claims.
[2.20] The doctrine of tenure has its historical origins in the English legal
system. The Crown is the absolute owner of all land. At the time of English
settlement Australia was regarded as terra nullius, that is, land belonging to
no one. As the doctrine of tenure formed the basis of land ownership in
England, the doctrine of tenure was applied to Australian land. At the time
of English settlement all Australian land therefore became vested in the
Crown and the Crown made grants of land to prospective landholders.
The Privy Council’s decision in Cooper v Stuart (1889) 14 App Cas 286
provided authority for the proposition that Australia was settled and as
such the doctrine of tenure applied to Australian land.
That native title could not be recognised within the doctrine of tenure
was confirmed by the Federal Court in the decision of Milirrpum v Nabalco
Pty Ltd (1971) 17 FLR 141.
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CHAPTER 2 THE DOCTRINE OF TENURE AND NATIVE TITLE / 15
Milirrpum v Nabalco
[2.30] Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141
FACTS • The Commonwealth had granted mining leases over land on the Gove Peninsula
in the Northern Territory. Aboriginal groups challenged the validity of the leases as they
did not believe the Commonwealth had power to grant leases over what they perceived to
be their land.
HELD • Blackburn J held that the doctrine of tenure applied to Australian land so that
native title could not be recognised. Although Blackburn J accepted that the Aboriginal
groups had a recognisable system of law and connection with the land, he held that such
a relationship did not give rise to a proprietary interest in the land given the reception of
the doctrine of tenure. Blackburn J held (at 245):
All the Australian cases to which I was referred … affirm the principle, fundamental to the English
law of real property, that the Crown is the source of title to all land; that no subject can own
allodially, that only an estate or interest in it which he holds immediately of the Crown. On the
foundation of New South Wales therefore, and of South Australia, every square inch of territory in
the colony became the property of the Crown. All titles, rights and interests whatever in land
which existed thereafter in subjects of the Crown were the direct consequence of some grant from
the Crown.
that the Crown’s absolute ownership of the land was subject to claims of
native title. Native title therefore became a burden on the Crown’s title.
FACTS • The plaintiffs were Murray Islanders and members of the Meriam people. The
plaintiffs were claiming rights in specified parcels of land on the Murray Islands, which lie
in the Torres Strait. The Meriam people were in occupation of the Islands before first
European contact and continue to occupy the Islands. There had not been a permanent
immigrant population and anthropological records showed that the inhabitants of the
Islands were descended from the people described in early European reports. The basis of
the Meriam people’s claims was that they were either: (a) holding the land under
traditional native title or, (b) that they possessed usufructuary rights over the land, or that
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16 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
HELD • The High Court (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ;
Dawson J dissenting) decided in favour of the Meriam people.
Brennan J, who delivered the leading judgment, made the following comments about
native title and the notion of the Crown’s absolute title (at 45):
It was only by fastening on the notion that a settled colony was terra nullius that it was possible for
the Crown to acquire ownership of the land in a colony already occupied by indigenous
inhabitants. It was only on the hypothesis that there was nobody in occupation that it could be
said that the Crown was the owner because there was no other. If that hypothesis be rejected, the
notion that sovereignty carried ownership in its wake must be rejected too. Though the rejection
of the notion of terra nullius clears away the fictional impediment to the recognition of indigenous
rights and interests in colonial land, it would be impossible for the common law to recognise such
rights and interests if the basic doctrines of the common law are inconsistent with their
recognition.
acquired the absolute beneficial ownership of the land therein, and accepts that the antecedent
rights and interests in land possessed by the indigenous inhabitants of the territory survived the
change in sovereignty. Those antecedent rights and interests thus constitute a burden on the
radical title of the Crown.
[2.60] The decision of the High Court in Mabo v Queensland (No 2) (1992)
175 CLR 1 gave rise to a recognition of common law native title.
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CHAPTER 2 THE DOCTRINE OF TENURE AND NATIVE TITLE / 17
ISSUE • In order to prove a claim for common law native title (the onus of proof being on
those who assert the claim) prerequisites must be evident.
[2.90] The High Court also recognised that common law native title can
be extinguished by the Indigenous owners or by the Crown in certain
circumstances.
4 … Native title has been extinguished by grants of estates of freehold or of leases but not
necessarily by the grant of lesser interests (eg, authorities to prospect for minerals).
5. … Native title has been extinguished to parcels of the waste lands of the Crown that have been
validly appropriated for use (whether by dedication, setting aside, reservation or other valid
means) and used for roads, railways, post offices and other permanent public works which
preclude the continuing concurrent enjoyment of native title. However native title can
continue on land set aside as a national park.
…
7. Native title to an area of land which a clan or group is entitled to enjoy under the laws and
customs of an indigenous people is extinguished if the clan or group, by ceasing to
acknowledge those laws, and (so far as practicable) observe those customs, loses its
connection with the land or on the death of the last of the members of the group or clan.
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18 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
8. Native title over any parcel of land can be surrendered to the Crown voluntarily. …
9. If native title to any parcel of the waste lands of the Crown is extinguished, the Crown
becomes the absolute beneficial owner.
Native title is defined under s 223(1) of the Act and replicates the
common law definition requiring a connection between the claimants and
the land or waters by reference to traditional laws and customs. In addition
to the common law definition, s 223(2) provides that hunting, gathering
and fishing are also native title rights.
Under s 81 a claim for native title falls for determination by the Federal
Court. A determination of native title under s 225 of the Act enables the
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Federal Court to determine who holds the native right (whether a person
or group); the nature and extent of the native title right and interest; and
whether the native title right and interest exist by reference to land or
waters in a particular area.
In order to register a native title claim with the Federal Court, a
registration test is applied. The test under s 190B requires, amongst other
things, identification to the satisfaction of the Registrar:
• of the area (land or waters);
• of the claimant (person or group);
• of the native title rights and interests being claimed;
• that the claimant and any predecessors have an association with the area;
• that there are traditional laws and customs observed by the claimants
that give rise to the native title claim;
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CHAPTER 2 THE DOCTRINE OF TENURE AND NATIVE TITLE / 19
• that the claimant has continued to hold the native title in accordance
with those traditional laws and customs;
• that the claimant has or previously had a traditional physical connection
with any part of the land or waters covered by the application or did
have such connection but for some action of the Crown.
The Native Title Act 1993 (Cth) also established the National Native Title
Tribunal. The functions provided under s 108 of the Act include making
decisions, conducting inquiries and determinations that are given to it,
mediating Federal Court proceedings and conducting research. The
Tribunal also has a role in mediating and registering Indigenous Land Use
Agreements (ILUAs).
The question of how native title applies to other interests in land has
also been considered by the High Court:
• Native title is extinguished by a grant of fee simple: Fejo (on behalf of
Larrakia People) v Northern Territory (1998) 195 CLR 96.
• Native title was not extinguished by a non-exclusive use pastoral lease
(Wik Peoples v Queensland (1996) 187 CLR 1) but can be extinguished by
an exclusive possession pastoral lease (Western Australia v Ward (2002)
213 CLR 1) and a pastoral lease held in perpetuity: Wilson v Anderson
(2002) 213 CLR 401.
• Native title may exist in the sea and in the seabed beyond the low-water
mark: Yarmirr v Northern Territory (2001) 208 CLR 1.
• Native title may not be extinguished by a mineral lease: Western Australia
v Brown [2014] HCA 8.
• May have been extinguished where the traditional law and customs are
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Validation of Acts
[2.130] In Western Australia v Commonwealth (1995) 183 CLR 373 the State
of Western Australia challenged the validity of the Native Title Act 1993
(Cth). The High Court, in a unanimous decision, confirmed that the Act
was a valid exercise of Commonwealth power. The effect of the decision
was to confirm the primacy of the Commonwealth’s native title
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20 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
determination regime under the Act. In that respect, the Act contains
provisions to deal with the validation of past, intermediate and future Acts
by governments with respect to native title.
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MindMap02
Doctrine of tenure Native title is a burden on Native Title Act 1993 (Cth)
the Crown’s title
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Chapter 3
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Adverse Possession
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Adverse Possession
[3.10] INTRODUCTION....................................................................... 22
[3.20] RECOGNISING POSSESSION AS “GOOD TITLE” ............................. 22
[3.50] STATUTORY RECOGNITION OF ADVERSE POSSESSION ................. 23
[3.60] Commencement of the limitation period............................... 24
[3.80] The running of the limitation period .................................... 25
[3.90] Lapse of time............................................................... 26
[3.100] WHAT CONSTITUTES ADVERSE POSSESSION? ............................. 27
Introduction
[3.10] Possession of property is regarded as a proprietary right and as
such the proprietary right can only be defeated by someone who is able to
demonstrate that they have a better interest. In the context of land, an
example of a higher and better interest than possession is documentary
title. Documentary title proves a person’s ownership (and therefore lawful
possession) of the land. In the Torrens system a person’s title will also be
registered. The doctrine of adverse possession highlights the distinction
between the possession of land and of documentary title to land and how
possession (via duration of time and intention) can become good title.
Asher v Whitlock
[3.20] Asher v Whitlock (1865) LR 1 QB 1
FACTS • In 1842 Thomas Williamson enclosed a piece of land and later built a cottage, in
which he lived until his death in 1860. Under the terms of his will, he left the land to his
wife for as long as she lived and remained unmarried. In the event that she died or
remarried, he left the land to his daughter. In 1861 Mrs Williamson remarried, but lived on
the land with her daughter and new husband (the defendant). Mrs Williamson and her
daughter subsequently died and the defendant continued to live on the land. The plaintiff,
an heir-at-law of the daughter, sought to recover the land as owner.
HELD • The court considered that it was an established principle “that possession is good
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CHAPTER 3 ADVERSE POSSESSION / 23
against the world except the person who can show good title”. On the facts, the court
considered that the defendant had not acquired title by virtue of his possession and that
the plaintiff’s title, documented via Mr Williamson’s will, was superior.
[3.30] The ability for a person to acquire title to land through possession
of land was found to apply in Australia by the Privy Council in the
decision of Perry v Clissold [1907] AC 73.
Perry v Clissold
[3.40] Perry v Clissold [1907] AC 73
FACTS • In 1891 a piece of land was resumed by the New South Wales Government for a
public school. Section 10 of the relevant Act provided that upon resumption, compensation
would be paid to the owner of the land. Mr Clissold had entered into possession of the
land in 1881. Mr Clissold had exclusive possession of the land, using it for his own benefit,
and paid all rates and taxes. Mr Clissold’s name was registered as the owner of the land in
the books of the local council. Mr Clissold died and his executors sought compensation
from the Minister for the resumption of the land. The Minister refused, contending that
Mr Clissold was a trespasser who had no proprietary interest in the land.
HELD • The Privy Council held that Mr Clissold’s estate was entitled to compensation for
the resumption, as Mr Clissold’s possession of the land was sufficient to gain him title to
the land. The Privy Council held (at 4):
It cannot be disputed that a person in possession of land in the assumed character of owner and
exercising peaceably the ordinary rights of ownership has a perfectly good title against all the
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world but the rightful owner. And if the rightful owner does not come forward and assert his title
by process of law within the period prescribed by the provisions of the Statute of Limitations
applicable to this case, his right is for ever extinguished, and the possessory owner acquires
absolute title.
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24 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
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CHAPTER 3 ADVERSE POSSESSION / 25
FACTS • JA Pye (Oxford) Ltd was the owner of the land and the Grahams held a grazing
licence. When the grazing licence expired in 1983, the Grahams were asked to vacate the
land. However, the Grahams remained on the land, continuing the activities that were
permitted under the expired grazing licence and undertaking farming activities in excess
of the licence. The Grahams claimed title to the land by virtue of adverse possession. One
of the issues for the House of Lords to determine was when the limitation period to judge
the claim of adverse possession commenced.
HELD • Lord Browne-Wilkinson framed the issue in the following way (at [5]):
The Grahams, in order to succeed, will have to show that they ‘dispossessed’ Pye more than
12 years before Pye started proceedings on 30 April 1998. As will appear, this requires the
Grahams to prove that Pye was dispossessed between 31 August 1984 (when the Grahams’
occupation ceased to be with the permission of Pye) and 30 April 1986.
It is common ground that Pye did not ‘discontinue’ possession within the meaning of the Act … It
was further common ground that so long as the Grahams were occupying the disputed land with
Pye’s consent, they could not be treated as having dispossessed Pye. Accordingly no relevant
right of action can have accrued to Pye … until after the expiry on or about 31 August 1984 of the
grass-cutting permission.
The relevant question therefore is whether at some time between 1 September 1984 and 30 April
1986 Pye were ‘dispossessed’ of the disputed land so that, at that date, Pye’s right of action
accrued …
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26 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
The ability to combine time in such a manner is legislated for in New South
Wales by the Limitation Act 1969 (s 38(2)) and in Western Australia by the
Limitation Act 2005 (s 65(2)).
The limitation period may stop running if the documentary title owner
asserts their proprietary right so as to dispossess the adverse possessor of
possession or the adverse possessor acknowledges the true owner’s title.
For the owner to assert their proprietary right, all the legislative provisions
require something more than a formal entry onto the land. Physical
repossession of the land must occur.
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Lapse of time
[3.90] The statutory provisions also allow for the limitation period to be
extended in certain circumstances. However, once the statutory period has
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CHAPTER 3 ADVERSE POSSESSION / 27
ended, the right of action available to the documentary title holder lapses.
In other words, the documentary title holder will be precluded from
regaining title to the land. In such a circumstance, the adverse possessor
can make application to be registered as the owner of the land.
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28 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
On the facts of the case Lord Browne-Wilkinson considered that the Grahams were in
factual possession of the land as it was within the Grahams’ exclusive physical control. He
considered that Pye, as documentary title owner, was excluded from the land by hedges
and held no key to the road gate.
Lord Browne-Wilkinson found that the Grahams had the requisite intention to possess.
He pointed out (at [60]–[59]) that:
… the Grahams by grazing land during 1984 and thereafter were not only acting without
permission of the paper owner: they were acting in a way which, to their knowledge, was directly
contrary to the wishes of the proprietors … [t]here was independent evidence that Michael
Graham ‘treated the land’ as his own.
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MindMap03
Questions for Possession of land by someone other than Statutory recognition
examination the documentary title holder adverse of adverse possession
(ie, contrary) to the proprietary rights
and interests of the documentary title
Commencement – when did the holder giving rise to a right to title Application – in all jurisdictions
adverse possession adverse possession can dispose
commence? What statutory a documentary title holder’s title
time period applies? to land
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Chapter 4
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Fixtures
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Fixtures
[4.10] INTRODUCTION....................................................................... 30
[4.20] FIXTURES AND CONTRACTUAL RELATIONSHIPS ........................... 30
[4.30] IS THE OBJECT A FIXTURE OR A CHATTEL? THE DEGREE OF
ANNEXATION AND PURPOSE (OR OBJECT) OF ANNEXATION TESTS. 31
[4.40] Degree of annexation ..................................................... 32
[4.60] Purpose (object) of annexation ......................................... 32
[4.70] SUMMARISING THE TESTS........................................................ 33
Introduction
[4.10] A fixture is a chattel that has become part of the land due to its
connection with the land. In other words, in becoming affixed to the land,
the chattel has lost its characteristic as personal property. The general rule
is that which is attached to the land becomes part of the land (quicquid
plantatur solo, solo cedit). Whether something is a chattel or has become a
fixture gives rise to competing and conflicting claims over ownership.
Disputes can arise between the owner of land and those who hold lesser
interests in land, for example, between a landlord and tenant or a
mortgagor and mortgagee. To settle disputes over ownership, the common
law developed the doctrine of fixtures.
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CHAPTER 4 FIXTURES / 31
Whilst these statutory provisions may specify that fixtures go with the
land, the statutory provisions generally provide no guidance as to how to
determine whether an object is a chattel or has become a fixture to the land.
Guidance can be sought from the common law.
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32 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
Degree of annexation
Holland v Hodgson
[4.40] Holland v Hodgson (1872) LR 7 CP 328
ISSUE • Were spinning looms bolted to the floor of a mill chattels or a fixture?
Applying the test to the facts, the spinning looms were found to be fixtures.
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[4.50] In addition to the degree of annexation test the courts have applied
the purpose of annexation test. This test requires a consideration of why
and for what purpose the chattel was affixed to the land.
FACTS • Coroneo claimed that some chairs (amongst other items) in a theatre be
returned to them by the mortgagee in possession on the basis that the chairs were
chattels not fixtures. The chairs were fixed to the floor and connected together when the
theatre was in use. The chairs could be moved and connected in different ways depending
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CHAPTER 4 FIXTURES / 33
HELD • Regarding the purpose of annexation test, Jordan CJ stated (at 712):
The test of whether a chattel which has been to some extent fixed to land is a fixture is whether it
has been fixed with the intention that it shall remain in position permanently for an indefinite or
substantial period, or whether it has been fixed with the intent that it shall remain in position only
for some temporary purpose. In the former case, it is a fixture, whether it has been fixed for the
better enjoyment of the land or building, or fixed merely to steady the thing itself, for the better
use or enjoyment of the thing fixed. If it is proved to have been fixed merely for a temporary
purpose it is not a fixture. The intention of the person fixing it must be gathered from the purpose
for which and the time during which the user in the fixed positions contemplated. If a thing has
been securely fixed, and in particular if it has been so fixed that it cannot be detached without
substantial injury to the thing itself or to that to which it is attached, this supplies strong but not
necessarily conclusive evidence that a permanent fixing was intended. On the other hand, the fact
that the fixing is very slight helps to support an inference that it was not intended to be
permanent. But each case depends on its own facts.
Applying the purpose of annexation test to the facts, the chairs were held to be chattels.
[2.50] National Australia Bank Ltd v Blacker (2000) 104 FCR 288
FACTS • Mr and Mrs Blacker owned a dairy farm that was being foreclosed by the
National Australia Bank. A dispute arose between the bank and the Blackers as to
whether some pumps (mounted on a steel skid, resting on the ground so as to be towed
and/or pulled by a tractor), 200 valves and 200 sprinkler heads were chattels or fixtures.
The Blackers argued that the items were chattels and the bank contended the chattels
were fixtures, thus forming part of the mortgaged property.
HELD • Conti J, summarising the tests (at [13] and [14]), noted:
Purpose of annexation
In determining the purpose or object of annexation, a variety of considerations may be taken into
account. The Court ought as a general rule to have regard to:
• Whether the attachment was for the better enjoyment of the property generally or for the better
enjoyment of the land and/or buildings to which it was attached.
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34 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
Conti J considered (at [16]) that: “there is no single test which is sufficient to determine
whether an item of property is a chattel or a fixture. It is clear that the Court ought to have
regard to all the circumstances of the case in making its determination.”
Applying the tests to the facts, Conti J found that the items were chattels. With respect to
the pump he considered (at [25]) that “[t]he pumps have rested on the land on their own
weight for all operational purposes and were not so relatively heavy in weight as to have
yielded any inference of intended permanency of physical location”. And further (at [26])
“[i]n the present case no damage would be done to the pumps nor the realty and it would
cost far less to remove the pumps than what they are worth”.
The valves (at [27]–[28]):
… could readily and conveniently be removed and replaced by the same or similar items without
causing damages or inconvenience, they were comparatively inexpensive as items of plant, and
would have been readily replaceable if lost or damaged. The sprinkler heads can similarly be
removed without difficulty. They rested on their own weight and the Bank failed to meet the onus
required to prove that they are not chattels.
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Palumberi v Palumberi
[4.100] Palumberi v Palumberi (1986) 4 BPR 9106
FACTS • Upon completion of a contract, a dispute arose between the vendor and
purchaser as to whether some items were chattels or fixtures passing with the premises to
the purchaser on the sale.
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CHAPTER 4 FIXTURES / 35
HELD • The carpets and stove, both slightly affixed to the house, were regarded as being
fixtures, as in addition to being affixed they had been installed for the purpose of
improving and enjoying the premises. The Venetian blinds, curtains, built-in linen cabinet
(which was freestanding and readily removable), television antenna (as it was not annexed
to the property for any building-related purpose), outside spotlight and timer, light fittings
and portable heater were regarded as chattels.
Park v Lasrado
[4.110] Park v Lasrado [2005] Q ConvR 54-636; [2005] QSC 211
FACTS • The applicants were the receivers of a house property appointed by the
mortgagee. Mr Lasrado had installed a large chandelier in the entrance hall of the house.
The question was whether the chandelier was property secured by the mortgage. The
receivers contended that upon installation it became a fixture secured by the mortgage.
The chandelier was suspended from a dome in the ceiling of the entrance hall. A pulley
system enabled the chandelier to be raised and lowered but the chandelier was not
attached to the pulley system.
HELD • Byrne J held that the arrangement permitted detachment of the chandelier at any
time without any damage being occasioned to either the fabric of the ceiling or the
chandelier itself. Given this, Byrne J considered there was no affixation of the chandelier to
the house so it retained its nature as a decorative chattel.
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FACTS • National Dairies WA Ltd (the appellant) agreed to purchase the land, factory
premises and plant and equipment of the dairy business. The question raised by the
appeal was whether various items of plant and equipment were goods, wares and
merchandise exempt from stamp duty. The appellant submitted that the items were
chattels, on the basis that there was either no physical annexation to the land or the
degree of annexation was slight.
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36 PART I WHAT IS PROPERTY AND THE IMPORTANCE OF POSSESSION
HELD • Whilst the court noted the degree of annexation was slight, it regarded the plant
and equipment as comprising an intrinsic part of the dairy farm’s operation, holding that
the plant and equipment were fixtures that had been annexed to the land for the purpose
of the better enjoyment of the land for milk processing purposes as a whole.
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PART II
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INTERESTS IN LAND
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MindMap04
Relevant contractual Doctrine of fixtures: that which is Application of the tests
relationships attached to land forms part of the land
Each case will be determined by
Vendor and purchaser – its particular facts
fixtures to the land pass
with title unless there is a There can be differences in the
contrary contractual treatment of similar objects:
intention Leigh v Taylor [1902] AC 157 and
Re Whaley [1908] 1 Ch 615
Mortgagee and mortgagor –
fixtures are part of the Doctrine of fixtures – tests Authorities
mortgage security to apply to the facts
National Australia Bank Ltd v Park v Lasrado [2005]
Blacker (2000) 104 FCR 288 – Q ConvR 54 636; [2005]
Landlord and tenant – Degree of Annexation – how items were chattels and so QSC 211 – Degree and Purpose
tenant may be able to is the chattel affixed to the replaceable; Degree of of Annexation – decorative in
remove fixtures upon land? (Holland v Hodgson Annexation – slight affixation; nature and removable without
termination of the tenancy (1872) LR 7 CP 328 no damage to remove damage
Agricultural fixtures – Purpose (Object) of Palumberi v Palumberi (1986) National Dairies WA Ltd v
4 BPR 9106 – Degree of Commissioner of State
common law position is that Annexation – why and for
Annexation – fixtures: carpets Revenue (2001) 24 WAR 70 –
agricultural fixtures cannot what purpose was the and stove; chattels: venetian Purpose of Annexation – plant
be removed. Some chattel affixed to the land? blinds, curtains, linen cabinet, and equipment were fixtures
jurisdictions have altered (Australian Provincial TV, antenna, outside spotlight because they were intrinsic to
this position to allow Assurance Co Ltd v Coroneo and timer, light fittings and the farm’s operation despite
removal through statute (1938) 38 SR (NSW) 700) portable heater slight annexation
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Chapter 5
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Doctrine of Estates
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Doctrine of Estates
[5.10] INTRODUCTION....................................................................... 40
[5.20] DIVISION OF ESTATES.............................................................. 40
[5.30] WORDS OF LIMITATION: THE CREATION OF FREEHOLD ESTATES .... 42
[5.40] DETERMINABLE AND CONDITIONAL INTERESTS............................ 42
[5.60] RIGHTS OF OWNERS OF FREEHOLD ESTATE ............................... 44
[5.70] THE DOCTRINE OF WASTE ....................................................... 44
Introduction
[5.10] The doctrine of estates focuses on the fact that the owner of a piece
of land has a present interest in the land (ie, their current ownership of the
land), but that successive (ie, future) interests in the same piece of land can
be created. As North J commented in Western Australia v Ward (2000) 99
FCR 316 at [811] “[i]n essence, the doctrine of estates reflected the idea that
a person should be able to have an interest in land giving rise to a present
right to possession, while at the same time other persons would also have
interests in the same land giving them future rights to possession”.
Division of estates
[5.20] An estates is regarded as either a freehold or leasehold estate. A
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CHAPTER 5 DOCTRINE OF ESTATES / 41
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42 PART II INTERESTS IN LAND
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CHAPTER 5 DOCTRINE OF ESTATES / 43
Zapletal v Wright
[5.50] Zapletal v Wright [1957] Tas SR 211
FACTS • Wright was a married man separated from his wife who began a relationship
with Zapletal. Wright brought some land, using his own money, but at Zapletal’s request
put the title in their joint names. The relationship broke down and Zapletal sought an
order for the sale of the land and division of part of the proceeds to her. Wright argued that
Zapletal’s interest in the land was a gift conditional upon her continuing to reside with
him. In the event she stopped living with him, her interest in the land would cease.
HELD • The court (Burbury CJ and Crisp J) accepted that there was a condition attached
to the gift (ie, the grant of the interest in the land), but they needed to determine whether
the condition was a determinable condition or a condition subsequent. Crisp J commented
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(at 217):
… I think that the agreement for the determination of the estate should be regarded as a condition
subsequent for the following reasons. The form of the gift was an undivided moiety in fee; it was
not in term limited to an estate defined by reference to any prior event. In fact it might continue
after the event in which defeasance was to take place or might become impossible or irrelevant,
that is, after the defendant’s death. The form of the condition is such that it did not denote the
extent of the estate but only the event in which the larger estate conferred may have been cut
short.
In simpler terms, he considered that “plainly its [the condition’s] object was to bind the
plaintiff to the defendant and to provide inducement for her not to leave him”.
Following the determination that the condition was a conditional interest, not a
determinable interest, the validity of the condition then needed to be considered.
Burbury CJ commented (at 215):
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44 PART II INTERESTS IN LAND
The presence of the condition subsequent in the transaction from its inception I think must be
taken as tending to perpetuate the illicit relationship and to keep the defendant apart from his
legal wife. I think it must follow that the condition is void as tending to immorality. That upon its
true construction it operates as a condition subsequent and not as a conditional limitation of the
estate granted is I think immaterial for the purpose of determining its validity. The distinction is a
vital one; as an illegal conditional limitation it would destroy the whole of the appellant’s interest,
as an illegal condition subsequent it enables the plaintiff to retain her vested interest free from
the condition. But that is a consequence which flows from the distinction made in the law of
property between a conditional limitation and a condition subsequent. It follows in my opinion
that the plaintiff is entitled to an absolute interest as a joint tenant for an estate in fee simple in
the property …
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CHAPTER 5 DOCTRINE OF ESTATES / 45
Permissive waste describes the situation where the life tenant has failed
to do what is expected. The most obvious expectation is one of repair.
However, the tenant may not be liable to repair unless there is an express
requirement in the grant for the life tenant to keep the land or building, etc,
in repair.
Voluntary waste refers to an act committed by the life tenant that has
damaged the land. The life tenant will be responsible for the voluntary
waste unless the grant expressly exempts the life tenant from damage that
may be caused to the land. This common law position is reflected in some
States’ legislation.
Equitable waste is the flagrant and wanton destruction of the property
by the life tenant. The life tenant will be responsible for the equitable waste
unless the grant expressly exempts the life tenant from such damage that
may be caused to the land. In the case of Vane v Lord Barnard (1716) 2 Vern
738, Lord Barnard was the life tenant of a manor. He, after a falling out
with his son, stripped the manor of its lead guttering, iron, glass windows,
doors and floorboards. The court regarded this as equitable waste, the
damage being so significant.
A life tenant is prohibited from committing equitable waste by operation
of statute in some jurisdictions.
1936, s 12
Tasmania No legislative provision No legislative provision No legislative position
Victoria Property Law Act 1958, Property Law Act 1958, Property Law Act 1958,
s 132A(5) s 132A(1) s 133
Western No legislative provision No legislative provision Property Law Act 1969,
Australia s 17
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MindMap05
Division of estates A person can have an interest in land given Rights of owners of a
rise to a present right to possession, while life estate
at the same time giving others future
Freehold – indeterminate estate rights to possession
in land Right to alienate their interest
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Chapter 6
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Future Interests
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Future Interests
[6.10] INTRODUCTION....................................................................... 48
[6.20] REVERSION............................................................................ 48
[6.30] REMAINDERS.......................................................................... 49
[6.40] COMMON LAW RULES REGARDING CONTINGENT LEGAL
REMAINDERS.......................................................................... 50
[6.50] STATUTORY PROVISIONS.......................................................... 51
[6.60] COMMON LAW RULE AGAINST PERPETUITIES .............................. 52
[6.70] CLASS GIFTS.......................................................................... 53
[6.80] CONSEQUENCES OF BREACHING THE RULE AGAINST
PERPETUITIES ........................................................................ 54
Introduction
[6.10] Freehold estates are held either in possession, in reversion or
remainder. These classifications designate whether the freehold estate is a
present or a future interest. For example, the person in current possession
of the freehold estate holds a present interest. A person whose possession is
postponed until some precondition permitting possession is met holds a
future interest. Future interests are classified as either reversions or
remainders (remainders being further classified as being vested or
contingent).
Reversion
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[6.20] A reversion is the residue of the freehold estate after a lesser estate
has been granted.
Consider the following example.
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CHAPTER 6 FUTURE INTERESTS / 49
Remainders
[6.30] A remainder interest will terminate an earlier freehold estate.
However a remainder is postponed by the existence of an existing estate in
possession. A remainder is vested or contingent.
A remainder interest is a present interest to future enjoyment. To be
vested, the person entitled to take the future interest must be ascertained
and there must be no precondition to the person taking the interest save the
ending of the existing estate.
Consider the following example.
FACTS: X, the owner of an estate in fee simple, grants to B a life estate but then grants the
fee simple to C.
INTERESTS: X’s estate in fee simple is a larger freehold estate than B’s life estate. B’s life
estate is a present interest as B is entitled to possession. B’s interest is a life estate vested in
possession. X remains owner of the fee simple but is not entitled to possession either
presently or in the future.B’s interest will end upon B’s death, at which time C will be
entitled to possession. Until B’s death, C is entitled to the remainder of the fee simple estate
vested in interest.
Until B’s death, C’s estate is a future interest, ie, a fee simple estate in remainder.
The remainder is vested in interest as C is named and there is no precondition, apart from
B’s death, which will inhibit C taking the interest.
FACTS: X, the owner of an estate in fee simple, grants to B a life estate but then grants the
fee simple to C provided he attains the age of 21.
INTERESTS: X’s estate in fee simple is a larger freehold estate than B’s life estate. B’s life
estate is a present interest as B is entitled to possession. B’s interest is a life estate vested in
possession. B’s interest will end upon B’s death; C will then be entitled to possession.
However, C’s entitlement is conditional: C must be 21. As there is a condition that must be
met in addition to the end of the existing interest, C’s interest is regarded a contingent
interest.
Until B’s death, C’s estate is a future interest: a contingent fee simple estate in remainder.
When C turns 21, his interest will vest in interest, as there will be no precondition, apart from
B’s death, precluding him taking the interest. When B’s life estate comes to an end, C’s
interest will vest in possession.
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50 PART II INTERESTS IN LAND
FACTS: D, the owner of an estate in fee simple, grants to B a life estate, then a life estate
to X, a life estate to Y, and the fee simple to C.
INTERESTS: D’s estate in fee simple is a larger freehold estate than B’s life estate. B’s life
estate is a present interest as B is entitled to possession. X’s and Y’s life estates are future
interests: life estates in remainder as they are not entitled to possession until the end of the
present interests (ie, X has to wait until the death of B, and Y has to wait for the death of B
and X). D remains owner of the fee simple but is not entitled to possession either presently
or in the future. C will not be entitled to possession until all the other interests have ended.
Until Y’s death, C is entitled to the remainder of the fee simple estate vested in interest.
Until B’s death, X’s estate is a future interest: a life estate in remainder vested in interest.
Until B’s and X’s deaths, Y’s estate is a future interest: a life estate in remainder vested in
interest.
Until B’s, X’s and Y’s deaths, C’s estate is a future interest: a fee simple estate in
remainder vested in interest. Upon B’s, X’s and Y’s deaths, C’s interest will become vested in
possession.
simple remainder was granted, the fee simple estate being the most
absolute estate, no further interest could be created.
3. A remainder was void unless it followed a prior particular estate. In
other words, artificial conditions could not be placed on lesser interests
in order to shorten ownership.
4. The contingent remainder had to be capable of vesting during the
existing possessory estate. In other words, the condition on the
remainder could not be such that there could be a gap between
interests.
A further difficulty surrounding legal contingent remainders arose from
Shelley’s Case (1581) 1 Co Rep 93b; 76 ER 206 where the following rule was
stated:
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CHAPTER 6 FUTURE INTERESTS / 51
It is a rule of law, when the ancestor by any gift or conveyance takes an estate in
freehold, and in the same gift or conveyance an estate is limited either mediately
or immediately to his heirs in fee tail; that always in such cases, ‘the heirs’ are
words of limitation of the estate, and not words of purchase.
From the above, such a grant would seem to give a life estate to B and
the remainder in fee simple to B’s heirs. However, the effect of the rule in
Shelley’s Case was such that a grant by D to B for life and then to B’s heirs
was regarding as a grant in fee simple to B. Some jurisdictions have
legislated to exclude the rule in Shelley’s Case from having any application.
Jurisdiction Legislation
New South Wales Conveyancing Act 1919, s 17
Queensland Property Law Act 1974, s 28
South Australia Rule not excluded from operation
Tasmania Rule not excluded from operation
Victoria Property Law Act 1958, s 130
Western Australia Property Law Act 1969, s 27
In addition to the rules listed above, the common law also developed
natural and artificial methods to destroy contingent legal remainders from
coming into effect. The rule in Purefoy v Rogers (1671) 2 Wms Saund 380; 85
ER 1181 (a contingent interest would fail if there was a gap in possession),
the Statute of Uses 1535 (conversion of equitable interests into a legal
interest) and the Statute of Wills 1540 (beneficiary of land took a legal
interest not an equitable interest) also sought to rule over contingent legal
remainders. Due to the complexity of the common law rules, the regime
has since been modified, although to differing degrees between jurisdictions.
Statutory provisions
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[6.50]
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52 PART II INTERESTS IN LAND
Element Interpretation
Vest The identity of the person receiving the interest (whether an individual or a class)
must be known and there must be no precondition to taking the interest other than
the end of a prior estate.
21 years The perpetuity period.
Life in being The human life (or group of lives) from which the 21-year period is counted. The
human life must be in being, that is, the individual or individuals must be alive at
the time the interest is created.
At the creation Where the creation of the interest is via a person’s will or testamentary disposition:
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CHAPTER 6 FUTURE INTERESTS / 53
Element Interpretation
of the interest the date of death, 21-year period starts to run from the testator’s death. Where the
creation of the interest occurs during the grantor’s lifetime, eg, an inter vivos
transaction (eg, a trust deed): 21-year period starts to run from the date
the interest takes effect.
FACTS: X’s will grants all her property to her daughter B’s first child.
PERPETUITY ISSUES: If upon X’s death, B had no children, B is the life in being and the
21-year time limit starts for the vesting of the interest.
The modern common law rule against perpetuities has been modified by
statute in all Australian States except South Australia. The statutory
provisions specify the duration of the perpetuity period. Further, instead of
requiring certainty of interests at the time of their creation, the legislation
provides for a “wait and see” approach. This means that time can elapse so
as to see which interests vest during the period and which interests will fall
outside the perpetuity period.
Class gifts
[6.70] One way of extending the perpetuity period is to give a class gift.
The interest is not granted to an individual but to a class of people that are
as yet unascertained, for example, a person’s grandchildren who attain the
age of 18. The share of each grandchild will depend upon how many
grandchildren there are at the relevant time. If a member’s interest vested
outside the period then the whole of the gift would fail.
The statutory modifications seek to save the grant by saving those class
gifts that do vest during the perpetuity period. The statutory provisions do
this in an ordered way:
1. By adopting a “wait and see” approach.
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54 PART II INTERESTS IN LAND
Jurisdiction Legislation
New South Wales Perpetuities Act 1984, s 10
Queensland Property Law Act 1974, s 213
South Australia Common law position
Tasmania Perpetuities and Accumulation Act 1992, s 10
Victoria Perpetuities and Accumulations Act 1968, s 9
Western Australia Property Law Act 1969, s 107
Jurisdiction Legislation
New South Wales Perpetuities Act 1984, s 17
Queensland Property Law Act 1974, s 215
South Australia Common law position
Tasmania Perpetuities and Accumulation Act 1992, s 12
Victoria Perpetuities and Accumulations Act 1968, s 11
Western Australia Property Law Act 1969, s 109
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MindMap06
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Chapter 7
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Legal and Equitable Interests
[7.10] INTRODUCTION....................................................................... 56
[7.20] LEGAL AND EQUITABLE INTERESTS IN LAND ............................... 56
[7.100] ENFORCEMENT OF EQUITABLE RIGHTS ...................................... 60
[7.110] SPECIFIC PERFORMANCE AND INJUNCTIONS AS EQUITABLE
REMEDIES ............................................................................. 61
[7.110] Specific performance...................................................... 61
[7.140] Injunction .................................................................... 62
Introduction
[7.10] Both legal and equitable interests can be created and exist in the
same piece of land. The distinction between legal and equitable interests is
one of character. Legal interests are created when the formalities required
by the common law or statute to create an interest are complied with (eg,
writing and registration). Conversely, an equitable interest is characterised
by the absence of such formalities.
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CHAPTER 7 LEGAL AND EQUITABLE INTERESTS / 57
Regent v Millett
[7.30] Regent v Millett (1976) 133 CLR 679
FACTS • The respondent plaintiff was the daughter of the appellant defendants. The
appellants bought a house, agreeing that the daughter and her husband could live in the
house and treat it as their own if they paid the mortgage. The house would be transferred
to them when the mortgage was paid off. The respondent went into possession of the
property and began paying the mortgage instalments. The house was in bad condition
and repairs were made. The respondent wanted to carry out further renovations and went
to the bank for a loan. Repairs were carried out on the house by the respondent. The
appellants refused to transfer the property. The appellants argued that no action arose as
there was no written document to support the conveyance. The respondent sought
enforcement of the oral agreement, seeking the remedy of specific performance.
HELD • Gibbs J (Stephen, Mason, Jacobs and Murphy JJ agreeing), finding that there were
sufficient acts of part performance, stated (at [5]):
The acts of part performance on which the respondents relied were (1) the taking of possession;
(2) the effecting of repairs before December 1972; (3) the doing of the work on the renovations and
additions in January 1973 and (4) the making of the mortgage repayments.
The principle upon which the doctrine of part performance rests was stated by
Lord Cranworth LC in Caton v Caton (1866) LR 1 Ch App 137 at 148 in words that appear to
have a direct application to the present case. He said (at [7]):
… when one of two contracting parties has been induced, or allowed by the other, to alter his
position on the faith of the contract, as for instance by taking possession of land, and expending
money in building or other like acts, there it would be a fraud in the other party to set up the legal
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invalidity of the contract on the faith of which he induced, or allowed, the person contracting with
him to act, and expend his money.
[7.40] For land within the Torrens System the additional requirement of
registration is required for the interest to be regarded as a legal interest in
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58 PART II INTERESTS IN LAND
Chan v Cresdon
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FACTS • Cresdon and Sarcourt agreed to enter into a lease of land. Annexed to the
written lease was a guarantee in which Chan agreed to be guarantor of Sarcourt’s
obligations under the lease. The lease was signed by the parties but not registered.
Sarcourt was in rental arrears and defaulted under the terms of the lease. Cresdon took
action against Chan to recover the arrears as guarantor. Chan denied liability on the basis
that the lease was not a legal lease (ie, it was not registered) therefore the guarantee
obligations attached to the lease were not enforceable. To resolve the dispute the High
Court was required to classify the interests.
HELD • The High Court found that the lease did not create a legal interest in favour of
Cresdon because it was not registered as required by the Torrens title legislation. That the
lease was not registered was not fatal, however, as the High Court held that the
agreement between Sarcourt and Cresdon, because it was in writing, created an equitable
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CHAPTER 7 LEGAL AND EQUITABLE INTERESTS / 59
lease. However, in finding that an equitable lease had been created, the High Court was
not satisfied that Chan’s guarantee formed part of the equitable lease. The guarantee
documentation referred to Chan’s guaranteeing performance of obligations “under the
lease” however “the lease” was not enforceable as a legal interest, given the failure to
register. Therefore the High Court concluded that the agreement constituting the
equitable lease did not include the guarantee, and so Chan was not liable.
FACTS • Latec was the registered mortgagee of land owned by Hotel Terrigal. Due to
mortgage arrears, Latec exercised its power of sale and sold the property to its subsidiary,
Southern, in circumstances regarded as fraudulent by the courts. Terrigal became aware
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of the circumstances of the sale and sought to have the sale set aside. However, in the
meantime, Southern had granted an equitable mortgage to MLC Nominees. The High
Court was required to categorise the interests of Hotel Terrigal and MLC Nominees to
determine the dispute.
HELD • Menzies, Kitto and Taylor JJ classified MLC Nominees’ interest as an equitable
interest on the basis that the mortgage was secured over the land but not registered. MLC
Nominees’ granting of the mortgage was not connected to the fraud of Latec and
Southern so MLC Nominees was regarded as an innocent third party.
Menzies and Kitto JJ classified Hotel Terrigal’s right to sue to have the sale of the land set
aside as a mere equity. However, Taylor J (at [4]) regarded Hotel Terrigal’s interest as an
equitable interest considering that “the owner of land a transfer of which has been
obtained by fraud retains an equitable interest therein”.
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60 PART II INTERESTS IN LAND
FACTS • King owned a building and by contract permitted David Allen to fix posters to the
wall of the building. The contract period was four years. Before the end of the contract
period King sold the building and the new owner did not permit David Allen to affix
posters to the building. David Allen argued that his right under the contract was
proprietary in nature giving him an enforceable interest in the land so that he should be
permitted to continue affixing posters for the remainder of the contract period.
HELD • The House of Lords held that the agreement conferred a personal right upon
David Allen, not a proprietary right. The contract was not referable to any particular
interest in the land. That the right was personal only meant that the agreement could not
be enforced against the new owners of the building.
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CHAPTER 7 LEGAL AND EQUITABLE INTERESTS / 61
• Those who seek equity must do equity. In other words, the remedy
should be sought within a reasonable time.
Walsh v Lonsdale
[7.120] Walsh v Lonsdale (1882) 21 Ch D 9
FACTS • Lonsdale granted Walsh a lease of a weaving shed. The formal lease document
had not been signed by the parties. The agreement with respect to rent was that it would
be paid yearly in advance and that one year’s rent should be due and payable in advance
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on demand. Walsh entered into possession and paid rent quarterly, not in advance.
Lonsdale issued Walsh with a notice requiring rental in advance.
HELD • As per Jessel MR, Cotton and Lindley LJJ, the agreement for lease and subsequent
possession of the premises gave rise to an equitable lease. The equitable lease gave rise to
obligations between Walsh and Lonsdale so that specific performance of the agreement
could be granted. The court considered that the lease comprised the same terms in equity
as if the lease had been legally created by deed.
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62 PART II INTERESTS IN LAND
Injunction
[7.140] An injunction can be in one of two forms: a prohibitory injunction
which prohibits a person from doing something; or a mandatory injunction
which compels a person to do something (recall LJP Investments Pty Ltd v
Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490 where the court
issued an injunction requiring the removal of scaffolding).
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MindMap07
Requirement for writing Legal Interest – all Equitable Interest – not Torrens system land
formalities complied all formalities complied
with, eg, writing and with
registration A legal interest is created once
A conveyance or disposition of the interest is registered on the
an interest in land must be titles register
made in writing
A mandatory injunction
compelling action (eg, LJP
Investments Pty Ltd v Howard
Chia Pty Ltd (1989) 24 NSWLR
490 – mandatory injunction to
remove scaffolding)
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Chapter 8
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Co-ownership
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Co-ownership
[8.20] JOINT TENANCY...................................................................... 64
[8.30] TENANCY IN COMMON ............................................................. 65
[8.40] CREATION OF CO-OWNERSHIP AT LAW ....................................... 66
[8.50] CREATION OF CO-OWNERSHIP IN EQUITY ................................... 66
[8.70] RIGHTS OF CO-OWNERS .......................................................... 67
[8.100] SEVERANCE OF A JOINT TENANCY ............................................ 68
[8.140] SEVERANCE BY PARTITION OR SALE ......................................... 71
Joint tenancy
[8.20] A joint tenancy reflects the situation where there is no separation of
ownership between the tenants. In other words no tenant owns an
identified and distinct share (ie, a one-third or two-thirds share) of the
property. A joint tenancy is characterised by the four unities and the right
of survivorship. If any one of the four unities is missing, a tenancy in
common will be created.
The four unities are:
1. Unity of possession — All tenants are simultaneously entitled to
possession and enjoyment of the entire parcel of land.
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CHAPTER 8 CO-OWNERSHIP / 65
FACTS: X, Y and Z are granted a fee simple estate under their mother’s will. The will
specifies that X, Y and Z are to hold the property as joint tenants.
CO-OWNERSHIP ISSUES: The four unities — possession, interest, title and time — are
present. Being joint tenants X, Y and Z do not hold a specified interest in the property, they
are entitled to possess and enjoy the entire parcel of land. In the event that X dies, Y and X,
through the right of survivorship, will absorb X’s interest and continue to hold the fee
simple estate as joint tenants. The absorption of each tenant’s interest will continue until
there is only one remaining tenant; that tenant will then be entitled to sole absolute
enjoyment and possession of the estate.
Tenancy in common
[8.30] By comparison, where an estate is held in a tenancy in common,
each owner (tenant) has a distinct and specified share (eg, one-half,
one-third, two-thirds) in the property. Whilst each tenant has a distinct
ownership share, the property, in its physical state, is not demarcated to
reflect the share held. Each tenant maintains their interest in the property
and is entitled to possession of the whole of the parcel of land. The only
unity present is the unity of possession.
The distinct share held by a tenant in common can be alienated by the
tenant during their lifetime or under their will to whomever they choose.
The right of survivorship has no application to a tenancy in common and
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FACTS: X, Y and Z own a fee simple estate. They each own a one-third share. X passes
away and under the terms of his will grants the whole of his estate to his children F, G and
H. Y subsequently dies, leaving the whole of his estate to C.
CO-OWNERSHIP ISSUES: The unity of possession is present. Whilst X, Y and Z hold a
specified interest in the property, they are entitled to possess and enjoy the entire property.
Upon administration of X’s estate (the right of survivorship having no application) the
tenancy in common comprises:
• F, G and H — one-sixth share, respectively;
• Y and Z — one-third share, respectively.
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66 PART II INTERESTS IN LAND
Jurisdiction Legislation
New South Wales Tenants in common presumed: Conveyancing Act 1919, ss 26, 27
Joint tenancy presumed for Torrens land: Real Property Act 1900,
s 100
See Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1
NSWLR 501
Queensland Tenants in common presumed: Property Law Act 1974, ss 35, 36
South Australia Joint tenancy presumed: Real Property Act 1886, s 74
Tasmania Joint tenancy presumed: Land Titles Act 1980, s 44
Victoria Joint tenancy presumed: Transfer of Land Act 1958, s 30(2)
Western Australia Joint tenancy presumed: Transfer of Land Act 1893, s 60
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Muschinski v Dodds
[8.60] Muschinski v Dodds (1985) 160 CLR 583
FACTS • Muschinski sought a declaration that she was the beneficial (ie, equitable) owner
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CHAPTER 8 CO-OWNERSHIP / 67
of a parcel of land. She held the land in tenancy in common with her partner, Dodds.
Muschinski argued that the interest Dodds held in the land was held on trust for her as she
had contributed all the moneys required to complete the purchase of the property.
HELD • Gibbs CJ stated (at [6]) the principles for creation of a co-ownership in equity as
being:
Where, on a purchase, a property is conveyed to two persons, whether as joint tenants or as
tenants in common, and one of those persons has provided the whole of the purchase money, the
property is presumed to be held in trust for that person, to whom I shall, for convenience, refer as
‘the real purchaser’. However a resulting trust will not arise if the relationship between the real
purchaser and the other transferee is such as to raise a presumption that the transfer was
intended as an advancement, or in other words a presumption that the transferee who had not
contributed any of the purchase money was intended to take a beneficial interest … [N]o
presumption of advancement arises where a man puts property into the name of a woman with
whom he is living in what is commonly called a de facto relationship … However the presumption
that there is a resulting trust may be rebutted by evidence that in fact the real purchaser intended
that the other transferee should take a beneficial interest … [T]he intentions of both are material,
but where only one has provided the money it is his or her intention alone that has to be
ascertained.
Gibbs CJ (Mason and Deane JJ concurring; Brennan and Dawson JJ dissenting) did not
consider that the presumption of advancement had been rebutted and held (at [17]) that:
In these circumstances … the appellant is entitled to contribution from the respondent to the
extent to which she paid more than one half of the purchase moneys. Further, she would appear
to be entitled to an equitable charge upon the respondent’s half interest for such an amount. In
determining the amount of the equitable charge … the amounts respectively contributed by the
parties might well serve as a basis.
[SEE ALSO • Ogilvie v Ryan [1976] 2 NSWLR 504; Calverley v Green (1984) 155 CLR 242
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and Baumgartner v Baumgartner (1987) 164 CLR 137; Cetojevic v Cetojevic [2007] NSWCA
33; Trustees of Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278;
Stassinopoulos v Stassinopoulos [2011] VSC 647.]
Rights of co-owners
[8.70] The nature of the co-ownership, regardless of whether it is a joint
tenancy or tenancy in common, gives rise to co-owners having rights
against each other.
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68 PART II INTERESTS IN LAND
Forgeard v Shanahan
[8.80] Forgeard v Shanahan (1994) 35 NSWLR 206
FACTS • The parties lived in a de facto relationship, purchasing a home as joint tenants.
The purchase moneys were jointly contributed. The relationship broke down and Forgeard
left the property whilst Shanahan remained. Following the break-up, Forgeard contributed
to the mortgage repayments but stopped after a year, leaving Shanahan to make the
payments. Forgeard, as an owner of the property, sought an order that the property be
sold.
HELD • In determining whether the property should be sold (Meagher and Mahoney JJA;
Kirby P dissenting), Meagher JA considered the question was “what right [has] one
co-owner against another, particularly when one has been in occupation and the other
has not”. Meagher JA considered the rights of tenants against each other as being:
• A right to occupation — possession by any one of the joint tenants is possession by the
other joint tenants. Therefore, if there has been no exclusion of possession by a joint
tenant of another it will be assumed that tenant has chosen not to exercise his legal right
to occupy the land.
• A right to share rents and profits.
• A right to compensation for improvements. The compensation is not calculated on the
value of the improvements but the amount by which the value of the property has been
increased by the improvements.
• A right to be jointly liable for debts jointly incurred. For example, under a mortgage or for
rates and levies.
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[8.90] Where the joint tenant has been wrongly excluded or ousted by the
co-owner from possession of the property, the excluded joint tenant may be
able to claim payment of occupation rent. The calculation of occupation
rent can be complex: see Biviano v Natoli (1998) 43 NSWLR 695; and Kangas
v Tsangaras (1990) 5 BPR 11,254. In Victoria disputes between co-owners
regarding the exercise of their rights against each other are governed by the
Property (Co-Ownership) Act 2005.
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CHAPTER 8 CO-OWNERSHIP / 69
Lennon v Bell
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FACTS • Mr and Mrs Lennon purchased a property together as joint tenants. They
subsequently separated and Mr Lennon moved out of the property. Property settlement
negotiations were in process but had not been concluded. Mrs Lennon signed a notice of
intention to sever the joint tenancy and a transfer changing the title from joint tenants to
tenants in common. The documents were forwarded to Mr Lennon for signature but at the
time of Mrs Lennon’s death, the transfer had not been lodged for registration. As the
transfer had not been registered there was no severance at law. Mrs Lennon’s estate
argued that there had been a course of dealing between the parties that evidenced their
intention to sever the joint tenancy.
HELD • Mullins J held that there had been no severance of the joint tenancy at law or in
equity. Mullins J (at [23]) considered that “[a]fter separation of the applicant and
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70 PART II INTERESTS IN LAND
Mrs Lennon, there was not a course of dealing between them that was sufficient to allow
the inference to be drawn that they had mutually acted inconsistently with the continuance
of a joint tenancy”.
[SEE ALSO • Sprott v Harper [2000] Q ConvR 54-545; [2000] QCA 391; Saleeba v Wilke
[2007] ANZ ConvR 664; [2007] QSC 298; In the Marriage of Pertsoulis (1980) 6 Fam LR 39;
[1980] FLC 90-059.]
Jurisdiction Legislation
New South Wales Real Property Act 1900, s 97
Queensland Land Title Act 1994, s 59
South Australia No specific provision
Tasmania Land Titles Act 1980, s 63(1)
Victoria No specific provision
Western Australia No specific provision
However, where the severance of the joint tenancy is not effective at law
(ie, where it has not been registered) there may still be severance of the
joint tenancy in equity. The equitable remedy may be the creation of a trust.
Corin v Patton
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FACTS • Mr Patton and his wife were joint registered proprietors of land. Mrs Patton was
terminally ill and wanted to sever the joint tenancy to prevent her husband from gaining
ownership of the property. The necessary transfer documents were signed by her. The
certificate of title for the property was held by the bank as security for an unregistered
mortgage over the property. Mrs Patton herself took no action before her death to obtain
the certificate of title so as to enable the transfer to be registered. The issue was whether
the joint tenancy had been severed by Mrs Patton.
HELD • The High Court held that the joint tenancy had not been severed at law as the
transfer had not been registered. Had the joint tenancy been severed in equity? The court
concluded that for a joint tenancy to be severed in equity, the person severing the joint
tenancy has to have done everything necessary to effect a transfer of the legal title. On the
facts, Mrs Patton had failed to do everything necessary. Whilst she had signed the
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CHAPTER 8 CO-OWNERSHIP / 71
transfer she had not procured the certificate of title from the bank. The transfer could not
have been lodged for registration without production of the certificate of title. In that way,
everything necessary had not been done.
Jurisdiction Legislation
New South Wales Conveyancing Act 1919, s 66G
Queensland Property Law Act 1974, Pt 4, Div 2
South Australia Law of Property Act 1936, s 69
Tasmania Partition Act 1869, s 3
Victoria Property Law Act 1958, s 225
Western Australia Property Law Act 1969, s 126
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PART III
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TITLE TO LAND
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MindMap08
Creation of a co-ownership Where an interest in land is Characteristics of a joint tenancy
owned by two or more people
simultaneously either as joint
The grant of the interest tenants or tenants in common No separation of ownership
specifies how the tenants are to
hold their interests
Presence of the four unities
Rights
Rights of Co-owners
of co-owners Against
against Each
each Other
other Severance of a joint tenancy
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Chapter 9
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The Torrens System
[9.10] INTRODUCTION....................................................................... 76
[9.20] THE TORRENS SYSTEM: IMPLEMENTATION.................................. 76
[9.30] THE TORRENS SYSTEM: IN OPERATION ...................................... 77
[9.40] The register................................................................. 77
[9.50] The administrator of the register........................................ 77
[9.60] Documentary title .......................................................... 78
[9.70] Registration ................................................................. 78
[9.110] Indefeasibility ............................................................... 81
Introduction
[9.10] The Torrens system, named after its developer Sir Robert Torrens, is
a land ownership system that relies upon the registration of interests and
dealings in land on a central register. The Torrens system of registration
contrasts with the general law system of land ownership, where title to
land is transferred by deed. Each transaction required a purchaser to
ensure the owner of the land had a good root of title through the chain of
title. This required the purchaser to trace the ownership of the land from
the original grant to the contemporary transaction. Checking for good root
of title could be a time-consuming and complex process. The chances of a
document being a forgery were real (despite the best checking) and any
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documentary forgery would break the chain of title. Interests in land could
be overlooked and missed. The Torrens system seeks to overcome these
inherent uncertainties in the general law system.
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CHAPTER 9 THE TORRENS SYSTEM / 77
The register
[9.40] In each jurisdiction, a register is required to be kept that records by
folio or lot reference each piece of land within the jurisdiction and the
interests held in that land.
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Jurisdiction Legislation
New South Wales Real Property Act 1900, s 31B
Queensland Land Title Act 1994, ss 27, 28
South Australia Real Property Act 1886, ss 47, 49
Tasmania Land Titles Act 1980, s 33
Victoria Transfer of Land Act 1958, s 27
Western Australia Transfer of Land Act 1893, s 48
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78 PART III TITLE TO LAND
remainder of the book in place of repeating all the names of the same
position in each different jurisdiction.
Documentary title
[9.60] Once the folio or lot has been created, a document confirming title,
generally known as a certificate of title, can be delivered to the registered
owner.
Jurisdiction Legislation
New South Wales Real Property Act 1900, s 33
Queensland Land Title Act 1994, s 42
South Australia Real Property Act 1886, s 51C
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Registration
[9.70] Once the folio or lot has been created, the registered owner is free
to deal with the land. Any dealings with the land — eg, a transfer, grant of
a lease, mortgage or easement — must subsequently be registered on the
register. Registration occurs when the particulars of the dealing are
recorded on the register. Registration is of vital importance as registration
records the interest holder’s interest in the land and provides the interest
holder with indefeasibility of title.
Jurisdiction Legislation
New South Wales Real Property Act 1900, s 41
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CHAPTER 9 THE TORRENS SYSTEM / 79
Jurisdiction Legislation
Queensland Land Title Act 1994, s 62
South Australia Real Property Act 1886, s 57
Tasmania Land Titles Act 1980, s 40
Victoria Transfer of Land Act 1958, s 40
Western Australia Transfer of Land Act 1893, s 58
Barry v Heider
[9.80] Barry v Heider (1914) 19 CLR 197
FACTS • Barry was the registered proprietor of land. Barry signed a transfer transferring
the land to Schmidt. The land included in the transfer was not the whole of the land, as
Barry had previously transferred part of it to Lawlor. Application had been made to the
Registrar-General for a fresh certificate of title for the remaining part of the land but the
new certificate had not been issued when the transfer to Schmidt was executed. Schmidt
obtained from Heider a loan of £800 on security of the land comprised in the transfer from
Barry. The transfer documents had not been registered when Barry alleged that Schmidt
had obtained the land by fraud and he had not signed the transfer. Barry claimed that, as
the transfer documents were unregistered, no interest in the land had been created.
HELD • The court considered that whilst a legal interest had not been created, as
registration had not occurred, equitable claims and interests in land can be maintained
under the Torrens system.
Griffith CJ opined (at 208):
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In my opinion equitable claims and interests in land are recognized by the Real Property Acts.
It follows that the transfer of 19th October, if valid as between [Barry] and Schmidt, would have
conferred upon the latter an equitable claim or right to the land in question recognized by the law.
I think that it also follows that this claim or right was in its nature assignable by any means
appropriate to the assignment of such an interest.
It further follows that the transfer operated as a representation, addressed to any person into
whose hands it might lawfully come without notice of Barry’s right to have it set aside, that
Schmidt had such an assignable interest.
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80 PART III TITLE TO LAND
Parties may have a right to have such an instrument executed and registered; and that right,
according to accepted rules of equity, is an estate or interest in the land. Until that instrument is
executed, sec 41 cannot affect the matter, and if the instrument is executed it is plain its inefficacy
until registered — that is, until statutory completion as an instrument of title — cannot cut down
or merge the pre-existing right which led to its execution.
[SEE ALSO • Chan v Cresdon Pty Ltd (1989) 168 CLR 242.]
Jurisdiction Legislation
New South Wales Real Property Act 1900, s 36(5)
Queensland Land Title Act 1994, s 177
South Australia Real Property Act 1886, s 56
Tasmania Land Titles Act 1980, s 48
Victoria Transfer of Land Act 1958, s 34
Western Australia Transfer of Land Act 1893, s 53
FACTS • Shell Co of Australia Ltd (Shell) was the lessee under a registered lease. The
lease contained a renewal provision. The land was sold, the new registered proprietor
being Celtic Agencies. Celtic Agencies defaulted under the mortgage held over the land
by Mercantile Credits Ltd. Mercantile Credits Ltd gave notice to Shell that it intended to
sell the land under its power of sale. Shell lodged a caveat over the title seeking to ensure
that Mercantile Credits Ltd sold the land subject to the lease and the option to renew.
Mercantile Credits Ltd argued that the option to renew, whilst part of the registered lease,
was not able to be registered itself, and was therefore not binding on Mercantile as the
mortgagee.
HELD • The court found in favour of Shell, holding that priority and indefeasibility was
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CHAPTER 9 THE TORRENS SYSTEM / 81
given to the right of renewal contained in the registered lease. The right of renewal directly
concerned the interest being held in the land and was not merely a personal right.
Indefeasibility
[9.110] Indefeasibility is the protection granted by registration of an
instrument dealing with an interest in land. It means that the registered
owner only takes land subject to those interests that are recorded and their
title is protected from any interest not recorded. The registered owner’s title
is paramount.
Jurisdiction Legislation
New South Wales Real Property Act 1900, s 42
Queensland Land Title Act 1994, s 38
South Australia Real Property Act 1886, s 69
Tasmania Land Titles Act 1980, s 40(1)
Victoria Transfer of Land Act 1958, s 42
Western Australia Transfer of Land Act 1893, s 68
Breskvar v Wall
[9.120] Breskvar v Wall (1971) 126 CLR 376
FACTS • Mr and Mrs Breskvar were the registered proprietors of an estate in fee simple.
They obtained a loan from Petrie, and to secure the loan gave Petrie a signed but blank
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82 PART III TITLE TO LAND
transfer and their certificate of title. Petrie subsequently inserted the name of his
grandson, Wall, as the purchaser on the signed transfer and had it registered. Wall then
contracted to sell the land to Alban Pty Ltd. Alban Pty Ltd was a bona fide purchaser for
value, as it had no knowledge of the fraud that had been perpetrated against the
Breskvars. The Breskvars filed a caveat, which prevented Alban Pty Ltd from having the
transfer registered. The Breskvars sought a declaration seeking that they be reinstated as
registered proprietors of the land.
HELD • Pursuant to the operation of the Torrens system, Wall was the registered
proprietor of the land: his possession of the certificate was conclusive evidence of his
status. Given his status as registered proprietor, his title, upon registration, was
immediately indefeasible. He was able to deal with the land as he wished, including
contracting for its sale. Pursuant to the contract of sale, Alban Pty Ltd held an equitable
interest in the land as purchaser. The court regarded the Breskvars as also holding an
equitable interest in the land: the right to sue. Given that Wall’s title was indefeasible the
court considered that the real dispute was between the two, equal yet competing,
equitable interests. Ultimately, the Breskvars’ equitable interest was postponed in favour
of Alban Pty Ltd. The court regarded the Breskvars as having armed Petrie and Wall with
the indicia of title by handing Petrie a blank signed transfer and the certificate of title.
Whereas Alban Pty Ltd was regarded as an innocent third party, having purchased the
land for value without notice of the fraud. Equity required that Alban Pty Ltd’s interest be
regarded as superior to that of the Breskvars.
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MindMap09
The Torrens system The Torrens system, named after its Registration
developer Sir Robert Torrens, is a land
ownership system that relies upon the
Each State jurisdiction has a registration of interests and dealings in land ... occurs when the
Torrens system in place upon a central register particulars of the dealing of
an interest in land are
recorded on the register
Each jurisdiction is similar but
the system across jurisdictions
... means that the registered
is not uniform – there are
owner is free to deal with
differences that are peculiar to
the land and the registered
each jurisdiction
owner holds a legal interest
that is indefeasible
The core concepts are uniform:
Any subsequent dealings
the register – a register is with the land, eg, a transfer,
required to be kept that lease, mortgage or
records by folio or lot reference easement must be
each piece of land within the Indefeasibility registered on the register
jurisdiction and the interests
held in that land ... is the protection granted
If an interest is not
to an interest holder upon
registered it is an equitable
the administrator of the registration – Frazer v
interest. Equitable interests
register – the powers of the Walker [1967] 1 AC 569
Registrar/Recorder/
can exist and be enforced
Registrar-General are under the Torrens system –
contained within the governing ... describes the immunity Barry v Heider (1914) 19
legislation from attack by another CLR 197
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claim to an interest in
the land
documentary title – once the
folio or lot has been created for
the piece of land a document ... is immediate upon
confirming title, generally registration not deferred –
referred to as a duplicate
Breskvar v Wall (1971)
certificate of title, can be
delivered to the registered 126 CLR 376
owner
indefeasibility
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Chapter 10
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Exceptions to Indefeasibility:
The Fraud Exception
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Exceptions to Indefeasibility: The Fraud
Exception
[10.10] INTRODUCTION....................................................................... 84
[10.20] NOTIFICATIONS ON THE REGISTER ............................................ 84
[10.50] FRAUD .................................................................................. 85
[10.60] Fraud by the registered proprietor...................................... 86
[10.90] Fraud requires dishonesty or moral turpitude ........................ 88
[10.110] Fraud by an agent......................................................... 89
[10.130] FORGERY .............................................................................. 90
Introduction
[10.10] Although registration provides indefeasibility of title, the
protection is not absolute. Exceptions to indefeasibility are contained
within the legislation and imposed by the common law through the in
personam exception. It is important to note that the statutory exceptions to
indefeasibility differ between the jurisdictions. Care must be taken when
considering whether an exception will apply in any given jurisdiction. The
fraud exception to indefeasibility is common to all jurisdictions.
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Jurisdiction Legislation
New South Wales Real Property Act 1900, s 42
Queensland Land Title Act 1994, s 184
South Australia Real Property Act 1886, s 69
Tasmania Land Titles Act 1980, s 40
Victoria Transfer of Land Act 1958, s 42
Western Australia Transfer of Land Act 1893, s 68
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CHAPTER 10 EXCEPTIONS TO INDEFEASIBILITY: THE FRAUD EXCEPTION / 85
FACTS • Bursill Enterprises Pty Ltd (Bursill) was the registered proprietor of an estate in
fee simple. On the northern side of Bursill’s land was Berger Bros Trading Co Pty Ltd’s
(Berger) land. Bursill’s land was subject to a right of way but across this strip was a
building. A dispute arose between the parties as to the extent of the easement. At the time
both Bursill and Berger purchased their land, a notation on the title listed the title as
being subject to a right of way created by Transfer No 7922, but contained no further
information detailing the extent and nature of the easement.
HELD • The court held that because Transfer 7922 was listed on the title, the registered
proprietor took possession subject to that registered interest. The court considered that it
was the responsibility of any purchaser of the land to check Transfer 7922 to ascertain the
nature and extent of the right of way.
Windeyer J commented (at [20]):
It seems to me that, at any time from 1872 till today, a prudent conveyancer acting for a purchaser
of the land that is now Bursill’s would have ascertained what it was that transfer 7922 referred to
on the vendor’s certificate of title in law effected. True he might have been surprised to discover all
that his search revealed. 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 purposes in what manner and at what times
… I think that the registered proprietor of the land that is now Bursill’s held his title subject to that
interest. Therefore I consider that the owner of the land that is now Berger’s has, and has had, in
law a right to the exclusive use and occupation of this building.
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Fraud
[10.50] The fraud exception to indefeasibility is contained in the
legislation relevant to each jurisdiction.
Jurisdiction Legislation
New South Wales Real Property Act 1900, ss 42, 43
Queensland Land Title Act 1994, s 185(1)(a)
South Australia Real Property Act 1886, s 69(a)
Tasmania Land Titles Act 1980, s 40(3)(a)
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86 PART III TITLE TO LAND
Jurisdiction Legislation
Victoria Transfer of Land Act 1958, s 42(1)
Western Australia Transfer of Land Act 1893, ss 68(1), 134
FACTS • Ferguson was the registered proprietor of land the subject of a mortgage in
favour of the Bank of South Australia. He was in default of the mortgage but alleged that
the mortgage had been obtained by the fraud of the bank. Ferguson had applied for the
mortgage but some of the documents submitted to the bank’s regional office to support
the granting of the mortgage had been altered by the local bank manager without
Ferguson’s knowledge.
HELD • The court held (at 258) that the mortgage was indefeasible because for fraud to
be operative, it must operate on the mind of the person said to have been defrauded and
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CHAPTER 10 EXCEPTIONS TO INDEFEASIBILITY: THE FRAUD EXCEPTION / 87
to have induced detrimental action by that person. This was not the case, as the document
was not prepared for or by Ferguson and was not used by Ferguson himself for any
dishonest purpose.
FACTS • Mr De Jager forged his wife’s signature on a mortgage, the security for which was
his business interests. Employees of Australian Guarantee Corporation (AGC) knew that
the documents were improperly attested but presented the mortgage documents for
registration in any event.
HELD • The court held that AGC had committed a fraud against Mrs De Jager. The court
considered that the employees’ actions constituted a deliberate misrepresentation
because they knew and participated in the fraud against Mrs De Jager.
FACTS • Grgic was the registered owner of land and his son had possession of the
certificate of title. A friend of the son attended at the ANZ Bank and, impersonating Grgic,
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signed a mortgage before a bank officer. The documents required the bank officer in
witnessing the documents to attest that the documents were “signed in my presence by
the mortgagor who is personally known to me”. Grgic argued that the ANZ Bank, via its
employee, had perpetrated a fraud against him in witnessing the mortgage.
HELD • The court considered that the bank, through the actions of its employee, had not
committed a fraud. The court accepted that the employee had not been as meticulous as
could have been but that there was no actual dishonesty on the part of the employee. The
employee could only have committed a fraud if the bank officer had known that the
impersonator was not Grgic and witnessed the documents in any event.
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88 PART III TITLE TO LAND
FACTS • Scorpion Hotels was arguing that the mortgage that it had entered into with
Pyramid was defeasible as the mortgage had been signed and witnessed by a person who
was not a director of the company, as the company’s constitution required.
HELD • The court held that the mortgage was indefeasible. Hayne JA commented (at
193–194) that:
There was, in this case, no evidence that Pyramid, or anyone acting on its behalf, knew that the
witness to the affixing of the mortgagor’s company seal was not a director of the company (if in
fact that were so). There was no evidence that Pyramid, or anyone acting on its behalf, knew that
the execution of the mortgage had not been authorised by Scorpion (if that were so). It was not
suggested to [Pyramid’s Solicitor] that he had chosen not to make enquiries about these (or any
other) matters because he feared what he might find out. …
I do not accept that the matters that are now put forward as showing that Pyramid acted
dishonestly to do so, whether those matters are taken separately or in combination. At most they
might show either that Pyramid or its solicitors failed to take due care in settling the loan and
mortgage transaction, or that if enquiry had been made, fraud might have been revealed. …
That is not fraud.
FACTS • Mrs Russo was the registered proprietor of a residential property. Gerada had
been employed as a law clerk and dealt with her firm’s conveyancing transactions. A
collateral mortgage was taken over Mrs Russo’s property. The mortgage document was
signed with what was purported to be her signature and Gerada signed the attestation
clause without witnessing Mrs Russo sign the document. Her employer’s instructions had
been not to witness a document without the person being present. It came to light that
Mrs Russo’s signature had been forged by her son-in-law. The questions on the appeal
were whether the false witnessing by Gerada of Mrs Russo’s signature constituted fraud
and whether her false witnessing constituted fraud for which the bank was responsible.
HELD • The court held that neither Gerada nor the bank was guilty of fraud. As to
Gerada’s conduct, Ormiston JA considered (at [38]) that:
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CHAPTER 10 EXCEPTIONS TO INDEFEASIBILITY: THE FRAUD EXCEPTION / 89
… there was no direct evidence of dishonesty or moral turpitude on the part of Miss Gerada,
unless one were able to rely solely on the untruth told by her in the attestation clause; secondly,
there is not a scintilla of evidence to show that she was involved in [the son-in-law’s] dishonesty or
that she would have any reason to do so.
Fraud by an agent
[10.110] The House of Lords in Assets Co Ltd v Mere Roihi [1905] AC 176
confirmed that the actions of a registered proprietor’s agent are also
relevant in determining whether the fraud exception to indefeasibility may
apply. An agent’s fraud may be attributed to the registered proprietor as
principal in two situations:
• where the agent was acting on behalf of the principal within the scope of
their actual or apparent authority;
• where knowledge of the fraud can be imputed to the principal.
FACTS • Galea, a solicitor, was acting on behalf of both Schultz and Corwill Properties.
Corwill Properties was the registered proprietor of a piece of land. Galea forged and
registered a mortgage over the land in favour of Schultz. Subsequently, a discharge of the
mortgage was registered but it too was the result of a fraud on the part of Galea. Schultz
claimed that the mortgage was indefeasible but the discharge was not, given the fraud.
Conversely, Corwill Properties argued that the discharge, having been registered, was
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indefeasible.
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90 PART III TITLE TO LAND
The court again considered the two situations in which a principal can be held liable for
the actions of their agent. As agent for Corwill Properties the court considered that
Galea’s action in deceiving Schultz to sign the discharge was not within the actual or
apparent scope of his authority as its agent. The court also found that Galea’s knowledge
of the fraud was his own and had not been communicated to Corwill Properties. Given
these findings the fraud could not be “brought home” to Corwill Properties.
Conclusion
On that basis the court concluded that both the mortgage and the discharge of the
mortgage were indefeasible. That being the case, the court concluded (at 586) that:
… [Corwill Properties’] title to the land must be upheld as being that presently disclosed on the
face of the register. In other words, [Corwill Properties] presently holds an unencumbered fee
simple in the land free from any interest therein on the part of [Schultz].
Forgery
[10.130] South Australia is the only jurisdiction that refers to forgery as
being an exception to indefeasibility: Real Property Act 1886, s 69(b). The
advent of e-conveyancing has seen a legislative obligation imposed upon
parties to confirm the identity of a party signing the document and the
witness. Depending upon the jurisdiction, a failure to comply with the
obligation to confirm the identity of the person can be an explicit exception
to indefeasibility (particularly in the context of the execution of a mortgage)
or render the perpetrator liable for an offence.
Jurisdiction Legislation
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MindMap10
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Chapter 11
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Exceptions to Indefeasibility:
Other Statutory Provisions
and the In Personam
Exception
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Exceptions to indefeasibility: Other
[11.10] INTRODUCTION....................................................................... 92
[11.20] STATUTORY EXCEPTIONS ......................................................... 92
[11.20] Prior folio or certificate of title........................................... 92
[11.30] Wrong description of parcel or boundaries ........................... 93
[11.40] Omitted or wrongly described easements............................. 93
[11.50] Leases ....................................................................... 93
[11.60] Rates and taxes ........................................................... 94
[11.70] Volunteers................................................................... 94
[11.80] Overriding legislation ...................................................... 94
[11.100] THE IN PERSONAM EXCEPTION................................................. 95
Introduction
[11.10] There are other statutory exceptions to indefeasibility in each
jurisdiction. Although the statutory exceptions are common they are not
uniform to all jurisdictions. Further, those exceptions that may be common
may differ in interpretation and application. Care must be taken when
considering whether an exception will apply in any given jurisdiction.
Statutory exceptions
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Jurisdiction Legislation
New South Wales Real Property Act 1900, s 42(1)(a)
Queensland Land Title Act 1994, s 185(1)(e)
South Australia Real Property Act 1886, s 69(e)
Tasmania Land Titles Act 1980, s 40(b)
Victoria Transfer of Land Act 1958, s 42(1)(a)
Western Australia Transfer of Land Act 1893, s 68(1)
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CHAPTER 11 EXCEPTIONS TO INDEFEASIBILITY: OTHER / 93
Jurisdiction Legislation
New South Wales Real Property Act 1900, s 42(1)(c)
Queensland Land Title Act 1994, s 185(1)(g)
South Australia Real Property Act 1886, s 69(c)
Tasmania Land Titles Act 1980, s 40(3)(f)
Victoria Transfer of Land Act 1958, s 42(1)(b)
Western Australia Transfer of Land Act 1893, s 68(1)
Jurisdiction Legislation
New South Wales Real Property Act 1900, s 42(1)(a1)
Queensland Land Title Act 1994, s 185(1)(c)
South Australia Real Property Act 1886, s 69(d)
Tasmania Land Titles Act 1980, s 40(3)(e)
Victoria Transfer of Land Act 1958, s 42(2)(d)
Western Australia Transfer of Land Act 1893, s 68(3)(c)
Leases
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Jurisdiction Legislation
New South Real Property Act 1900, s 42(1)(d): the lease cannot be longer than three years
Wales
Queensland Land Title Act 1994, s 185(2): the lease cannot be longer than three years
South Australia Real Property Act 1886, ss 69(h), 119: the lease cannot be longer than one year
Tasmania Land Titles Act 1980, s 40(3)(d): the lease cannot be longer than three years
Victoria Transfer of Land Act 1958, ss 42(2)(e), 66: tenant needs to be in possession and
the lease term should not be longer than three years
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94 PART III TITLE TO LAND
Jurisdiction Legislation
Western Transfer of Land Act 1893, s 68(1A): the lease cannot be longer than five years
Australia and the tenant must be in actual possession
Volunteers
[11.70] A registered volunteer is a person who becomes registered as
having an interest in land but has not paid valuable consideration for that
interest. Queensland is the only jurisdiction that provides that a registered
volunteer obtains indefeasible title to the land: Land Title Act 1994, s 180.
The High Court held in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007)
230 CLR 89 that a volunteer has the capacity to obtain indefeasibility of
title.
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Overriding legislation
[11.80] General principles of statutory interpretation provide for earlier
statutes to be overridden by later more specific statutes. Given this rule of
statutory interpretation, the Torrens system legislation in each jurisdiction
is potentially capable of being overridden by a subsequently enacted
statute. In this way, later statutes may create rights and interests that are
not recorded on the register.
FACTS • On the relevant parcel of land, a drainage reserve had been created in favour of
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CHAPTER 11 EXCEPTIONS TO INDEFEASIBILITY: OTHER / 95
the Council pursuant to the Local Government Act 1919 (NSW). The Act provided that
the drainage reserve was to take priority over the title of the registered proprietor. The
drainage reserve, however, was not registered on the title. Prior to Pratten purchasing the
land, Council claimed no interest in the land. After the purchase Council asserted its
ownership of the land.
HELD • The court held that the Local Government Act 1919, being a later statute,
overrode the Real Property Act 1900 (NSW). The court regarded the indefeasibility of
Pratten’s title as being subject to the drainage reserve created by the later statute.
[SEE ALSO • Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2002) 55 NSWLR 446.]
The Privy Council declined to specify and limit the legal and equitable
claims that would fall within the exception. The ambit of the in personam
exception is therefore difficult to define.
The in personam exception applies to all Torrens system jurisdictions. In
some jurisdictions the exception is specifically provided for, whilst in
others the exception has been incorporated into the Torrens system via the
common law.
Jurisdiction Legislation
New South Wales No specific provision
Queensland Land Title Act 1994, s 185(1)(a): the registered proprietor does not
obtain indefeasibility of title in relation to an equity arising from an act
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