Real Property Assignment Answer Guide July 2016
General Remarks
These are some comments to help understand the feedback given on your assignments. Generally speaking, the assignments were of a reasonable standard. Most people need to do work on the areas described below. The numbered paragraphs correspond to the numbers on your papers. Remember that this is a guide – it will not be applied mechanically without careful consideration of your answer.
1. Most students need to improve their referencing and citation. Some students did not reference and cite any cases or provide the necessary references to Butt or other texts. This is unforgivable and should not be repeated in this or other subjects. Referencing and citation is important not only for academic purposes but for professional lawyering. If you are in doubt about referencing have a look at the Australian Guide to Legal Citation available from the University of Melbourne.
2. It is important to use cases to strengthen your argument. When using a case to show how a principle works. It is not enough to say that ‘Smith v Jones illustrates this principle’ without then explaining the case and why it is useful for your answer. Similarly when using sections from legislation it is not useful to your argument to simply cut and paste the section into the text or provide a basic citation, for eg ‘The assignment is legal: s 23C’. You need to demonstrate your understanding of how the section actually works and use your owns words to describe key terms in the section and its mechanics. Then use cases that provide examples of how the section works. Try to layer your answer with detail.
3. Some students need to improve their expression, sentence structure and layout. Do not be afraid to use subheadings although avoid point-form description of the issues. It is not possible to pass an assignment or an exam by providing point form notes. If you are having trouble, enroll in the assignment writing training through LEC.
4. Students should also be mindful of the fact that long, verbose assignments are worse that short concise ones. The word limit was 4 pages but many people went far over. Keeping within the word limit is good practice for the exam where time will be the key to success.
5. Be careful to read the question and provide an answer to the question being asked rather than an excursion into the area. General comments and discussion are to be encouraged but not at the cost of the answer. Many students attempted these questions by just rattling off the basic laws without considering them in the light of the questions that were asked. You must ALWAYS answer the question – a summary of the rules is not an attempt to grapple with the questions being asked.
Question
Andrea was the owner of 20 acres of Old System land at Little Beach on the Central Coast of New South Wales. She had bought the property off Sam and the conveyance had been recorded in a deed which had been registered.
Five years after the purchase, Andrea agreed with her neighbour, Bruce, that he could come onto the property and cut down 20 trees per year from the plantation stock. Bruce paid Andrea $5000 for the agreement which was recorded in writing but which was never formalized into a deed. The agreement was not registered.
As Andrea got older she decided she wanted to live in a smaller place so she bought a new unit at Avoca Beach and moved out. She leased the property at Little Beach to Christine. The lease agreement was for two years, with an option to renew for a further 2 years. This lease was made by parol.
To finance the purchase of the unit at Avoca, Andrea borrowed money from David. David provided the money on the basis that he would be given an interest in the land at Little Beach so if Andrea was unable to pay the debt he could sell the property to realize his debt, or, should Andrea die, she would leave the Little Beach land to him in her will. The agreement was put into writing but not in deed form. It was not registered.
Andrea had trouble with paying the loan back to David so she decided to sell the Little Beach land. She entered into a contract with Edgar, who was living in Bangladesh at the time and unable to inspect the land. He decided not to bother to get an agent to inspect for him. At settlement Edgar received a deed of conveyance. The deed noted that the fee simple was transferred “subject to all existing profits”. The deed was then registered by Edgar’s licensed conveyancer.
Later Edgar travelled from Bangladesh and arrived at Little Beach. He found that the property was being occupied by Christine. He was also surprised to see that Bruce was chopping down some of the trees and taking the timber. Things got worse when he received a letter from David who claimed to have a mortgage over the land. Andrea had disappeared.
(a) Does Edgar have to allow Bruce access to his land to chop down trees? (4 marks);
(b) Is Edgar subject to Christine’s lease? (4 marks);
(c) Is Edgar subject to David’s mortgage? (4 marks); and
(d) If we change the facts and assume that the land is held in the Torrens system, how does your answer to (a), (b) and (c) change? (8 marks).
6. Edgar has a legal interest in the fee simple: s 23B. He has a registered deed: s 184C. Importantly, his deed states that his interest was subject to all existing profits.
7. Bruce has a profit a prendre, which is an interest in land: Australian Softwood Forests v Attorney General (1981-82) 148 CLR 121. Profits normally relate to natural fruits of the land, soil and animals but plantation timber can also come under a profit because it is planted and then left to grow over a longtime: Permanent Trustee Australia Ltd v Shand (1992) 27 NSWLR 426. This means that the agreement is more than a mere licence. The profit was not created incompliance with s 23B of the Conveyancing Act but it was in writing (s 23C) and was specially performable, with consideration passing between the parties. The rule in Walsh v Losndale can apply. It is equitable.
8. Edgar cannot use s 184G to defeat the profit. While both instruments as in writing they are not ‘competing’ because Edgar’s interest expressly states that it is ‘subject to all existing profits’: Scholes v Blunt (1917) 17 SR (NSW) 36. The issue is therefore whether he is a bona fide purchaser for value without notice: Pilcehr v Rawlins. Edgar doesn’t appear to have made any inquiries or inspections regarding existing profits. Arguably, he therefore on constructive notice and the profit can be enforced against him. Some students might have argued otherwise about the notice issue, which is fine as long as the issue was discussed sensibly.
9. Christine’s lease is not in writing and does not comply with s 23D(2) as it’s term (plus option) is too long for the short term exception. Because consideration has passed and it is otherwise specially performable, the lease is equitable under the doctrine of part performance: Maddison v Alderson. This should have been discussed in detail.
10. Because the lease is oral in nature s 184G cannot apply. The issue is therefore to be determined by the bona fide purchaser rule: Pilcher v Rawlins. Edgar is subject to constructive notice due to his failure to inspect: Hunt v Luck. He is subject to the lease.
11. David has an equitable mortgage via the rule in Walsh v Lonsdale which should have already been discussed. Edgar can rely on s 184G for this conflict as he was a valuable purchaser, acting in good faith and there interests are contained in competing instruments. Edgar would not be subject to the mortgage.
12. If the land is Torrens land, Edgar has, on the face of it, indefeasibility: ss42, 43. This should have been discussed in detail. Edgar’s registration means that he takes his interest absolutely free of other unregistered interests, unless an exception can be applied.
13. In terms of the Bruce’s profit, the exception in s 42(1)(b) does not apply as the profit was not created in the old system and left off the register in the conversion process. Nor do any other exceptions apply. The fact that he might have constructive notice is irrelevant because of s 43.
14. In terms of Christine’s lease, s 42(1)(d) should have been discussed. It cannot apply as the lease it not a short term lease as required by the section. Edgar can claim indefeasibility even though he has notice: s 43.
15. In terms of the mortgage, Edgar can once again claim indefeasibility. No exception can apply to Edgar’s interest. There was no fraud or other person equity. Finally, a caveat will not help David, as he is already registered, and caveat can only be effective to prevent registration.