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LAW EXTENSION COMMITTEE
/05 REAL PROPERTY
COURSE PROBLEMS
Set out below are a number of problems, divided into three groups as follows:
Group 1 Old system title
Possessory title
Torrens title
Group 2 Fixtures
Trespass
Encroachment of buildings
Co-ownership
Group 3 Easements
Restrictive covenants
Mortgages
Leases
Some of these problems may be discussed in class.
GROUP 1
Old system title
1. Section 184G of the Conveyancing Act provides:
All instruments ... which are executed or made bona fide, and for valuable consideration, and are duly registered ... shall have and take priority not according to their respective dates but according to the priority of the registration thereof only.
In what ways does s 184G change the general law rules as to priority between competing interests in land? In what ways has the law remained the same?
2. Alice is seized for an estate in fee simple in Blackacre, a property under old system title. She enters into a deed whereby she grants an easement to Elias for consideration, so that Elias is able to use a road across Blackacre to get to his property, Whiteacre. Although the deed is executed by both parties, Elias does not register it in the General Register of Deeds.
Alice then orally leases Blackacre to Lou for a term of two years. Alice vacates Blackacre, but before Lou goes into possession, Alice agrees in writing to sell Blackacre to Peter. Peter pays the usual 10 percent deposit. He inspects the property, but does not see the road across Blackacre. Before the contract of sale is completed, Peter becomes aware of the existence of the easement.
The contract of sale is subsequent completed and, in exchange for the balance of the purchase price, Peter receives a deed of conveyance of Blackacre executed by Alice. The conveyance is not expressed to be subject to either Elias' easement or Lou's lease. Peter then registers the deed of conveyance. After registration, he becomes aware of Lou's claim.
Is Peter's interest subject to either Elias' easement or Lou's lease? Refer in your answer to relevant case and statute law.
3. Ferdinand is seized for an estate in fee simple in Brownacre, a property under old system title. He leases Brownacre to Sebastian for a term of two years at market rent. The lease is not in writing. Sebastian enters into possession.
Ferdinand's solicitor, Christopher, has possession of the title deeds to Brownacre for safekeeping only. He forges Ferdinand's signature on a deed of conveyance, by way of mortgage in favour of Isabella, for an advance of $150,000 which Isabella has made. Isabella registers the document in the General Register of Deeds, but does not take possession of the title deeds. Christopher appropriates the advance for his own purposes.
Ferdinand takes the title deeds and deposits them with Cadiz Bank as security for an advance of $100,000. The bank searches the General Register of Deeds, and discovers the existence of Isabella's document, but believes that Brownacre will provide sufficient security.
Isabella has not been paid any amount due under the mortgage, and seeks to sell Brownacre to recover her advance. Ferdinand becomes aware of what Christopher has done, but Christopher has disappeared. Brownacre is now worth only $200,000, due to a dramatic slump in property values.
Can Ferdinand and Cadiz Bank resist Isabella's claim to priority? Is Sebastian affected by any of the dealings with Brownacre? Refer in your answer to relevant case and statute law.
4. Helen is seized for an estate in fee simple in Redacre, a property under old system title. She enters into a contract in writing to sell Redacre to Maria. Maria pays a deposit of 10 percent of the purchase price.
Before Maria's contract is completed, Helen enters into a second written agreement to sell Redacre to Olivia, who pays a deposit of 10 percent of the purchase price. Olivia has no notice of the existence of Helen's contract with Maria. In due course, Olivia completes her contract with Helen, and in exchange for the balance of the purchase price receives from Helen the title deeds to Redacre and a duly executed deed of conveyance.
Maria happens to hear of the existence of Olivia's contract with Helen. Before Olivia's conveyance can be registered, Maria registers her contract with Helen in the General Register of Deeds.
Discuss the priority question which arises between Maria and Olivia. Refer in your answer to the manner in which the system of registration of instruments affects the general law priority rules.
Possessory title and qualified title
5. How may possessory title to land be acquired over land under old system title? Would your answer differ in respect of Torrens title land?
6. G is the registered proprietor of Greenacre. H, I, J and K between them have been in adverse possession of since 1 June 1971. However none of H, I, J or K have been in adverse possession for more than five years.
Advise G, H, I, J and K as to their respective rights.
7. Discuss with reference to relevant legislation the operation of Qualified Title.
Torrens title
8. Equine is the registered proprietor in fee simple under the Real Property Act of Brownacre, which is situated in a country town. Upon Brownacre is erected an old four-bedroom house and a stable to the side, part of which is erected 4 metres above a 3 metre wide easement benefiting the adjoining property and giving access to the back portion of the property. Equine is a veterinary surgeon who holds the land on trust for himself and his two partners although of course this is not disclosed on the certificate of title.
The property was purchased some time ago with a view to the veterinary practice being moved to the property. Unfortunately there has been a falling cut between Equine and his two partners over the splitting of profits and the fact that one of the partners is paying undue attention to Equine's wife. Unbeknown to the other two partners, Equine on 1 December leases Brownacre to Dr Fixit for a period of two and a half years. Dr Fixit intends trying to establish a medical practice there but is delayed in taking possession as he is waiting on certain equipment.
Equine then sells the property to Oats, a hay dealer, for $160,000. Oats inspects the property prior to exchange and finds it vacant. After exchange of contracts and prior to settlement, Oats meets one of Equine's partners in the street. The partner tells Oats that the partners may be dissolving their partnership with Equine but that, in any event, they will shortly be moving their practice to Brownacre. Oats instructs his solicitor to immediately settle the contract. Settlement takes place on 2 February. The transfer is registered.
After settlement Oats, while inspecting Brownacre, discovers Dr Fixit on the property, about to take possession of it for his surgery. Dr Fixit shows Oats the lease and insists on staying for the full two and a half years. It is also discovered that the part of the stable erected over the easement is claimed by the adjoining owner. The easement is simply recorded on the title as "right of way created by transfer no 12345 dated 20-1-1917". An examination of the transfer shows that the dealing not only gives a right of way but also operates as a transfer of the buildings over the right of way, as it gives the adjoining owner the building plus the right to pull down or re-erect any other buildings over the right of way provided that such buildings be erected at least 4 metres from the ground.
Equine's partners now give notice to Oats that they intend to claim rectification of the register or alternatively that Oats holds as trustee for them on the basis that he was fraudulent in settling the purchase of Brownacre, having had notice of their interest in the land.
Advise Oats.
9. Rita is the registered proprietor of Blackacre under the provisions of the Real Property Act. Rita executes a Mortgage over Blackacre in favour of Matilda, who becomes registered as mortgagee. When registration is effected, Matilda returns the certificate of title to Rita.
Rita then enters into a written agreement with Edward whereby in return for an advance by Edward, Rita agrees to execute a Mortgage in his favour over Blackacre. She shows Edward the certificate of title and represents that there are no outstanding interests in the property. Edward does not search the Register to verify this, nor does he lodge a caveat in respect of his interest.
Rita subsequently enters into an agreement to sell Blackacre to Peter. On completion, Peter pays the purchase price and receives in return a Transfer signed by Rita, the certificate of title, and a Mortgage which has apparently signed by Matilda, but Rita has forged Matilda’s signature. Before the dealings are lodged for registration, Edward lodges a caveat claiming an interest in Blackacre as equitable mortgagee for the amount advanced by him.
Peter then lodges his dealings for registration. Rita has disappeared with the proceeds of sale. Edward claims to be entitled to recover his advance in priority to Matilda, and that Peter’s interest is subject to his mortgage. Matilda claims that she is entitled to prevent registration of the Discharge.
Are any of these claims likely to succeed?
10. A is the registered proprietor of Blackacre under the Real Property Act. On 1 January, A borrows $20,000 from B. As security for the loan, A deposits the certificate of title to Blackacre with B.
On 1 March, A borrows $20,000 from C. As security for the loan, C fraudulently entices A to execute a blank memorandum of transfer. C is aware that the certificate of title is kept in the safe of his "friend" B.
On 1st August, without the knowledge of B, C uplifts the title deeds from B's safe and inserts the name of his daughter, D, as the transferee in the memorandum of transfer.
Before registering her interest, D borrows $50,000 from E on the security of Blackacre. Settlement of the mortgage takes place on 12 August. E then lodges the certificate of title, the memorandum of transfer between A and D and the memorandum of mortgage between D and E at the Land Titles Office.
(a) Advise A, B, D and E of their respective rights in Blackacre.
(b) If the facts in (a) were changed so that D had obtained registration before settling her mortgage with E, how, if at all, would your advice differ?
(c) If the facts in (a) were changed so that A had given C no documents at all, but C had forged A's signature on a memorandum of transfer from A to D, how, if at all, would your advice differ?
11. Vance was registered as the proprietor of an estate in fee simple of land under the Real Property Act. He needed money to help his necessitous son, Ron. For this purpose he borrowed money from Bob, and executed a memorandum of mortgage in Bob's favour. However he could not find the certificate of title to give to Bob.
Because he was waiting for Vance to find the certificate of title, Bob did not register his mortgage. Nor did he lodge a caveat against the title to protect his interest as mortgagee.
In the meantime, Ron discovered the certificate of title amongst his father's papers. Without telling his father he purported to sell the land to Ian and, on settlement, gave Ian a memorandum of transfer upon which he had forged his father's signature.
Rather than register his memorandum of transfer immediately, Ian sold the land to Sean. For the purpose of the sale, Ian himself executed a memorandum of transfer in favour of Sean and on settlement with Sean handed over the certificate of title, the memorandum of transfer executed by Ron, and the memorandum of transfer executed by himself.
After Sean had lodged these documents for registration, but before any of them were registered, Ron confessed his fraud to his father and to Bob, Ian and Sean.
What are the respective rights in the land (if any) of:
(a) Vance;
(b) Bob; and
(c) Sean?
How can those rights be enforced?
12. Olive is the registered proprietor of land under the Real Property Act. She plans to travel overseas and leaves her certificate of title with her solicitor, Sally, for safe keeping.
Sally also acts for Olive's neighbour, Edna. Olive has agreed to grant a right of way over her land to Edna. Sally prepares the documents necessary to create the right of way, but she does not bother to do anything about the registration of the documents.
Before departing for overseas, Olive leases her land to Lyn for a period of two years. The lease agreement is an informal one which is not registered. Lyn enters into possession on 1 January.
Once Olive has left the country, Sally decides to make some "easy money". Sally also acts for Mary, who has asked Sally to invest $80,000 for her. Sally forges Olive's signature on a memorandum of mortgage in favour of Mary, and a mortgage over Olive's land is registered by the Registrar General. Sally uses the $80,000 for her own purposes, although she does make the mortgage repayments as they fall due. After some time, Sally persuades Mary to sign a discharge of mortgage, telling her that shortly the loan will be fully repaid.
Sally then, without authority, enters into a contract to sell Olive's land to Pam. When Pam inspects the property she meets Lyn, but Sally tells Pam that Lyn is her sister who is staying in the house for a short while. Pam accepts Sally's story and expects Lyn to be gone by the time of settlement. At settlement, Pam receives the certificate of title, the discharge of mortgage to Mary and a memorandum of transfer. The transfer appears to be signed by Olive, but of course Olive's signature has been forged by Sally.
On 2 March Pam lodges her documents for registration. On 3 March Sally's activities are discovered.