Real Property Notes:

Module One: Native Title and Tenures and Estates:

Definition of Real Property:

- Is land and interests in land. Real property is subdivided into two further groups,
corporeal hereditaments (tangible real property, ie land) and incorporeal
hereditaments (intangible interests in land, such as easements, or right of way).

Three key doctrines:

- Doctrines of tenure
- Doctrine of estates
- Doctrine of Native title

(These three doctrines provide the structure for our land holding system)

Doctrine of Tenure:
Based on three principles
- No one owns land absolutely
- All land is held of the Crown
- No one holds land except of the Crown

Feudal Tenures:
- The king owned all land absolutely
- He granted his subjects (tenants) the right to use the land, not the land itself
- The right was granted an estate
- In return, the Tenant owed the King obligations

Traditional versus new conception of tenure

Traditional view of tenure in Australia: the importation of feudal law – Attorney General
and Brown

Modern View of tenure in Australia: Mabo v State of Queensland (No. 2)

Attorney General v Brown (1847)

Brown finds coal in his land; the Crown argues that it belongs to the Crown as the
land was granted to him. Crown were within their rights as sovereigns to create a
reservation clause.

Mabo v State of Queensland No. 2

- Plaintiffs claimed that an interest in land had survived the annexation of New South
Wales by Great Britain.
- One aspect of this argument was that the Crown had acquired sovereignty but not full
(lets the use the word from the case – beneficial) ownership.
- This is essentially the same argument as in Attorney-General v Brown
Doctrine of Estates:
- Radical title gives the Crown the power to grant interests in land
- Those interests are called estates

What is an estate?
Are different bundles of rights and powers exercisable in respect of land. It is pretty much the
interest we have In land.

Types of estates:
The difference between the types of estate is the time in which they endure, in other words
how long the estate exists.

1. Freehold estates
a. Fee simple
b. Life estate
c. Fee tail
2. Leasehold estates
3. Estates in remainders and reversionary estates strata

Estate in Fee Simple

- In Fejo, an estate in fee simple is, "for almost all practical purposes, the equivalent of
full ownership of the land” [44]
- An inheritable estate
- Now under Conveyancing Act s 47(1)

Life Estate
- Two types: Life estates and life state pur autre view Inter Vivos or by will
- An estate for the life of the person granted (after their death, the estate in fee simple
falls back on the remainder-man)

Life estate
- I would hold the land until I die
- Have all incidents of ownership, includes exclusive possession and alienability (can
sell) except who you sell it to is measured to whos life is on the life estate.
- E.g if I give my land to anna, anna can sell the land to tom, but tom only owns the
land until Anna dies.

Life estate pur autre view:

- I would hold the land until someone else dies
- How long the land is owned is dependent on how long the owner of the life estate
lives

Fee Tail
- Land was reverted to grantor if there was no appropriate heir
- Way of keeping land in aristocratic families
- Estate in fee simple allows land to be inherited by anyone.

Estate in reversion:
 - a reversionary interest generally occurs when a grantor has not expressed a wish in
how the remainder of the estate is to be dealt with. Once interest in the primary estate
has expired, there is a presumption that title reverts back to the grantor.

Estate in remainder:
To A for life, the remainder for B is fee Simple. Grant my land to tom for life and the
remainder to Anna in Fee simple.

Native Title:

Native Title Act 1933 (Cth)

- Mabo recognised native title

- Drafted by the Keating government

What is native title?

Native title recognises the traditional rights and interests to land and waters of aboriginal and
Torres strait islander people.

Mabo no 1.

Dealt with procedural questions and foundational legal issues which ultimately formed the
basis for the decision in Mabo No.2.

Issue for the court to determine was whether or not an estate could extinguish native title.
Thus, could the sovereign extinguish pre-existing rights?

- A clear indication of intention to extinguish is needed.

- Therefore, the result of Mabo (No.1) was that if native title existed, it was founded
inthe concept of equality before the law. It was about recognising the legal system
andthe legal rights that pre-dated the operation of the Anglo-Australian legal system.
- Though it is recognized that native title was a right that existed only for Indigenous
people, the question was how the law treats Indigenous Peoples in exercising those
pre-existing rights.

Thus, native title is regarded as a form of inheritance which is passed down onto future
generations through customary law and indigenous communities.

Mabo no 2.

All Judges, except Dawson J, held: There was a concept of native title at common law;

 The source of the content of native title was the traditional connection to or occupation of
the land;

Ruling: States can rule on Native title

 - The nature and content of the rights underpinning that native title claim are to be
determined by the character of that connection under traditional laws and customs
- Native title could be extinguished by the valid exercise of government powers
provided a clear and plain intent to do so was outrightly stated.

Here, the idea of the doctrine of continuity idea feeds into the court’s construction of how to
establish and deal with native title claims. Hence, it is a way to fit Aboriginal land rights
within Western understandings of land.

Effect of Mabo: Was Terra Nulius abolished? Did the decision really abolish that idea,
by recognising Aboriginal land rights?

Post Mabo 2:

 Following the doctrinal shift in Mabo (No.2) and practical realisation of costly and time
consuming litigation occurring if native title matters are left to be dealt solely by the courts,
the Keating government initiated a statutory process to facilitate native title claims.

- Native Title Tribunal: Provides assistance in building native title claims, moving them
through the process, facilitating agreement making and negotiation etc.
- Native Title Registrar: Maintains a register of native title claims.
- Claims to be determined by the Federal Court
- Must be consistent with mabo in spirit and form

Section 223:

- Section 223 of the Native Title Act postulates a definition of native title, based on
Brennan J’s judgment in Mabo No.2. Pursuant to 223 (1), three areas must be satisfied
to establish the holding of native title. These are: a) the rights and interests are
possessed under the traditional laws acknowledged, and the traditional customs
observed, by the Aboriginal peoples or Torres Strait Islanders; and b) the Aboriginal
peoples or Torres Strait Islanders, by those laws and customs, have a connection with
the land or waters c) the rights and interests are recognised by the common law of
Australia.

Wik 1996

- Concerned effect of pastoral leases on native title

- Assumption pastoral leases were basic common law leases
- Majority disagreed and held that pastoral leases are a particular form of statutory lease
that does not confer exclusive possession
- Extinguish permanently to the extent of the inconsistency

Western Australia v Ward:

- First case contested under the reformed NTA

- Found Native Title was extinguished across all areas where a lease, mining lease or
pastoral lease had been granted.
- The court also considered the issues of mining leases and the public right to fish under
the reformed provisions concerning the rights and powers to water, fish, and of
 mineral and petroleum resources other than ochre and that substantial rights requires
specific proof for each right claimed.
- Federal Court found traditional laws and customs don’t manifest as ‘ownership’ or
‘possession’.
-  Ward confirmed that the start and end point for native title is now the NTA.

Topic 2: Torrens Title 1:

Torrens System:

- A system of titling based on registration

- It was introduced as a new system of land titling, designed to replace what is known
as ‘old system titling’. This old system relied on ‘chains of title’

Chains of title:

- A chain of title is the sequence of transfers of title to a property from the present
owner back to the original owner of the property.
- What was needed was a ‘good root of title’. So what was needed was to show that all
the documents were present, they were validly signed, not forged. Any of these
problems would leave the purchaser vulnerable to someone else proving that they had
a better claim to the estate or interest,

The Torrens System:

- The Torrens System was designed to be a kind of ‘one stop shop’. Instead of having
show a chain of documents, the idea is the purchaser does not need to investigate the
history; you do not need to look behind the register (the ‘curtain principle’): see
Gibbs v Messer [1891] AC 248 at 254
- The Torrens System was designed to be a kind of ‘one stop shop’. Instead of having
show a chain of documents, the idea is the purchaser does not need to investigate the
history; you do not need to look behind the register (the ‘curtain principle’): see
Gibbs v Messer [1891] AC 248 at 254

Torrens in NSW:

- Currently in the Real Property Act 1900

- The relevant government department is Land and Property Information NSW (LPI)

The register (s31b Real Property Act 1900)

S 31B:

(1) The Registrar-General shall cause a Register to be maintained for the purposes of this Act.

(2) The Register shall be comprised of:

(a) folios,

(b) dealings registered therein under this or any other Act,

The register and folios:

S 32 (1):

The Registrar-General creates a folio of the Register for land by making a record of:

(a) a description of the land and of the estate or interest therein for which it is created,

(b) a description of the proprietor for the time being of the estate or interest and the fact that
any such proprietor is a minor if the Registrar-General knows that to be the case, and

(c) such particulars, as the Registrar-General thinks fit… and by allocating a distinctive
reference to the record so made

Once a folio for land has been created for a parcel of land in NSW, the land is registered.

What is a folio?

- This does not mean ‘residential, pretty house and in Glebe’. Nor does it mean 23
Smith Street.
- This refers to the unique identifier give to every folio
- On the slide before the identifiers are:

Folio 28 Vol 7667

Since computerization this formulation has changed to a lot on plan number. The current title
reference of this land is still 28/7667, but this now refers to Lot 28 on Deposited Plan 7667

S 33 Real Property Act:

(1) The Registrar-General may, if the Registrar-General thinks fit so to do, from time to time
issue a certificate of title for the land comprised in any folio of the Register and may, for the
purposes of subsection (4), require the production to the Registrar-General of any certificate
of title.

(2) A certificate of title shall be in an approved form.

(4) When the Registrar-General issues a certificate of title, the Registrar-General shall cancel,
wholly or partially as the case may require, any certificate of title thereby superseded and that
has been produced, or is otherwise available, to the Registrar-General

(5) Notwithstanding subsection (1), the Registrar-General shall issue a certificate of title for
the land comprised in a folio of the Register upon the written request of:

(a) the registered proprietor of that land, or

(b) any registered mortgagee, registered chargee or covenant chargee of that land.

Certificate of title:
 - Recites the details in the folio
- It is a copy of what is recorded in the folio of the register.
- S 33 now allows for electronic certificates

Registration:

S 36(6A) – a dealing has been registered when the Register General has made such recording on the
register

S 3(1)(a) A dealing is an instrument that is registrable or capable of being made registrable. Includes
easements, mortgages, transfers, leases etc

S 41 – A dealing is not effectual until recorded on the register

The person who is the registered owner of the estate or interest is is known as the registered
proprietor

Order of registration: Section 36 Real Property Act:

(4) Where two or more dealings which affect the same land have been lodged and are
awaiting registration, the Registrar-General may register those dealings in the order which
will give effect to the intentions of the parties as expressed in, or apparent to the Registrar-
General from, the dealings.

(5) Subject to section 12A, where the intentions of the parties to dealings referred to in
subsection (4) appear to the Registrar-General to conflict, the order of registration shall be the
order in which the dealings were lodged in registrable form.

(9) Dealings registered with respect to, or affecting the same estate or interest shall,
notwithstanding any notice (whether express, implied or constructive), be entitled in priority
the one over the other according to the order of registration thereof and not according to the
dates of the dealings.

Indefeasibility: (Means conclusive evidence of ownership)

- Term does not appear in the Real Property Act

- Arguably the centrepiece of the Torrens System of land holding
- Operates by virtue of s 42
- An indefeasible title is one that is conclusive
- An indefeasible title is one that cannot be set aside due to a defect existing in that title
prior to its registration
- If one has an indefeasible estate or interest then that estate or interest is held from all
other interests that are not on the register.

How to transfer an estate:

- Two parties enter into a contract for sale. On a nominated day the contracts are
exchanged and the parties are bound by the contract. This means that the contract is
 specifically enforceable by the purchaser. In fact it means that in equity they are
already the owner (this is known as the doctrine of conversation) but the legal estate
does not pass until registration.
- A date is nominated for settlement.
- The certificate of title is required for a transfer: s RPA s 38
- The documents are lodged
- The transfer is registered.
- The purchaser is the new registered proprietor.

Section 42 (1) RPA

“Notwithstanding the existence in any other person of any estate or interest which but for this
Act might be held to be paramount or to have priority, the registered proprietor for the time
being of any estate or interest in land recorded in a folio of the Register shall, except in case
of fraud, hold the same, subject to such other estates and interests and such entries, if any, as
are recorded in that folio, but absolutely free from all other estates and interests that are not
so recorded except …”

Section 45(1) RPA

(1) Except to the extent to which this Act otherwise expressly provides, nothing in this
Act is to be construed so as to deprive any purchaser or mortgagee bona fide for
valuable consideration of any estate or interest in land under the provisions of this Act
in respect of which the person is the registered proprietor.

(2) Despite any other provision of this Act, proceedings for the recovery of damages, or
for the possession or recovery of land, do not lie against a purchaser or mortgagee
bona fide for valuable consideration of land under the provisions of this Act merely
because the vendor or mortgagor of the land

(a) may have been registered as proprietor through fraud or error, or by means of a
void or voidable instrument, or
(b) may have procured the registration of the relevant transfer or mortgage to the
purchaser or mortgagee through fraud or error, or by means of a void or voidable
instrument, or
(c) may have derived his or her right to registration as proprietor from or through a
person who has been registered as proprietor through fraud or error, or by means
of a void or voidable instrument

Immediate Indefeasibility:

Conferred immediately upon registration of the instrument, even in cases of fraud / forgery.

Frazer v Walker – Central authority of indefeasibility

Facts:

- Mr and Mrs Flora Frazer were registered proprietors of a farm in Auckland.

 - Mrs Frazer who purported to be acting for both Mr Frazer (the appellant) and herself,
negotiated a loan from a couple - the Radomski’s (the second respondent) - of
3000pounds.
- In order to secure the loan Mrs Frazer gave the Radomski’s a mortgage over the farm,
forging he husband’s signature.
- She took the form to her solicitors office where she signed her own signature and the
clerk witnessed both Mr Frazer and Mrs Frazer’s signatures, despite not having seen
Mr Frazer sign the document.
- The mortgage to the Radomski’s was registered and appeared as a registered interest
on the relevant folio.
- Mrs Frazer made no payment of either principle or interest under the mortgage.
- Eventually after receiving no payments, the Radomski’s exercised their power of sale
as mortgagees of the property and sold the property to Mr Walker (the first
respondent). He became the new registered proprietor.
- Neither the Radomski’s or Walker had any knowledge of the forgery. Once Walker
was registered as the registered proprietor he brought action against Mr Frazer for
possession of the land.
- Mr Frazer claimed that until that time he had not known what his wife had been up to.
Mr Frazer counter-claimed against Mr Walker, seeking a declaration that because his
signature was forged on the mortgage form the mortgage was null and void.

HELD:

immediate indefeasibility was conferred upon Mr Walker as he was a bona fide purchaser for
value regardless of whether the mortgage was void. Act of registration gains title and title is
conclusive.

→Central authority of indefeasibility

Breskvar v Wall – Title by registration, not registration of title

- Mr and Mrs Breskvar executed transfer to Petrie as security for a loan

- The transfer was not properly executed – The name of the transferee was blank at the
time it was signed
- Petrie fraudulently used transfer and sold to his grandson, Wall – new RP.
- Wall sold to Alban Pty Ltd, but before they could register the Breskvar’s lodged a
caveat,preventing registration
- Breskvar’s sought a declaration that the transfer to Alban was invalid as Petrie and
Wall were fraudulent purchasers because of the invalid transfer deed, meaning their
registration was invalid and they had no title to pass to Alban
- Alban argued he was bona fide purchaser for consideration and has immediate
- indefeasibility.

Barwick CJ

Yes there was fraud on the part of Petrie and Wall, but that doesn’t mean that Wall didn’t
acquire title by virtue of the registration
 The registration system doesn’t register titles–It provides titles according to
registration.

Registration doesn’t validate the title which the proprietor already had – The act of
registration is what gives the registered person the title.

Therefore, even if the situation which leg to the registration was wrong (ie fraud) the
registration of title still vests in the registered person.

- Could have contested against Wall before title was passed to Alban, but after it passed
to Alban, he was a bona fide purchaser for consideration.

→Title by registration, not registration of title

Volunteers

- A person who doesn’t provide valuable consideration

- Volunteers get the same benefit of indefeasibility as purchsers

Ambit of indefeasibility:

1. Registration will not make something out of something it is not. Eg. Just because
something is registered as an easement, if it doesn't meet the criteria of an easement,
and it is not in fact an easement, registration won’t make it an easement
2. Even if an interest is considered to be indefeasible that does not mean that every
provision in the instrument will receive the benefit of indefeasibility

Example: if a lease is registered and receives the benefit of indefeasibility,

does that mean that every covenant in the lease receives that benefit? What
about, say, an option to renew?

When searching the register:

- S 42(1) the registered proprietor is ... “subject to such other estates and interests and
such entries, if any, as are recorded in that folio”
- You do not need to go further that the register when searching for other interests
- However, if the register refers to other documents, then it is expected that your search
will extend so far as the other documents referred to in the register,

Exceptions to indefeasibility:

 Fraud – s42(1) and s 43RPA

 Statutory exceptions in s 42(1)(a)-(d)
 In personam exception

Fraud s 42 (1)

“Notwithstanding the existence in any other person of any estate or interest which but for
this Act might be held to be paramount or to have priority, the registered proprietor for the
time being of any estate or interest in land recorded in a folio of the Register shall, except in
case of fraud, hold the same, subject to such other estates and interests and such entries, if
any, as are recorded in that folio, but absolutely free from all other estates and interests that
are not so recorded except …”

Fraud s 43 RPA

(1) Except in the case of fraud no person contracting or dealing with or taking or proposing
to take a transfer from the registered proprietor of any registered estate or interest shall be
required or in any manner concerned to inquire or ascertain the circumstances in or the
consideration for which such registered owner or any previous registered owner of the estate
or interest in question is or was registered, or to see to the application of the purchase money
or any part thereof, or shall be affected by notice direct or constructive of any trust or
unregistered interest, any rule of law or equity to the contrary notwithstanding; and the
knowledge that any such trust or unregistered interest is in existence shall not of itself be
imputed as fraud.

Who has to be fraudulent?

For there to be an exception to the indefeasibility of the registered proprietor the fraud must
be brought home to that registered proprietor.

So fraud must be on the part of the registered proprietor or her agent. FRAUD CAN BE
DONE BY AN AGENT (Casegrain and Co)

- Shultz v Corwill is also an example of fraud commited by an agent.

Actual Fraud
 - Assets Co: “Actual fraud” – ie. Dishonesty of some kind
- Stuart v Kingston: Consciously dishonest act, moral turpitude

Therefore you need more than equitable fraud, but notice accompanied by other conduct can
amount to fraud.

Loke Yew v Port Sweetenham Rubber Co LtdInducement into sale based on promise can be
fraud

Facts:

- Loke Yew acquired land of Eusope but didn’t complete registration.

- Eusope entered a contract to sell the rest of the land to Port Swettenham who agreed
that they were along buying the land which didn’t below to Loke Yew.
- Despite their understanding that they are not buying the unregistered land belonging
to the P, the D registered all of their land in their name and became RP of P’s land
also.
- Loke Yew argued that this amounted to fraud and there is no indefeasibility of D’s
title.

HELD

- In this case D made a promise that Ps interest would be preserved, if promise wasn’t
made Eusope wouldn’t have agreed to the sale.
- When D went back on his promise he was guilty of fraud
- Privy Council said there was more than actual knowledge, there was an inducement
and a representation
- If Eusope was willing to sign without the promise, then they would have had
indefeasibility, but the promise brought them within the gamete of fra

Bahr v Nicholay
Fraud against whom?

- The fraud by the registered proprietor must have been against the party seeking to
assert an interest
- However, it may also be sufficient for s 42 if the registered proprietor has obtained
registration
- The cases in the second category usually arise in the context of mortgages – eg where
a bank employee falsely certifies that a mortgage was signed in her presence knowing
that the mortgage is to be submitted to the Registrar-General for registration (ie the
Registrar was induced to act by a misrepresentation).

Davis v Williams:
Is knowledge of fraud, fraud?

1. Actual knowledge of fraud

Actual knowledge of fraud can constitute fraud and render the title of the new registered
proprietor defeasible: Assets Co

2. Constructive knowledge of fraud and wilful blindness

What if the purchaser deliberately shuts their eyes for fear of finding out there was fraud?

If the purchasers suspicions were aroused and he abstained from making inquires for fear to
finding out the truth that can be fraud: Assets Co
This is particularly important in the context or mortgages where mortgagees do not properly
check that the mortgage was validly signed and attested. This is now largely covered by s
56C and will be examined in the Topic on mortgages.

Volunteers and fraud

- Volunteers get the benefit of indefeasibility – Bogdanovic v Koteff

- Exception – s 1189(1)(d)(ii)

A person who has derived land through a person who has committed fraud, where no valuable
consideration will not get benefit of indefeasibility – Cassegrain wife only paid $1 for land

Cassegrain

 Claude Cassegrain obtained registration by fraud. He transferred his interest to his wife
Felicity for $1.
 This came within s 118(1)(d)(ii)
 She obtained registration through a person who obtained by fraud (and was bona fide) but was
did not provide valuable consideration
 So the first transfer to her was indefeasible, but Claude’s subsequent transfer of his interest to
her was defeasible and could be set aside
 This is a kind of limited deferred indefeasibility

Fraud Checklist:

Can the fraud be brought home to the registered proprietor?

- If the fraud was by an agent can that fraud be imputed to the registered proprietor?

Was there fraud?

- Was there actual fraud? Dishonesty; moral turpitude

- Was there notice + sufficient conduct to constitute fraud?
- Was there knowledge of fraud?
- Was there wilful blindness?

When was the fraud?

Section 118(1)(d)(ii)?

Statutory exceptions to indefeasibility:

• S 42(1)(a) – prior folio

o Where you end up with two folios of the same land – Administrative error

• S 42(1)(a1) – omitted and misdescribed easements o Easement has been left off the folio

 S 42(1)(b) – omitted or misdescribed profits a prendre

 S 42(1)(c) – wrong description or boundaries

o Surveying mistakes
  S 42(1)(d) – short term leases
 Leases less than 3 years, must be in possession or entitled to immediate possession

In personam exceptions

- An in personam right arises by virtue of an obligation created by the registered proprietor:

- A plaintiff can bring a claim “against a registered proprietor a claim in personam, founded in
law or in equity, for such relief as a court acting in personam may grant” (Frazer v Walker at
585)
- sometimes also called ‘personal equities’ (eg Breskvar v Wall)
- Registration does not extinguish obligations incurred by a registered proprietor
- The obligations can be legal or equitable
- They can arise before or after registration
- The scope of the exception is unclear and of continuing controversy

How does it fit within the RPA?

- they prevent claims arising in personam because of the conduct of the registered proprietor.
- The Act specifies in what circumstances the estate or interest of the registered proprietor
will be subject to other estates and interests
- The very purpose of the system was to ensure that general law doctrines had little part to
play
- But the courts have held that registered proprietors should not be relieved from personal
obligations owed to others
- And the statute itself in other places assumes that rights exist beyond the register. Caveats
are an example.

Known cause of action

- The in personam exception requires a known cause of action.

- There must be a known cause of action which can be enforced against the registered
Proprietor
- Its not enough that something happens which is ‘unfair’
- Mere neglect is not enough

Cause of action

- A cause of action a set of pre-defined elements which allow a person to argue for a remedy
in court
- You have studied some in contract law - misrepresentation, mistake, unconscionable
conduct, undue influence and duress, some forms of estoppel, breach of trust (don’t confuse
causes of action with remedies: eg damages; specific performance etc)

]
Registrars power of correction

- S12(1)(d) – general prower to correct ‘errors and omissions in the Register’

- An error exists if there is a difference between the instrument lodged for registration and
the register
- Largely clerical or departmental errors
- There are suggestions it could be wider – Castle Holdings v Sahab – but its not clear yet what
this might mean
- 12(3)(b) – the correction does not have effect if its affects a right that has arisen on the basis
of an earlier uncorrected entry

Courts Powers of correction

- S138(1) – proceedings for recovery of land

- The court can create/cancel/amend a folio or issue a new CT
Topic 3: Torrens Title III:

Formalities and Common Law Priorities:

Essential v Formal Requirements

Fee Simple: The right to exclusive possession forever

Life Estate: The right to exclusive possession for the duration of ones life

Lease: Exclusive possession for a certain term

Easement: a right to use the land of one party

Profit a prendre: the right to enter servient land and remove the soil or its natural produce

Conveyancing Act 1919 (NSW), s 23B Legal Interest

(1) No assurance of land shall be valid to pass an interest at law unless made by deed

This section does not apply to: … (d) a lease or tenancy or other assurance not required by
law to be made in writing …

This section does not apply to land under the provisions of the Real Property Act 1900.

Formalities for creating a Deed:

Requirements for a deed:

1. S 38 Signature and attestation

2. Every deed, whether or not affecting property shall be signed as well as sealed, and shall be
attested by at least one witness not being a party to the deed; but no particular form of words
shall be requisite for the attestation.

Manton v Parabolic Pty Ltd (1985) NSWLR 361

Facts:

Deed is the most solemn form of document a person can execute – statutory mortgage
documents are equivalent to deed

 Mortgagee (Manton) tried to exercise power of sale

 With other forms of land ownership a mortgagee will have a power of sale to sell the land if
the borrower/the mortgagor defaults. If that power is not expressly included in the mortgage,
it will be implied into the mortgage by s 109 of the Conveyancing Act 1919 (NSW) – but only
if the mortgage was made by deed.
 Parabolic argued that no power of sale had arisen as the mortgage had not been made by a
deed

HELD
  Statute has set up its own prescribed forms and methods and in this case the court held that
these acted as an equivalent of a deed and they were able to enforce their mortgage interests.
 The relevant documents were deeds, the mortgagee therefore had the ability to exercise its
power of sale.

Conveyancing Act 1919 (NSW), s 23C Equitable Interest

(1) Subject to the provisions of this Act with respect to the creation of interests in land by parol:

u (a) no interest in land can be created or disposed of except by writing signed by the
person creating or conveying the same, or by the person’s agent thereunto lawfully
authorised in writing, or by will, or by operation of law,
u (b) a declaration of trust respecting any land or any interest therein must be
manifested and proved by some writing signed by some person who is able to declare
such trust or by the person’s will,
u (c) a disposition of an equitable interest or trust subsisting at the time of the
disposition, must be in writing signed by the person disposing of the same or by the
person’s will, or by the person’s agent thereunto lawfully authorised in writing.
u (2) This section does not affect the creation or operation of resulting, implied, or
constructive trusts.

Conveyancing Act 1919 (NSW), s 23D – Legal Interest Exception

(1): All interests in land created by parol and not put in writing and signed by the person so creating
the same, or by the person’s agent thereunto lawfully authorised in writing, shall have,
notwithstanding any consideration having been given for the same, the force and effect of interests at
will only.

(2): Nothing in this section or in sections 23B or 23C shall affect the creation by parol of a lease at the
best rent which can reasonably be obtained without taking a fine taking effect in possession for a term
not exceeding three years, with or without a right for the lessee to extend the term at the best rent
which can reasonably be obtained without taking a fine for any period which with the term would not
exceed three years. (USE WHEN HAVE COMPETING UNREGISTRED INTERERESTS: LEGAL
INTEREST WILL TRUMP EQUITABLE INTEREST)

Conveyancing Act 1919 (NSW), s 23D – Legal Interest Exception

- Applies to parol / oral leases

- Even if these leases are not in the form of a deed (as required by s 23B) or in writing (as
required by s 23C), they will still create a legal interest if they comply with s 23D (2).

Requirements:

1. Best rent reasonably available (Market Rent)

2. Take effect in possession. Must give the lessee an immediate right to possession
3. Term of the lease plus any option to extend the lease must not exceed 3 years

Part Performance:

u Where parties have failed to comply with the requirements under s 23B (use of a deed), they
may be able to enforce their agreement under the doctrine of part performance.
u This requires proof that one party has done acts in executing the contract.
 u Those acts must be unequivocally related to the execution of that agreement i.e. the acts must
have been done only as a means of executing the agreement.
u Section 23E(d) of the Conveyancing Act provides that Part Performance continues to apply to
ss 23B, 23C and 23 D

Madison v Alderson (1883) 8 APP Cas 467

Facts:

Maddison continued in service as Alderson’s housekeeper for many years without the payment of
wages and giving up a chance to make a home of her own, allegedly in consideration for Alderson’s
oral promise to leave her in his will a life interest in his land. Alderson died without leaving a valid
will.

Held:

Lord O’Hagan, 486: that these were not sufficient acts of part performance. They did not
unequivocally point to the existence of a contract under which she was to receive a life interest. They
were also consistent with the intention to enjoy present comforts and the expectation of future
provision.

Cooney v Burns (1992) 30 CLR 216

Facts: Written and signed contract between agent of Cooney (as vendor) and Burns as (purchaser) for
the sale of Cooney’s lease (with contents) of a hotel in Victoria. However, agent was not authorised in
writing as required by Vic statute. (This is not the same as what is required by the NSW
Conveyancing Act)

u Purported acts of part performance:

u taking inventory of chattels to be included in the sale.
u Cooney handing lease document to Burns’ solicitor for preparation of transfer
u Burns incurring expense in preparing the assignment of lease and applying for transfer of
hotel licence.

Held:

u Insufficient acts of part performance.

u Drawing up an inventory of inclusions?: No
u Not a part of the agreement, nothing to do with right of ownership: Isaacs J, 236
u Act preparatory to performance of contract (Starke J, 244)
u Handing over lease document?: No
u Ordinary production for inspection of title; step before performance (Isaacs J, 236)

Equitable Mortgage by deposit of title deeds:

u An enforceable equitable mortgage can be made by a deposit of title deeds, if they were
deposited with the intent that the land was to be security for the payment of a debt (Theodore
v Mistford)

Theodore v Mistford (2005) 221 CLR 612

Facts:
 u Glen Theodore guaranteed the obligations of his company under a contract to purchase a
business whereby payment of part of the purchase price was deferred. His mother, Mrs
Theodore, authorised him to lodge with the vendor’s solicitors, as security for Glen’s
obligations under the guarantee, the certificate of title for land she owned. However, she did
not wish to personally guarantee his obligations (as she wanted her exposure limited to the
value of her property)
u Mr Theodore failed to meet his obligations, and Mistford attempted to recoup the money. Mrs
Theodore argued that they did not have a valid mortgage (or guarantee) to enforce.

Held:

u The vendor had an equitable mortgage even though Mrs Theodore had not promised to grant
a legal mortgage.
u The Court affirmed that the deposit of the certificate of title under Torrens will create an
equitable mortgage unless it is established that the CT was deposited for other reasons.
u Here, the deposit of the CT was intended to create an immediate security in favour of
Mistford, but that there was no common intention or agreement that Mrs Theodore would
execute a guarantee or be personally liable for her sons repayments.
u Therefore, they were limited to recovering the sum owing out of the proceeds of the sale and
could not pursue Mrs Theodore personally as well.

Contracts to grant / Create interest:

Section 54A

u (1)No action or proceedings may be brought upon any contract for the sale or other
disposition of land or any interest in land, unless the agreement upon which such action or
proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the
party to be charged or by some other person thereunto lawfully authorised by the party to be
charged.
u (2) This section … does not affect the law relating to part performance … .

This section applies … to land

Contracts to grant a lease:

Walsh v Lonsdale (1882) 21 Ch D 9

u The case of Walsh v Lonsdale establishes that where parties have entered into a written
agreement, which fails to comply with the formal requirements (i.e. not in a deed as required
by s 23B); or have engaged in sufficient acts of part performance (s 23E)
u And a court would grant specific performance on the agreement;
u That an equitable lease arises between the parties on the basis of the equitable maxim, ‘treat
that as done which ought to be done’.

A) Prior Legal v Later Legal

Nemo Dat Quod Non Habet (you cannot give what you don’t have)

B) Prior legal v Subsequent equitable:

Rule: Legal will prevail unless evidence of conduct which led to creation of the later equitable interest

Fraud: “where the owner of the legal estate has assisted in or connived at the fraud” (Northern
County v Whipp)

Negligence: where the failure to procure the title deeds makes them guilty of negligence: Walker v
Linom

Northern Counties of England Fire Insurance Co v Whipp (1884) 26 CH D 482

FACTS

 The Appellant executed a legal mortgage to their company, and put the deeds in the safe
which he had keys to.
 Eventually he removed the deeds and gave everything except the mortgage to Mrs Whipp, not
telling her about the security

HELD

 The Courts will postpone a legal mortgage to a subsequent equitable interest when;
 The legal mortgagee has participated in the fraud – refusing to give a title deed may be
sufficient to establish this unless there is explanation
 Where the legal mortgagee has made the mortgagor his agent, and the security has been
misrepresented by that agent

Walker v Linom (1907) 2 CH 104

Facts:

Walker was the holder of a fee simple, which he conveyed to trustees to be held on trust. The trusts
were to Walker for life or until he attempted to alienate that interest, then to his wife for life. The
solicitors who acted for Walker and the Trustees took possession of the title deeds, but Walker
retained the deed which had conveyed the land to Walker. Walker then used the deed to mortgage the
land to Barnes, who subsequently sold to Linom.

Issue: Did Linom have priority over the trustees?

Held: Trustees were postponed to Linom

“In my opinion any conduct on the part of the holder of the legal estate in relation to deeds which
would make it inequitable for him to rely on his legal estate against a prior equitable estate of which
he has no notice ought also to be sufficient to postpone him to a subsequent equitable estate the
creation of which has only been rendered possible by possession of the deeds which but for such
conduct would have passed into the possession of the owner of the legal estate.”

C) Prior Equitable vs Subsequent Legal

Rule: A bona fide purchaser for value without notice, will prevail against an earlier equitable interest.

“bona fide” - without fraud

“purchaser of the legal estate” – holder of a legal interest

 “for value” – consideration in money or money’s worth

“without notice”

Pilcher v Rawlins (1872) 7 CH APP 259

Facts:

Pilcher held legal title to money as trustee for his children. Pilcher advanced this money to Rawlins in
exchange for a mortgage over Rawlins’ land, Blackacre. Pilcher and Rawlins then engaged in a
fraudulent scheme, where they borrowed money from another set of trustees (Stockwell and Lamb)
and issued a ‘second legal’ mortgage. This mortgage was fraudulently prepared by Rawlins, who
prepared an abstract of title that omitted the first mortgage. Rawlins paid the money under the first
mortgage, and Pilcher discharged the mortgage and reconveyed the legal interest back to Rawlins.
Rawlins then executed a ‘correct’ legal mortgage to Stockwell and Lamb. The beneficiaries under
Pilcher’s trust learnt that they had not received any of the money when the first mortgage was paid
out.

Issue: Whether the prior equitable interest of the beneficiaries under the Pilcher trust could prevail
against the legal estate acquired by the trustees under the second mortgage.

Held: Stockwell and Lamb succeeded. They had acted bona fide and in good faith in granting the
mortgage and took without any knowledge that a prior estate existed.

D) Equitable v Equitable:

Qui prior est tempore potior est jure (First in time if the merits are equal).

Breskvar v Wall (1971) 126 CLR 376

FACTS

 The Breskvars owned property as joint tenants.

 They borrowed some money and as security, provided the man who lent the money a blank
transfer form.
 The man who lent the money inserted the name of his grandson, Wall.
 The man who registered the transfer then entered into a contract to sell the land.
 The purchaser inspected the register and saw the grandson was the owner.
 Before completed, the original owner lodged a caveat saying it was his and the document was
fraudulent.
 He said that the indefeasibility was affected by fraud.

ISSUE

 Indefeasibility – whether a caveat had priority over the right to register a transfer of property
where the caveat holder had provided consent to transfer.
 Who had priority?

HELD

 The equitable interest of the new purchaser had priority.

 Menzies J stated that the man who inserted the name had committed fraud and this would
have been an exception to the grandson (the grandson did not obtain indefeasibility) but the
 grandson had sold the property, which changed the situation by creating a new equitable
interest.
 Barwick J said the Torrens system is not a system of registration by title but title by
registration. Consequently, a registration from a void instrument is effective according to the
terms; it does not matter why it is void.
 The registration was effective even though it had been created by a void instrument.
 Windeyer J said a doctrine of indefeasible title was seen as the very essence of the Torrens
system.
 Barwick J referred to Frazer v Walker and its approach to indefeasibility.
 McTiernan and Barwick JJ held that you must look at all the factors. Their Honours noted the
equitable interest was created before the equitable interest of the new purchaser whose title
had not been registered.
 Gibbs J said the original owner lost their priority by their conduct; the owner can only get
damages by fraud – they cannot recover the property.

E) Mere Equitites:

Prior Mere Equity vs Later Equitable Interest or later legal interest:

Later equitable interest has priority over an earlier mere equity if the later equitable interest was taken
bona fide, for value, and without notice of the earlier equity.

Latec Investments v Hotel Terrigal (1965) 113 CLR 265

the right to set aside a fraudulent mortgagee sale was held to be a mere equity

- Hotel Terrigal was the owner of a hotel which was mortgaged to Latec
- Latec defaulted on their mortgage obligations
- Latec exercised its power of sale under the mortgage
- Latec sold the property to Southern Hotels which was a totally owned subsidiary of Latec
(thus the mortgage was fraudulent)
- Latec sought to have the fraudulent mortgage sale to Southern Hotels set aside following a
default of Southern Hotels to MLC in which the floating charge crystallised
- n the priority dispute btw Hotel Terrigal & MLC, HCA unanimously ruled in favour of MLC
- In separate judgements, Kitto & Menzies JJ effectively ruled that Hotel Terrigal's right to set
aside the fraudulent mortgagee sale was not an equitable interest, but only a mere equity that
could not prevail against MLC's equitable interest

Caveats and unregistered Interests:

The term caveat refers to a notice, warning, or word of caution provided to an individual or entity
before they take action. The term, which means "let him beware" in Latin,

Nature of unregistered interests:

• Section 41 states that, ‘No dealing, until registered in the manner provided by the act, shall be
effectual to pass any estate or interest in any land under this act’
 • Unregistered interest vs registered interest: unregistered interests are extinguished by later
registered interests unless protected by caveat or preserved as an exception to indefeasibility,
and cannot be revived against subsequent owners.
• Unregistered interest vs unregistered interest: subject to the common law priority rules – qui
prior est tempore, potior est jure (first in time subject to the merits)
•
• However, some unregistered interests are legal in nature:
• A lease that meets the requirements of s 23D(2) of the Conveyancing
Act (cf Topic 3)
• An easement implied under Wheeldon v Burrows (cf Topic 8)

Barry v Heider (1914) 19 CLR 197

Facts: Mr Barry was the RP of a fee simple in Torrens land. Barry was defrauded by Schmidt who
tricked him into signing a transfer form for a far lower price than intended ($1200). This left Barry
with an unpaid vendor’s lien for the remainder of purchase price.

Before Barry could register a caveat, Schmidt used the transfer form / CT to grant an unregistered
mortgage to Mrs Heider. Barry then lodged a caveat noting he had an unpaid vendors lien, and
Schmidt then granted a further mortgage to a law firm, Gale and Gale.

Issue: Barry argued that as the mortgages were unregistered they did not create an interest in the land
under s 41 of the Act.

Held:

- Barry was subject to Mrs Heider’s interest as she was a bona fide purchaser for value without
notice;
- But took priority over Gale and Gale. They had searched the register before taking their
mortgage and had notice of the caveat – so they should have inquired further as to the nature
of Barry’s interest.

Chan v Cresdon (1989) 168 CLR 242

Facts:

Tenant under an unregistered lease. The lease had not been registered by the landlord, but it had been
intended to be registered. There was a guarantee clause in the agreement where a third party
guaranteed the tenant’s obligations under the lease. The tenant failed to pay rent and the landlord sued
the guarantors for outstanding rent.

Held:

Held (re unregistered interests): per Mason, Brennan, Deane and McHugh JJ (at 257): “Though the
unregistered instrument is itself ineffective to create a legal or equitable estate or interest in the land,
before registration, the section does not avoid contracts or render them inoperative. So an antecedent
agreement will be effective, in accordance with the principles of equity, to bring into existence an
equitable estate or interest in the land. But it is that antecedent agreement, evidenced by the
unregistered instrument, not the instrument itself, which creates the equitable estate or interest. in this
way no violence is done to the statutory command [in s 41].
Caveats:

• Caveat:   is a means by which a Certificate of Title to land can be “tagged” to show that
someone other than the registered owner has a proprietary interest in the land. The person
lodging the notice is the caveator. Practically, a caveat is a statutory injunction.
• Per s 74F(1) a person who claims to be entitled to a “legal or equitable estate or interest in
land” may lodge a caveat prohibiting the recording of any dealing affecting the interest or
estate claimed.

J&H Just (holdings) v Bank of NSW (1971) 125 CLR 546

• The purpose of a caveat was expressed by Barwick CJ at 552 as follows:

• “Its purpose is to act as an injunction to the Registrar-General to prevent registration of
dealings with the land until notice has been given to the caveator. This enables the caveator to
pursue such remedies as he may have against the person lodging the dealing for registration.
The purpose of the caveat is not to give notice to the world or to persons who may consider
dealing with the registered proprietor of the caveator's estate or interest though if noted on the
certificate of title, it may operate to give such notice.

Caveatable Interest:

• It cannot be lodged to protect a mere contractual or personal right, it must be to protect a

proprietary interest.
• The caveatable interest must exist at the time of lodgement.

Examples:

- Interest of a purchaser under a contract for sale;

- Interest of an equitable mortgagee;
- Interest of a lessee under a lease or an agreement for a lease;
- Option to purchase land

Formalities of Caveats:

- to lodge a caveat it must comply with the requirements of s 74F

- per s 74F (5) – (a) be in the approved form, (b) Specify (v) the prescribed particulars of the
legal or equitable estate or interest
- Per s 74L: “the court shall disregard any failure of the caveator to comply strictly with the
requirements of this part… with respect to the form of the caveat”

Effect of a caveat:

- Once lodged, the RG will not be able to lodge any further dealings: S 74H (1)(a)
- However, the caveat will have no effect upon dealings lodged before the caveat, as dealing
are registered in order: s 74h(4)

Removal of Caveats:

• A lapsing notice can be filed by a party who is seeking to register an interest: s 74I, the
caveator has 21 days to bring an application to extend the caveat.
 • A lapsing notice can also be filed by the RP: s 74J, again, the caveator has 21 days to bring an
application to extend the caveat.
• Where a lapsing notice has been served under either of the provisions above, the court may
elect to extend the caveat (s 74K).
• Note also the court’s power under s 74MA to remove caveats.

Abigail v Lapin (1934) Ac 491

• Facts: Mr and Mrs Lapin were the owners of a fee simple. They executed a transfer in favour
of Mrs Heavener as security for a loan (leaving the Lapins with an equity of redemption).
When executing the transfer, the Lapins failed to indicate that the transfer was by way of
security only, and their failure to do so allowed Mrs Heavener to register her interest.
• Mrs Heavener then granted a mortgage over the land to Abigail who searched the register
before acquiring their interest.
• The Lapins did not lodge a caveat.
• Held: Abigail’s later interest had priority.

Heid v Reliance (1983) 154 CLR 326

FACTS

 Heid sold land to an investment company for $165,000

 $50,000 was secured by a mortgage back to Heid
 He did not register this mortgage
 The title and documents were given to the purchaser
 The purchaser executed a mortgage to the finance company who registered the transfer but
not the mortgage

ISSUE

 Who had the better equitable interest?

HELD

 The finance company because Heid had armed the purchaser by not registering the interest

Butler v Fairclough (1917) 23 CLR 78

FACTS

 The owner of a crown lease which was charged with a mortgage obtained a loan, providing
the lease as security
 The loan was not registered however
 The owner of the loan decided to sell the loan, and the purchaser inspected the register but did
not see the loan.
 5 days after that, the person who had lodged the loan, added a caveat to state their equitable
interest in the loan.
 5 days after that the purchaser lodged the transfer document and the person who lodged the
caveat was notified
 The purchaser later withdrew the application for transfer but then did lodge it, and the
registrar did not notify the caveat.
 The person who put on the caveat said it was fraud.
ISSUE

 Does failing to lodge a caveat promptly amount to postponing conduct?

HELD

 Registration was valid; once registered the caveator lost their priority.
 The legislation that governed caveats tried to protect the caveatour and recognise equitable
rights unless precluded by
 The caveator must take action within 14 days or their caveat will lapse, however a caveaor
may not wish to restrict the registration and that therefore the caveator does not need to do
anything.
 Imports personal dishonesty or moral turpitude
 Isaacs J: that it must be the fraud of the registered proprietor, and in this case the owner was
not responsible for the registrar’s failure to notify.
 If all things are equal, the earliest equity wins, but it can lose its priority if the holder does
something bad (e.g. not acting promptly to protect the interest).
 The party who lodged the caveat lost their priority by failing to lodge the priority promptly
and before the purchase price had been paid.
 An equitable interest first in time can lose its time by act or omission which can induce
the later equitable interest to act to his or her detriment (e.g. the delay).

Jacobs v Platt Nominees [1990] VR 146

• Facts: When Jacobs learned that the Company had entered into a contract with Perpetual she
lodged a caveat and commenced proceedings for a declaration of priority and an order for
specific performance.
• She failed at trial on the basis that her failure to caveat earlier postponed her earlier interest to
Perpetual’s later interest, but succeed on appeal.
• Held: Crockett, King and Gobbo JJ: (159-160)
• Is was said in the joint judgment in Heid's Case, at p. 341: "It will always be necessary to
characterize the conduct of the holder of the earlier interest in order to determine whether, in
all the circumstances, that conduct is such that, in fairness and in justice, the earlier interest
should be postponed to the later interest….Failure to lodge a caveat does not in itself involve
the loss of priority, being only one of the circumstances to be considered.

Black v Garnock (2007) 230 CLR 438

• Facts: The Smiths owned “Wanaka”, a 1600-acre farm property near Bombala in Southern
NSW. The Smiths owed money to Mr. Black, Mr. Chapman and Mr. Carter, a firm of
accountants. In September 2004, the accountants obtained a judgment in the District Court of
NSW for $228,000 against the Smiths.
• On 15 July 2005, the Garnocks and the Luffs agreed to buy Wanaka from the Smiths for
$1,000,000. Settlement was to take place at 2pm on 24 August 2005.
• Held 3:2 (per Majority: Gummow, Hayne and Callinan JJ; Gleeson CJ and Crennan J
dissenting)
• The writ took priority to the purchase because it was registered before the attempted
registration of the sale to the purchasers. The High Court majority noted that the purchasers
should have lodged a caveat on the title of the property upon entering into the contract to
protect their interests.
 • Held 3:2 (per Majority: Gummow, Hayne and Callinan JJ; Gleeson CJ and Crennan J
dissenting)
• The writ took priority to the purchase because it was registered before the attempted
registration of the sale to the purchasers. The High Court majority noted that the purchasers
should have lodged a caveat on the title of the property upon entering into the contract to
protect their interests.

Topic 3: Section 43A

Section 43A:

(1) For the purpose only of protection against notice, the estate or interest in land under the
provisions of this Act, taken by a person under a dealing registrable, or which when
appropriately signed by or on behalf of that person would be registrable under this Act shall,
before registration of that dealing, be deemed to be a legal estate.
(2) No person contracting or dealing in respect of an estate or interest in land under the
provisions of this Act shall be affected by notice of any instrument, fact, or thing merely by
omission to search in a register not kept under this Act. (i.e. charges recorded on on the
Corporations Act register)

Applies only between settlement and registration, before settlement the party will not be protected
from notice. After registration the party will have the benefit of indefesibility under s43 and s43A
and is no longer relevant.

Section 43A requirements:

- Must be bona fide: Diemasters v Meadowcorp (2001) 52 NSWLR 572

- Must have given value: Westpac Banking Corporation v Ollis (2008) NSWSC 824
- Must be lodged promptly:
- The dealing must be lodged promptly or within a ‘reasonable time after settlement’.
(Courtenay v Austin).
- The protection is “not everlasting” and does not assist those “who make no effort to
get the protection of registration” (Diemasters)
- See also comments in Finlay v R & I Bank of WA

Must not have had notice: Drulroad v Gibson (1992) NSW ConvR 55 -637

- Includes constructive notice – so if the purchaser/mortgagee would have discovered the

interest had they undertaken the proper pre-completion searches then they will not have the
protection of s 43A.
- Notice acquired before or at settlement will deprive a party of the benefit of s 43A.
- Notice received after settlement, but before registration, will not prevent a party from relying
on s 43A.
- Notice acquired after registration is irrelevant because of immediate indefeasibility under s
42.

Section 43A Successive Effect

As s 43A(1) imports the bona fide purchaser for value without notice doctrine into the Real Property
Act 1900, the rule in Wilkes v Spooner also applies.
Applying the rule in Wilkes v Spooner to s 43A(1), a party claiming through a purchaser/mortgagee
who has the protection of s 43A(1) will also be entitled to the protection of s 43A(1) even where that
subsequent party has notice.

E.g. RP transfers to P. Before P registers, they grant a mortgage to M. If P has no notice of prior
interests, then they will have the protection of s 43A(1) and M will get the benefit of the successive
effect of s 43A(1) as they obtain their title through P. Note risks: Mayer v Coe (1968) 88 WN (NSW)
(Pt 1) 549

Section 43A Requirements:

Two key requirements

1. Must have possession of the certificate of title or means of compelling its

production (Finlay v R & I Bank of Western Australia (1993) NSW ConcR 55 -686
2. Dealing must be immediately registrable (Icac v Courtenay)
Weller v Williams (2010) NSWSC 716
3. Other consifderations: Stamp Duty, has a caveat been lodged

Taleb v National Australia Bank (2011) 82 NSWLR 489

Facts: On 28 January 2010, Taleb (the Plaintiff) entered into a deed of acknowledgment with Hock A
Car Investments Pty Ltd regarding loans made to Hock by the Plaintiff. Clause 1.3 of the deed of
acknowledgement provided that, “The debtor will grant to the Creditor the right to register a Caveat
over the Debtor’s interest in property.” Although the plaintiff expected the solicitors who prepared the
deed to lodge a caveat on his behalf, the solicitors denied that they were acting for the plaintiff and
they did not lodge the caveat.

On 6 October 2010, the plaintiff was warned that arrangements were being made that would compete
with his interests. Eventually, a caveat was lodged on behalf of the plaintiff on 26 November 2010
claiming an “equitable interest” arising by virtue of the deed of acknowledgement.

Facts: On 18 October 2010 NAB (the first defendant) entered into a bill facility with Hock A Car
Investments Pty Ltd secured by a first mortgage over the same property. The first defendant also took
possession of the certificate of title.

The first defendant had conducted searches of the register on 27 July 2010, 30 September 2010 and 15
October 2010 and found no reference to the plaintiff’s interest. The first defendant’s mortgage was
not stamped until around 30 November 2010 and was not lodged for registration until 7 December
2010. The Registrar-General raised a requisition requiring removal of the plaintiff’s caveat before
registration of the mortgage.

Issue: Was NAB entitled to protection against notice under s 43A(1)?

Held: Bryson AJ: NAB was not entitled to the protection of s 43A.

[41] “In my opinion the mortgage was not registrable until it was stamped. This is the conclusion
which Windeyer J was reluctant to reach in Diemasters Pty Ltd v Meadowcorp Pty Ltd (2001) 52
NSWLR 572 at [22]. In the present case I must come to a conclusion and s 301 of the Duties Act 1997
dictates the conclusion that the mortgage was not registrable.

Barlin Investments Pty Ltd v Westpac Banking Corporation (2012) NSWSC 699
Facts: On 10 December, before Chiha’s dealings had been given distinctive references, Barlin’s
solicitor discovered that only lots 33 and 75 remained, and lodged a caveat through the traditional
registration process. Thus, Barlin’s caveat was registered before Chiha’s dealings.

On 11 December 2009, the Chiha dealings were examined and were given distinct references at that
time. However, because of the caveat, the dealings were not registered and LPI sent Westpac a
requisition in respect of those dealings referring to the caveat.

Issue:

- Barlin sought a declaration that its interest takes priority over Westpac.
- Westpac argued that it had the better equity, and was entitled to priority, which would give it
a dealing registrable.
- Mr Chiha claimed protection under s 43A(1), and Westpac and the Mitchells relied upon the
successive effect of s 43A(1).

HELD:

Ball J: Westpac’s equitable interest had priority over Barlin.

Module 4: Mortgages:

What is a mortgage?

A conveyance of land or an assignment of chattels as a security for the payment of a debt or the
discharge of some other obligations for which it is given.

Equity of redemption:

- An old system mortgage involved a conveyance of the fee simple, at law the mortgagor had
no interest in the land.
- In response, the courts of equity intervened and recognised the equity of redemption. The
equity of redemption was the recognition that:
- Mortgagor ought to retain interest in land
- That interest in the land had commercial value and could be traded.

Equitable right to redeem:

 - Equity also recognised the right to redemption – a right to redeem upon payment what was
loaned. E.g once you have paid the mortgage you own the property.
- The right to redeem will be lost if:
- Mortgagee exercises their power of sale (Owner sells house)
- Foreclosure occurs

Equitable redemption arises as soon as the mortgae is created, equitable right to redeem does not arise
until the mortgage has been paid off.

Nature of Mortgages:

Old System mortgage:

- Conveyance of the legal fee simple to the mortgagee, with the mortgagor acquiring an equity
of redemption.
- As this involves title passing to the mortgagee, there can only be one legal mortgage of OS
land. All subsequent mortgages are equitable in nature.

Legal mortgage: Provided mortgage has registered mortgage it will take effect as a legal mortgage (s
23B)

Equitable mortgage: In writing (s 23C), Deposit of title deeds (Theodore v Mistford), Agreement to
grant a mortgage.

Torrens System mortgage and equitable right of redemption:

- No equity of redeption for TT mortgages as no conveyancer of fee simple occurs.

- The mortgagor always remains the owner of the fee simple so not really necessary for the
equity of redemption to operate.
- It is generally assumed that mortgagor has an equity of redeption in the sense that the court of
equity will protect TT mortgagor against unconscionable acts of mortgages, however this is
theoretically dubious.

Real Property Act 1900 (NSW) Section 56

If you want to register a mortgage it has to be in an approved form.

(1) Whenever any land or estate or interest in land under the provisions of this Act is intended to
be charged with, or made security for, the payment of a debt, the proprietor shall execute a
mortgage in the approved form.
(2) Whenever any such land, estate, or interest is intended to be charged with or made security
for the payment of an annuity, rent-charge, or sum of money other than a debt, the proprietor
shall execute a charge in the approved form.

Real Property Act 1900 (NSW) Section 57

(1) A mortgage, charge or covenant charge under this Act has effect as a security but does not
operate as a transfer of the land mortgaged or charged.

Indefeasibility and mortgages:

Australian Guarantee Corporation LTD v DE Jager (1984) VR 483

Facts: A husband and wife were jointly registered as the registered proprietors of a property. The
husband arranged a mortgage over the property with AGC but his wife refused to sign the mortgage.
Someone then forged her signature on the mortgage docs. An intermediary of the husband took the
mortgage docs to AGC. When he got there, AGC's employee noted that the signatures on the
document were not attested. The intermediary said that he had witnessed the husband’s signature but
not the wife’s – but he attested both in front of AGC’s employee anyway. The mortgage was
registered, the husband defaulted in repayment of the loan and the mortgagee proceeded to exercise
the power of sale. 

Arguments: Mrs De Jager argued that AGC’s interest against her was defeasible for Fraud.

Held: Tadgell J: Mrs De Jager succeeded.

• The Bank had represented to the RG that the wife’s consent to the mortgage had been
witnessed when they knew it hadn’t. Without that attestation of witness, the RG would not
have registered the mortgage.

Section 56c of the Real Property Act 1900

(1) Mortgagee must confirm identity of mortgagor before presenting a mortgage for lodgment under
this Act, the mortgagee must take reasonable steps to ensure that the person who executed the
mortgage, or on whose behalf the mortgage was executed, as mortgagor is the same person who is, or
is to become, the registered proprietor of the land that is security for the payment of the debt to which
the mortgage relates.

(2) Without limiting the generality of subsection (1), the mortgagee is to be considered as having
taken reasonable steps to ensure the identity of the mortgagor under subsection (1) if the mortgagee
has taken the steps prescribed by the conveyancing rules.

(6) Cancellation of recordings in the Register The Registrar-General may cancel, in such manner as
the Registrar-General considers appropriate, any recording in the Register with respect to a mortgage
if the Registrar-General is of the opinion--

(a) that the execution of the mortgage involved fraud against the registered proprietor of the
mortgaged land, and

(b) that the mortgagee--

(i) has failed to comply with subsection (1), or

(ii) had actual or constructive notice that the mortgagor was not the same person as the person
who was, or was about to become, the registered proprietor of the land that is security for the
payment of the debt to which the mortgage relates.

56C

- If there is a failure to comply, or the Registrar General is satisfied that the execution of
mortgage involved fraud, then they may cancel the registration of the mortgage.
- Note: amendments to assurance fund provisions (no compensation payable to mortgagee who
fails to comply s 129(2)(j)
The Conveyancing Rules (cf Real Property Regulations 2014 (NSW):

- Mortgagee must have full name, date of birth, address

- Mortgagee must verify the information through identification documents.

The indefeasibility Umbrella:

• Note: The concept of indefeasibility applies to all registered interests; so a registered

mortgage/easement/lease will be indefeasible as well as a Registered Proprietor’s title. 
• Indefeasibility will extend not only to the relevant interest in the land, but also the provisions
of the dealing related to that interest e.g. registration of a mortgage protects not only the
mortgagee’s interest in the land, but also the mortgagee’s right to sell.

Registration of a forged Mortgage:

• Although registration will cure a void dealing of forgery, does the registration also cure the
non-proprietary i.e. contractual obligations expressed in the documentation that creates the
proprietary interest.
• Relevant in the case of mortgages: does registration of a forged Torrens title mortgage also
extend to the personal covenant of the mortgagor to repay the debt? 
• If not, the mortgagee is able to exercise their power of sale to recoup
a part of their loss, but cannot sue on the personal covenant to repay
to obtain the balance.

All Monies Mortgages:

All monies/all advances mortgages: is expressed to secure the repayment of amounts advanced from
time to time under one or more loan agreements. It is the loan agreement which contains the covenant
to repay and the terms of repayment. The loan agreements themselves are not registered. 

This is based on s57(2)(a) which says that a mortgagee’s power to sell depends on the existence of a
‘default’ in the observance of a covenant ‘in the mortgage’. Thus, unless the loan agreement has been
incorporated into the registered mortgage, the obligation to repay is found only in a collateral
document.

Provident Capital Ltd v Printy [2008] NSWCA 131

Facts: Two forged mortgages.

- The All Monies mortgage provided:

- 2.1 “The Mortgagor must pay the secured money to the Mortgagee as provided in any related
agreement
- Related agreement was defined in cl 1.1 to mean, “any agreement under which ‘the
Mortgagee lends money or incurs any obligation or liability

Held: Per Basten JA with Tobias and McColl JJA agreeing) The mortgage did not secure the amount
owed as the mortgage did not specify the amount owing, and the agreement was not incorporated into
the mortgage itself. 
Basten JA at [42]: “There remains a question, where the covenant in the mortgage reflects a covenant
in a separate agreement, as to whether indefeasibility extends to the latter covenant or is limited to the
former, so that, if the separate agreement is void, there is no debt secured.”

Van den heuvel v perpetual trustees victoria ltd [2010] NSWCA 171

Facts: A wife’s signature was forged by her husband on a mortgage. The lender sought possession of
the home, and the wife sought relief.

• The registered mortgage was expressed to be security for payment to Perpetual of “the
Secured Money”.
• “Secured Money” was defined to mean all monies payable or contingently owing to Perpetual
under a “secured agreement”.
• “Secured Agreement” was defined to mean: Any present or future agreement between me or
us, or any one of us, and You, or An agreement which varies such an agreement.

Arguments: Mrs Van den Heuvel argued that because the loan agreement was prepared for both
husband and wife to sign and only the husband signed, it never came into effect. To succeed with
her argument, Mrs Van den Heuvel needed to show that the parties (i.e. Perpetual and Mr Van den
Heuvel) did not intend to take on an obligation unless Mrs Van den Heuvel was also bound.

• First Instance: The lender was entitled to possession, and the wife was entitled to
compensation from the Assurance Fund – her loss being calculated as the  value of her half-
share in the property and the net sum she would receive after repayment of the mortgage.
• Appeal: The wife appealed on the ground that she should have been compensated for the
whole amount of the mortgage.

Held: Per Hodgson JA and Young JA (Basten JA dissenting) The wife was bound by the
mortgage. Both Perpetual and Mr Van den Heuvel intended that they be bound to the loan
agreement, even if Mrs Van den Heuvel did not sign.

Rights and Remedies of the Mortgage:

Remedies of the Mortgagee:

- Foreclosure (not covered in this course)

- Power of Sale (our focus)

Power of Sale:

- Allows the mortgagee to sell the property if the mortgagor defaults

- S 109(1)(a) of the Conveyancing Act 1919 (NSW) implies this power into all mortgages, but s
111(1) provides that in the case of a registered Torrens mortgage, the power of sale must be
exercised in accordance with ss 57, 58 and 58A of the Real Property Act 1900 (NSW).

• Per Real Property Act, to exercise the power of sale, there must be:

- 1) A default (per s 57(2)(b))

- 2) A notice has been issued to the Mortgagee specifying the default and requiring it to
be remedied within a month (57(3)); and
- 3) A failure by the Mortgagor to remedy the default.
In considering the standard of care required to exercise the power of sale, two lines of authority
developed:

- Good Faith: The mortgagee need only act bona fide in conduct of sale: Pendlebury v The
Colonial Mutual Life Assurance Society (1912) HCA
- Reasonable Care: The mortgagee must take reasonable care to obtain the market price for the
property: Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch.

Conveyancing Act 1919 (NSW) Section 111A (Reasonable care)

u S 111A Duties of Mortgagee

(1) A mortgagee or chargee, in exercising a power of sale in respect of mortgaged or charged land,

must take reasonable care to ensure that the land is sold for:

A) if the land has an ascertainable market value when it is sold-

not less than its market value, or
B) in any other case-the best price that may reasonably be
obtained in the circumstances

(4) ….a person who suffers loss or damage as a result of the breach of the duty has a remedy
in damages against the mortgagee.

(6)  Nothing in this section affects the operation of any rule of law relating to the duty of the
mortgagee or chargee to account to the mortgagor or chargor.

Pendlebury v The Colonial Mutual Life Assurance Ltd (1912) 13 CLR 676

Facts: William Pendlebury’s land was subject to a mortgage to the Colonial Mutual Life Assurance
Society. Colonial exercised the power of sale with the following factors:

The land was worth £2000, but was sold for £720.

The auction was advertised in Melbourne newspapers, but the property was located in rural Victoria,
and no local advertising was carried out. Total spent on advertising: £2.

The advertisement didn’t identify its location, just that it was 7 miles from Curyo Railway Station.

Held: Griffith CJ (at 680): held that the “mortgagee must not act reckless or wilfully sacrifice the
interests of the mortgagor, and that if he does he is to be regarded as not having acted in good faith”.

Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949

Facts: Cuckmere Brick (the mortgagor) wanted to develop a site to build 100 flats and had obtained
planning approval to do so. They obtained finance from Mutual Finance. Struggling financially,
Cuckmere changed its plans and decided to build 35 houses instead. The development did not
commence, and the mortgagor defaulted. The mortgagee exercised its power of sale.

It was sold at auction for £44,000 but was alleged to be valued at a substantially higher price. 

The advertising for the sale noted that it had planning approval to build the houses, but omitted the
approval to construct flats.
Held: Salmon, and Cairns LJJ; Cross LJ dissenting)

- The mortgagees had breached their duty.

- A mortgagee in exercising his power to sell the mortgaged property owed the mortgagor the
duties of acting in good faith and of taking reasonable precautions to obtain the true market
value at the date on which he decided to sell the property; that the mortgagees, on the facts
here, failed to take reasonable precautions to obtain the true market value for the land.

Conduct of the power of sale:

• Advertising: (Pendlebury)
• Valuation:  (Pendlebury)
• Timing of sale:  Pendlebury)
• Improvements:  (Southwell v Roberts)
• Duty to inform the Mortgagor of the terms of the sale:  (ANZ v Bangadilly)

Southwell v Roberts (1940) 63 CLR 581

Facts: William Roberts owned a property in Ashfield subject to a mortgage to Ruby Southwell for
£800. Southwell as mortgagee went into possession of the land. The land comprised two parts, A had
two semi-detached houses which were dilapidated, and B was vacant land. Southwell estimated it
would cost £200 to repair and decided to demolish them and build new houses on the land. In their
place, two flats were constructed each with four bedrooms at a cost of £1,640 without the mortgagor’s
consent.

Held: Starke, Dixon and McTiernan JJ, dismissing the appeal

Starke J (at 588): “In my opinion the amount expended was neither reasonable in amount nor
reasonable having regard to the nature of the property. The mortgagee expended double the amount of
the principal debt and changed the character of the buildings upon the land, and indeed on the vacant
portion of the land she erected a building where none had been before. The case is an example of a
mortgagee in possession effecting improvements without regard to the mortgagor's interest and
calculated to improve him out of his property. In these circumstances the expenditure cannot be
allowed, unfortunate though it be for the mortgagee. But she could have protected herself by obtaining
the consent or acquiescence of the mortgagor or possibly by foreclosing.”

Putting this all together:

u 1. Does the mortgagee have a right to possession?

u 2. Has there been a genuine sale?
u 3. s111A compliance

Right to possession:

u A mortgagee cannot exercise their power of sale unless the following has occurred:
u There is a default under the mortgage – either in the payment of the principal or interest or
non observance of any terms of the mortgage;
u There has been service of a valid s57 (2) (b) notice requiring the default to be remedied within
one month;
u There has been non compliance with that notice.

Only when the above has occurred can the mortgagee sell the properties.
Has there been a genuine sale?

u There must be a sale, which means that it must be genuine – Farrah v Farrah’s Limited;
u Sale to a related entity must be a truly independent bargain. A mortgagee cannot sell to him or
herself – ANZ V Bangadilly Pastoral Co
u This step requires us to scrutinize the purchaser. It must be an arm’s length transaction.
u If the sale is not a genuine sale it can be set aside. There is no need to then consider step 3.

ANZ Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 195

→Cannot sell to one self, must be an independent bargain

FACTS

 -  Talga sold a property (Bangadilly) to Hall Investments

 -  Hall was controlled by Mr and MRs Hall
 -  Bangadilly was subject to two mortgages
o First–Glenthorne
o Second–ANZ
o
 -  Talga had financial trouble and was unable to complete the sale to Hall investments
 -  Hall’s arranged for another of their companies (Halco) to take an assignment of the first

mortgage, and then exercised its power of sale to sell to a third company owed by them

(Bangadilly pastoral co)

 -  Bangadilly Pastoral Co paid significantly less than market value

 -  It was sold at a loss of $15,000 to the first mortgagee (Halco – Their company also)
 -  ANZ was not informed the auction was taking place

HELD

 -  Power of sale had been improperly exercised

 -  There was no independent bargain (Halls fixed the reserve and the sale price)

Per Aikin J (at 227): It is difficult to find what is truly a close analogy to a case where the same two
people are directing the activities of two companies, one the vendor and the other the purchaser, so
the vendor knows what is in the mind of the purchaser and vice versa. If it were a private sale it
could not be said to be an independent bargain and in my opinion it could not then stand.

S11 A Compliance:

u If there has been a genuine sale, then the mortgagee has a number of obligations. Section
111A of the Conveyancing Act sets out the required standard which requires reasonable steps
be taken to obtain a proper price.
u A mortgagee must take reasonable care to ensure that the land is sold for
u Not sold for less that its market value; or
u If it does not have ascertainable market value, for the best price that can reasonably be
obtained.

Conduct of the Power of sale:

 • Onus: The onus is on the mortgagor to establish that there has been a breach of duty.
• If there is a breach: the mortgagor is entitled to damages under s 111(4). The measure of loss
that the mortgagor would be able to obtain, will be the difference between the price actually
obtained and the price that would have been obtained if the breach had not occurred

Priorities and tacking:

Priorities:

- Priorities between competing mortgagees are resolved on the same lines as priorities between
competing interests generally
- n the context of Torrens, priority will determined in accordance with the order of registration.
However, parties under s 56 can agree to alter the order of priorities.

Tacking:

- Some mortgages will contain a provision which allows the mortgagee to advance further
funds and to ‘tack’ those funds onto an existing mortgage.
- The purpose of these provisions is for the lender to maintain their priority for the full sum,
rather than having different ranking security interests.
- Whether the lender/mortgagee is entitled to tack a further advance onto an existing mortgage
will depend upon whether there are any additional mortgages over the property, and whether
the first ranking mortgagee has notice of those mortgages at the time that the further advance
is made.

Central Mortgage Registry of Australia Ltd v Donemore Pty Ltd [1984] 2 NSWLR 128

Facts: Warden was the registered proprietor, who granted two mortgages.

A first mortgage to Central Mortgage for $56,000 on 5 February 1980, which also covered further
advances;

A second mortgage to Donemore for $22,000 on 3 April 1981- protected by a caveat, but unregistered
– Donemore was aware of the mortgage to Central Mortgage but did not obtain their consent or notify
them that they would be taking a mortgage over the property.

Central Mortgage made a further advance of $128,000 on 23 December 1981

Issues:

- Was Central Mortgage prohibited from tacking their further advance?

- Did the caveat put them on constructive notice?
- Is constructive notice sufficient to prevent them from tacking their further advance?

Held: Kearney J: They were permitted to tack their further advance.

Actual not constructive notice (133): “In the absence of notice (i.e. notice which gives him real and
actual knowledge, and so affects his conscience), the mortgagee is entitled to assume and act on the
assumption that the state of the title has not changed… I conclude that in this instance, there being no
notice in fact communicated to the plaintiff, the principle of Hopkinson v Rolt does not operate to
preclude the plaintiff from he priority claimed by it in respect of the balance of moneys remaining
after discharge of the first mortgage and expenses of sale.”

Module 5: Co-ownership:

Types of co-ownership

- Joint tenancy
- Tenancy in common

Characteristics of joint tenancy

1. Four unities
2. Potential or aliquot shares
3. Right of survivorship
4. Presumption of survivorship (s 35 Conveyancing Act)
5. Alienability and exclusive possession

The Four Unities:

For a joint tenancy to exist the four unities must be present. These are:

- Possession
- Interest
- Title
- Time

The right of survivorship:

 When a joint tenant dies the interest of the other joint tenant is enlarged to the extent of the
deceased’s joint tenant’s interest.
 S 35 Conveyancing Act 1900 (NSW)

Characteristics of a tenancy in common:

- Unity of possession
- Undivided shares
 - No right of survivorship
- Alienability and exclusive possesion

Mixing forms of co-ownership:

It is possible for an estate or interest to be held in a combination of joint tenancy and tenancy in
common

For example: Rob has a 1/3 share as tenant in common with Elsie and Jim, who hold their 2/3 share as
joint tenants.

Co-0ownership at law and in equity:

We can hold interests separately at law and in equity

Joint tenancies and tenancies in common can exist at law and in equity

Alice and Bert can be joint tenants at law, but hold as tenants in common in equity.

Creation of co-ownership:

At common law – presumption of joint tenancy

But now S 26(1):

“In the construction of any instrument … a disposition of the beneficial interest in any property
whether with or without the legal estate to or for two or more persons together beneficially shall be
deemed to be made to or for then as tenants in common, and not as joint tenants”.

S 26(2): default rule in s 26(1) does not apply where the instrument expressly provides they are to
take as joint tenants (as long as they are joint tenants – ie four unities are present)

S 26(1) applies to law and equity (Delehunt v Carmody)

S100 RPA

(1) Two or more persons who may be registered as joint proprietors of an estate or interest in land
under the provisions of this Act, shall be deemed to be entitled to the same as joint tenants.

Hircock Homes – this means that if you are registered as a joint proprietor you have all the rights of a
joint tenant. Read down to effectively be about language – ‘proprietors’ and ‘tenants’

Presumptions in Equity:

“equity follows the law” unless…

1) unequal contribution to purchase price

2) Advance money on a mortgage

3) Partnership assets
Creation: The quick guide:

1. Work out the legal interest – joint tenancy or tenancy in common - Presumption of tenancy in
common (s 26(1) unless expressly joint tenants (s 26(2)).
2. Work out the equitable interest. “Equity follows the law”. So whatever the tenancy is at law it
will also be in equity UNLESS:
3. One of the three exceptions applies on the facts: unequal contribution; advance on a
mortgage; partnership assets.

Severance:

Ends joint tenancy by converting it to a tenancy in common

It does so by destroying one or more of the 4 unities (except possession)

Ends the right of survivorship (because there is no longer a joint tenancy)

Unilateral Act: Alienation (transfer)

Alienation severs the joint tenancy

In order to be effective at law the transfer must be registered

If the transfer is not registered the alienation may still be effective in equity

Key cases: Wright v Gibbons; Corin v Patton

Unilateral act: Mortgage:

Whether this severs depends on whether it is a Torrens mortgage or an old system title mortgage

A Torrens mortgage is a statutory charge. Therefore there is no transfer and the mortgage does not
sever the joint tenancy

(An ost mortgage involves an outright conveyance of the estate with a provision to convey back once
the mortgage has been repaid. This severs the joint tenancy.)

Unilateral Act: Lease:

Rather than sever, the granting of a lease ‘suspends’ the joint tenancy.

This defers the right of survivorship until the end of the lease

The right to enforce in the meantime descends to the deceased joint tenant’s heirs

Key case: Frieze v Ungar

Unilateral Act: s 97 RPA:

Rather than sever, the granting of a lease ‘suspends’ the joint tenancy.

This defers the right of survivorship until the end of the lease
The right to enforce in the meantime descends to the deceased joint tenant’s heirs

Key case: Frieze v Ungar

Other ways of severing:

• Agreement. Everyone has to agree. Only effects severance in equity unless registered. Query:
is writing needed?
• Court order: eg order of the Family Law Court
• Bankruptcy – vests property in a trustee in bankruptcy (therefore akin to alienation). This is
‘involuntary alienation’. See s58(1)(a) Bankruptcy Act 1966 (Cth)
• Course of conduct – conduct sufficient to indicate that all consider that they now have a
tenancy in common. All must participate. Does not need writing.

Severance by homicide:

Homicide. One cannot profit from one’s crime. Perpetrator holds on trust for the victim’s next of kin.

So if A kills B. A retains the legal estate by right of survivorship but in equity the estate is held by A
and B’s heirs.

This is known as the ‘forfeiture rule’

In cases of unlawful killing (but not murder) ss 4, 5 Forfeiture Act give the court the power vary the
interests in equity in order to do justice

Ending co-ownership:

Action of the parties:

• One acquires shares of other

• Operation of right of survivorship
• All transfer their interests to the same person

Order for sale:

• sale versus partition: s 66G CA

• one co-owner can apply to the SC to appoint trustees to hold the property on statutory trust for
sale or for partition
• Where the co-owner(s) seeking sale have interest(s) of less than 50% then the court will only
do so if it thinks it just in all the circumstances: Pannizotti v Trask
• The court can order an account of improvements and occupation fees
• Key case: Segal v Barel No 1

Module 6: Leases:

Leases v Licenses:

Bare license:

Privilege granted from one to another to do something that would otherwise be illegal. E.g getting
permission to go to different houses and hand out flyers.
Contractual License:

Needs consideration, revocable on terms of contract or reasonable notice. E.g hiring a hotel room.

License coupled with propriety interest:

E.g Profit a prendure – give right to take something from land (i.e fish from a river)

Fixed term lease:

For a specific time frame e.g 6 months, 1 year, etc

Can have an option to renew.

Periodic tenancy lease:

Rolls over from period to period

e.g could have 2 week lease which rolls over every 2 weeks. If you pay rent every 2 weeks you have a
2 week periodic lease.

Tenancy at will:

Arises whenever a person occupies land as a tenant. E.g where you have entered into possession but
have not commenced the lease.

Tenancy at sufferance:

Where you hold onto the lease after it has entered without consent of landlord, can be asked to leave
at anytime.

How do we know if we have a lease?

1. Right of exclusive possession of the premises (Radiach v Smtih)

2. The term must be for a definite period
3. Lease must be created in appropriate form

Rights and obligations between landlord and tenant:

1. Identification od the lessor and lessee

2. Identification of the premise to be leased
3. The commencement and duration of the term
4. Rent to be paid
5. Who is responsible for repair

A commercial lease might include:

- Incentives or rent free perioeds

- Access
- Aicon
- Security, etc.

Landlords Covenants (righs and obligations of the landlord)

 1. Quiet enjoyment

Lessee has the right to exclusive possession as per the lease – landlord not allowed to intrude or
ruin enjoyment of property.

2. Non Derogation from Grant (Norman, Aussie Traveller)

Landlord must not do anything which renders the premises less fit that when it was let.

Modern Electronic had a brothel upstairs, the sex noises and whipping was not in the contract and
they sued for non derrrogation from the grant.

S 84 / 85 of the Conveyancing Act: (lesse covenants)

- Lessee covenants to repair

- Pay rent on time
- Landlord must be allowed to inspect and repair
- Landlord has right to enter for no payment

Landlord can not give consent to rent:

- S133D(1) and 132CA

- If you wanted to open up a fish and chip shop, the landlord could deny it because the oil could
cause permanent damage and deter further renters.

S51 RPA: Leasehold estate

- If the landlord sues the original tenant there is a right of indemnity against the assignee who
breached.

Termination:

• Lease term comes to an end

• One party gives notice in accordance with the lease or statutory provisions
• re-entry and forfeiture for lessee’s breach of covenant; and/or
• common law right to terminate for lessee’s repudiation or fundamental breach
(ordinary contractual right)

Module 7: Easements:

What is an easement:

• a right annexed to land to use the land of another in a particular manner (or, less commonly,
to prevent another using her or his land in a particular manner)
• Incorporeal hereditament – rights over land rather than rights to land. Intangible. Inheritable
• Non-exclusive right

Positive v Negative easements:

• positive easements give rights of entry upon another person’s land to enable something to be
done on that land
• a negative easement is a right which prevents a landowner from using his or her land in a
particular way
Characteristics of an easement:

• dominant and servient tenement

• easement must accommodate the dominant tenement
• the dominant and servient tenement must not be held and occupied by the same person
• the right must be capable of forming the subject matter of a grant

Key cases: Re Ellenborough Park; Clos Farming

1. Dominant and servient tenement

• There must be at least two lots of land – a DT and a ST.

• There can also be one DT and multiple STs or multiple DTs and one ST
• This means you that at common law you cannot have an easement in gross
• Some easements in gross are possible for the Crown, local councils or public utility providers:
88A(1A) CA

2. Easement must accommodate the DT

• It must make the dominant land a better and more convenient property
• does the right claimed as an easement have a connection with the land in the sense of being
reasonably necessary for its better enjoyment as a parcel of land

3. The DT and ST must not be owned by the same person:

If the easement was validly created originally it may be extinguished where the owner of the
dominant and servient tenement become the same.

But s 47(7) RPA - if its recorded in the register it is not extinguished solely because the two
lots come into common ownership

4. Must be capable of forming the subject matter of a grant:

Must not be too wide or vague. Must be able to define the right

It is also necessary to assess the degree to which the rights conferred interfere with the
servient owners' exclusive possession of the site

Re Ellenborough Park:

In 1855 a large area of land was subdivided into lots. A central circular park was laid out and around
it terrace houses. Part of a move to create higher spec higher density inner city dwellings for the
newly affluent middle class. Some houses were contiguous, some not.

The park was to be a ‘pleasure ground’ and each purchaser of a surrounding lot was give the right to
use the park, subject to paying a fee for its maintenance.

During WWII the park was requisitioned. The war office later was to pay compensation for its use to
those with an interest. Did this extend to the non-contiguous properties.

Which raised the question what was the nature of the interest they had? Was it an easement?

‘And also the full enjoyment at all times hereafter in common with the other persons to whom such
easements may be granted of the pleasure ground set out and made in front of the said plot of land-in
the centre of the square called Ellenborough Park which said pleasure ground is divided by the said
Walliscote Road but subject to the payment of a fair and just proportion of the costs charges and
expenses of keeping in good order and condition the said pleasure ground.’

Whether it was an easement depended on criteria 2 and 4.

Did it accommodate the dominant tenement? Did it make it a better and more convenient property?
Was there a natural connection with the land?

Was it capable of forming the subject matter of a grant? Was the right too wide or too vague?

Clos Farming:

• Development in regional NSW

• 86 lots. Developer sold 80 of them and retained a number, including lot 86
• Together they made up a vineyard
• Each of lots 1-80 had a Part A (residential component) and a Part B (farming component)
• Lot 86 had a machinery shed, a chemical shed and a brick farm office block
• Each lot was sold subject to several restrictions.
• 88B instrument

Restriction 14: ‘easement for vineyard’

Free right for every person in whose favour this easement is created and every person authorised by
him and either with or without vehicles, farming implements and machinery, to enter, go, pass, re-
pass, turn around and remain upon that part of the lot burden marked "B" on the plan for the purpose
of carrying vineyard establishment works, the planting and re-planting of grapevines and crops, the
planting and harvesting of crops, spraying, slashing, vineyard and crop maintenance and the
harvesting of grapes and crops together with the right from time to time to sell the produce of such
harvest and to deduct therefrom and retain the costs of farm maintenance, harvesting, packaging,
freight, agents commission, marketing and reasonable administration costs associated with such
harvesting and the sale of such harvest.

Was clos farming an easement?

This turned on restriction 14.

Santow JA (NSWCA) held that while there is no reason that a novel arrangement such as this could
not be an easement, it was not an easement as it failed the 2 nd and 4th criteria in Re Ellenborough Park.

Degree of interference:

An easement cannot amount to ownership or possession of the servient land. But the ambit of this is
unclear.

Reasonable use – degree or proportionality. Assessment of how much of the land is subject to the
easement and for what periods of time??

Key cases: Clos Farming; Batchelor v Marlow; JEA Holdings.

JEA Holdings:

• JEA was the RP of lot 4 which comprised 198 car parks and a telecommunications tower.
• Awar owned lot 5. It was adjacent to lot 4. There was a hotel on this lot.
 • Awar claimed to have an easement over JEA’s land giving it right to use the 198 car parks for
the benefit of the hotel.
• Proportionality test/reasonable use
• Owner of the ST does not need to have reasonable use of the ST in its entirety. This is a
relevant consideration but it is also relevant to consider the extent of the interference with the
rights of ownership on the part of the ST actually affected.

Creation:

• Express grant / express reservation

• Implied grant or reservation
• Prescription or long user
• Approved plan of subdivision under s 88B CA
• Section 88K CA

Express grant or reservation: at law:

§ Torrens: Registration of a dealing in the approved form: s 46 RPA

§ Where created by an instrument coming into effect on after 1 Jan 1931 must comply with s
88(1) CA.
§ Under s 47(1) RPA the Registrar-General shall record particulars of the dealing in the folio
for both dominant and servient tenements

Express grant: in equity:

s 23C + consideration or part performance

54A + consideration or part performance

Rule in Wheeldon v Burrows

Four thing are recquired:

1. A severance or grant
2. At the time of severance the exercise of the quasi-easement is continuous and apparent
3. The easement is necessary for the reasonable enjoyment of the land benefitted
4. At the time of severance the quasi-easement has been used by the grantor for the benefit of
the land

S 88B CA

The registration of a plan of subdivision will create all the easements referred to in it and vest them in
the land benefitted by the easement.

We will discuss this in much more detail in the next module.

S88K CA

SC can grant an easement over land if it is reasonably necessary for the effective use or development
of other land.

Used in two circumstances:

 1. Where a private easement is needed and owner of the ST will not agree to an easement
2. By developers

Easements and indefeasibility:

S 42(1)(a1)

Easements can be omitted or misdescribed in two ways:

when old system title is converted to Torrens and an easement ‘subsisting immediately before’ is not
recorded

where an easement is validly created over land already Torrens but is not recorded on the folio.

Remedies:

Abatement (self help)

Use an alternative route: go around it: Selby v Nettlefold; Treweekes

Action for nuisance (why not trespass?) – requires substantial interference – damages / injunction

Profits a prendre:

Right to go onto someone else’s land and take the natural products of the land
Key distinction with easements: always in gross
Can be registered and receive indefeasibility under s 42(1)
Exception to indefeasibility s 42(1)(b)
Basically same law as for easements

Module 8: Covenants:

What is a covenant?
A covenant is an agreement which regulates the use of land in some way. These can be restrictive or
positive
A freehold covenant regulates the use of freehold land (and to be distinguished from a leasehold
covenant)
Restrictive Covenant: A restrictive covenant restricts the use of land in some way; It does not
involve the covenantor in paying any money to comply with the covenant
Positive Covenant: requires something to be done, places a positive obligation, often involves the
payment of money

Example of restrictive covenant:

- Size of building or walls
- Building materials and colors
- Ancillary structures – garden sheds, clothes lines

Ferella v Otvosi (2005) – must be made out of brick, cant have a wall higher than a meter

Examples of a positive covenant:

 - To maintain or upkeep a road
- To construct and maintain a stormwater drain

Contract and proprietary interest:

1. A covenant begins life as a contract between two parties. In the previous diagram owners of
lots A and B
2. But what happens when the land (either lot) is sold? Can the covenant be binding on third
parties?
3. When does it ‘run with the land’
4. And what about indefeasibility?

Contexts:

1. Housing developments – 88B developments

2. Private agreements between private parties and non-88B developments

Housing developments – 88B

• Developers like to control how the development looks and how the land is used, including
after all the lot has been sold. They regulate the quality of the build so as to ensure that the
value of the remaining lots in the development is maintained.
• In addition, local councils also may impose restrictions on development approval which are
also intended to ensure that building is of a standard (and often of a style).

Housing estates (Pleasantville) and restrictive covenants:

- Good example of restrictive covenants is new park in Marsden park, all lots look the exact
same.

Creating restrictive covenants: Housing Developments

The appropriate way to create restrictive covenants in a housing development is under s88B
Conveyancing Act 1919

This requires:

1) Compliance with the provisions of s 88B

2) Approved form 10
3) A deposited plan. This is an example. It is the plan for Newpark (known often as a plan of
subdivision)

Contracts for sale:

Registration of the s88B instrument creates the restrictive covenants.

Each contract for sale for each lot will include the appropriate restrictive covenant. As they are part of
an 88B development, they are binding on all purchasers and anyone who buys from them.

Enforcement of covenants in 88B instruments:

Who can enforce the covenant?

It is likely that if you breach the covenant that a wide range of parties can enforce the covenant
against you:

1) The developer;
2) Your neighbours;
3) The local council (if it is either given the right in the instrument or it imposed the covenant as
part of development approval)

Enforcement of covenants in 88B instruments:

In order to be enforceable the covenant must:

1) Be restrictive;
2) Be in the plan of subdivision (the deposited plan)
3) comply with s 88(1)

S 88(1) CA

1. The land to which the benefit is appurtenant

2. the land which is subject to the burden of the easement or restriction
3. the persons (if any) having the right to release, vary, or modify the restriction
4. the persons (if any) whose consent to a release, variation, or modification of the easement or
restriction is stipulated for

Private agreements and non 88B developments

Restrictive covenants can also be entered into between private parties.

Non-88B developments.

While these are slightly different contexts, they raise the same issues of enforcement against
successors in title (subsequent purchasers

Creation:

In NSW the covenant can be incorporated into the transfer

Or otherwise by deed – 23B and ask the RG to note it on the folio for the burdened land

47(1) RPA requires the RG to record it in the folio of the burdened land

46A RPA – covenants can be created even though the same person owns the benefitted and burdened
lands.

Is there compliance with s 88(1)?

Section 88(1) is required when you wish to enforcement against successors in title (not the original
covenantee). Therefore where the burden of a covenant is being enforced against a successor in title
the covenant must comply with these requirements to be enforceable.

Restrictive covenants and Torrens:

Restrictive covenants cannot be registered

88(3) CA

(a) Registrar has the power to record the restriction on the folio of the burdened land. S 47(1) RPA the
Registrar must record the restriction

(b) a recording in the Register kept under that Act shall not give the restriction any greater operation
than it has under the dealing creating it

(c) where recorded the restriction is an ‘interest’ for s 42 RPA

Enforceability:

Given that RCs cannot be registered, how can they be enforced against subsequent registered
proprietors?

• As between the original covenantor and covenantee the covenant is enforceable as a matter of
contract law.
• As between successors in title to the original parties it’s a bit more complicated…. Recording
for s 42 RPA is not enough by itself.
• Running the burden – here’s the practical issue as a whiteboard simulation.

Buden cannot run at law:

Known as the Rule in Austerberry’s Case

At common law there is an inflexible rule that the burden cannot run at law. The original agreement
is enforceable as a matter of contract law, but not beyond that. This is so even if the covenant
expressly says that it binds successors in title.

This is not changed by s 70A(1) of the CA.

The Burden can run in equity:

The burden of a negative or restrictive covenant can run in equity. There are four requirements:

1) It must be negative or restrictive. The burden of a positive covenant can never run
2) The successor in title to the covenantee must have notice of the covenant
3) The burden must have been intended to run
4) The covenant must benefit the covenantee’s land

The Purchaser must take with notice:

The purchaser (successor in title to the covenantor) must take with notice: Tulk v Moxhay

This is the original case that first allowed a contractual agreement to run with the land

It concerned Leicester Square in London

Notice and s 88(3)

Section 88(3) can provide that notice – the restrictive covenant is recorded on the folio

Intention:
Intention is not a matter of subjective intention

Intention is objective and is found in the words of the covenant.

Covenantor covenants for: ‘himself, his heirs and assigns and successors in title’ or similar.

If it (objectively) is personal to the covenantor it will not run. Here is an example.

The covenant must be intended to run with the land of the covenantor – s 70A(1)

“A covenant relating to any land of a covenantor ... shall, unless a contrary intention is expressed,
be deemed to be made by the covenantor on behalf of himself or herself and the covenantor’s
successors in title ... and ... shall have effect as if such successors ... were expressed”.

Applies to covenants created after 1 January 1931

The covenant must benefit the land of the covenantee at the date of creation:

This has three subparts:

a) The covenant must ‘touch and concern’ the land – Rogers v Hosegood
b) A covenant cannot touch and concern the land if the land to be benefitted is so large that it
cannot be benefitted as a matter of fact: Re Ballard’s Conveyance
c) The covenant must benefit the land of the covenantee at the date of creation: Kerridge v
Foley

Schemes of development:

If a covenant in a non-88B development is not enforceable (because it does not comply with Kerridge
v Foley) it may still be enforceable as a scheme of development

This is an equitable mechanism. Where a scheme of development exists the covenants are mutually
enforceable regardless of the date of transfer of the individual lots.

Getting very rare now.

Originally held in Re Pirie that these could not exist on Torrens land but later determined in Re Louis
that they could.

Hosking v haas.

Lennard v Jessica Estates:

• The Lennard’s purchased a lot in an 88B development.

• They were not the original owners.
The 88B instrument had a restriction that no more than one dwelling could be built on
burdened lots; there could be no semi-detached duplexes; and no subdivision of the land was
possible.
• The local council approved a two-lot strata subdivision and the building of duplexes on the
lot.
• The developer alleged breach of covenant and sought an injunction.
• Lennard’s claimed the restriction was overridden by cl 6 of the LEP.
Cl 6 of the LEP stated:

(1) If any agreement, covenant or similar instrument prohibits a land use allowed by this plan,
then it shall not apply to that land use (to the extent necessary to allow that land use).

This clause was made pursuant to s 28 (now 3.16) of the EPAA

It was held that the effect of cl 6 was to override the covenant.

But the exact words of the LEP mattered. What did they prohibit? A ‘land use’. So in the end the
judgment turned on the construction of the words ‘land use’. So cl 6 covered the prohibition on the
construction of the duplexes and the subdivision.

Module 9: Strata:

What is strata title:

Per Barrett JA in Segal v Barel [2013] NSWCA 92:

“When a strata plan is registered under the Strata Act  in respect of particular land, there occurs…a
division of that land into "lots" and "common property". Separate certificates of title under the Real
Property Act issued for each lot and the common property.

Each lot has a "unit entitlement" specified in the strata plan. The lots are, in effect, cubes of airspace
defined by a combination of lines and other markings on the registered strata plan and physical
features of the buildings such as the surfaces of floors, walls and ceilings.

The common property is so much of the original land (including buildings) as is not included in the
lots. In a residential setting, lots usually comprise living quarters and car parking spaces, while the
common property is typically outdoor areas (lawns, gardens, paths, driveways and the like) together
with the fabric of the buildings excluding the inner surfaces of floors, walls and ceilings. 

- Lot: One or more cubic spaces bounded by the inner surface of the wall, or the upper surface
of any floor and the lower surface of any ceiling of a unit in the scheme. (defined in s 4 of
SSDA)
- Common Property: any part of a parcel that is not comprised in a lot (definition in s 4 of
SSDA) Separate CT for common property. Held by owners corporation as agent of the
proprietors in the scheme.

S 9 SSDA: Subdivision of land by strata plan:

(1)  The following land may be subdivided into lots, or lots and common property, by the registration
of a plan as a strata plan:

(a)  land including the whole of a building and consisting of one current plan lot or 2 or more
contiguous current plan lots,

(b)  land including part only of a building and consisting of one current plan lot or 2 or more current
plan lots (whether contiguous or not).

S 10 SSDA: General Requirements for strata plan:

(1)  A plan intended to be registered as a strata plan must:

 (a)  include a location plan, a floor plan and an administration sheet, and

(b)  specify or be accompanied by proposed by-laws

(3)  The administration sheet for the proposed strata scheme must include the following:

• (a)  a proposed schedule of unit entitlement relating to the

scheme (i.e. what share will each lot have)

Creation: s 24 SSDA

(1)  This section applies if common property in a strata scheme is created by registration of a strata
plan

(2)  On registration of the plan or notice, the common property:

(a)  vests in the owners corporation of the strata scheme

(3)  The Registrar-General must, on registration of a strata plan, create a folio for the estate or interest
of the owners corporation in the common property.

The Owners Corporation:

Per s 8(1) (SSMA): “The owners of the lots from time to time in a strata scheme constitute a body
corporate under the name "The Owners--Strata Plan No X" (X being the registered  number of the
strata plan to which that strata scheme  relates).

The Owners Corporation will appoint a strata committee at the outset. Decisions of the committee are
treated as decisions of the Owners Corporation (s 29 SSMA)

Five Key Management Areas cf s 9 SSMA:

1) Financial Management (Pt 5 SSMA)

2) Property Management (Pt 6 SSMA)

3) Insurance (Pt 9 SSMA)

4) Records and Accounts (Pt 10 SSMA)

5) Building Defects (Pt 11 SSMA)

1) Financial Management (Pt 5 SSMA

Administrative Fund: expenses of a recurrent nature (per s 73)

- Used to meet expenditure to maintain common property in good condition.

Capital Works Fund (‘Sinking Fund’)(per s 74); requires a 10 year plan (s 80(1))

- Major repairs (e.g. repairing the common property);

- To distribute surplus (paid to members in proportionate shares);
 To cover any major building repairs under Pt 11 (i.e. Building defects).

S 77 SSMA:

- (1)  An owners corporation for a strata scheme may, in accordance with a

unanimous resolution, distribute between the owners any money in its
administrative fund or capital works fund that is not, in the opinion of the
owners corporation, required for the purposes of either fund
- (2)  A distribution to an owner of a lot or other person entitled to receive it
under this section must be made in the same proportion that the unit
entitlement of the lot bears to the aggregate unit entitlement.

2) Property Management (Pt 6 SSMA)

S 106:

- (1)  An owners corporation for a strata scheme must properly maintain and keep in a state of
good and serviceable repair the common property and any personal property vested in the
owners corporation.
- (2)  An owners corporation must renew or replace any fixtures or fittings comprised in the
common property and any personal property vested in the owners corporation.
- Per s 106(3), The Owners Corporation will not be required to repair if it makes a special
resolution that:
- A) It is inappropriate to maintain/repair the particular item; and
- B) Its decision will not affect the safety, or detract from the appearance of any property in the
strata scheme.

- Repair: replacement and renewal

- The Proprietors – Strata Plan No 6522 v Furney [1976] 1 NSWLR 412
- What does it mean to ‘repair’
- Proprietors Strata Plan No 30234 v Margiz (1993) 32 NSWLR 294.
- Repair vs Renew
- The Owners – Strata Plan 21702 v Krimbogiannis [2014] NSWCA 411:
- Can the Owners Corporation enter the lot owner’s property?

3) Insurance (Pt 9 SSMA)

Must insure the building under a damage policy from an approved insurer (s 160)

Must cover insurance to replace the building (in the event of destruction); to repair damage/restore
any damaged portion; and to pay those to repair/place (s 161)

Also require workers’ compensation and personal injury insurance (s 164)

4) Records and Accounts (Pt 10 SSMA)

Must keep a strata roll (s 177):

- In relation to the lots: this includes the names of the owners of each lot and their addresses;
- In relation to the common property: the total unit entitlement of each lot, insurance details,
by-laws.
 Must also keep records of notices served upon the Owners Corporation, minutes or meetings and
motions, and financial statements relating to the expenditure from the administrative and capital
works funds.

5) Building Defects (Pt 11 SSMA)

- Building Defects Bond Scheme

- Concerned with defects that might arise in relation to the property following its construction.

- Building developers must enter into bond (2% of contract price) to cover any defects discovered
within 24 months of construction.

By Laws:

By-Law – originating from the Danish word ‘byr’.

S 136 SSMA: By-Laws may be made “in relation to the management, administration, control, use or
enjoyment of the lots or the common property and the lots of a strata scheme.

Generous approach to interpretation of power: Casuarina Rec Club Pty Ltd v The Owners– Strata
Plan 77971 (2011) 80 NSWLR 711.

S 136 (SSMA)  Matters by-laws can provide for:

• (1)  By-laws may be made in relation to the management, administration, control, use or
enjoyment of the lots or the common property and lots of a strata scheme.
• (2)  A by-law has no force or effect to the extent that it is inconsistent with this or any other
Act or law.

Casuirna Rec Club Pty Ltd v 77971 (2011) 80 NSWLR 711

Limitations on By Laws:

• S 136 (SSMA)
• (2)  A by-law has no force or effect to the extent that it is
inconsistent with this or any other Act or law.
• S 137 (SSMA)
• (1)  A by-law may limit the number of adults who may reside
in a lot by reference to the number of bedrooms of the
residence.
• (2)  The limit may not be fewer than 2 adults per bedroom.

• S 139 (SSMA)
• (1) By-law cannot be unjust
• A by-law must not be harsh, unconscionable
or oppressive.
• (2) By-law cannot prevent dealing relating to lot
• No by-law is capable of operating to prohibit
or restrict the devolution of a lot or a
 transfer, lease, mortgage or other dealing
relating to a lot.
• (4) By-law cannot restrict children
• A by-law for a residential strata scheme has no force
or effect to the extent to which it purports to prohibit
or restrict persons under 18 years of age occupying a
lot. This subsection does not apply to a by-law for a
strata scheme for a retirement village or housing
exclusively for aged persons.
• S 139 (SSMA)
• (5) By-law cannot prevent keeping of assistance animal
• A by-law has no force or effect to the extent to which it purports to prohibit or restrict
the keeping on a lot of an assistance animal
• (6) A by-law may require a person who keeps an assistance animal on a lot to
produce evidence to the owners corporation that the animal is an assistance animal.

Termination:

By Application to Court (s 135 SSDA)

- (1)  Any of the following persons may apply to the court for a termination order for a strata
scheme:
- (a)  an owner of a lot in the scheme,
- (d)  the owners corporation.

• (2) notice of the application must be served upon each person

referred to in subsection 1.
• By Application to Court (s 135 SSDA)
• (1)  Any of the following persons may apply to the court for a termination order for a
strata scheme:
• (a)  an owner of a lot in the scheme,
• (d)  the owners corporation.
• (2) notice of the application must be served upon each person referred to in
subsection 1.
•