3012law property law 2: bureaucratization of property ......3012law property law 2:...

3012LAW Property Law 2: Bureaucratization of Property Interests Combined with some Property 3

Geramie Bruno ANOTHER SET OF NOTES WHICH HOPEFULLY WILL SEE US THROUGH THE EXAM WITH 7’S

Geramie Bruno 3012LAW Property Law 2 Notes 2014

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Contents Week 1 Boundaries to Land....................................................................................................................... 2

Week 2 Creation of Estates in Land (Formalities)...................................................................................... 9

Week 3 Torrens Title System Introduction to Indefeasibility and Statutory Schemes for Registration . 20

Week 4 The Fraud Exception to Indefeasibility ....................................................................................... 29

Week 5 The In Personam Exception to Indefeasibility ............................................................................ 38

Week 6 The Short Lease, Adverse Possession and Other Exceptions to Indefeasibility ........................... 50

Week 7 Unregistered interests and Priorities under the Torrens System .............................................. 60

Week 8 Caveats and Torrens Remedies .................................................................................................. 72

Week 9 Mortgages .................................................................................................................................. 86

Week 10 Leases ..................................................................................................................................... 101

Week 11 Easements .............................................................................................................................. 116

Week 12 Covenants ............................................................................................................................... 130


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Week 1 Boundaries to Land

What element must be present for ownership in property to exist?

- Exclusive possession of the property- Millar v Taylor (1769) 98 ER 201 - The concept was established by Lord Mansfield. - There are two rights, rights in rem (A right you can enforce to the world at large) in contrast

to rights in personam (a personal right under a contract)

Land is a three-dimensional concept, so we need to consider the scope (the boundaries) of a person’s exclusive possession of land.

These are 1) the airspace above 2) The minerals below 3) Horizontal (or lateral boundaries) and 4) Whether the contents of the property forms part of the land (fixtures)

1) The airspace above a. The Ad Coleum Rule (The prima facie rule)

i. The owner of land owns “everything up to the sky and down to the centre of the earth” (Cujus est solum, ejus est usque ad coelum et ad inferos).

1. Bury v Pope (1586) 78 ER 375. 2. Defendant built house blocking access to plaintiffs window, p sued

for nuisance, but unsuccessful because defendant had the right of everything up to the sky- Ad coleum rule

ii. Many issues can arise such as cranes swing over property, signs that cover air space, privacy issues from hot air balloons etc

b. Restrictions/qualifications on the Ad Coleum rule: i. Trespass and Nuisance laws under the common law however, had placed

limitations upon the fundamental ad coleum rule established in Bury v Pope. ii. FIRST APPROACH:

Bernstein v Skyways & General Ltd [1978] QB 479: Ad coeleum rule should be restricted to the extent of allowing the public to “enjoy the benefits of science” without interfering with the land owner’s right to use and enjoy their land.

1. Skyways took photographs from plane of houses and sold these to residents

2. Held that this did not interfere with Bernsteins “use and enjoyment” and Skyways was entitled to “enjoy the benefits of science” because they were so far above

3. Per Griffiths J at 488- … I find that the defendants' aircraft did not infringe any rights in the plaintiff's air space, and thus no trespass was committed. It was … flying many hundreds of feet above the ground and it is not suggested that … it caused any interference with any use to which the plaintiff put or might wish to put his land.

4. Per Griffiths J at 489: [I]f the circumstances were such that a plaintiff was subjected to the harassment of constant surveillance of his house from the air, accompanied by the photographing of his every activity, [this would amount to] an actionable nuisance for which [a court] would give relief.


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iii. SECOND APPROACH iv. LJP Investments v Howard Chia Investments (1989) Aust Tort Rep 80-269: v. Held: Trespass: Considering conduct that “may interfere with any ordinary

uses of the land including “significant commercial gain” caused by the use of the plaintiff’s airspace.

vi. See also Bendall Pty Ltd v Mirvac Pty Ltd (1989) 24 NSWLR 490. 1. Scaffolding over plaintiffs property was held that even though the P

suffered no damage, they may suffer damage and the D used land for commercial gain

2. per Hodges J at 495-497: [T]he relevant test is not whether the incursion actually interferes with the occupier’s actual use of land at the time, but rather whether it … may interfere with any ordinary uses of the land …

3. [The] case really comes down to the question of whether one person should be permitted to use the land of another person for considerable commercial gain for himself, simply because his use of the other person’s land causes no significant damage to that other person’s land. As a matter of general principle ... “No”.

4. per Bryson J at 472: In my view, the defendants have made an unfortunate choice based on economic considerations and have been caught poaching with the squire’s game tucked in their belts.

5. The resource represented by the plaintiff’s airspace is not available like natural resources of the countryside for them to take as they find suitable, any more than they could count on using other people’s bricks or other resources.

6. At the heart of the litigation is a very simple question of using or not using other people’s property, and this disqualifies the defendant’s from any real claim to consideration of hardships which they have incurred.

vii. Bendall Pty Ltd v Mirvac Pty Ltd 1. Crane swung over P’s land 2. Held to be trespass due to use of land for commercial purpose

which could interfere with the use and enjoyment, but no trespass for adequate reasons in moving the crane over the land to protect it from damage

2) The Minerals Below a. THE AD COLEUM RULE: b. Bury v Pope (1586) 78 ER 375: c. Prima facie, persons own all above and below land. d. RESTRICTIONS/QUALIFICATIONS ON THE AD COLEUM RULE: e. COMMON LAW: f. The Case of Mines (1568) 75 ER 472:

i. Gold and silver vest with the crown. g. Examples- Client that wishes to pump water from the ground to use for agricultural

purposes h. LEGISLATION: i. Mineral Resources Act 1989 (Qld)


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j. Petroleum Act 1923 (Qld) and Petroleum and Gas (Production and Safety) Act 2004 (Qld)

k. Geothermal Energy Act 2010 (Qld) l. Water Act 2000 (Qld); See Hazlett v Preznell m. Atomic Energy Act 1953 (Cth)

i. All acts here basically vest ownership of the related items in the crown n. Hazlett v Presnell

i. Held to be a breach of Victorian Water Act as Mr Hazlett did not have a Victorian license to take water from the river

3) Horizontal/ Lateral Boundaries a. BOUNDARIES INVOLVING CREEKS AND WATERWAYS: b. s 9 of the Land Act 1994 (Qld): c. Rivers, Creeks and Banks vest with the crown. (Hazlett v Presnell (1982) 149 CLR 107) d. s 13A of the Land Act 1994 (Qld): e. In the case of tidal waters, the crown owns up until the high water mark. (Svendsen

v State of Queensland [2002] 1 Qd R 216) f. DOCTRINE OF ACCRESSION AND EROSION: g. Hazlett v Presnell (1982) 149 CLR 107 per Gibbs CJ, Mason, Murphy, Wilson, Brennan

and Deane JJ: h. In the event of a change in the course of a river, the legal boundary of the land

would change if: i. 1) The change was “gradual and imperceptible”; and

ii. 2.) The change was a result of “natural phenomenon”. i. Hazlett v Presnell

i. Hazlett lived on an island surrounded by the Murray River, he took water and was charged under Vic legislation for not having a water license. The river was dredged which changed the waterflow.

ii. Held: The change was not gradual and not a result of natural phenomena” Mr Hazlett took water from a Victorian waterway and was therefore charged under Victorian Legislation

j. ENCROACHMENT i. s 184 of the Property Law Act 1974 (Qld) provides that:

1. Application for relief in respect of encroachments a. Either an adjacent owner or an encroaching owner may

apply to the court for relief under this division in respect of any encroachment.

ii. Encroaching- when you build something on someone else’s land and relief is granted under the PLA in respect to someone who has suffered because of an encroachment

iii. s 182 of the Act provides the relevant definitions for the purposes of s 184: 1. encroachment means encroachment by a building, including

encroachment by overhang of any part as well as encroachment by intrusion of any part in or upon the soil.

2. building means a substantial building of a permanent character, and includes a wall.

iv. Remedies185(1) provides that: v. On an application under section 184 the court may make such order as it

may deem just with respect to—


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1. the payment of compensation to the adjacent owner; and 2. the conveyance, transfer, or lease of the subject land to the

encroaching owner, or the grant to the encroaching owner of any estate or interest in the land or of any easement, right, or privilege in relation to the land; and

3. the removal of the encroachment. vi. Under s 185(2), the court may take account of the following factors in

determining the scope of relief which is granted: 1. the fact that the application is made by the adjacent owner or by

the encroaching owner, as the case may be; and 2. the situation and value of the subject land, and the nature and

extent of the encroachment; and 3. the character of the encroaching building, and the purposes for

which it may be used; and a. the loss and damage which has been or will be incurred by

the adjacent owner; and b. the loss and damage which would be incurred by the

encroaching owner if the encroaching owner were required to remove the encroachment; and

c. the circumstances in which the encroachment was made. 4) Whether the contents of the property forms part of the land (Fixtures or chattels)

a. Fundamental rule established in Minshall v Lloyd (1837) 150 ER 834: b. per Parke Baron at 838:

i. [T]he law is clearly settled … that every thing substantially and permanently affixed to the soil is in law a fixture. The principle of law is, that "quicquid solo plantatur solo cedit.“ [what is attached to the land, becomes part of the land]

c. When then is an object a fixture? d. Holland v Hodgson (1872) LR 7 328: e. Consideration needs to be given to the degree and purpose of annexation.

i. Milling company had looms installed that were bolted to the floor using nails. Company has become insolvent and also defaulted on mortgage repayments

ii. Held: Fixtures due to extent of annexure and nails showed clear intention of being permanent

iii. per Blackburn J at 334: 1. There is no doubt that the general maxim of the law is, that what is

annexed to the land becomes part of the land; but it is very difficult, if not impossible, to say with precision what constitutes an annexation sufficient for this purpose.

2. It is a question which must depend on the circumstances of each case, and mainly on two circumstances, as indicating the intention, viz the degree of annexation and the object of annexation.

f. Australian Provincial Assurance Co v Coroneo (1938) 38 SR (NSW) 700: i. Further guidance as to whether an object is a fixture, was provided by His

Honour Jordan CJ who established that: 1. If a item is fixed to the ground then the item is presumed to be a

fixture and the onus is on those who object to prove otherwise;


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2. If an item is not fixed to the ground, then the object is presumed to not be a fixture and the onus is on those who object to prove otherwise; and

3. In considering whether or not an item is a fixture, consideration should be given to:

a. Whether or not it was intended as permanent; and b. Whether or not there was an intention to improve the land.

ii. Coroneo was the owner of a picture theatre which included projection equipment, switchboards and seats that were bolted in loose and which would be shifted for various events in the theatre. Coroneo defaulted under a mortgage

iii. Held: Could take projection equipment and switchboards as could not be moved. They were fixtures.

iv. Held: Could take the chairs as although they were bolted, they could be moved and were moved for events. The intention was that they were chattels.

g. FURTHER FIXTURE AND CHATTEL CASES: h. 1. STEAM ENGINE:

i. Hobson v Gorringe [1897] 1 Ch 182: Steam engine bolted to concrete floor held to be a fixture due to intention of installation to be permanent.

ii. Steam Engine purchased by mill owner under hire/purchase agreement which stated title would pass only when full payment made. Engine bolted to concrete floor.

iii. Mill owner defaulted under both hire/purchase agreement and mortgage of mill

iv. Held: Bolting to ground indicated a clear intention that engine was to be permanent therefore a fixture.

i. 2. TAPESTRY: j. Leigh v Taylor [1902] AC 157: a. Tapestry held not to be a fixture due to intention for enjoyment of resident not

to improve value of land. b. Madam de Falbe holder of a “life estate” in a manor house. Whilst in

occupancy, she installed expensive tapestries comprising of canvass stretched over pieces of wood and then nailed to the wall. Could be removed without significant disfigurement.

c. Held: Chattels as could be easily removed without disfigurement and intended for the mere enjoyment of the occupier whilst “temporarily there”.

d. per Lord Halsbury at 158: a. [The] purpose of it being placed there, is not intended to form part of the

realty, but is only a mode of enjoyment of the thing, while the person is temporarily there, and if it is there for the purpose of his or her enjoyment then it is removable and goes to the executor.

k. 3. DISHWASHER/SHED: l. Farley v Hawkins & ors [1996] QCA 520: m. Dishwasher held to be a fixture because it would create significant

disfigurement to the house if it was removed.


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a. Shed bolted to concrete base held to be a fixture as it could not be easily removed.

b. Ms Farley wrote will indicating that: Children would receive house; and Second husband would receive the rest of the estate.

c. Held: Fixtures therefore formed part of land. d. Dishwasher - Kitchen set up so that it could not be removed without

disfigurement. No tiling underneath and connected to plumbing. e. Shed - Due to “size and relative permanence” and being not intended for

“easy transportability” despite being paid for by second husband. f. per Derrington J at 5-6: a. In respect of the dishwasher, its status as a fixture is established because

not only is it lightly connected with fixtures but also it is set into fixtures. Although it could easily be removed after the disconnection of the plumbing, the entire fixture into which it was built was intended as an integrated whole. This is not the case where it merely occupies an empty space.

b. per Derrington J at 6: c. The shed was so substantial as to amount to a fixture. … It is not of the type

of structure fabricated for easy transportability where the bolting to a base is merely for security during its temporary location at the place where the base is located. … By its size and relative permanence the shed in this case is intended to be a fixture and its being bolted to the base as a convenient form of building construction does not detract from this.

n. 4. TV AERIAL/VENETIAN BLINDS/CABINET /STOVE/CARPET: o. Palumberi v Palumberi [1986] NSW ConvR 55287: p. A TV aerial installed on the roof of a unit using a U-Bolt, a non built-in cabinet and

venetian blinds were held to be chattels and hence, did not form part of the land. a. A Stove and Carpet installed to replace existing items were held to

be fixtures.

b. c. Palumberi v Palumberi per Kearney J at 287:


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a. It would seem from perusal of these and other authorities in the field that there has been a perceptible decline in the comparative importance of the degree or mode of annexation, with a tendency to greater emphasis being placed upon the purpose or object of annexation, or, putting it another way, the intention with which the item is placed upon land. This shift has involved a greater reliance upon the individual surrounding circumstances of the case in question as distinct from any attempt to seek to apply some simple rule or some automatic solution.

i. 5. AIRCONDITIONING UNITS: 1. Belgrave Nominees Pty Ltd v Barlin-Scott Airconditioning (Aust) Pty

Ltd (1984) VR 947: 2. Airconditioning considered fixture due to connection to power and

water supply. 3. Held: Fixtures Although resting on their own weight, they were

connected via pipes and electrical cables. There was therefore, presumption that the units were fixtures that had not been discharged by the defendant.

ii. 6. HOUSES RESTING ON STUMPS: 1. Reid v Smith (1905) 3 CLR 656: 2. Houses resting on stumps held to be fixtures. 3. Tenant erects wooden buildings as per lease which rest on their own

weight. At the end of the lease 4. Held: Fixtures. Buildings intended as permanent due to provision in

lease and the fact that resting on wooden piles was common practice in Queensland to avoid termite infestation

iii. 7. PIPES EMBEDDED IN THE GROUND: iv. North Shore Gas Co Ltd v Commissioner for Stamp Duties (NSW) (1940) 63

CLR 52: i. Pipes embedded in the ground were held to be fixtures.

ii. Held: Stamp duty payable on pipes as pipes were fixtures. The pipes were embedded in the ground.

iii. BUT consider Commissioner of Main Roads v North Shore Gas Co Ltd (1967) 120 CLR 118:

a. In this case, gas pipes embedded in the ground were held to not be fixtures despite the level of annexation because the Gas Company had a mere license with respect to the use of the land.

b. Land containing gas company pipes resumed by the government for a road project. Gas company sought compensation however, this would only apply if the pipes formed part of the land

c. Held: Compensation would not be rewarded as the pipes were chattles. As the Gas Company held a mere license over the land, there was no intention that the gas pipes be permanent.

Don’t just presume because a case is similar the result will be the same, look at the facts closely.


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Week 2 Creation of Estates in Land (Formalities) Doctrine of Tenure 1. No person owns land outright. 2. Title of the land ultimately lies with the crown who holds ownership of the land. 3. Creates “a single devolving chain of title”. Wik Peoples v Queensland (1996) 187 CLR 1, 90-91 per Brennan CJ. This case established that the doctrine of Tenure involved three concepts

The doctrine of tenure was created after the invasion of England by the French and duke Normanby who believed he should have the throne.

Doctrine of Estates 1) What people hold in land is a so called “estate” or interest in land; 2) The estate is the “time in the land” which fall into different categories with different rights

associated with each; 3) The estate is a separate “thing” to the actual property itself.

Walsingham’s Case (1573) 75 ER 805, 816-817.

4) Estates involve the possession of land, either presently of in the future a. Glenn v Federal Commissioner of Land Tax (1915) 20 CLR 490, 498 per Griffith CJ; Sir

Robert Megarry and Sir William Wade, The Law of Real Property (Sweet and Maxwell, 6th ed, 2000) [7-001].

With the two doctrines working together, they provide for the orderly enjoyment and successive title of any pastoral land. The doctrine of estates is important for succession law- as in who will be granted interests in land after a person’s death.

In order to define the scope of the rights associated with the grant of an estate in land, it is necessary to consider

1) Words of Purchase; 2) Words of Limitation; and 3) Future Possessory Interests.

Words of Purchase - Indicate the persons who will be granted the interest. - e.g. “To B for Life” - Charles Fearne, Essay on the Learning of Contingent Remainders and Executory Devises

(Volume 1, 1795) 92: o [W]ords of purchase are those by which, taken absolutely without reference to, or

connection with, any other words, the estate first attaches or is considered as commencing in the person described by them.

Words of Limitation - 1. Words of limitation qualify the words of purchase: - Charles Fearne, Essay on the Learning of Contingent Remainders and Executory Devises

(Volume 1, 1795) 92: o [W]ords of limitation operate by reference to or connection with other words, [i.e.

the so called “words of purchase”] and extend or modify the estate given by those other words.

- 2. There are several types of words of limitation:


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o Words creating a “Fee Simple” estate; � A fee simple estate is an estate in which the holder has the right of

“absolute ownership” including the ability to alienate this estate. � The rights conferred on the grantee are the most extensive of the three

estates of freehold. � Commonwealth v New South Wales (1923) 33 CLR 1, 42 per Issacs J:

x A fee simple is the most extensive in quantum, and the most absolute in respect to the rights, which it confers, of all estates known to the law. It confers … the lawful right to exercise over, upon, and in respect to, the land, every act of ownership which can enter into the imagination … Besides these rights of ownership, a fee simple at the present day confers an absolute right, both of alienation inter vivos and of devise by will.

� This right of “absolute ownership” however, is subject to the encumbrance of the crown under the Doctrine of Tenure and Native Title.

x Mabo v Queensland (No 2) 175 CLR 1 per Brennan J at 48-49. � Strict wording requirements are required under common law in order to

create a fee simple estate by way of inter vivos transfer through the use of “and his Heirs”. This requirement does not apply with respect to wills.

x Sexton v Horton (1926) 38 CLR 240 per Knox CJ at 244 and Starke and Higgins JJ at 249; Holdsworth, Sir William, A History of English Law (2nd ed 1937, Vol 2) pp 388-389 and 392-394.

� It is fundamental to the estate of fee simple that the estate will go to the heirs of the grantee upon the death of the grantee. In order to grant an estate in fee simple, the words “and his heirs” must be used

� This requirement however, no longer applies under s 29 of the Property Law Act 1974 (Qld):

x Words of limitation x (1) A disposition of freehold land to any person without words of

limitation, or any equivalent expression, shall pass to the disponee the whole interest which the disponor had power to dispose of in such land, unless a contrary intention appears in the disposition.

x Estates made after 4th December 1952 are automatically fee simple

x x Estate granted inter vivos to Lennox from the grantor, then to his

heirs after he dies. Fee simple o Words creating a “Fee Tail” estate;

� A Fee Tail is a grant to one person in addition to specified heirs who would acquire the estate after the person’s death.


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� Fee tails are smaller in scope than “fee simple” estates. x Willion v Berkley (1562) 75 ER 339, 384-385.

� Means a cut down/ limited fee simple. In most cases fee tails are limited to the lineal descendants of the grantee, but can be limited to others with a special fee tail

� s 22 of the the Property Law Act 1974 (Qld) has abolished “fee tail” estates. x Note: This extends to include estates created prior to 1974. x Fee tails that have been granted in the past are converted to fee

simple restrospectively

�

� o Words creating a Life estate;

� Will only subsist for the life of the tenant acquiring the interest. � Are the smallest of the three estates of freehold. � There are two different types of life estates:

x Ordinary Life Estates - Subsist for the life of the grantee; and x Estates “pur autre vie” - Subsist for the life of another party.

� See Halsbury Laws of Australia [355-2070]. � A life tenant can be held liable by the grantor for the tort of waste

(devaluation) with respect to the land. � s 24 of the Property Law Act 1974 (Qld); Defries v Milne [1913] 1 Ch 98, 108. � There are four different types of waste:

x Permissive Waste - Omissions which result in the property being devalued. Not a positive act, but can be done by not adequately maintaining the property

o Mancetter Developments Ltd v Garmanson Ltd [1986] QB 1212, 1218.

x Voluntary Waste - Life tenant acting in a way which results in the property being devalued. A life tenant may however, be exempt from liability for voluntary waste by way of specific terms in the instrument creating the life estate.


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o Marsden v Edward Heyes Ltd [1927] 2 KB 1. x Equitable Waste - If a life tenant is exempt from voluntary waste by

specific terms in the instrument creating the life estate, they may be still liable for actions “which a prudent man would not do in the management of his own property”.

o Turner v Wright (1860) 45 ER 612 per Lord Campbell. x Ameliorating Waste - Altering the land in a manner which improves

the value of the land. Although uncommon, if the character has changed completely, courts may still grant remedies.

o Doherty v Allman (1877) 3 App Cas 709. o In most cases damages are not awarded unless there is a

significant change of character. o Doherty- involved a tenant who converted warehouses to

residential units that improved the value of the land. The court refused to grant remedies on the basis that the character had not been changed enough warrant a remedy. It needs to be REALLY SIGNIFICANT CHANGE

x x Less than a fee simple estate, when Anwar dies the estate goes back

to the grantor. This is called reversion. The property goes back to the remainder man, not to his heirs

x s 29 of the Property Law Act 1974 (Qld), provides that: o Words of limitation o (1) A disposition of freehold land to any person without

words of limitation, or any equivalent expression, shall pass to the disponee the whole interest which the disponor had power to dispose of in such land, unless a contrary intention appears in the disposition.

x o Words creating a Determinable limitation; and

� e.g. “while”, “until”, “as long as”, “during”. � An estate that is only granted for a determinable time.

x After the interest is over the property reverts to the grantor. May or may not happen

� Property reverts to the grantor automatically after the determinable event has occurred.


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Quality of registered interests (1) A registered proprietor of an interest in a lot holds the interest subject to registered

interests affecting the lot but free from all other interests. (2) In particular, the registered proprietor -

(a) is not affected by actual or constructive notice of an unregistered interest affecting the lot; and

(b) is liable to a proceeding for possession of the lot or an interest in the lot only if the proceeding is brought by the registered proprietor of an interest affecting the lot.

(3) However, subsections (1) and (2) do not apply - (a) to an interest mentioned in section 185; or (b) if there has been fraud by the registered proprietor, whether or not there has been fraud by a person from or through whom the registered proprietor has derived the registered interest.

(4) The time of execution of the documentation effecting a transfer, lease or other interest in land does not have any legal significance except in circumstances involving at least two unregistered interests. (5) Generally speaking registered interests are “legal” in nature whereas unregistered interests are “equitable” in nature.

Compensation Scheme Where a person, through no fault of their own, has been deprived of an interest in land or suffers other loss or damage such loss can be compensated by the State. s 188 provides that: Compensation for deprivation of lot or interest in lot

(1) This section applies if a person (the “claimant”) is deprived of a lot, (2) or an interest in a lot, because of—

(a) the fraud of another person; or (b) the incorrect creation of an indefeasible title in the name of another person; or (c) incorrect registration; or (d) an error in an indefeasible title or in the freehold land register; or (e) tampering with the freehold land register; or (f) loss, destruction or improper use of a document deposited or lodged at the land registry or held by the land registry for safe custody; or (g) an omission, mistake, breach of duty, negligence or misfeasance of or by the registrar or a member of the staff in the land registry; or (h) the exercise by the registrar of a power in relation to an application or dealing with which the person had no connection.

(2) The claimant is entitled to compensation from the State for the deprivation. s 188 provides that compensation cannot be sought for personal injury. Under s 188C, a 12 year limitation period applies from the time affected the party knew or ought to have known the circumstances resulting in deprivation. s 190 provides that the state is “subrogated to the rights of the claimant against any other person, in relation to the deprivation, loss or damage”. UNREGISTERED INTERESTS UNDER THE TORRENS SYSTEM:

1. Unregistered interests do in fact have a role as equitable interests in the Torrens system and hence have a different status under Torrens then they do under the common law.


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2. There are a number of maxims that have been developed by courts to resolve conflicts between two or more of these unregistered equitable interests.

3. The prima facie rule that has developed is that the first in time prevails unless there has been some disentitling conduct which has postponed the conduct. (Barry v Heider (1914) 19 CLR 197)

4. Courts have also demonstrated a willingness to postpone “mere equities” that are followed by “full equitable estates”. Phillips v Phillips (1862) 45 ER 1164, 1167 per Lord Westbury:

A prior equity may be postponed if it amounts to “an equity as distinguished from an equitable estate – as for example, an equity to set aside a deed for fraud, or to correct it for mistake” in the event of the holder of the equitable estate acquiring the interest with good consideration and without notice of the earlier equity. See also Latec Investments v Hotel Terrigal (in liq) (1965) 113 CLR 265.

Generally speaking, priority disputes involving competing unregistered equitable interests are resolved in the following manner.

1. Equitable interest followed by another equitable interest - general law rules apply; 2. Equitable interest followed by a legal (Torrens) interest - priority is obtained by the legal

interest (in the absence of an exception to indefeasibility); 3. Legal interest followed by an equitable interest - priority is obtained by the legal interest (in

the absence of an exception to indefeasibility); and 4. Legal interest followed by a legal interest. This situation will depend on a contract, a statute,

or equitable considerations.

3012law property law 2: bureaucratization of property ......3012law property law 2:...

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