[Examiner comments]
Property: LAWS2204 Semester 1 2003 Final Exam
Question
1a
1b
1c
Total
Mark: 25/40
Mark: 32/40
Mark: 14/20
Mark: 71/100 scaled to 74%
Question:
2a
2b
Total
Mark: 66
Mark: 7
Mark 73/100 scaled to 76%
Question: 3
Mark: 70/100 scaled to 73%
Total
Mark: 74% scaled to 75%
How to Use this Script: These Sample Exam Answers are based on problems done in the
past two years.
Since these answers were written the law may have changed and/or the subject may have
changed. Additionally, the student may have made some mistakes in their answer, despite
their good mark.
Therefore DO NOT use this script by copying or simplifying part of it directly for use in
your exam or to supplement your summary. If you do so YOUR MARK WILL
PROBABLY END UP BEING WORSE!
The LSS is providing this script to give you an idea as to the depth of analysis required
in exams and examples of possible structures and hence to provide direction for your
own learning. Please do not use them for any other purposes - otherwise you are putting
your academic future at risk.
Question 1a
Carla wants to know if purchasing B’s land will include the disputed strip
Does B have ownership of the disputed strip [against doc owner]
Has the limitation period run out [extinguish etc]
B will gain possession if the 12 year limitation period has run out (s27(2) Limitations
Act). This requires an eligible plaintiff, a defendant in possession, with factual
possession (Moran), the requisite intention to possess (Moran), no consent from the
owner and possession to be unbroken.
Here A is an eligible plaintiff. B is in possession by way or enclosing the land by
fence and grazing sheep. This would amount to an appropriate degree of control
(Moran) as little more could be done to possess farm land. In addition, he built a
workshop on part of the strip of land [2000]. B has the requisite intention to exclude
others since late 2002 and prior to this he believed the land to be his. [fence]
B’s possession is for 12 continuous years without A’s permission, so the limitation
period applies unless an even has stopped time running.
Has the Limitation period stopped?
A’s offer of sale would be insufficient to stop the running of the limitation period.
This is because it did not amount to consent. [what else to do?]
The limitation period therefore applies and B acquires title to the land, barring action
by A. B is therefore able to p[ass the rights of the strip of land to C by way of
purchase. C should ensure that this is expressly mentioned in the deed of transfer,
rather than B transferring his initial interest, that existed prior to B gaining ownership
of the land.
If B a life tenant [Not B but A - a pity as therefore you missed the point - a significant
issue]
B gains ownership of the strip, but not the life estate which will revert to the grantor.
If C buys in this situation, she buys the strip in fee simple and the life estate land for
the remainder of B’s life.
Question 1b
C wants to avoid D’s right of way
C’s interest
As she has settled, C as legal fee simple
D’s Interest
D as an easement by express grant from B. As there is no deed, this is not a legal
easement (s23B(1) NSW Conveyancing Act)
An equitable interest will arise whee there is a specifically enforceable contract
(Lysaght v Edwards). Where a contract is in writing then it is specifically enforceable
(s54A(1) NSW Conveyancing Act). Here D “exchanged contracts with” B, wo there
are written contracts that are specifically enforceable. This gives D an equitable
interest. [other factors]
Priority dispute between C & D
D has a prior equitable interest and C has a later legal interest. In this situation, the
subsequent legal interest will prevail if taken by a bona fide purchaser for value
without notice. Here C is clearly a bona fide purchaser for value.
Did C have notice of D’s interest?
Here C noticed the gate, however, this is not sufficient to give actual notice of D’s
Right of way. However, C is bound by such knowledge that would have been
discovered if she had undertaken reasonable investigations (s164 NSW Conveyancing
Act). Here documentary searches would not have revealed the easement as B’s
solicitor failed to execute a deed.
Enquiries must be made of a person in possession of land (Smith v Jones). While C
made reasonable attempts to contact D that failed due to D being overseas, she did not
enquire about the gate to B.
Although it is possible B may not have told C about the easement, it is till an option
she should have explored.
It is therefore likely that C will have constructive notice of D’s easement, although
this depends upon the sort of information likely to be recovered from B. We are not
told on the facts whether B is a truthful person or not. If this notice is established, C
will lose priority and be bound by D’s easement.
[31/40 sorry 32/40 as only 1 so far to recognise risks re B. Vg on priorities. Need a
little bit more on D]
Question 1c
Did C abandon her painting
Although abandonment is not specifically recognised at common law, the requisitie
elements are (Moorehouse):
1
Unequivocal acts to give up physical control
2
Intention to give up ones rights to the thing at the world at large
[law unclear, discuss relativity of title]
Here, C’s intent to give up the painting to the world at large are evidence by her
declaration that “she didn’t care what happened to the painting”
It is possible that her acts of not retrieving the painting could satisfy the requisite acts
of giving up physical control. Combined with her declaration, there is not much more
that she could be done but taking the gallery and leaving it in a public place or rubbish
dump. [alternative view of facts]
Even if these elements are satisfied, as seems likely, the common law does not
recognise abandonment [law unclear!] and as in (Kaine) she may be able to sue the
subsequent taker. In this case she would be able to sue the gallery for a portion of the
sale price for conversion. However, as this is personal property and another person
has purchased the painting, she is unlikely to recover ownership of the painting.
Question 2
X wants to acquire the land free from easement
Action by UU to rescind the sale
For the sale to be rescinded, UU must show that there was a defective exercise in the
power of sale by VB and win a priority dispute with X.
Defective Exercise of Sale by VB?
A mortgagee has power to sell mortgage property of part thereof (s109(1)(a) NSW
Conveyancing Act). As there is also an express provision in the mortgage, VB as
mortgagee clearly has power of sale.
In order to exercise the power of sale, there must be default by the mortgagor and
notice served on the mortgagor giving a specified period of time for rectification of
the default (s57 RPA (NSW)) Here, we are told that there is a 3 month default and
the required notice has been given.
As there is no issue relating to sale by the mortgagee itself (as in Farrah), there is an
insufficient defect in the power of sale exercise to allow rescission of the sale.
Although it may be possible for UU to seek damages against the mortgagee if the sale
price was too low or if VB breached its duties as mortgagee, these issues do not
concern. [could, but no facts/claim]
Is there an issue with VB’s registered interest?
As VB is a registered proprietor, it has indefeasible title, subject to any exceptions
(Fraser v Williams, Breskvar v Wall, s42 RPA)
Fraud?
Fraud by the person obtaining registered title is an exception to indefeasible title (s42
RPA). ‘Fraud’ means personal dishonesty and moral turpitude (Wicks v Bennet) [by
the RP]
Here, UU claims that her signature on the mortgage to VB was forged by her
husband. As this would mean the bank employee as VB did not witness [?] her
signature, this also implicates the bank. This may be sufficient to establish an
exception to VB’s indefeasible title, however, more information about how the
mortgage transfer was signed would be required [hypothesis?]
If there is an exception to indefeasibility due to fraud, this would remove the bank’s
right to the power of sale. The sale to X could then be rescinded if UU would win in
priority dispute with X.
UU versus X priority dispute
Here UU has a registered interest [not this aspect –see Breskvar eg. So wrong rule
used]. X has an unregistered interest arising from a specifically enforceable contract
of sale.
As UU would have indefeasible title, X would need to show an exception (s42 RPA).
It is unlikely any exceptions can be established on the facts.
So in the unlikely event that the banks title is defeased for fraud, there would be a
defective exercise of sale and as UU would win a priority dispute with X, the sale to
X could be undone. However, as previously mentioned more information would be
required to establish fraud by the bank, so this outcome is unlikely. UU would
therefore seek recourse to the compensation fund, but this is of no concern to X. [no]
Is X bound by W’s right to install drainage pipes?
W has an unregistered easement by way of an express grant from UU [sec?]. X has an
unregistered interest arising from a specifically enforceable contract of sale.
Does s43A protect X as purchaser?
For X to be given priority under s43A, X must be without notice of any kind, obtained
a dealing ready for registration, with the certificate of title available and delating with
a registered proprietor (s43A RPA) [tomorrow]. Here X is clearly a purchaser with a
registrable dealing and VB is a registered proprieter. However, as settlement is yet to
occur, being scheduled for 20 June 2003 and X has raised the issue of W’s interest for
legal advice he clearly has notice of this interest and will have this knowledge at
settlement. S43A therefore does not give X priority over W.
Unregistered Interests Priority
Between unregistered interests, the first in time prevails unless the equities are
unequal. Here W has the prior interest.
Are the Equities Unequal
The prior interest holder is to be postpoined if an act or omission by the 1st interest
holder has contributed to a belief by the 2nd interest holder that the prior interest was
not in existence (Abigail v Lappen). Failure to caveat may lead to a loss of priority if
it is the only way to avoid misleading the later party (Person to Person). Here W did
caveat, but only after a year of his interest existing, and as the drainage pipers are
“under [the] land”, they would not be visible by inspection. Even some sort of sign
may be insufficient to have drawn X’s attention to the pipes. As a caveat is therefore
the only method to avoid misleading X, the timing of the caveat is crucial
Failure to caveat quickly may be enough to contribute to a belief by X that Ws’
interest was not in existence (Butler) [s42(1)(a1)]
W’s interest would therefore be postponed and X would not be bound by the
easement.
X should get registrar to give notice to UU and W. This will start the 14 day lapse
period. [a little more]
[Caveats: 3/5; W 15/20; V 12/20 +3 = 33/45 = 66/90. Gap re U’s priority dispute
with X]
Question 2b
For UU to ensure her daughter receives her share in the joint tenancy, this joint
tenancy must be severed.
This can be achieved by UU directly transferring her share to her daughter or to a
third party to hold on trust for her daughter (Corin v Patton)
If the transfer is by gift, UU must have executed the transfer form and given it, with
the certificate of title to her daughter.
[Other easier options but OK. 7/10]
Question 3
K wants to evict both tenants. To do so K must show that he is not bound by the
leases or is able to evict for breach of covenant.
Is K bound by the lease to I?
As K is registered he has indefeasible title that is immediate and good against all the
world unless there is an exception (s42 RPA, Fraser v Walker, Breskvar v Wall).
However as I’s lease is registered, K is bound by it.
Has I breached a covenant of her lease?
Here the lease “expressly prohibits use of the premises for the preparation or sale of
food and beverages.” Here Ivy has sublet to S to run a coffee bar. The running of a
coffee bar is clearly in breach of this covenant.
Can this covenant be enforced?
Privity of estate exists where the assignee has the identical interest to the assignor. K
has an identical interest to H and therefore pricty of estate applies.
Where there is privity of estate, a covenant can be enforced where it touches and
concerns the land. Here the covenant prohibits certain types of land use, so clearly
concerns the land. This covenant is thereby enforceable.
Remedy for Forfeiture for breach by I?
The remedy for forfeiture is an implied statutory right (s85(1) Conveyancing Act) if
there is a non rent breach for at least 2 months. Here there is a non rent breach by
allowing Stella to operate a coffee bar, but as this subletting to Shas only occurred
recently so the breach, if any, is unlikely to be of sufficient duration to provide the
remedy of forfeiture. More clear information as to the current situation would be
required.
Remedy of Termination
A landlord can terminate a lease contract for a serious repudiatory breach by the
tenant (Tabali). Here, as outlined above, there is insufficient information to conclude
that the covenant has been breached. It is uncertain whether the coffee shop is
operating yet. If it is operating and beverages are being served, then this may be a
sufficient breach to justify termination.
It is unlikely V can evict I yet, but could wait until sufficient breach of the covenant
by the coffee shop owner occurs to justify forfeiture or termination. If V chooses
forfeiture, there are several notice requirements and I may seek relief. If I does seek
relief, then the court will look to all actions of the parties and may take a grim view of
K not warning I that subletting for the purposes of a coffee bar is likely to breach a
covenant in the lease.
Is K bound by the lease to J?
Js lease is not registered and will only be binding on K if an exception to K’s
indefeasibility can be established. (s42 RPA, Fraser v Walker, Breskvar v Wall)
Is there an exception to K’s indefeasibility?
Fraud?
Fraud by the person obtaining title is an exception (s42 RPA) to indefeasibility, but
mere notice is not enough (s43 RPA). The notice K has of J’s lease is therefore
insufficient to establish fraud unless it amounts to personal dishonesty or moral
turpitude (Wicks v Bennet). Here, the leases were left out of the contract of sale by
mistake, so there is no basis for fraud.
Action in personam?
There is no contract between K and J and therefore no action in personam available
unless a (Barr v Nicolai) type trust can be established. Here K has not expressly
declared himself to be trustee for J, so no action in personabm exception in relation to
J.
Estoppel: No promise with a detrimental reliance arises in this situation, so there is no
exception to indefeasibility on this basis
Unregistered Leases <3yrs
Because the total period of J’s lease, including options to renew is greater than 3
years, it is not protected by the unregistered leases exception to indefeasible title in s
42(1)(d) of the Real Property Act
What is J interest?
As J is in possession and paying rent, under an informal lease there is an implied
annual tenancy (Moore v Dimond). However, implied yearly tenancies are converted
to tenancies at will, terminable with one months written notice (s127(1) NSW
Conveyancing Act)
Can K evict J?
Under the provisions of s127(1) NSW Conveyancing Act, K can evict J with one
months written notice.
[Architect? 0/10
[J – excellent – more on facts re fraud 35/45 + Bahr would have been beneficial
[Ivy – solid analysis 35/45