Property law in New South Wales [Fourth edition.] 9780409343106, 0409343102

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Property Law in New South Wales Fourth edition

To my mother, Mona, and my late father, Gordon, who stimulated my interest in property JG

To my beloved family, and especially to those who have arrived since the last edition, Silas, William, Jack, Anthea, Eleanor and Charlie NF

To George SD

In loving memory of Professor Phillipa Weeks, whose passion for Property Law inspired generations of ANU Law students HR

Property Law in New South Wales Fourth edition Janice Gray BA, LLB, (Grad) Dip Ed (UNSW), Grad Dip (Leg Pract) (UTS), MA (UNSW), PhD (UEA) Solicitor of the Supreme Court of New South Wales Senior Lecturer, Faculty of Law, University of New South Wales

Neil Foster BA, LLB (UNSW), BTh (ACT), DipATh (Moore), LLM (UoN) Admitted as a Solicitor of the Supreme Court of New South Wales Associate Professor, School of Law, University of Newcastle

Shaunnagh Dorsett BA, LLB (Hons) (Tas), LLM (Calg), PhD (UNSW) Professor, Faculty of Law, University of Technology Sydney

Heather Roberts BA (Hons), LLB (Hons), PhD (ANU)

Senior Lecturer, ANU College of Law, Australian National University

LexisNexis Butterworths Australia 2018

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National Library of Australia Cataloguing-in-Publication entry

Author: Title: Edition: ISBN: Notes: Subjects: Other Authors/Contributors:

Gray, Janice. Property Law in New South Wales. 4th edition. 9780409343106 (pbk). 9780409343113 (ebk). Includes index. Property — New South Wales. Leases — New South Wales. Mortgages — New South Wales. Foster, Neil. Dorsett, Shaunnagh. Roberts, Heather.

© 2018 Reed International Books Australia Pty Limited trading as LexisNexis. First edition 2003 (reprinted 2006); second edition 2007 (reprinted 2009); third edition 2012 (reprinted 2014 and 2015). Cover image: ‘Another fence’, photograph by Philip Bell, . This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers. Typeset in Helvetica Neue LT Std and Bembo Std. Printed by Griffin Press, Australia. Visit LexisNexis Butterworths at www.lexisnexis.com.au

Contents Preface Table of Cases Table of Statutes Chapter 1: The Concept of Property Chapter 2: Land, Fixtures and Chattels Chapter 3: Fundamental Principles — Tenure and Estates Chapter 4: Native Title Chapter 5: Possession and Adverse Possession Chapter 6: Law, Equity and Trusts Chapter 7: Old System and Priorities Chapter 8: Torrens Title Chapter 9: Common Property Chapter 10: Perpetuities Chapter 11: Leases and Tenancies Chapter 12: Easements and Profits à Prendre Chapter 13: Freehold Covenants Chapter 14: Mortgages Appendix A: A Notice of Adverse Possession Appendix B: Dealing Lodgment Activity Appendix C: Torrens Assurance Fund Payments

Index

Detailed Contents Preface Table of Cases Table of Statutes Chapter 1: The Concept of Property Connections to Property Introduction to the Concept Analytical Dimension What do we mean by the term ‘property’? Is property a relationship or a thing? Philosophical Bases of Property Labour theory of property Utilitarian justifications for private property Economic justification for private property Justice and equality Women and property A pluralist approach? Historical Changes in the Nature and Function of Property Doctrinal Dimension — The Boundary Between Property and Other Rights Property and contract Property and Indigenous rights Body parts and property rights

Is there property in a spectacle? Property and information Property and the right to work Property and civil rights Public property, private property, common property Property rights and human rights Conclusion Chapter 2: Land, Fixtures and Chattels Introduction Land Personalty Choses in possession Choses in action What is Land? Airspace Subsoil Natural rights Boundaries of Land Land bounded by tidal waters Land bounded by non-tidal waters Accretion and erosion Fixtures Introduction General principles Tenant’s fixtures Protection of Property Interests in Land Trespass to land — tort

Title to sue Recovery of possession Self-help Trespass to land — statutory penalties Chattels Introduction Property interests in chattels Fragmented property interests — bailment Actions in tort to protect proprietary interests in chattels Overlapping of remedies An exception — permanent loss or damage to a reversionary interest Rights of a bailee Self-help Finders Finder versus employer or principal Finder versus occupier Reform Fixtures by mistake Unreasonable refusal of consent to annex Right to implead a third party in an action in conversion Chapter 3: Fundamental Principles — Tenure and Estates Introduction Common Law and Principles of Reception Doctrine of Tenure Background and history Local Developments and the Doctrine of Tenure New South Wales and tenures — background

Quit rents Pastoral leases Other statutory modifications Relevance of English Tenure to Australia Differences between English and Australian doctrines Tenure, allodialism and native title Doctrine of Estates Definition of an ‘estate’ Freehold estates Estates of less than freehold — leasehold Words of limitation Determinable and conditional interests Future interests Vested and contingent remainders Reform Chapter 4: Native Title Introduction The Evolution of Native Title in Australia Relationship with the land ‘Settlement’ and onwards The Gove case Mabo (No 2) Background The finding in Mabo (No 2) Some key continuing issues in the ‘common law’ of native title Legislation Native Title Act 1993 (Cth)

Native Title Amendment Act 1998 (Cth) More recent legislative amendments Reform Definition of ‘native title’ Cultural knowledge Compensation Chapter 5: Possession and Adverse Possession Introduction Historical Development of the Concept of Possession Concept of possession Possessory actions Ejectment and Possession Need to establish ownership? Need to establish a better right to possession? Jus Tertii Adverse Possession Definition Rationale Adverse possession and human rights Source of adverse possession rights Adverse possession and the Crown When does the limitation period start? What needs to occur for the cause of action to accrue? What are the criteria for adverse possession? Property held on trust Suspending the statutory period Adding consecutive periods of adverse possession together

Stopping time running Abandonment To what rights does adverse possession give rise? Possessory title and Torrens land Reform Paper dealings Nature of the adverse possessor’s rights before a successful claim over Torrens title land Abolition of adverse possession doctrine Chapter 6: Law, Equity and Trusts Introduction Legal and Equitable Ownership Historical introduction Creation and Transfer of Interests in Land at Law Deeds Legal interests created by parol or by conduct Interests in personalty Creation and Transfer of Interests in Land in Equity — Contracts for the Sale of Land General Auctions Overcoming the absence of formal requirements — the equitable doctrine of part performance Equitable interests arising under contract — the doctrine of conversion and requirement of specific enforceability Creation and Transfer of Interests in Land in Equity — Trusts Express trusts — general Transfer of equitable interests

Formalities Non-express trusts Estoppel Proprietary estoppel Equitable estoppel Gifts Personalty Land Trusts and Domestic Relationships — Statutory Intervention Property (Relationships) 1984 Act (NSW) s 20 Family Law Act (Cth) s 79 Reform Uncertainty surrounding Conveyancing Act 1919 (NSW) s 23 Presumptions of resulting trust and advancement Domestic labour and unconscionability Chapter 7: Old System and Priorities Introduction Common law and equitable priority rules Earlier legal interest versus later legal interest Earlier legal interest versus later equitable interest Earlier equitable interest versus later legal interest Prior equitable interest versus later equitable interest Registration of deeds and priorities Introduction Registration of ‘instruments’ Registration and priority Bona fide and for valuable consideration

Effect of registration on void instruments Reform Persistence of old system title generally Tabula in naufragio Equities and ‘mere equities’ Chapter 8: Torrens Title Introduction Sir Robert Torrens Introduction of the Torrens scheme How land is brought under the Torrens system Old system title and computerisation conversions Torrens Register, folios and dealings Principles underpinning the Torrens system Indefeasibility of Title What is indefeasibility? Deferred versus immediate indefeasibility What will attract indefeasibility on registration? Exceptions to Indefeasibility Fraud Other estates and interests in land Prior folio Omission or misdescription of easements Omission or misdescription of profits à prendre Wrong descriptions of parcels Short-term tenancies Some Other Exceptions to Indefeasibility In personam exception

Adverse possession Overriding statutes Registrar-General’s general power to correct Other provisions in the Real Property Act Volunteers Unregistered Interests under the Torrens system Caveats Other circumstances where caveats may be used Priority notices Competition between unregistered interests Section 43A of the Real Property Act Torrens Assurance Fund — Pt 14 of the Real Property Act 1900 (NSW) Key sections of the Real Property Act — ss 120 and 129 Fraud and the Torrens Assurance Fund Damages Interrelationship with other sections Proceedings for recovery Reform Overriding statutes and the Real Property Act 1900 (NSW) Which is preferable — deferred or immediate indefeasibility? Volunteers Torrens Assurance Fund Chapter 9: Common Property Introduction Co-ownership General

Joint tenancy Tenancy in common Creation of co-ownership — joint tenancy or tenancy in common? Severance of joint tenancy Rights and obligations of co-owners Termination of co-ownership Strata Schemes Introduction Basic structure of strata schemes Common property Owners corporation Management Responsibilities of owners and occupiers By-laws Disputes Termination of strata schemes Strata renewal process Reform Unilateral severance of Torrens title land Occupation rents and profits Strata scheme by-laws and property rights Chapter 10: Perpetuities Introduction History of the Rule against Perpetuities Modern Rule Against Perpetuities Shared principles Common law position

Perpetuities Act 1984 (NSW) Applying the Rule against Perpetuities Examples of the rule’s application Reform Abolition of the rule against perpetuities Section 4(3) of the Perpetuities Act ‘Wait and see’ rule Chapter 11: Leases and Tenancies Introduction Leases at Common Law — Terminology Creation of Leases Substantive requirements Formal requirements Types of Tenancies at Common Law Fixed-term tenancies Periodic tenancies Tenancy at will Tenancy at sufferance Tenancy by estoppel Concurrent leases Reversionary leases Covenants in Leases Introduction Implied covenants Express covenants Enforceability of Covenants Privity of contract

Privity of estate Covenants touching and concerning the land Assignment of the lease Assignment of the reversion Can assignors or assignees sue or be sued for past breaches? Termination of Leases Termination by notice Effluxion of time Contractual remedies Forfeiture by re-entry Merger Surrender Frustration Remedies Damages and injunction Set-off Reform of the Common Law Removal of the certain duration requirement Abolition of s 127 implied tenancies Privity of estate and continuing liability for tenants after assignment Residential Tenancies Introduction What is a residential tenancy? Creating residential tenancies Parties’ obligations Rent Termination

NSW Civil and Administrative Tribunal (NCAT) Residential tenancies and priorities Reform of residential tenancies legislation Retail Leases What is a retail lease? Rights and obligations Rent Assignment and subletting Termination Disputes Chapter 12: Easements and Profits à Prendre Introduction Easements General Substantive requirements for the creation of an easement Examples of easements Easements distinguished from other types of rights Formal requirements for the creation of an easement Common types of easements and the extent of rights conferred Remedies Easements and the Torrens system Extinguishment of easements Profits à Prendre General Creation of profits à prendre Remedies Extinguishment of profits

Profits à rendre Access to Neighbouring Land Act 2000 (NSW) Reform Easements in gross Easements and profits by prescription Chapter 13: Freehold Covenants Introduction Enforceability of the Benefit of a Covenant at Common Law (Benefit of the Covenant Running with the Land of the Covenantee) Annexation of covenant to the land Express assignment of the benefit at law Enforceability of Covenants and s 36C of the Conveyancing Act 1919 (NSW) Enforceability of the Burden of a Covenant At law In equity — the doctrine in Tulk v Moxhay Requirements of s 88(1) of the Conveyancing Act Enforceability of the Benefit of a Covenant in Equity Benefit annexed to the land Express assignment Building Schemes Requirements of a building scheme Freehold Covenants and Torrens Restrictive covenants Building schemes and the Torrens system Formal Requirements for the Creation of Freehold Covenants

Old system title Torrens title Section 88B of the Conveyancing Act Remedies Modification and Extinguishment of Covenants Express agreement Implied agreement Merger Statutory extinguishment under s 89(1) of the Conveyancing Act Suspension of covenants Reform Positive covenants and freehold land Section 36C of the Conveyancing Act Chapter 14: Mortgages Introduction Nature of a mortgage Securities over chattels, hire-purchase, consumer credit law and the PPSA Mortgages over land Old System Title Mortgages Creation of legal and equitable mortgages over freehold land Mortgage of leasehold Torrens Title Mortgages Creation of registered and unregistered mortgages over freehold land Creation of mortgage of leasehold Crown land mortgages Clogs on the Equity of Redemption Introduction

Extinguishment of the right to redeem Postponement of the right to redeem Collateral advantages Other covenants Statutory intervention Relationship Debt and Mortgages Rights and Remedies of the Mortgagee Personal covenant Possession of the mortgaged property Right to assign Right to improve property Power to lease Rights to fixtures Appointment of a receiver Foreclosure Discharge of mortgage Power of sale Priorities Competition between mortgages Old system title Torrens title Tacking Death and Mortgages Reform Accurate nomenclature Internet advertising Sureties and sexually transmitted debt

Transfers as mortgages Resolution of negligence and good faith test with regard to power of sale

Appendix A: A Notice of Adverse Possession Appendix B: Dealing Lodgment Activity Appendix C: Torrens Assurance Fund Payments Index

Preface In Chapter 1 of this book, we observe that ‘conceptual questions as to the nature of property law, and evaluative assessments as to the appropriate boundary of property rights … intrude into the judicial and legislative elaboration of … doctrinal rules’.1 In this the fourth edition, we particularly seek to explore the connections between conceptual questions and doctrinal rules and, wherever possible, offer readers discussion and analysis of both. At times, we move from broad, macro discussions on one hand, to highly specific doctrinal analyses of statute and case law on the other. We also seek to enrich our analysis through the integration of relevant secondary literature (from books, scholarly journals and reports, for example). We hope that this means our book will appeal to a wide range of readers, including academics, students, judges and legal practitioners alike. Although we did not have a non-legal audience particularly in mind when writing, we would be delighted if non-lawyers simply wishing to know more about property law also found our book useful. We appreciate that there is a growing awareness of the importance of inter-disciplinarity in problemsolving and scholarship, and see property law as being able to contribute to the developing body of interdisciplinary understandings, and so enhance the successful functioning of many aspects of our society. It goes without saying that we, the authors, are all passionate about property law and hope that our deep fascination with the subject shines through, helping readers develop a similar passion or, if not, at least a warm and satisfying enjoyment of the subject. We have tried to weave a narrative throughout the book — a narrative that emphasises the way in which Australian land law has developed from its early colonial heritage into law that responds to the peculiar Australian conditions and circumstances, and a narrative that sees social, political and cultural experience embedded in land law. Property law’s capacity to adapt to new social, political and cultural circumstances is particularly evident in the chapters on fundamental principles (Chapter 3), native title (Chapter 4) and Torrens title (Chapter 8), for

example, but of course, it is also evident in many of the other chapters in this book. As is to be expected, this edition includes discussion and analysis of new statutory provisions, new reports and policies, and many new cases. These include: native title cases such as the Bar-Barrum People’s appeal in Queensland v Congoo,2 and Akiba v Commonwealth;3 Cassegrain v Gerard Cassegrain & Co Pty Ltd4 and its discussion of the fraud exception to indefeasibility; the impact of the new priority notice regime5 on priority rules within the Torrens system; Re Estate Late Chow Cho-Poon; Application for Judicial Advice6 as a recent application of the rule against perpetuities — and, by way of comparison with New South Wales, the Northern Territory’s most recent report on the rule against perpetuities;7 the High Court’s discussion of proprietary estoppel in Sidhu v Van Dyke;8 the role of the New South Wales Civil and Administrative Tribunal (NCAT) in its application to residential and commercial leasing; an overview of the new regime under the Personal Property Securities Act 2009 (Cth) (PPSA), which has some important and possibly unexpected impacts on security arrangements involving goods;9 and updated references to the new version of the New South Wales strata titles legislation. In this edition, there has been a change to the authorial team. We farewell Brendan Edgeworth, who, along with lead author Janice Gray, was one of the two original authors of the book back in 2003, and, in his place, we welcome Heather Roberts. Heather, formerly a solicitor in the property division of a large commercial firm before joining the Australian National University, has a keen interest in property law and brings her considerable experience and expertise to the authorial role. In terms of responsibilities in this edition, Janice Gray has taken over Chapter 1 on the concept of property, from Brendan Edgeworth. She has substantially revised that chapter to make clear connections between land law and emerging property-related issues (such as housing affordability, the privatisation of Land and Property Information (LPI), and the controversy surrounding compulsory acquisitions). She has also substantially revised and updated the chapters on fundamental concepts (Chapter 3), possession and adverse possession (Chapter 5), and perpetuities (Chapter 10) — chapters

that she wrote for the first edition, and revised and updated in the second and third editions. Meanwhile, Heather Roberts has taken over the Torrens title chapter (Chapter 8), originally both written and subsequently revised by Janice Gray in the previous editions. Heather has also assumed responsibility for revising and updating Chapters 2 and 6 as well as substantially re-writing Chapter 7 (old system and priorities) — all chapters that were originally written and revised in later editions by Brendan Edgeworth. In this edition, Neil Foster has continued to assume responsibility for updating and revising Chapters 4, 9 and 14 (originally written by Janice Gray), while Shaunnagh Dorsett has been responsible for Chapters 11, 12 and 13 (originally written by Brendan Edgeworth). We are grateful to more people than we are able to thank here. However, some individuals deserve special mention. We have very much appreciated the patience and expertise of our editors at LexisNexis, Jocelyn Holmes and Nicola Tomlin. Both have been highly professional and a delight with which to work. In particular, Janice Gray would like to thank David for his continual support and affection. She also thanks Natalie Hodgson for her research assistance and the Faculty of Law, UNSW Sydney, for the research grant funding making Natalie’s employment possible. Neil Foster thanks his family for their ongoing love and support, and his colleagues at Newcastle Law School, especially Dr Kevin Sobel-Read and Dr Tim Connor for assistance with PPSA materials. Shaunnagh Dorsett would like to thank Chris Pearce for his research assistance and the Faculty of Law at the University of Technology Sydney for its support. Heather Roberts would like to thank Andrew Henderson, Darryn Jensen, Roberta McRae, Wayne Morgan and Michael Tarlowski for their comments. We have stated the law as it was available to us on 31 March 2017. Janice Gray Neil Foster

Shaunnagh Dorsett Heather Roberts April 2017

1.

Chapter 1 at 1.5.

2.

Queensland v Congoo (2015) 256 CLR 239.

3.

Akiba v Commonwealth (2013) 250 CLR 209.

4.

Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425.

5.

Real Property Act 1900 (NSW) Pt 7B.

6.

Re Estate Late Chow Cho-Poon; Application for Judicial Advice [2013] NSWSC 844.

7.

Northern Territory Law Reform Committee, Northern Territory Law Reform Committee: Report on Perpetuities, Report No 40, Department of Attorney-General and Justice (NT), July 2014.

8.

Sidhu v Van Dyke (2014) 251 CLR 505.

9.

See Chapter 14 at 14.4–14.10.

Table of Cases References are to paragraph numbers 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 …. 12.34 7-Eleven Stores Pty Ltd v United Petroleum Pty Ltd [2010] QSC 469 …. 11.40

A Abbatangelo v Whittlesea City Council (2008) V Conv R 54-750; [2007] VSC 529 …. 5.66, 5.118 Abbiss v Burney (1881) 17 Ch D 211 …. 10.12, 10.26 Abela v Public Trustee [1983] 1 NSWLR 308 …. 9.44, 9.46 Abigail v Lapin (1934) 51 CLR 58; [1934] AC 491 …. 8.73, 8.131, 8.138, 8.163, 8.166 Ace Property Holdings Pty Ltd v Australian Postal Corp [2010] QCA 55 …. 5.9, 5.80 Ackroyd v Smith (1850) 10 CB 164 …. 12.5 Acorn Computers v MCS Microcomputer Systems Pty Ltd (1984) 6 FCR 277 …. 6.15 Adamson v Hayes (1973) 130 CLR 276 …. 6.23, 6.53 Adavale Realty Pty Ltd v Williams (RTT 96/024133 …. 11.123 Adderley v Dixon (1824) 1 Sim & St 607 …. 6.14 Adeyinka Oyekan v Musendiku Adele [1957] 1 WLR 876 …. 4.20 Adler v Blackman [1953] 1 QB 146 …. 11.13 Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 …. 4.13

AG Securities v Vaughan [1990] 1 AC 417 …. 11.5 AG(CQ) Pty Ltd as Trustee for AG(CQ) Family Trust v A & T Promotions Pty Ltd as Trustee for Toowoomba Unit Trust [2011] 1 Qd R 306; [2010] QCA 083 …. 7.26, 7.27, 8.162 Agra Bank v Barry (1874) LR 7 HL 135 …. 7.6, 7.39 Agripay Pty Ltd v Byrne [2011] 2 Qd R 501 …. 14.41 Agripower Barraba Pty Ltd v Blomfield (2015) 317 ALR 202 …. 2.19, 2.21 Ahern v LA Wilkinson (Northern) Ltd [1929] St R Q 66 …. 11.44 Ahluwalia v Robinson [2003] NSWCA 175 …. 11.37 Akiba on behalf of the Torres Strait Islanders of the Regional Seas Claim Group v State of Queensland (No 2) [2010] FCA 643 …. 4.34 Akiba v Commonwealth (2013) 250 CLR 209 …. 4.34, 4.57 Akici v LR Butlin [2005] EWCA Civ 1296; [2006] 1 WLR 201 …. 5.9 Alcorn v R [2006] NSWCCA 209 …. 8.204 Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53 …. 8.89, 8.91 Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437 …. 11.24 Aldred’s Case, Re (1610) 9 Co Rep 57b …. 12.7 Aldridge v Wright [1929] 2 KB 117 …. 12.26, 12.52 Allam Homes Pty Ltd v Vocata [2003] NSWSC 628 …. 8.145 Alleasing Pty Ltd; Re OneSteel Manufacturing Pty Ltd v OneSteel Manufacturing Pty Ltd [2017] FCA 656 …. 14.9 Allen v Anthony (1816) 1 Mer 282; 35 ER 978 …. 7.19 — v Knight (1846) 5 Hare 272 …. 7.28 — v Roughley (1955) 94 CLR 98 …. 5.32, 5.33, 5.38, 5.39, 5.43, 5.44, 5.45, 5.55, 5.77, 5.135, 5.144, 5.145 — v Snyder [1977] 2 NSWLR 685 …. 6.33, 6.34 Allen’s Asphalt Pty Ltd v SPM Group Pty Ltd [2010] 1 Qd R 202; (2009) 255

ALR 588; [2009] QCA 134 …. 8.136, 8.162, 14.16 Allfox Building Pty Ltd v Bank of Melbourne Ltd (1992) NSW ConvR ¶55– 634 …. 14.115 Allianz Australia Insurance Ltd v Lo-Guidice [2012] NSWSC 145 …. 2.48 Allison v Petty (1899) 9 QLJ 125 …. 3.44 Altarama Ltd v Camp (1980) 5 ACLR 513 …. 14.115 Amcor Ltd v Barnes [2016] VSC 707 …. 14.31 American Express International Banking Corporation v Hurley [1985] 3 All ER 564 …. 14.64 Amodu Tijani v Secretary, Southern Nigeria [1921] 2 AC 399 …. 3.43 Amtel Pty Ltd v Ah Chee [2015] WASC 341 …. 14.41 Anderson v Anderson [2016] NSWSC 1204 …. 9.33, 9.35 — v Bowles (1951) 84 CLR 310 …. 11.17, 11.27 — v O’Donnell (2000) 10 BPR 18,501 …. 9.34 Anderson, Ex parte; Re Green (1946) 46 SR (NSW) 389 …. 11.54 Anderson Group Pty Ltd v Tynan Motors Pty Ltd [2006] NSWCA 22 …. 2.62 Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205 …. 14.32 — v Parker [1973] Qd R 93 …. 3.114, 3.116 — v Partington (1791) 3 Bro CC 401; 29 ER 610 …. 10.18 Angelopulos v Sabatino (1996) 65 SASR 1 …. 6.41 Anonymous (1722) 2 P Wms 75; 24 ER 646 …. 3.4 Antar v Fairchild Developments Pty Ltd [2008] NSWSC 638 …. 8.145 Antoniades v Villiers [1990] 1 AC 417 …. 11.5 Apostolou v VA Corp Aust Pty Ltd [2010] FCA 64 …. 14.106 Appleyard Capital Pty Ltd, Re (2014) 101 ACSR 629 …. 14.5 Application of Fox (1981) 2 BPR 9310 …. 13.6

Application of Mango Credit Pty Ltd, Re [2016] NSWSC 199 …. 14.31 Apriaden Pty Ltd v Seacrest Pty Ltd (2005) 12 VR 319 …. 11.65 Arambasic v Veza (No 4) [2014] NSWSC 1109 …. 8.124 Argyle Art Centre Pty Ltd v Argyle Bond & Free Stores Co Pty Ltd [1976] 1 NSWLR 377 …. 11.66 Armitage v Nurse [1998] Ch 241 …. 7.7 Armory v Delamirie (1722) 1 Strange 506; 93 ER 664 …. 2.64 Armour v Penrith Projects Pty Ltd [1979] 1 NSWLR 98 …. 8.194 Ashburnam Golf Club Ltd v Hogan (22 July 1982, unreported) …. 5.105 Ashe v Westminster Bank plc [2008] 1 WLR 710 …. 5.124 Asher v Whitlock (1865) LR1QB 1 …. 3.9, 5.16, 5.33, 5.34, 5.37, 5.44, 5.48, 5.70, 5.77, 5.88, 5.135, 5.145 Ashforth, Re [1905] 1 Ch 535 …. 10.10 Ashmore Developments Pty Ltd v Eaton (1992) Qd R 1 …. 11.56 Ashoil Holdings Pty Ltd v Fassoulas (2005) NSW ConvR ¶56-125 …. 12.56, 12.62 Assaf v Kostrevski (1999) NSW ConvR ¶55-883 …. 11.37 Assets Co Ltd v Mere Roihi [1905] AC 176 …. 8.23, 8.28, 8.62, 8.66, 8.70, 8.73 Attorney-General v Brown (1847) 1 Legge 312; 2 SCR (NSW) 30 …. 3.5, 3.7, 3.33, 3.36, 3.38, 4.7 — v Chambers (1854) 4 De GM & G 206 …. 2.13 — v Mosman Council (1910) 11 SR (NSW) 113 …. 2.8 — v Pyle (1738) 1 Atk 435; 26 ER 278 …. 3.115, 10.54 — v Simpson [1901] 2 Ch 671 …. 12.32 Attorney-General (Cth) v R T Co Pty Ltd (No 2) (1957) 97 CLR 146 …. 2.21 Attorney-General (Quebec) v Attorney-General (Canada) [1921] 1 AC 401 …. 4.43

Atwell v Roberts (No 3) [2009] WASC 96 …. 6.19 Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd 1 …. 11.18, 11.23 Austerberry v Corporation of Oldham (1885) 29 Ch D 750 …. 12.37 — v Oldham Corp (1885) 29 Ch D 750 …. 13.12 Austin Construction Co (Australia) Ltd v Becketts Holdings Pty Ltd (1958) 75 WN (NSW) 444 …. 8.89 Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 …. 6.41 Australia and New Zealand Bank Ltd v Sinclair [1968] 2 NSWR 26 …. 14.62 Australia and New Zealand Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 195 …. 14.96, 14.98, 14.104, 14.111 — v Comer (1993) NSW ConvR ¶55–668 …. 14.54 — v Devine Holdings Pty Ltd (1991) ANZ ConvR 526 …. 14.86 — v Pola [2013] NSWSC 1801 …. 14.104 — v Widin (1990) 26 FCR 21; 102 ALR 289 …. 6.8, 6.12, 14.16 Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 …. 6.19, 7.26, 7.28 Australia in Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd (2008) 37 WAR 498 …. 12.7 Australian Co-operative Development Society Ltd, Ex parte [1978] Qd R 395 …. 14.124 Australian Express Pty Ltd v Pejovic [1963] NSWR 954 …. 14.53 Australian Guarantee Corporation Ltd v De Jager [1984] VR 483 …. 8.78 Australian Guarantee Corporation (NZ) Ltd v CFF Commercial Finance Ltd [1995] 1 NZLR 129 …. 8.168 Australian Hi-Fi Publications Pty Ltd v Gehl [1979] 2 NSWLR 618 …. 8.86, 12.49, 12.51 Australian Provincial Assurance Co Ltd v Rogers (1943) 43 SR (NSW) 202 …. 11.8

Australian Provincial Co Ltd v Coroneo (1938) 38 SR (NSW) 700 …. 2.22 Australian Regional Credit Pty Ltd v Mula [2009] NSWSC 325 …. 14.41 Australian Securities & Investments Commission, Re Money for Living (Aust) Pty Ltd (admins apptd) v Money for Living (Aust) Pty Ltd (admins apptd) (No 2) (2006) 24 ACLC 1240 …. 14.34 Australian Security Estates Pty Ltd v Bluecrest Holdings Pty Ltd (1999) 9 BPR 17,533 …. 8.137 Australian Softwood Forests Pty Ltd v Attorney-General (NSW) (1981) 148 CLR 121 …. 12.65 Avco Financial Services Ltd v Commonwealth Bank of Australia (1989) 17 NSWLR 679 …. 14.125, 14.126 Avco Financial Services v White [1977] VR 561 …. 8.143 Ayton v Ayton (1787) 1 Cox 327; 29 ER 1188 …. 10.21

B Backhouse v Bonomi (1861) 9 HLC 503 …. 12.11 Bacon v O’Dea (1989) 88 ALR 486 …. 8.143 Bahr v Nicolay (No 2) (1988) 164 CLR 604; 78 ALR 1 …. 8.66, 8.75, 8.92, 8.97, 8.101, 12.51 Bailey v Barnes [1894] 1 Ch 25 …. 7.5, 7.31, 14.132 — v J Paynter (Mayfield) Pty Ltd [1966] 1 NSWR 596 …. 11.39 Bain v Brand (1876) 1 App Cas 762 …. 2.25 Bainbrigge v Browne (1881) 18 Ch D 188 …. 7.33 Baird Textile Holdings v Marks & Spencer Plc [2001] EWCA Civ 274 …. 1.45 Baker v Sebright (1879) 13 Ch D 179 …. 3.54 Bakewell Management Ltd v Brandwood [2004] 2 AC 519 …. 12.33 Baldwin v Rogers (1853) 3 De GM & G 649; 43 ER 255 …. 10.21 Ballard’s Conveyance, Re [1937] Ch 473 …. 13.6

Ball-Guymer v Livantes (1990) 102 FLR 327 …. 2.18 Baloglow v Konstantinidis (2000) 11 BPR 20,721 …. 6.22 Bank of New South Wales v Commonwealth (1948) 76 CLR 1 …. 4.50 Bank of South Australia v Ferguson (1998) 192 CLR 248; 151 ALR 729 …. 8.76 Bank of Victoria v Forbes (1887) 13 VLR 760 …. 5.119 — v M’Hutchison (1881) 7 VLR (L) 452 …. 11.13 Bannister v Bannister [1948] 2 All ER 133 …. 6.32 — v Cheung [2014] NSWCATCD 105 …. 11.109 Barham v Barham [2010] NSWSC 503 …. 9.35 Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWLR 480 …. 11.43 Barker v Corporation of the City of Adelaide [1900] SALR 29 …. 2.8 Barlin Investments Pty Ltd v Westpac Banking Corporation (2012) 16 BPR 30, 671 …. 8.177, 8.181 Barnes v Addy (1874) LR 9 Ch App 244 …. 6.31, 8.102 Barnhart v Greenshields (1853) 9 Moo PC 18 …. 7.18 Barns v Edwards (1993) 31 NSWLR 714 …. 2.39 — v Queensland National Bank Ltd (1906) 3 CLR 925 …. 14.95, 14.104 Barrett v Barrett (1918) 18 SR(NSW) 637 …. 10.14 Barry v Heider (1914) 19 CLR 197 …. 8.92, 8.93, 8.94, 8.128, 8.129, 8.137, 8.161, 14.19 Bartha v O’Riordan [2004] QSC 205 …. 5.87 Bartholomew’s Will, Re (1849) 1 Mac & G 354 …. 10.14 Bartlett v Ryan (2000) 10 BPR 18,077 …. 5.86, 5.149, 5.155 Basely v Clarkson (1681) 3 Lev 37 …. 2.31 Bass v Gregory (1890) 25 QBD 481 …. 12.7, 12.10 Bassett v Nosworthy (1673) Rep t Finch 102 …. 7.11

Batchelor v Marlow [2003] 1 WLR 764 …. 12.7 Batey v Potts (2004) 61 NSWLR 274 …. 9.50 Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566 …. 6.31 Batiste v Lenin (2002) 11 BPR 20,403 …. 11.60, 11.72, 11.82 Baumgartner v Baumgartner (1987) 164 CLR 137 …. 6.35, 6.49, 6.55, 7.20 Baxendale v Instow PC [1981] 2 All ER 620 …. 2.15 Baxter v Four Oaks Properties Ltd [1965] Ch 816 …. 13.33 Bayliss v Public Trustee (1988) 12 NSWLR 214 …. 8.126 Baynes & Co v Lloyd & Sons [1895] 2 QB 610 …. 11.23 Bayport v Watson [2002] VSC 206 …. 5.113 Bazley v Wesley Monash IVF Pty Ltd [2011] 2 Qd R 207 …. 1.65 Beames v Queensland [2002] QSC 83 …. 8.118 Beatty v Australia and New Zealand Banking Group Ltd [1995] 2 VR 301 …. 8.32 Beaulane Properties v Palmer [2005] EWHC 1460 …. 5.106 Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459 …. 8.152 Beconwood Securities Pty Ltd v Australia and New Zealand Banking Group Ltd (2008) 246 ALR 361 …. 14.1 Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] 1 NSWLR 106 …. 8.152, 8.160 Beeby v Official Assignee of Pickering [1953] NZLR 832 …. 14.125 Beever v Spaceline Engineering Pty Ltd (1993) NSW ConvR ¶55-678 …. 5.35, 5.86 Belgrave Nominees Pty Ltd v Barlin-Scott Air-conditioning (Australia) Pty Ltd [1984] VR 947 …. 2.21 Bellevue Crescent Pty Ltd v Marland Holdings Pty Ltd (1998) 34 NSWLR 364 …. 12.54

Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260 …. 8.136 Belperio v Linehaul Holdings Pty Ltd (2004) 89 SASR 185 …. 11.60 Bendigo and Adelaide Bank Ltd v Karamihos [2014] NSWCA 17 …. 14.36 Benjamin, Re [1926] VLR 378 …. 10.14 Bennell v Western Australia (2006) 153 FCR 120 …. 4.32 Bernstein v Skyviews & General Ltd [1978] QB 479 …. 1.4 Bernstein of Leigh (Baron) v Skyviews and General Ltd [1978] QB 479 …. 2.7 Berryman v Sonnenschein [2008] NSWSC 213 …. 12.36 Beswick v Beswick [1966] Ch 538 …. 13.10 Bethian Pty Ltd v Green (1977) 3 Fam LR 11,579 …. 8.142 Betlehem v Keytown Constructions Pty Ltd [2007] WASC 38 …. 8.142 Bevan v Bevan [2014] FamCAFC 19 …. 6.51 Bevham Investments Pty Ltd v Belgot Pty Ltd (1982) NSW ConvR ¶55–088 …. 14.94 Bhana v Bhana [2002] NSWSC 117 …. 3.113 Big Top Hereford Pty Ltd v Thomas (2006) 12 BPR 23,843 …. 9.65 Biggs v Hoddinott [1898] 2 Ch 307 …. 14.28, 14.30 Billson v Residential Apartments Ltd [1992] 1 AC 494 …. 11.73 Bird v Hildage [1948] 1 KB 91 …. 11.66 Birmingham Citizens Permanent Building Society v Caunt [1962] Ch 883 …. 14.53 Bishop v Taylor (1968) 118 CLR 518 …. 11.4 Biviano v Natoli (1998) 43 NSWLR 695 …. 9.54, 9.59 Black v Garnock (2007) 230 CLR 438; [2007] HCA 31 …. 6.18, 8.135, 8.138, 8.172 Blacks Ltd v Rix [1962] SASR 161 …. 13.39 Blackwell, Re [1926] Ch 223 …. 10.14

Blackwood v London Chartered Bank of Australia (1871) 10 SCR (NSW) Eq 91 …. 7.39 Blades v Higgs (1861) 10 CBNS 713; 142 ER 634 …. 2.63 Blankard v Galdy (1693) 2 Salk 411; 91 ER 356 …. 3.36 Blathwayt v Baron Cawley [1976] AC 397; [1975] 3 All ER 625 …. 3.93 Blaxland v Grattan (1887) 8 LR (NSW) (L) 287 …. 7.41 Bleckly, Re; Bleckly v Bleckly [1951] Ch 740 …. 10.21 Blower v Larkin [1833] NSWSupC 94 …. 5.50 Blulock Pty Ltd v Majic (2001) 10 BPR 19,143 …. 12.34 Blundell v Curvers [2002] NSWSC 436 …. 9.65 Bodney v Bennell (2008) 167 FCR 84 …. 4.32 Bogdanovic v Koteff (1988) 12 NSWLR 472 …. 8.27, 8.124, 8.125 Bolten v Beckenham [1981] 1 QB 278 …. 14.46 Bolton v Bolton (1879) 11 Ch D 968 …. 12.29 Bona Vista Properties Pty Ltd, Re [2007] NSWSC 1278 …. 12.61 Bond v Hong Kong Bank of Australia Ltd (1991) 25 NSWLR 286 …. 14.47 Bondlake Pty Ltd v Owners — Strata Plan No 60285 (2005) 62 NSWLR 158 …. 9.74, 9.75 Bonner v Tottenham & Edmonton Permanent Investment BS [1899] 1 QB 161 …. 11.49 Booth v The Salvation Army Building Association Ltd (1897) 14 TLR 3 …. 14.32 Borg-Warner Acceptance Corporation (Australia) Ltd v Diprose (1987) 4 BPR 9408; NSW ConvR ¶55–364 …. 14.40 Borman v Griffith [1930] 1 Ch 493 …. 12.6, 12.26 Boss v Hamilton Island Enterprises Ltd [2009] QCA 229 …. 11.43 Bostock’s Settlement, Re; Norrish v Bostock [1921] 2 Ch 469 …. 3.77 Boulter v Boulter (1898) 19 LR (NSW) Eq 135 …. 9.56

Boulton v Pilcher (1861) 29 Beav 633 …. 10.14 Bourke v Beneficial Finance Corp Ltd (1991) ANZ ConvR 473 …. 14.112 Bowden v Lo (1998) 9 BPR 16,317; NSW ConvR ¶55-868 …. 11.82, 11.115 Boyce v Beckman (1890) 11 LR (NSW)(L) 139 …. 7.38 Boyd v Mayor of Wellington [1924] NZLR 1174 …. 8.26, 8.28 Boyer v Warbey [1953] 1 QB 234 …. 11.51, 11.86 BP Properties Ltd v Buckler (1988) 55 P & CR 337 …. 5.92 Brace v Duchess of Marlborough (1728) 2 P Wms 491 …. 7.10, 7.31 Bradford Banking Co Ltd v Henry Briggs, Son & Co Ltd (1886) 12 App Cas 29 …. 4.137 Bradford Corporation v Pickles [1895] AC 587 …. 12.11 Bradley v Carritt [1903] AC 253 …. 14.31 Brand v Chris Building Co Pty Ltd [1957] VR 625 …. 2.30, 2.66 Break Fast Investments Pty Ltd v Giannopoulos (also known as Giannopoulos) (No 5) [2011] NSWSC 1508 …. 8.105 Breams Property Investment Co Ltd v Stroulger [1948] 2 KB 1 …. 11.46 Bree v Scott (1904) 29 VLR 692 …. 5.119 Breen v Williams (1996) 186 CLR 71 …. 4.52 Breheney, In the Will of [1915] VLR 242; (1915) 21 ALR 273 …. 10.20 Breskvar v Wall (1971) 126 CLR 376 …. 7.26, 8.20, 8.26, 8.27, 8.29, 8.30, 8.31, 8.44, 8.92, 8.104, 8.124, 8.125, 8.167, 8.202, 14.142 Brett, In the Will of [1947] VLR 483 …. 10.38 Brickwood v Young (1905) 2 CLR 387 …. 9.55 Bridges v Bridges [2010] NSWSC 1287 …. 5.59, 5.80, 5.81, 5.90, 5.121 — v Hawkesworth (1851) 21 LJQB 75; [1843–60] All ER Rep 122 …. 2.67 — v Mees [1957] Ch 475 …. 5.131 Brikom Investments Ltd v Carr [1979] QB 467; [1979] 2 All ER 753 ….

11.66 Brisbane South Regional Health Authority v Taylor [1996] HCA 25 …. 5.58 Brisbane Water County Council v Commissioner of Stamp Duties [1979] 1 NSWLR 320 …. 9.122 British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063 …. 11.82 British Bakeries (Midlands) v Michael Testler & Co Ltd [1986] 1 EGLR 64 …. 11.43 British Road Services Ltd v Arthur V Crutchley & Co Ltd [1968] 1 All ER 811 …. 2.52, 2.62 Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420; NSW ConvR ¶55–342 …. 14.40 Brocklesby v The Temperance Permanent Building Society [1895] AC 173 …. 7.8 Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd (2007) 35 WAR 27 …. 8.131 Brook, Ex parte; Roberts, Re (1878) 10 Ch D 100 …. 2.28 Brookfield Multiplex Ltd v Owners — Strata Plan No 61288 (2014) 254 CLR 185 …. 9.71 Brown v Brown (1993) 31 NSWLR 582 …. 6.30, 6.54 Brown (on behalf of the Ngarla People) v State of Western Australia (No 2) [2010] FCA 498 …. 4.57, 4.58 Browne v Flower [1911] 1 Ch 219 …. 11.23, 12.7 Brunker v Perpetual Trustee Co Ltd (1937) 57 CLR 555 …. 8.128 Brutan Investments Pty Ltd v Underwriting and Insurance Ltd (1980) 39 ACTR 47 …. 14.116 Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 …. 11.5, 11.18 Brydall v Owners of Strata Plan No 66794 (2009) 14 BPR 26,831 …. 12.7 Bryson v Bryant (1992) 29 NSWLR 188 …. 6.36, 6.55

Buchanan-Wollaston’s Conveyance, Re [1939] Ch 738 …. 9.63 Buckinghamshire County Council v Moran [1990] Ch 623; [1989] 2 All ER 225 …. 5.106, 5.108, 5.110, 5.113, 5.118 Bucknall v Reid (1876) 10 SALR 188 …. 11.29 Bull v Bull [1955] 1 QB 234 …. 9.15 Bullen v A’Beckett (1865) 1 Moo NS 223; 15 ER 684 …. 7.11, 7.40 Bulli Coal Mining Co v Osborne [1899] AC 351 …. 2.10 Bulstrode v Lambert [1953] 1 WLR 1064 …. 12.36 Bunn, Re (1880) 16 Ch D 47 …. 10.14 Bunning Building Supplies v Sgro (1995) V Conv R ¶54-535 …. 8.143 Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qd R 712 …. 6.14, 6.15 Burgess v Rawnsley [1975] Ch 429 …. 9.31, 9.43 Burman’s Caveat, Re [1994] 1 Qd R 123 …. 5.151 Burnett v Randwick City Council [2006] NSWCA 196 …. 2.65 Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540 …. 11.14 Burrell, Re (1869) LR 7 Eq 399 …. 14.47 Burrows v Crimp (1887) 4 WN (NSW) 11b …. 7.39 Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 …. 2.6, 8.81, 8.82, 9.66, 12.7 Butcher v Bowen [1964] NSWR 36 …. 11.10 Butler v Fairclough (1917) 23 CLR 78 …. 8.66, 8.131, 8.138, 8.147, 8.162, 8.165, 8.167, 8.168 Byrne v Hoare [1965] Qd R 135 …. 2.65

C C J Belmore Pty Ltd v AGC (General Finance) Ltd [1976] 1 NSWLR 507 …. 14.33

Cable v Bryant [1908] 1 Ch 259 …. 11.24 Cadell v Palmer (1833) 1 Cl & Fin 372; 6 ER 956 …. 10.5, 10.26 Cain v New South Wales Land and Housing Corporation [2014] NSWCA 28 …. 11.125 Calabrese v Miuccio (No 2) [1985] 1 Qd R 17 …. 9.43 Calder v Attorney-General of British Columbia (1973) 34 DLR (3rd) 145 …. 4.13, 4.42 Caldwell v Rural Bank of New South Wales (1951) 69 WN (NSW) 246 …. 8.26 Callow v Rupchev (2009) 14 BPR 27,533 …. 9.58, 9.132 Calverley v Green (1984) 155 CLR 242 …. 6.29, 6.30, 6.54, 9.17 Cambridge v Rous (1858) 25 Beav 409; 53 ER 693 …. 10.32 Cameron v Murdoch (1986) 63 ALR 575 …. 6.39 Campbell v Baigent (2010) 15 BPR 28,959 …. 12.59, 12.60, 12.61, 12.62 — v Holyland (1877) 7 Ch D 166 …. 14.70, 14.71 Canas Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433 …. 11.68 Canning’s Will Trusts, Re [1936] Ch 309 …. 10.36 Cape v Trustees of the Savings Bank of New South Wales (1893) 14 LR (NSW) Eq 204 …. 4.80 Capital Finance Australia Ltd v Karabassis (2003) 11 BPR 21,123 …. 8.142 — v Struthers (2008) 14 BPR 98,328; [2008] NSWSC 440 …. 7.29, 8.140 Carberry v Gardiner (1936) 36 SR (NSW) 559 …. 11.8 Cardwell v Walker [2004] 2 P & CR 9 …. 12.6 Carey v Doyne (1856) I Ch R 104 …. 14.47 Carmody v Delehunt [1984] 1 NSWLR 667 …. 9.133 Carpet Fashion Pty Ltd v Forma Holdings Pty Ltd [2004] NSWCA 150 …. 11.21

Carr v Finance Corp of Australia (No 2) (1982) 150 CLR 139 …. 14.92 Carroll v Perpetual Trustee Co Ltd (1916) 22 CLR 423 …. 10.12 Carter v Cole [2006] All ER(D) 139 …. 12.37 Cartwright, Re; Avis v Newman (1889) 41 Ch D 532 …. 3.51 Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425; 316 ALR 111 …. 7.11, 7.24, 8.20, 8.62, 8.127, 9.23 Castell & Brown Ltd, Re [1898] 1 Ch 315 …. 7.28 Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149 …. 8.23, 8.116, 12.48 — v — (No 2) (2013) 303 ALR 84 …. 8.23 Casuarina Rec Club Pty Ltd v Owners — Strata Plan 77971 (2011) 80 NSWLR 711 …. 9.104, 9.127, 9.134 Cavalier v Pope [1906] AC 428 …. 11.37 Cawthorne v Thomas (1993) 6 BPR 13,840 …. 5.103, 5.135 Caxton Publishing v Sutherland Publishing [1939] AC 178 …. 2.49 Ceedive Pty Ltd v May [2005] NSWSC 222 …. 8.93 Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 …. 11.66 Central Mortgage Registry of Australia Ltd v Donemore Pty Ltd [1984] 2 NSWLR 128 …. 14.136 Cervi v Letcher (2011) 33 VR 320 …. 5.110, 5.114, 5.116 Chaffers v Abell (1839) 3 Jur 577 …. 10.14 Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452 …. 8.184, 8.185, 8.187, 8.188, 8.204 Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd [2014] NSWSC 952 …. 8.168 Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675 …. 8.4, 8.46, 8.48, 8.50 — v — [2008] NSWSC 178 …. 8.190, 8.191, 8.193

Chang v Registrar of Titles (1976) 137 CLR 177 …. 6.18 Chant v Deputy Commissioner of Taxation (1994) 15 ACSR 184 …. 14.123 Chaplin v Chaplin (1773) 3 P Wms 229 …. 3.48 — v Smith [1926] 1 KB 198 …. 5.9 Chapman, Re [1977] 1 WLR 1163 …. 10.18 Chartered Trust plc v Davies (1997) 76 P & CR 396 …. 11.24 Chase Corporation (Australia) Pty Ltd v North Sydney Brick and Tile Co Ltd (1994) 35 NSWLR 1 …. 14.135 Chasfild Pty Ltd v Taranto [1991] VR 225 …. 8.31, 8.32 Chatham Empire Theatre (1955) Ltd v Ultrans Ltd [1961] 2 All ER 381 …. 11.74 Chatsworth Estates Co v Fewell [1931] 1 Ch 224 …. 13.44, 13.48 Cheah Theam Swee v Equiticorp Finance Group Ltd [1992] 1 AC 472 …. 14.47 Cheedy on behalf of the Yindjibarndi People v Western Australia [2011] FCAFC 100 …. 4.1, 4.86 Chelsea Yacht & Boat Co Ltd v Pope [2000] 1 WLR 1941 …. 2.21 Chia v Rennie (1997) 8 BPR 15,601 …. 14.116 Chick v Dockray [2011] TASFC 1 …. 12.36 China and South Sea Bank Ltd v Tan Soon Gin [1990] 1 AC 536 …. 14.102, 14.109, 14.114 Chiu v Healey (2003) 11 BPR 21,241 …. 12.36, 12.59 Chong v Chanell [No 2] NSWSC 1066 …. 8.151 Christopoulos v Kells (1988) 13 NSWRL 541 …. 12.50 Chronopoulos v Caltex Oil (Australia) Pty Ltd (1982) 45 ALR 481 …. 6.5, 11.51 Chung Ping Kwan v Lam Island Co Ltd [1997] AC 38 …. 5.80 Circuit Finance Australia Limited (recs and mgrs apptd) (in liq) v Panella [2011] NSWSC 311 …. 8.162

Circuit Finance Australia Ltd v Panella (2012) 16 BPR 30,347 …. 6.19 Circuit Finance Pty Ltd v Glenauchen Pty Ltd [2001] SASC 41 …. 14.32 City and Metropolitan Properties Ltd v Greycroft Ltd [1987] 1 WLR 1085 …. 11.56 City Developments Pty Ltd v Registrar-General of the Northern Territory [2001] NTCA 7 …. 12.5 City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd (1961) 106 CLR 477 …. 2.62 City of Canada Bay v Bonaccorso Pty Ltd (2007) 71 NSWLR 424 …. 8.109, 8.110 City of Subiaco v Heytesbury Properties Pty Ltd [2001] 24 WAR 146 …. 11.77 Citycorp Australia Ltd v McLoughney (1984) 35 SASR 375 …. 14.106 Cityland Property (Holdings) Ltd v Dabrah [1968] Ch 166 …. 14.32 Civil Service Co-operative Society Ltd v McGrigor’s Trustee [1923] 2 Ch 347 …. 11.64 Clare Morris Ltd v Hunter BNZ Finance Ltd (1988) 4 BPR 9609 …. 14.92 Clark v Baker (1987) 4 BPR 9476 …. 14.35 — v Raymor (Brisbane) Pty Ltd (No 2) [1982] Qd R 790 …. 8.143 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 …. 14.92 — v Ramuz [1891] 2 QB 456 …. 6.16 Classic Heights Pty Ltd v Black Hole Enterprises (1994) V Conv R ¶54-506 …. 8.143 Clay v Karlson (1998) 19 WAR 287 …. 3.43 Clayton v Ramsden [1943] AC 320 …. 3.93 Clem Smith Nominees Pty Ltd v Farrelly (1978) 20 SASR 227 …. 13.6 Clements v Ellis (1934) 51 CLR 217 …. 8.20, 8.26, 8.27, 8.28 Clifford, Re [1980] 2 WLR 749 …. 10.18

Clifford v Dove (2003) 11 BPR 21,149 …. 12.9, 12.37, 13.15 Climie v Wood (1869) LR Ex 328 …. 2.26 Clobery v Lampen (1683) 2 Free 24; 2 Ch Cas 155 …. 10.14 Clos Farming Estates Pty Ltd v Easton (2001) 10 BPR 18,845 …. 5.10 — v — (2002) 11 BPR 20,605 …. 12.5, 12.7, 12.65, 12.73 Clunies-Ross v Commonwealth (1984) 155 CLR 193; 55 ALR 609 …. 4.50 Clyne v Lowe (1968) 69 SR (NSW) 433 …. 7.18, 8.89 — v NSW Bar Association (1960) 104 CLR 186 …. 1.73 Coaker v Willcocks [1911] 2 KB 124 …. 12.41 Coe v Commonwealth (1979) 53 ALJR 403 …. 4.9, 4.13 — v — (1993) 68 ALJR 110 …. 4.35 Coffill v Lagudi Holdings Pty Ltd [2016] NSWSC 1764 …. 12.63 Cohen v Popular Restaurants Ltd [1917] 1 KB 480 …. 11.46 Cole v Kelly [1920] 2 KB 106 …. 11.52 Coleman, Re [1936] Ch 528 …. 10.36 Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638 …. 12.34, 13.49 Coles Supermarkets Australia Pty Ltd v Stateland Developments Pty Ltd [2008] NSWSC 1425 …. 8.145 Colls v Home and Colonial Stores Ltd [1904] AC 179 …. 12.10 Commercial and General Acceptance Ltd v Nixon (1980) ANZ ConvR 306 …. 14.111 — v — (1981) 152 CLR 491 …. 14.104, 14.110, 14.111 Commercial Bank of Australia v Amadio (1983) 151 CLR 447 …. 14.42 Commonwealth Bank of Australia v Buffett (1993) 114 ALR 245 …. 14.47 — v Richards (1987) ANZ ConvR 82 …. 14.106 — v Serobian [2009] NSWSC 302 …. 4.35 — v Tugvale Pty Ltd (1993) NSW ConvR ¶55–687 …. 14.85

Commonwealth v Akiba (2012) 204 FCR 260 …. 4.34 — v Orr (1981) 37 ALR 653 …. 14.60, 14.62 — v Registrar of Titles for Victoria (1918) 24 CLR 348 …. 12.7 — v Verwayen (1990) 170 CLR 394 …. 6.42 — v Yarmirr (2001) 208 CLR 1; 184 ALR 113 …. 3.2, 4.26, 4.27, 4.29, 4.34, 4.40, 4.42, 4.44, 4.48, 4.51, 4.52, 4.54, 4.66, 4.84 Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47 …. 3.59, 11.2, 11.41 Composite Buyers Ltd v Soong (1995) 38 NSWLR 286 …. 8.143 Comptroller of Stamps v Howard-Smith (1936) 54 CLR 614 …. 6.21 Concept Projects Ltd v McKay [1984] 1 NZLR 560 …. 2.28 Congoo (on behalf of Bar-Barrum People) (No 4) v Queensland (2014) 218 FCR 358 …. 4.58 Conlan v Registrar of Titles (2001) 24 WAR 299 …. 8.77 Connell v Bond Corp Pty Ltd (1992) 8 WAR 352 …. 8.145 Connors v United Kingdom [2004] EHRR 189 …. 1.77 Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423 …. 8.37, 14.56 Cook v Bank of New South Wales (1982) 2 BPR 9580 …. 14.35 — v Shoesmith [1951] 1 KB 752 …. 11.42 Cooke v Dunn (1998) 9 BPR 16,489 …. 5.93, 5.119, 5.140 Coombs v Rogers (RTT 88/288) …. 11.118 Cooper, Re (1882) 20 Ch D 611 …. 7.41 Cooper v Stuart (1889) 14 App Cas 286 …. 3.5, 3.7, 4.9 Cooper’s Conveyance Trusts, Re [1956] WLR 1096 …. 10.54 Cope v Keen (1968) 118 CLR 1 …. 8.126 Copeland v Greenhalf [1952] Ch 488 …. 12.7 Coppage v Kansas 236 US 1 (1915) …. 1.16

Cordingley, Re (1948) 48 SR (NSW) 248 …. 9.64 Corin v Patton (1990) 169 CLR 540 …. 6.46, 8.126, 9.25, 9.31, 9.42, 9.130 Corozo Pty Ltd v Total Australia Ltd [1988] 2 Qd R 266 …. 8.96 Corporate Affairs Commission v ASC Timber Pty Ltd (1989) 18 NSWLR 577 …. 12.65 Costin v Costin [1997] ANZ Ltd v Customs and Excise Commissioners [1983] QB 735 …. 11.9 Couche v Adams (2002) ConvR 400; (1997) NSW ConvR ¶55-811 …. 8.126, 9.32, 9.130 Cottage Holiday Associates 11 BPR 20,101 …. 12.56, 12.60 Countrywide Banking Corp v Robinson [1991] 1 NZLR 75 …. 14.114 Courtenay v Austin (1961) 78 WN (NSW) 1082 …. 8.172 Cousins v Wilson [1994] NZLR 463 …. 2.33 Cowell v Rosehill Racecourse Co Ltd (1969) 56 CLR 605; 43 ALR 69 …. 1.57 Cowlishaw v Ponsford (1928) 28 SR (NSW) 331 …. 12.54 Cox v Bath (1893) 14 LR (NSW) 263 …. 2.63 — v Bishop (1857) 8 De GM & G 815 …. 11.51 — v Colossal Cavern Co, 276 SW 540 (1925) …. 5.85 Crabb v Arun District Council [1976] Ch 179 …. 6.39, 12.17 Craig v Green and Huggins (RTT 97/008879) …. 11.118 Craigie & Harley v Kemp [2016] WASC 243 …. 9.32 Cram Foundation v Corbett-Jones [2006] NSWSC 495 …. 3.82, 3.115, 10.54 Crate v Miller [1947] KB 946 …. 11.11 Cray v Willis (1729) 2 P Wms 528 …. 9.25 Credit Connect v Carney [2010] NSWSC 910 …. 4.34, 14.36 Creer v P & O Lines of Australia (1971) 125 CLR 84 …. 11.43 Cresdon v Chan Pty Ltd (1989) 64 ALJR 111 …. 8.128

Crest Nicholson Residential (South) Ltd v McAllister [2004] 1 WLR 2409 …. 13.4 Critchley v Collins [2004] SASC 10 …. 8.78 Croft v Kennaugh [1945] VLR 40 …. 14.54 Crook v Consumer, Trader and Tenancy Tribunal (2003) 59 NSWLR 300 …. 11.125 Crosbie-Hill v Sayer [1908] 1 Ch 866 …. 14.77 Crow v Wood [1971] 1 QB 77 …. 12.41 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 2016 …. 11.7 Cruse v Mount [1933] Ch 278 …. 11.25 Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949 …. 14.101, 14.111 Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd [2011] HCA 27 …. 13.50 Cunningham v Commonwealth of Australia [2016] HCA 39 …. 1.73 — v Moody (1748) 1 Ves Sen 174 …. 3.102 — v National Australia Bank Ltd (1987) ATPR ¶40–826 …. 14.115 Cure v Bridge Housing Ltd [2014] NSWCATAP 80 …. 11.125 Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS [2012] 2 Qd R 511 …. 12.36 Curryer’s Will Trusts [1938] Ch 952 …. 10.32 Cuzeno Pty Ltd v The Owners — Strata Plan 65870 [2013] NSWSC 1385 …. 12.26

D D v W [2011] SADC 151 …. 9.58 Dabbs v Seaman (1925) 36 CLR 538 …. 12.31, 12.54 Dale v Moses [2007] FCAFC 82 …. 4.17

Dalegrove Pty Ltd v Isles Parking Station Pty Ltd (1988) 12 NSWLR 546 …. 11.54, 11.56 Dally-Watkins, Ex parte; Re Wilson (1955) 72 WN (NSW) 454 …. 14.88 Dalton v Angus (1881) 6 App Cas 740 …. 12.10 — v Ellis; Estate of Bristow (2005) 65 NSWLR 134 …. 13.10 — v Henry Angus & Co (1881) 6 App Cas 740 …. 12.11, 12.33, 12.40 Damdounis v Recorder of Titles (Tas) 2002 11 Tas R 185 …. 8.159 Daniels v Davison (1809) 16 Ves 249; 33 ER 978 …. 7.19 Daniher v Fitzgerald (1919) 19 SR (NSW) 260 …. 14.58 Darby v Harris (1841) 1 QB 895 …. 2.26 Darbyshire v Darbyshire (1905) 2 CLR 787 …. 7.38 Darcey v Pre-Term Foundation Clinic [1983] 2 NSWLR 497 …. 2.39 Dare v Heathcote (1856) 25 LJ Ex 245 …. 12.33 D’Arcy v Burelli Investments Pty Ltd (1987) 8 NSWLR 317 …. 2.28 Dashwood v Magniac [1891] 3 Ch 306 …. 3.52 Daulia Ltd v Four Millbank Nominees Ltd [1978] 1 Ch 231 …. 6.9 Davey v Durrant (1857) 1 De G & J 535; 44 ER 830 …. 14.98 David Blackstone Ltd v Burnetts (West End) Ltd [1973] 1 WLR 1487 …. 11.66 David Jones Ltd v Leventhal (1927) 40 CLR 357 …. 11.23 David Securities Pty Ltd v Commonwealth Bank of Australia (1990) 93 ALR 271 …. 14.32 Davies v Bennison (1927) 22 Tas LR 52 …. 2.8 — v Ryan [1951] VLR 283 …. 8.26 — v Williams (1851) 16 QB 546 …. 12.43 Davis v Commonwealth (1988) 166 CLR 79; 82 ALR 633 …. 1.5, 1.74, 1.75, 1.76 — v Symons [1934] Ch 442 …. 14.25

— v Town Properties Investment Corp Ltd [1903] 1 Ch 797 …. 11.52 Davison’s Settlement, Re [1913] 2 Ch 498 …. 3.65 Dawes v Hawkins [1860] EngR 968; (1860) 8 CB NS 848; 141 ER 1399 …. 5.74 De Campo Holdings Pty Ltd v Cianciullo [1977] WAR 56 …. 9.63 De Rose v South Australia [2013] FCA 988 …. 4.70 — v — (No 2) (2005) 145 FCR 290; [2005] FCAFC 110 …. 4.23, 4.27, 4.58 Deacon v South-Eastern Railway (1889) 61 LT 377 …. 12.29 Dearle v Hall (1823) 3 Russ 1; 38 ER 475 …. 14.52 Debney, Re (1959) 60 SR (NSW) 471 …. 9.64 Debney v Semerdziev [1982] 2 NSWLR 391 …. 14.126 Dee Trading Co Pty Ltd v Baldwin [1938] VLR 173 …. 2.60 Delehunt v Carmody (1986) 161 CLR 464 …. 9.15, 9.22 Delgamuukw v British Columbia (1993) 104 DLR (4th) 470 …. 4.58 — v — [1998] 1 CNLR 14 …. 4.36, 4.43 Delohery v Permanent Trustee Co of New South Wales (1904) 1 CLR 283 …. 12.32 Dendy v Nicholl (1858) 4 CB (NS) 376 …. 11.66 Dennis v McDonald [1982] 1 All ER 590 …. 9.54, 9.58 Deputy Commissioner of Taxation (Vic) v General Credits Ltd (1983) 82 ALR 101 …. 14.50 Dewhirst v Edwards [1983] 1 NSWLR 34 …. 12.33, 12.50, 12.51, 12.53 Diemasters Pty Ltd v Meadowcorp Pty Ltd (2001) 52 NSWLR 572 …. 9.23 Diera Pty Ltd v Grover (1990) ASC 55-974 …. 14.92 Dillon v Nash [1950] VLR 293 …. 11.35 Dillwyn v Llewellyn (1862) 4 De GF & J 517; 45 ER 1285 …. 6.38 Dimmick v Pearce Investments Pty Ltd (1980) 43 FLR 235 …. 14.109 Dinsdale v Arthur [2006] NSWSC 809 …. 6.29

Direct Food Supplies (Victoria) Pty Ltd v DLV Pty Ltd [1975] VR 358 …. 11.71 Director of Public Prosecutions for Victoria v Le (2007) 232 CLR 562 …. 9.3 Djaigween v Douglas (1994) 48 FCR 535 …. 4.84 DKLR Holding Co (No 2) Pty Ltd v Comr of Stamp Duties (NSW) (1982) 149 CLR 431 …. 9.40 Dobbie v Davidson (1991) 23 NSWLR 625 …. 8.55, 12.33, 12.48, 12.51, 12.70 Dockray v Chick [2010] TASSC 32 …. 12.33, 12.52 Dockrill v Cavanagh (1944) 45 SR (NSW) 78 …. 3.59, 11.6, 11.8, 11.13, 11.15 Doe d Carter v Barnard (1849) 13 QB 945; 116 ER 1524 …. 5.32, 5.47, 5.48 Doe d Garnons v Knight (1826) 5 B & C 671 …. 6.5 Doe d Lockwood v Clarke & Brown (1807) 103 ER 313 …. 11.4 Dogan v Morton (1935) 35 SR (NSW) 142 …. 11.64 Doherty v Allman (1878) 3 App Cas 709 …. 3.53 Dolphin’s Conveyance, Re [1970] Ch 654 …. 13.31, 13.32, 13.33 Donald v Suckling (1866) LR 1 QB 585 …. 2.58 Doodeward v Spence (1908) 6 CLR 406 …. 1.63, 1.64, 1.65 Dorman v Rogers (1982) 148 CLR 365 …. 1.72, 1.73 Double Bay Newspapers Pty Ltd v A W Holdings Pty Ltd (1996) 42 NSWLR 409 …. 7.35, 8.164, 8.165 Dowdle v Inverell Shire Council (1998) 9 BPR 17,349 …. 8.151 Downsview Nominees Ltd v First City Corp Ltd [1993] 2 WLR 86 …. 14.66, 14.102 Dowse v Wynyard Holdings Ltd [1962] NSWR 252 …. 11.35 Dresdner v Scida (2003) 12 BPR 22,629 …. 12.23, 12.39 Drulroad Pty Ltd v Gibson (1992) 5 BPR 11,878; NSW ConvR ¶55-637 ….

8.172, 8.181, 14.16 Ducker v Smith [2011] NSWCA 212 …. 9.58 Dugdale, Re (1888) LR 20 Eq 186 …. 3.91 Duke of Norfolk’s Case (1682) 3 Ch Cas 1; 22 ER 931 …. 10.5 Dullow v Dullow (1985) 3 NSWLR 531 …. 6.30, 6.54 Duncan v Cliftonville Estates Pty Ltd (2001) 10 BPR 19,127 …. 12.7 — v Louch (1845) 6 QB 904 …. 12.37 — v McDonald [1997] 3 NZLR 669 …. 8.37, 8.57 Duncliffe v Caerfelin Properties Ltd [1989] 2 EGLR 38 …. 11.56 Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd (2000) NSW ConvR ¶55933; 10 BPR 18,099 …. 12.60, 12.61 Dyce v Lady James Hay (1852) 1 Macq 305 …. 12.7 Dykes v Gerke [1963] NSWR 721 …. 11.76

E E R Ives Investment Ltd v High [1967] 2 QB 379; [1967] 1 All ER 504 …. 6.40, 6.44, 13.14 E S & A Bank v Phillips (1937) 57 CLR 302 …. 14.18 Eade v Vogiazopoulos [1993] 3 VR 889 …. 8.32 Eagling v Gardner [1970] 2 All ER 838 …. 13.33 Earl Bathurst v Fine [1974] 2 All ER 1160 …. 11.72 Earl de la Warr v Miles (1881) 17 Ch D 535 …. 12.68 Eatock v Bolt (2011) 197 FCR 261 …. 4.17 Eaton v Swansea Waterworks Co (1851) 17 QB 267 …. 12.33 Ecclesiastical Commissioners for England’s Conveyance, Re [1936] Ch 430 …. 13.10 Eddowes, Re [1991] 2 Qd R 381 …. 12.5 Edgington v Clark [1964] 1 QB 367 …. 5.141, 5.142

Edward Kazas & Associates Pty Ltd v Multiplex (Mountain Street) Pty Ltd (2002) 11 BPR 20,353 …. 11.24, 11.35 Edwards; Re the Estate of Edwards [2011] NSWSC 478 …. 1.65 Edwards v Amos (1945) 62 WN (NSW) 204 …. 2.55 — v Sims 24 SW 2d 619 (Ky 1929) …. 2.10 Effeney v Millar Investments Pty Ltd [2011] NSWSC 708 …. 12.62 Elderly Citizens Homes of SA Inc v Balnaves (1998) 72 SASR 210 …. 8.140, 8.168 Elfar v Registrar General of New South Wales [2010] NSWSC 539 …. 8.191, 8.193 Elitestone Ltd v Morris [1997] 1 WLR 687 …. 2.21 Elizabeth Bay Road Pty Ltd v The Owners — Strata Plan No 73943 (2014) 88 NSWLR 488 …. 9.111 Ellaway v Lawson [2006] QSC 170 …. 3.93 Ellenborough Park, Re [1956] Ch 131 …. 12.3, 12.5, 12.7, 12.9 Elliot, Re (1886) 7 LR (NSW) 271 …. 8.145 Elliott v Bishop (1854) 10 Exch 496; 156 ER 534 …. 2.26 — v Boynton [1924] 1 Ch 236 …. 11.68 — v Renner [1923] St R Qd 172 …. 12.36 Ellis v City Women’s Hostel (RTT 97/022789) …. 11.92, 11.129 — v Lambeth LBC (2000) 32 HLR 596 …., 5.85 — v Loftus Iron Co (1874) LR 10 CP 10 …. 2.8 Ellison v Alliance Acceptance Ltd (1984) NSW ConvR ¶55–217 …. 14.116 — v O’Neill [1968] 2 NSWR 246 …. 13.6 Elliston v Reacher [1908] 2 Ch 374 …. 13.31, 13.32 Elroa Nominees Pty Ltd v Registrar of Titles [2003] QCA 165 …. 2.15 Elsom & Taylor-Parker v Coroneos [2016] NSWCATCD 47 …. 11.118 Elwes v Brigg Gas Co (1886) 33 Ch D 562 …. 2.66

— v Maw (1802) 3 East 38; 102 ER 510 …. 2.29 Elwin v Monash (1879) 2 SCR (NSW) Eq 57 …. 8.145 Emerald Securities Pty Ltd v Tee Zed Enterprises Pty Ltd (1981) 28 SASR 214 …. 14.118 Eng Mee Yong v Letchumanan [1980] AC 331 …. 8.151 Enkelmann v Glissan (1982) 2 BPR 9640 …. 11.6, 11.8 Epic Feast Pty Ltd v Mawson KLM Holdings Pty Ltd (1998) 71 SASR 161 …. 14.31 Equiticorp Industries Group Ltd v R [1996] 3 NZLR 586 …. 8.103 Equititrust Ltd v Franks (2009) 258 ALR 388 …. 9.20 ER Ives Investment Ltd v High [1967] 2 QB 379 …. 12.17 Errington v Errington [1952] 1 KB 290 …. 11.5 Esber v Kimberley Securities Ltd [2009] NSWSC 1422 …. 4.124, 4.125 Essex County Roman Catholic Separate School Board and Antaya, Re (1977) 80 DLR (3d) 405 …. 10.38 Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269 …. 14.28 Estate Late Chow Cho-Poon, Re; Application for Judicial Advice [2013] NSWSC 844 …. 10.18, 10.44 Estate of K, Re (1996) Tas R 365 …. 10.26 Estate of Novosadek, Re [2016] NSWSC 554 …. 9.51 Eudunda Farmers’ Co-operative Society Ltd v Mattiske [1920] SASR 309 …. 8.146 Evanel Pty Ltd v Nelson (1995) 39 NSWLR 209 …. 12.9 Evans v Bicknell (1801) 6 Ves 174 …. 7.7 — v Cornish Nominees Pty Ltd (2009) 14 BPR 27,257 …. 12.34 — v Miller [2011] WASCA 89 …. 13.41 — v Walker (1876) 3 Ch D 211 …. 10.12

Everett v Bayliss (1881) 2 LR (NSW) (Eq) 66 …. 14.44 Expo International Pty Ltd v Chant [1979] 2 NSWLR 820 …. 14.66, 14.106

F FAI Insurance Ltd v Pioneer Concrete Services Ltd (1987) 15 NSWLR 552 …. 8.168 Fairclough v Swan Brewery Co Ltd [1912] AC 565 …. 14.24, 14.25, 14.31 Fairweather v St Marylebone Property Co Ltd [1963] AC 510 …. 5.145 Falloon v Madden; Madden v Madden [2012] NSWSC 652 …. 9.22 Fanigun Pty Ltd v Woolworths Ltd [2006] ANZ ConvR 196 …. 12.36 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 …. 8.66, 8.104, 8.125 Farmer v Francis (1824) 2 Bing 151; (1826) 2 S & St 505 …. 10.14 Farrand v Yorkshire Banking Co (1888) 40 Ch D 182 …. 7.28 Farrar v Farrars Ltd (1888) 40 Ch D 395 …. 14.97 Farrow Mortgage Services Pty Ltd v Ragata Developments Pty Ltd (1993) 32 NSWLR 333 …. 14.91 Fast Funds Pty Ltd v Coppola; Coppola v Hall [2010] NSWSC 470 …. 14.36 Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 All ER 371 …. 13.4, 13.5 Fejo v Northern Territory (1998) 195 CLR 96; 156 ALR 721 …. 3.2, 4.54, 4.56, 4.58, 4.61, 4.76 Fennings v Lord Grenville (1808) 1 Taunt 245; 127 ER 825 …. 5.29 Ferella v Otvosi (2004) 12 BPR 22,191 …. 13.34 Ferguson v Miller [1978] 1 NZLR 819 …. 9.54 — v Registrar of Titles [1919] VLR 509 …. 5.145 Fernandes v Houstein (1963) 4 FLR 355 …. 8.145 Ferrari v Beccaris [1979] 2 NSWLR 181 …. 9.65

Field v Barkworth [1986] 1 WLR 137 …. 11.42 Finlay v R & I Bank of Western Australia Ltd (1993) NSW ConvR ¶55-686 …. 8.181 Finucane v Registrar of Titles [1902] St R Qd 75 …. 8.184 Firth v Halloran (1926) 38 CLR 261 …. 11.77 Flack v Chairperson, National Crime Authority (1997) 150 ALR 153 …. 2.67 Florgale Uniforms Pty Ltd (rec & mgr apptd) (in liq) v Orders (2004) 11 VR 54 …. 14.106 FNCB-Waltons Finance Pty Ltd v Crest Realty Pty Ltd (1987) 10 NSWLR 621 …. 14.78 Ford v Perpetual Trustees Victoria Ltd [2009] NSWCA 186 …. 14.35 Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154 …. 13.4, 13.5, 13.26 Forgeard v Shanahan (1994) 35 NSWLR 206 …. 9.57, 9.58, 9.59, 9.60, 9.63, 9.132, 9.133 Formby v Barker [1903] 2 Ch 539 …. 13.28 Forrest Trust; Trustees, Executors and Agency Co Ltd v Anson, Re [1953] VLR 246 at 250 …. 9.38 Forster v Finance Corp of Australia Ltd [1980] VR 63 …. 14.96 Forsyth v Blundell (1973) 129 CLR 477 …. 14.19, 14.104, 14.116, 14.117, 14.118, 14.120, 14.121, 14.122 Forte-Senes Hotels Pty Ltd v Austcorp No 473 Pty Ltd (2004) NSW ConvR ¶56-095 …. 11.76 Foster v Mountford (1976) 14 ALR 71 …. 1.71 Fouldes v Willoughby (1841) 8 M & W 540 …. 2.50 — v — (1848) 8 M&W 438 …. 2.49 Four Maids Ltd v Dudley Marshall (Properties) Ltd [1957] Ch 317 …. 14.49 Four Oaks Enterprises Pty Ltd v Clark [2002] ANZ ConvR 440 …. 8.159 Fowley Marine (Emsworth) Ltd v Gafford [1967] 2 QB 808 …. 5.118

Francis v Francis [2009] SASC 363 …. 9.63 Francis Jackson Developments Ltd v Stemp [1943] 2 All ER 601 …. 11.16 Franklin, Re [2009] VSC 496 …. 5.127, 9.9 Fraser v Canterbury Diocesan Board of Finance [2001] Ch 669 …. 3.82 Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke [2008] NSWSC 743 …. 12.61, 12.63, 13.49, 13.50 Frazer v Walker [1967] 1 AC 569; 1 All ER 649 …. 8.27, 8.29, 8.31, 8.44, 8.92, 8.118, 8.124, 8.202 Freed v Taffel [1984] 2 NSWLR 322 …. 9.41 Freemasons Hospital v Attorney General (Vic) [2010] VSC 273 …. 10.54 French v Barcham [2009] 1 All ER 145 …. 9.58 Frieze v Unger [1960] VR 230 …. 9.39, 9.54 Frost, Re (1889) 43 Ch D 246 …. 10.10 Fuentes v Bondi Beachside Pty Ltd [2016] NSWSC 531 …. 6.19 Fuller v De Rose [2006] HCA Trans 49 …. 4.23 — v Goodwin (1865) 4 SCR (NSW) 66 …. 7.38, 7.41 Furdson v Clogg (1842) 10 M & W 572; 152 ER 599 …. 5.142 Fyvie v Anand (1994) BPR 13,743 …. 12.11

G G J Coles & Co Pty Ltd v Commissioner of Taxation (1975) 49 ALJR 188 …. 11.41 Gage v Bulkeley (Packington’s Case) (1744) 3 Atk 215; 26 ER 925 …. 3.54 Gaite’s Will Trusts, Re [1949] 1 All ER 459; (1949) 65 TLR 194 …. 10.31 Gallagher, Ex parte (1908) 8 SR (NSW) 230 …. 8.23 Gallagher v Rainbow (1994) 179 CLR 624 …. 12.5, 12.36 Garcia v National Australia Bank Ltd (1993) 5 BPR 11,996; (1993) NSW ConvR ¶55–662 …. 14.41

— v — (1998) 194 CLR 395 …. 14.41 Gardener v Lewis [1998] 1 WLR 1535 …. 8.87 Garfitt v Allen (1888) 37 Ch D 48 …. 14.51 Garland v Brown (1864) 10 LT 292 …. 10.34 Garofano v Reliance Finance Corp Pty Ltd (1992) NSW ConvR ¶55-640 …. 8.31, 8.93, 8.100 Garrard v Frankel (1862) 30 Beav 445 …. 7.33 Gartner v Kidman (1961-62) 108 CLR 12 …. 3.6 Gazebo Penthouse Pty Ltd v Owners Corporation SP 73943 [2015] NSWCATCD 93 …. 9.110 General Credits Ltd v Southern Goldfields Ltd (1991) ANZ ConvR 40 …. 14.113 George v Commercial Union Assurance Co of Australia Ltd (1977) 1 BPR 9649 …. 14.118 George Wimpey & Co Ltd v Sohn [1967] Ch 487; [1966] 1 All ER 232 …. 5.110, 5.113, 5.118 Georgeski v Owners Corp SP49833 (2004) 62 NSWLR 534 …. 1.58, 2.33 Georgiadis v Australia and Overseas Telecommunications Corp (1994) 179 CLR 297; 119 ALR 629 …. 4.50 Gerhardy v Brown (1985) 159 CLR 70 …. 4.13 Gerraty v McGavin (1914) 18 CLR 152 …. 11.64 Gibbs v Messer [1891] AC 248 …. 8.22, 8.26, 8.27, 8.31, 8.33 Gibson v Co-ordinated Building Services Pty Ltd (1989) 4 BPR 9630 …. 8.151 — v Holland (1865) LR 1 CP 1 …. 6.8 Gifford v Lord Yarborough (1828) 5 Bing 163; 130 ER 1023 …. 2.15 Gilbert v Spoor [1983] Ch 27 …. 13.49 Gill v Lewis [1956] 2 QB 1 …. 11.71 Ginelle Finance Pty Ltd v Diakakis (2002) 12 BPR 22,137 …. 8.98

Ginger Development Enterprises Pty Ltd v Crown Developments Australia Pty Ltd [2003] NSWCA 296 …. 8.137 Gissing v Gissing [1971] AC 886 …. 6.32 Gissing and Sheffield [2012] FMCAfam 111 …. 6.51 Gittany v McDowell (2009) 14 BPR 26,803 …. 12.34 Giumelli v Giumelli (1999) 186 CLR 101 …. 6.31, 6.42 Glass v Hollander (1935) 35 SR (NSW) 304 …. 2.49 GMS Syndicate Ltd v Garry Elliott Ltd [1982] Ch 1 …. 11.71 Godwin v Francis (1870) LR 5 CP 295 …. 6.8 Golden Mile Property Investments Pty Ltd (In Liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237 …. 6.19 Goodright d Humphreys v Moses (1774) 2 Wm B1 …. 7.11 Goodwin v Papadopoulos (1985) NSW ConvR ¶55-256 …. 12.50 Gordon v Lidcombe Developments Pty Ltd [1966] 2 NSWR 9 …. 11.24 Gorman, Re [1990] 1 All ER 717 …. 9.57, 9.59 Gough v Wood [1894] 1 QB 713 …. 14.63 Gould v Kemp (1834) 2 My & K 304; 39 ER 959 …. 9.8 Govindan-Lee v Sawkins [2016] NSWSC 328 …. 12.34 Goyal v Chandra [2006] NSWSC 239 …. 9.35 Graham v KD Morris & Sons Pty Ltd [1974] Qd R 1 …. 2.8 — v Markets Hotel Pty Ltd (1943) 67 CLR 567 …. 11.39 — v Peat (1801) 1 East 244; 102 ER 95 …. 2.34 — v Philcox [1984] QB 747 …. 12.57 Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592 …. 11.56 Grant v NZMC Ltd [1989] 1 NZLR 8 …. 11.82 — v Preece [2012] VSC 55 …. 13.49

— v YYH Holdings Pty Ltd [2012] NSWCA 360 …. 2.51 Grave v Wharton (1879) 5 VLR 97 …. 5.143 Great Western Railway Co v Smith (1875) 2 Ch D 235 …. 11.74 Greenfield v Greenfield (1979) 38 P & CR 570 …. 9.46 Greenwood Village Pty Ltd v Tom the Cheap (WA) Pty Ltd [1976] WAR 49 …. 11.71 Greita Sebea v Territory of Papua (1941) 67 CLR 544 …. 2.26 Grescot v Green (1700) 1 Salk 199 …. 11.56 Grey v Inland Revenue Commissioners [1960] AC 1; [1959] 3 All ER 603 …. 6.24 Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 …. 8.46, 8.76, 8.77, 8.79, 8.92, 8.93, 8.101 Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900 …. 4.56, 4.70, 4.79 Grigsby v Melville [1973] 1 All ER 385 …. 12.7 Grill v Hockey (1991) 5 BPR 11,421 …. 12.62 Grime v Owners Corporation SP 52011 (Strata & Community Schemes) [2005] NSWCTTT 202 …. 9.78 Groongal Pastoral Co Ltd v Falkiner (1924) 35 CLR 157 …. 4.76, 14.78 Grosvenor Mortgage Management Pty Ltd v Younan (NSWSC, Young J, 23 August 1990, unreported, BC9002094) …. 8.93 Grundel v Registrar-General (1990) 5 BPR 11,217 …. 3.60 — v — (1990) NSW ConvR ¶55-548 …. 11.100 Grundy v Ley [1984] 2 NSWLR 467 …. 8.44, 14.76 Guerin v R (1984) 13 DLR (4th) 321 …. 4.24 Guggenheimer v Registrar of Titles [2002] VSC 124 …. 5.95 Guler v NSW Trustee and Guardian [2012] NSWSC 1369 …. 9.51 Gumana v Northern Territory of Australia (2005) 141 FCR 457 …. 4.34

— v — [2007] FCAFC 23 …. 4.34 Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 …. 11.46, 11.52, 11.60, 11.61 Gurfinkel v Bentley Pty Ltd (1966) 116 CLR 98 …. 14.20, 14.69 Gyarfas v Bray (1989) 4 BPR 9736 …. 13.6

H Hahndorf Golf Club Inc v John Nitschke Nominees Pty Ltd (2003) 86 SASR 221 …. 8.38 Haji Abdul Rahman v Mahomed Hassan [1917] AC 209 …. 8.73 Halaseh v Citibank Pty Ltd (RTT 96/016769) …. 11.131 Hall v Busst (1960) 104 CLR 206 …. 10.2 Hallifax Property Corporation Pty Ltd v GIFC Ltd (1987) NSW ConvR ¶55– 361 …. 14.93, 14.95 Halsall v Brizell [1957] Ch 169 …. 13.14 Hamilton v Iredale (1903) 3 SR (NSW) 535 …. 8.87 Hamlet of Baker Lake v Minister of Indian Affairs and Northern Development (1979) 107 DLR (3rd) 513 …. 4.28 Hammond v Farrow [1904] 2 KB 332 …. 8.89 Hanbury v Jenkins [1901] 2 Ch 401 …. 12.4 Hancock v Watson [1902] AC 14 …. 10.32 Hanny v Lewis (1998) 9 BPR 16,205 …. 12.34 Hanson v Graham (1801) 6 Ves 239 …. 10.14 Hanson Construction Materials Pty Ltd v Vimwise Civil Engineering Pty Ltd [2005] NSWSC 880 …. 8.136 Harada v Registrar of Titles [1981] VR 743 …. 12.7 Harbour Estates Ltd v HSBC Bank plc [2005] 2 WLR 67 …. 13.9 Hardcastle v Hardcastle (1862) 1 H & M 405 …. 10.14

Harding, Re [1956] NZLR 482 …. 10.14 Harding v National Insurance Co (1871) 2 AJR 67 …. 2.26 Hare v Van Brugge (2013) 84 NSWLR 41 …. 12.36, 12.37, 12.45 Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200 …. 11.24 Harnett v Green (No 2) (1883) 4 LR (NSW) 292; 5 ALT 61 …. 5.86, 5.97, 5.102 Harris v Commissioner for Social Housing (2013) 8 ACTLR 98 …. 11.23 — v Flower (1904) 74 LJ Ch 127 …. 12.36 — v King (1936) 56 CLR 177 …. 10.31 — v Smith (2008) 14 BPR 26,223 …. 8.94 — v Western Australian Exim Corp (1994) 129 ALR 387 …. 14.116 Harrison v Murphy (1877) 3 VLR (E) 105 …. 6.8 Harrow London Borough Council v Qazi [2004] 1 AC 983 …. 1.77, 5.3, 5.4, 5.14 Hart’s Trusts, Re (1858) 3 De G & J 195 …. 10.14 Harvey v McWatters (1948) 49 SR (NSW) 173 …. 14.116 Haselhurst v Elliot [1945] VLR 153 …. 11.6 Haskell v Marlow [1928] 2 KB 45 …. 11.26, 11.39 Hassett v Colonial Bank of Australasia (1881) 7 VLR 380 …. 8.83 Hastie v National Australia Bank Ltd (1994) 7 BPR 15,116 …. 8.148 Hawkesbury Valley Developments Pty Ltd v Custom Credit Corp Ltd (1995) NSW ConvR ¶55–731 …. 14.106 Hawkins v Farley [1997] 2 Qd R 361 …. 2.22 Hayes v Northern Territory (1999) 97 FCR 32 …. 4.28, 4.42, 4.59, 4.66 Haynes Case (1614) 12 Co Rep 113; 77 ER 1389 …. 2.67 Hayward v Smith (1887) 9 LR (NSW) Eq 11 …. 14.22 Haywood v Brunswick Building Society (1881) 8 QBD 403 …. 13.16, 13.18 Hazlett v Presnell (1982) 43 ALR 1 …. 2.15

Healey v Hawkins [1968] 1 WLR 1967 …. 12.33 Heath v Pugh (1881) 6 QBD 345 …. 14.67 Heathe v Heathe (1740) 2 Atk 121 …. 9.13 Hedley v Roberts [1977] VR 282 …. 9.54 Hegarty v Ellis (1908) 6 CLR 264 …. 3.34 Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd (2003) 59 NSWLR 312 …. 8.97 Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 …. 7.27, 7.28, 7.29, 8.163, 8.168, 8.171 Hemmings v Stoke Poges Golf Club Ltd [1920] 1 KB 720 …. 2.37, 11.69 Henderson v Astwood [1894] AC 150 …. 14.97 Henriksen v Bilpin Inn Pty Ltd (CT, Rossiter DC, 3 May 1996, unreported) …. 11.144 Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd [1976] VR 309 …. 14.116 Heslop v Burns [1974] 3 All ER 406 …. 11.5 Hewitt v Loosemore (1851) 9 Hare 449 …. 7.6 Hibbert v McKiernan [1948] 2 KB 142 …. 2.67 Hickey v Powershift Tractors Pty Ltd (1999) NSW ConvR ¶55-889 …. 8.78 Hickson v Darlow (1883) 23 Ch D 690 …. 14.115 Higgs v Nassauvian Ltd [1975] AC 464 …. 5.99, 5.101 Hill v Hill (2013) 11 ASTLR 121 …. 9.51 — v Lyne (1893) 14 LR (NSW) 449 …. 2.13, 2.15 — v Transport for London [2005] 3 WLR 471 …. 5.72 — v Tupper (1863) 2 H & C 121 …. 2.33, 12.5, 12.75 Hillig v NSW Native Title Services Ltd [2006] FCA 1184 …. 4.78 Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472 …. 8.109, 8.111

Hilton v Gray [2007] QSC 401 …. 8.46 Hinds v Uellendahl (No 2) (1992) 112 FLR 222 …. 8.97 Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1 NSWLR 501 …. 9.23 Hitchcock, Re (1900) 17 WN (NSW) 62 …. 8.131 Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 …. 2.46 Hobson v Gorringe [1897] 1 Ch 182 …. 2.20, 2.24, 14.63 Hockley v Rendell (1909) 11 WALR 170 …. 3.53 Hodson v Deans [1903] 2 Ch 647 …. 14.123 Hodson & Howes’ Contract, Re (1887) 35 Ch D 668 …. 14.90 Hoffman v Feinberg [1949] 1 Ch 245 …. 11.72 Hogarth v Jackson (1827) Mood & M 58; ER 1080 …. 5.29 Holden v Blaiklock [1974] 2 NSWLR 262 …. 11.64 Holland, Re; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165 …. 9.52 Holland v Hodgson (1872) LR 7 CP 328 …. 2.18, 2.19 Hollins v Fowler (1875) LR 7 HL 757 …. 2.49, 2.59 Hollis’ Hospital and Hague’s Contract, Re [1899] 2 Ch 540 …. 10.38 Hong Kong and Shanghai Banking Corp v Kloekner & Co AG [1989] 3 All ER 513 …. 11.82 Hooker Industrial Developments Pty Ltd v Trustees of the Christian Brothers [1977] 2 NSWLR 109 …. 6.5 Hoole v Smith (1881) 17 Ch D 434 …. 14.86 Hopkins v Worcester and Birmingham Canal Proprietors (1869) LR 6 Eq 437 …. 14.46 Hopkinson v Rolt (1861) 9 HL Cas 514; 11 ER 829 …. 14.18, 14.137 Hopper v Liverpool Corp (1944) 88 Sol J 213 …. 10.54 Hornsby Council v Roads and Traffic Authority (1997) 41 NSWLR 15 ….

12.73 Horsey Estate Ltd v Steiger & Petrifite Company Ltd [1899] 2 QB 79 …. 11.64 Horvath v Commonwealth Bank of Australia [1999] 1 VR 643 …. 8.93 Hosking v Haas [2009] NSWSC 1328 …. 13.33 — v — [2009] NSWSC 624 …. 13.20 — v — (No 2) [2009] NSWSC 1328 …. 13.20, 13.37 — v Smith (1888) 13 App Cas 582 …. 14.77 Hospital Products v United States Surgical Corp (1984) 156 CLR 41 …. 6.31 Houghland v R R Low (Luxury Coaches) Ltd [1962] 1 QB 694; [1962] 2 All ER 159 …. 2.48 Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 …. 9.76, 9.110 Howard v Shaw (1841) 8 M & W 118 …. 11.16 Hoyle, Re; Hoyle v Hoyle [1893] 1 Ch 84 …. 6.8 Hudson v Cripps [1896] 1 Ch 265 …. 11.23 Hughes v Griffin [1969] 1 WLR 23 …. 5.87, 5.88 Hulme v Schaecken [1999] NSWSC 1291 …. 9.31 Hume, Re [1912] 1 Ch 693 …. 10.14 Hunt v Luck [1902] 1 Ch 428 …. 7.19, 8.89 Hunter v Canary Wharf Ltd [1997] AC 655 …. 12.7 — v Hunter [1936] AC 222 …. 14.84 Hunter’s Lease, Re [1942] Ch 124 …. 11.46, 11.53, 11.56 Hussey v Palmer [1972] 1 WLR 1286; [1972] 3 All ER 744 …. 6.32, 6.33 Hycenko v Hrycenko [2016] VSC 247 …. 9.45 Hyde v Pearce [1982] 1 WLR 560 …. 5.90, 5.131 — v Pimley [1952] 2 QB 506 …. 11.42 Hyman v Rose [1912] AC 623 …. 11.72

Hypec Electronics Pty Ltd (in liq) v Registrar-General (2005) 64 NSWLR 679 …. 8.16, 8.18

I IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550 …. 8.90, 8.173, 8.174, 5.178, 5.179, 5.180 ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 …. 1.4 Imray v Oakshette [1897] 2 QB 218 …. 11.74 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580 …. 11.18, 11.18 Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 …. 14.115 Ingram v Mohren (1993) 10 WAR 497 …. 14.47 Inkhorn Pty Ltd v Herbert [2000] WASCA 333 …. 14.106 International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 Ch 513 …. 11.43 International Factors v Rodriguez [1979] QB 351 …. 2.57 International Tea Stores Co v Hobbs [1903] 2 Ch 165 …. 12.36 Inwards v Baker [1965] 2 QB 29 …. 6.38, 6.44 Ironside v Cook (1981) 41 P & CR 326 …. 12.33 Italian Forum Limited v Owners — Strata Plan 60919 [2012] NSWSC 895 …. 9.108

J J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1969) 90 WN (Pt 1) (NSW) 571 …. 8.167 — v — (1970) 92 WN (NSW) 803 …. 8.168 — v — (1971) 125 CLR 546 …. 8.138, 8.165, 8.167, 8.181, 8.182, 14.19 J A McBeath Nominees Pty Ltd v Jenkins Development Corp Pty Ltd [1992]

2 Qd R 121 …. 11.43 J C Berndt Pty Ltd v Walsh [1969] SASR 34 …. 11.23 J C Williamson Ltd v Lukey (1931) 45 CLR 282 …. 6.11 JA Pye (Oxford) Ltd v Graham [2000] 3 WLR 242 …. 5.59 — v — [2003] 1 AC 419; [2002] UKHL 30 …. 5.9, 5.14, 5.51, 5.59, 5.61, 5.62, 5.81, 5.82, 5.83, 5.94, 5.100, 5.106, 5.107, 5.108, 5.112, 5.114, 5.117, 5.124, 5.159 JA Pye (Oxford) Ltd v United Kingdom (2006) 43 EHRR 3; [2005] ECHR 921 …. 5.14, 5.60, 5.62, 5.63, 5.159 — v — (2008) 46 EHRR 45 …. 5.60, 5.62, 5.66, 5.69, 5.106 Jackson, Ex parte; Re Australasian Catholic Assurance Co Ltd (1941) 41 SR (NSW) 285 …. 4.55 Jackson v Jackson (1804) 9 Ves Jun 591 …. 9.15 — v NSW Land and Housing Corporation [2014] NSWCATAP 22 …. 11.130 Jacobs v Platt Nominees Pty Ltd [1990] VR 146 …. 8.168 Jaggard v Sawyer [1995] 1 WLR 269 …. 2.8 James v Dean (1805) 11 Ves 383 …. 11.16 — v Harris (1876) 35 LT 240 …. 11.23 — v Plant (1836) 4 A & E 749 …. 12.58 — v Registrar-General (1967) 69 SR (NSW) 361 …. 8.118, 12.50, 12.70 — v Stevenson [1893] AC 162 …. 8.55, 12.70 Jango v Northern Territory of Australia (2006) 152 FCR 150 …. 4.32, 4.70 — v — (2007) 159 FCR 531 …. 4.32, 4.70 Jea Holdings (Aust) Pty Ltd v Registrar-General (NSW) [2013] NSWSC 587 …. 12.7 Jee v Audley (1787) 1 Cox Eq Cas 324; 29 ER 1186 …. 10.31 Jeffries v Great Western Railway Co (1856) 5 E & B 802; 119 ER 680 …. 2.42, 2.55, 2.56

Jelbert v Davis [1968] 1 WLR 589 …. 12.38, 12.57 Jellicoe v Wellington Loan Co (1886) 4 NZLR 330 …. 14.55 Jenkins v Jones (1860) 2 Giff 99; 66 ER 43 …. 14.121 Jensen v Guigni (1994) 6 BPR 13,667 …. 8.137 — v Hawksley [1955] VLR 470 …. 7.21 Jeogla Pty Ltd v ANZ Banking Group Ltd (1999) 150 FLR 359; [1999] NSWSC 563 …. 14.143 Jessica Holdings Pty Ltd v Anglican Property Trust Diocese of Sydney (1992) 27 NSWLR 140 …. 8.136 Jin v Yang [2008] NSWSC 754 …. 8.105 John Alexander’s Clubs v White City Tennis Club (2010) 241 CLR 1 …. 8.172 John F Goulding Pty Ltd v Victorian Railways Commissioners (1932) 48 CLR 157 …. 2.51 Johnson, Ex parte; Re Whyte (1868) 5 WW & A’B (L) 55 …. 12.4 Johnson v McIntosh 8 Wheat 543 (1823) …. 4.13 Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd (2003) 9 VR 171 …. 2.49 Jonah and White [2011] FamCA 22 …. 6.51 Jones v Baker (2002) 10 BPR 19,115 …. 8.136 — v Bartlett (2000) 205 CLR 166 …. 11.37, 11.109 — v Chappell (1875) LR 20 Eq 539 …. 3.53 — v Collins (1891) 12 LR (NSW) L 247 …. 7.39 — v Lavington [1903] 1 KB 253 …. 11.23 — v Lock (1865) 1 Ch App 25 …. 6.45 — v Mackilwain (1826) 1 Russ 220 …. 10.14 — v Pritchard [1908] 1 Ch 630 …. 12.30 Jonray (Sydney) v Partridge Bros Pty Ltd (1969) 89 WN (Pt 1) (NSW) 568 …. 8.174, 8.176, 8.177, 8.181

Jonton Pty Ltd, Re [1992] 1 Qd R 105 …. 7.45 Jorss’ Caveat, Re [1982] Qd R 458 …. 8.151 Jourdain v Wilson [1821] 4 B & Ald 266 …. 11.46 JS and GP, Re (2006) 35 Fam L R 88 …. 6.24 Jurd v Public Trustee [2001] NSWSC 632 …. 6.48

K Kaizen Global Investments Ltd v Australia New Agribusiness & Chemical Group Ltd (in liq), Re [2017] FCA 431 …. 14.5 Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235 …. 8.46, 8.57, 11.51, 11.55 Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 …. 11.35 Karamihos v Bendigo and Adelaide Bank Ltd [2013] NSWSC 172 …. 14.36 Karpany v Dietman (2013) 252 CLR 507 …. 4.34, 4.57 Katakouzinos v Roufir Pty Ltd (1999) 9 BPR 17,303 …. 12.34 Kater v Kater (No 3) [1964] NSWR 987 …. 11.95 Kay v Lambeth London Borough Council [2004] 3 WLR 1396 …. 11.5 — v Lambeth London Borough Council; Leeds City Council v Price [2006] 2 AC 465 …. 1.77 Kay’s Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429 …. 14.96 Kebewar Pty Ltd v Harkin (1987) 9 NSWLR 738 …. 12.51 Keeves v Dean [1924] 1 KB 685 …. 11.41 Kelly, Re [1932] IR 255 …. 10.28, 10.29 Kelsen v Imperial Tobacco Co Ltd [1957] 2 QB 334 …. 2.8 Kemp v Lumeah Investments Pty Ltd (1984) NSW ConvR ¶55-162 …. 11.64 Kennard v AGC (Advances) Ltd (1987) V ConvR 54-210 …. 4.34

Kennedy v De Trafford [1897] AC 180 …. 14.103, 14.104 — v General Credits Ltd (1982) 2 BPR 9456 …. 14.50 Kennewell v Dye [1949] Ch 517 …. 14.45 Kenny v Preen [1963] 1 QB 499 …. 11.23 Kent v Kavanagh [2007] Ch 1 …. 12.26 Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 …. 4.124, 8.31, 8.149, 8.151, 8.168 Kerridge v Foley (1964) 82 WN (NSW) 293 …. 13.20, 13.28, 13.45 Khattar v Wiese (2005) 12 BPR 23,235 …. 12.34 Khoury v Khouri (2006) 66 NSWLR 241 …. 6.11, 6.12, 6.23 Kierford Ridge Pty Ltd v Ward [2005] VSC 215 …. 5.82, 5.113 Killick v Second Covent Garden Property Co Ltd [1973] 1 WLR 658; [1973] 2 All ER 337 …. 11.43 Kilpatrick v Gresser (NSWSC, Foster J, 13 May 1987, unreported, BC8701375) …. 11.117 Kindervater, In the Matter of an Application by [1996] ANZ Conv Rep 331 …. 12.34 King v AGC (Advances) Ltd [1983] 2 Qd R 75 …. 8.143 King v David Allen & Sons, Billposting Ltd [1916] 2 AC 54 …. 1.58, 1.59, 12.9, 12.14, 12.65 — v New South Wales Land and Housing Corp (1992) 26 ALD 684 …. 11.129 — v Smail [1958] VR 273 …. 8.124, 8.125, 8.206 King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076 …. 14.13, 14.18, 4.32, 14.51, 14.54 King’s Trusts, Re (1892) 29 LR Ir 401 …. 3.116 Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169; [1962] 3 All ER 593 …. 11.7 Kirby v Cowderoy [1912] AC 599 …. 5.102

Kirk v Sutherland [1949] VLR 3 …. 5.145 Kirkland v Quinross Pty Ltd [2008] NSWSC 286 …. 8.116, 8.191 KJRR Pty Ltd v Commissioner of State Revenue (Vic) [1999] 2 VR 174 …. 11.5 Knightsbridge Estates Trust Ltd v Byrne [1939] Ch 441 …. 14.26 — v — [1940] AC 613 …. 14.26 Kogarah Municipal Council v Golden Paradise Corp [2005] NSWCA 230 …. 8.109, 8.112 Koorootang Nominees Pty Ltd v ANZ Banking Group Ltd [1998] 3 VR 16 …. 8.103 Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62; 317 ALR 225 …. 6.20 Kowalczuk v Accom Finance (2008) 77 NSWLR 205 …. 14.35 Kravchenko v Rock Building Society [2010] ANZ Conv R 10-005 …. 14.106 Kreglinger v New Patagonia Meat and Cold Storage Co Ltd [1914] AC 25 …. 14.29, 14.31 Krey v National Australia Bank Ltd (1992) NSW ConvR ¶55–653 …. 14.92 Krolczyk v Raffan [1992] ANZ ConvR 228 …. 12.36 Kruger v Commonwealth (1997) 190 CLR 1 …. 4.35 Kumar, Re [2017] VSC 81 …. 9.8 Kumar v Dunning [1989] QB 193 …. 13.9 Kushner v Law Society [1952] 1 KB 264; [1952] 1 All ER 404 …. 11.6 Kyren Pty Ltd v Cinema Place Pty Ltd [2006] SASC 93 …. 12.36, 12.38

L La Martina v Penney [1968] SASR 411 …. 8.146 Lace v Chantler [1944] KB 368 …. 11.4 Lacon v Allen (1856) 3 Drew 579 …. 6.12

Ladies’ Hosiery & Underwear Pty Ltd v Parker [1930] 1 Ch 304 …. 11.13 Lagan Navigation Co v Lambeg Bleaching, Dyeing and Finishing Co Ltd [1927] AC 226 …. 12.43 Lake v Craddock (1732) P Wms 158 …. 9.19 Lake Macquarie City Council v Luka (1999) 9 BPR 17,481 …. 12.31, 12.54 Lakshmijit v Faiz Sherani [1974] AC 605 …. 5.90 Lam Kee Ying v Lam Shes Tong [1975] AC 247 …. 5.9 Lamiri v Aidan Nominees Pty Ltd (1987) ANZ ConvR 497 …. 11.23, 11.24 Lancaster v Lloyd (1927) 27 SR (NSW) 379 …. 12.26 Land Settlement Association Ltd v Carr [1944] 1 KB 657 …. 11.10 Landale v Menzies (1909) 9 CLR 89 …. 11.16 Lane v Capsey [1891] 3 Ch 411. 211 …. 12.43 — v Goudge (1803) 9 Ves 225 …. 10.14 Lane Cove Municipal Council v W & H Hurdis Pty Ltd (1955) SR (NSW) 434 …. 13.6 Lanyon Pty Ltd v Canberra Washed Sand Pty Ltd (1966) 115 CLR 342 …. 2.14 Lapin v Abigail (1930) 44 CLR 166 …. 7.26, 7.27, 7.28, 8.168, 14.20 Lardil Peoples v Queensland [2004] FCA 298 …. 4.34 Larke Hoskins & Co Ltd v Icher (1929) 29 SR (NSW) 142 …. 11.14 Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221 …. 11.66 Last v Rosenfeld [1972] 2 NSWLR 923 …. 6.33 Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 …. 7.26, 7.27, 7.33, 7.34, 7.45, 8.77, 14.19, 14.113, 14.139 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 …. 11.60 Lavender v Betts [1942] 2 All ER 72 …. 11.23

Lawson v NSW Department of Housing (RTT 92/001699) …. 11.112 Lawton v Lawton (1743) 3 Atk 13 …. 2.26 Lax Kw’alaams Indian Band v Canada (Attorney-General) 2011 SCC 56 …. 4.34, 4.35 Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57; 4 ALR 482 …. 8.145 Le v Williams [2004] NSWSC 645 …. 9.71 Leach v Thomas (1835) 7 C & P 327; 173 ER 145 …. 2.26 Lee v Blakeney (1887) 8 LR (NSW) 141 …. 2.35 Lee’s Application, Re (1996) 72 P & CR 439 …. 13.49 Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851 …. 12.45 Lee-Parker v Izzet [1971] 1 WLR 1688; [1971] 3 All ER 1099 …. 11.81 Lehrer and the Real Property Act 1900, Re (1960) 61 SR (NSW) 365 …. 8.38, 8.39 Leigh v Dickeson (1884) 15 QBD 60 …. 9.54, 9.55, 9.57, 9.58, 9.64 — v Jack (1879) 5 Ex D 264 …. 5.104, 5.105, 5.106, 5.107 — v Taylor [1902] 1 Ch 523 …. 2.19 Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544 …. 11.13, 11.60 Lemmon v Webb [1895] AC 1 …. 2.8 Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 …. 11.24 Lennard v Jessica Estates Pty Ltd (2008) 71 NSWLR 306 …. 13.50 Lennon v Bell [2005] QSC 286 …. 9.44 Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407; 106 ALR 595 …. 8.31, 8.129 Leverhulme, Re [1943] 2 All ER 274 …. 10.27 Levi v Spicer (2003) 11 BPR 20,927 …. 13.50

Lewen v Dodd (1595) Cro Eli 443 …. 9.13 Lewis v Bell (1985) 1 NSWLR 731 …. 11.5 LHK Nominees v Kenworthy (2002) 26 WAR 517 …. 8.104 Li v Eliezer (NSWSC, Simpson J, 1 May 1997, unreported, BC9703051) …. 11.112 Lidsdale Nominees Pty Ltd v Elkharadly [1979] VR 84 …. 11.66 Lift Capital Partners Pty Ltd v Merrill Lynch International (2009) 73 NSWLR 404 …. 14.31 Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23 …. 11.16 Lissa v Cianci (1993) NSW ConvR ¶55-667 …. 8.101 Littledale v Liverpool College [1900] 1 Ch 19 …. 5.110 Liverpool City Council v Irwin [1977] AC 239 …. 11.35 Liverpool Corporation v H Coghill & Sons Ltd [1918] 1 Ch 307 …. 12.33 LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490 …. 2.8 Lloyd v Banks (1868) 3 Ch App 488 …. 7.16 Lloyds and Scottish Trust Ltd v Britten (1982) 44 P & CR 249 …. 14.67 Lloyds Bank Ltd v Bullock [1896] 2 Ch 192 …. 7.30, 8.163 Lloyds Bank NZA v National Safety Council of Australia (1993) 115 ALR 93 …. 14.123 Lochner v New York 198 US 45 (1905) …. 1.16 Lock v Abercester Ltd [1939] Ch 861 …. 12.36 Locke v Yogoat Pty Ltd (1992) 5 BPR 11,687 …. 8.136 Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 …. 8.31, 8.92, 8.96, 8.101 Loibner v Owens [2006] NSWSC 410 …. 9.57 Loke Yew v Port Swettenham Rubber Co [1913] AC 491 …. 8.67

Lolakis v Konitsas (2002) 11 BPR 20,499 …. 12.7, 12.56 London & Blenheim Estates v Ladbroke Retail Parks Ltd [1992] 1 WLR 1278 …. 12.7 London and County (A & D) Ltd v Wilfred Sportsman Ltd [1970] 3 WLR 418 …. 11.56, 11.69 London Borough of Southwark v Williams [1971] Ch 734 …. 2.31 London County Council v Allen [1914] 3 KB 642 …. 13.2, 13.20 Lonergan v Lewis [2011] NSWSC 1133 …. 12.34 Long Leys Co Pty Ltd v Silkdale Pty Ltd (1991) 5 BPR 11,512 …. 14.56 Long v Gowlett [1923] 2 Ch 177 …. 12.27 — v Mitchie [2003] NSWSC 233 …. 12.56, 12.62 Longley v Longley (1871) LR 13 Eq 133 …. 6.27 Lord v Commissioners for the City of Sydney (1859) 12 Moo PC 473; 14 ER 991 …. 2.14 — v Price (1874) LR 9 Ex 54 …. 2.58 Lord Advocate v Lord Lovat (1880) 5 App Cas 273 …. 5.93, 5.102 Lord Waring v London and Manchester Assurance Co Ltd [1935] Ch 310 …. 14.117 Louis and the Conveyancing Act 1919, Re [1971] 1 NSWLR 164 …. 13.20, 13.28, 13.34, 13.37 Lowe v Sze Tu [2015] HCATrans 179 …. 8.125 Lowe’s Will Trusts, Re [1973] 1 WLR 882 …. 3.17 Loxton v Waterhouse (1891) 7 WN (NSW) 98 …. 2.33 Lubrano v Proprietors of Strata Plan No 4038 (1993) 6 BPR 13,308 …. 9.84 Lukacs v Wood (1978) 19 SASR 520 …. 8.96, 8.101 Luke v Luke (1936) 36 SR (NSW) 310 …. 9.58 Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635 …. 2.30 Lyde v Russell (1830) 1 B & Ad 394; 109 ER 834 …. 2.26, 2.28

Lyons v Lyons [1967] VR 169 …. 9.38, 9.43 Lysaght v Edwards (1876) 2 Ch D 499 …. 6.14, 6.15, 6.17, 7.45, 9.30, 9.43

M Mabo v Queensland [1992] 1 Qd R 78 …. 4.14 — v Queensland (No 1) (1988) 166 CLR 186; 83 ALR 14 …. 4.23 — v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 …. 1.8, 1.59, 1.78, 3.2, 3.5, 3.6, 3.7, 3.31, 3.33, 3.34, 3.35, 3.36, 3.37, 3.38, 3.91, 3.117, 4.1, 4.4, 4.5, 4.8, 4.9, 4.10, 4.11, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 4.24, 4.25, 4.26, 4.27, 4.28, 4.31, 4.33, 4.36, 4.37, 4.38, 4.39, 4.41, 4.43, 4.44, 4.47, 4.48, 4.57, 4.59, 4.61, 4.62, 4.63, 4.64, 4.66, 4.68, 4.70, 4.73, 4.74, 4.84, 5.8, 5.12, 5.29, 5.33 Macintosh v Bebarfalds Ltd (1922) 22 SR (NSW) 371 …. 3.79 Macintosh v Lobel (1993) 30 NSWLR 441 …. 2.37, 2.38, 14.66 Mack and the Conveyancing Act, Re [1975] 2 NSWLR 623 …. 13.32 Mackintosh v Trotter (1838) 3 M & W 184 at 186; 150 ER 1108 …. 2.28 Mackreth v Symmons (1808) 15 Ves Jun 328 …. 6.16 Macleay, Re (1875) LR 20 Eq 186 …. 3.91 Macpherson v Maund (1937) 58 CLR 341; 11 ALJR 346 …. 10.36 Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 …. 8.72, 8.93, 8.104 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 …. 11.64, 11.60, 11.65 Maddison v Alderson (1883) 8 App Cas 467 …. 6.10, 6.11 Magill v Magill (1997) NSW ConvR ¶55-795 …. 9.45 Maher v Bayview Golf Club Ltd (2004) 12 BPR 22,457 …. 12.32 — v Maher (1877) 1 LR Ir 22 …. 10.14 Maiden Civil (P&E) Pty Ltd, Re; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337 …. 14.4, 14.5, 14.6

Mailman v Challenge Bank Ltd (1991) 5 BPR 11,721 …. 14.102 Maiorana and the Conveyancing Act, Re [1970] 1 NSWR 627 …. 12.23 Majestic Homes Pty Ltd v Wise [1978] Qd R 225 …. 8.96 Malayan Credit v Jack Chia-MPH Ltd [1986] 1 WLR 590 …. 9.19 Malin, In the Will and Estate of [1905] VLR 270 …. 10.10 Mallett v Mallett (1984) 156 CLR 605 …. 6.51 Malzy v Eichholz [1916] 2 KB 308 …. 11.21, 11.23 Mamfredas Investment Group Pty Ltd (formerly known as MAM Marketing Pty Ltd) v Property IT and Consulting Pty Ltd [2013] NSWSC 929 …. 13.46, 13.48, 13.49 Manchester Bonded Warehouse Co Ltd v Carr (1880) 5 CPD 507; [1874–80] All ER Rep 563 …. 11.25 Manfield & Sons Ltd v Botchin [1970] 2 QB 612 …. 11.16 Mangan, Re (1983) 123 ALR 633 …. 14.57 Mangiola v Costanzo [1980] ANZ ConvR 331 …. 11.4 Manners (dec’d), Re [1955] 1 WLR 1096; [1955] 3 All ER 83 …. 10.18, 10.19 Mansfield v Mansfield (1890) 16 VLR 569 …. 9.38 Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 …. 14.92 March v March (1945) 62 WN (NSW) 111 …. 6.30 Marchesi v Apostoulou [2006] FCA 1122 …. 5.114 Marengo Cave Co v Ross 7 NE (2nd) 59 (1937) …. 5.85 Margil Pty Ltd v Stegul Pastoral Pty Ltd [1984] 2 NSWLR 1 …. 12.23 Maridakis v Kouvaris (1975) 5 ALR 197 …. 11.76 Marist Bros Community Inc v Shire of Harvey (1994) 14 WAR 69 …. 6.22 Marker v Marker (1851) 9 Hare 1; 68 ER 389 …. 3.54 Markfield Investments Ltd v Evans [2001] 1 WLR 131 …. 5.140 Markham v Paget [1908] 1 Ch 697 …. 11.23

Markos v O R Autor (2007) 13 BPR 24,487 …. 12.60, 13.48 Marks v Warren [1979] 1 All ER 29 …. 11.41, 11.42 Marquess of Zetland v Driver [1939] Ch 1 …. 13.6 Marquis of Cholmondeley v Lord Clinton (1820) 2 Jac & W 1; 37 ER 527 …. 5.53 Marriott, Re [1968] VR 260 …. 12.56 Marsden v Campbell (1897) 18 LR (NSW) Eq 33 …. 7.18, 7.39, 8.89 — v Edward Heyes Ltd [1927] 2 KB 1 …. 3.52 — v McAlister (1887) NSWLR (L) 300 …. 8.87 Marshall v Council of the Shire of Snowy River (1994) NSW ConvR ¶55719 …. 11.7, 11.64, 11.65 Martin, Re [1900] SASR 69 …. 8.145 Martin v King (1996) 7 BPR 14,681 …. 11.115 — v Martin (1959) 110 CLR 297 …. 6.30 Martins Camera Corner Pty Ltd v Hotel Mayfair [1976] 2 NSWLR 15 …. 11.23 Martinson v Clowes (1882) 21 Ch D 857 …. 14.98 Martyn, Re (1965) 65 SR (NSW) 387 …. 13.36 Martyn v Glennan [1979] 2 NSWLR 234 …. 8.152 Mason v Clarke [1955] AC 778 …. 2.31, 2.33, 12.65, 12.68, 12.71 — v Shrewsbury and Hereford Railway Co (1871) LR 6 QB 578 …. 12.9 — v Tritton (1994) 34 NSWLR 572 …. 4.27 Mason and the Conveyancing Act, Re [1962] NSWR 762; (1960) 78 WN (NSW) 925 …. 12.63, 13.48 Massart v Blight (1951) 82 CLR 423 …. 11.42, 11.113 Matthey v Curling [1922] 2 AC 180 …. 11.39 Mattie v Edwards (1847) 16 LJ Ch 405 …. 14.115 Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 …. 14.18, 14.124,

14.134, 14.136 Maurice Toltz Pty Ltd v Macy’s Emporium Pty Ltd [1970] 1 NSWR 474 …. 12.37 May v Ceedive Pty Ltd (2006) 13 BPR 24,147 …. 2.17, 2.19, 2.20, 2.21 Mayer v Coe (1968) 88 WN (Pt 1) (NSW) 549 …. 8.174 Mayho v Buckhurst (1617) Cro Jac 438 …. 11.46 MBF Investments Pty Ltd v Nolan (2011) 37 VR 116 …. 4.81, 14.106 McCarthy & Stone v Julian S Hodge & Co Ltd [1971] 1 WLR 1547 …. 7.31 McCauley v Karooz (1944) 61 WN (NSW) 165 …. 2.62 McColl v Bright [1939] VLR 204 …. 4.80 McCoy v Caelli [2010] NSWSC 1233 …. 9.33 — v Estate of Peter Anthony Caelli [2008] NSWSC 986 …. 9.33 McDermott v Boggs (NSWSC, Carruthers J, 12 March 1991, unreported) …. 2.39 McGlade v Native Title Registrar [2017] FCAFC 10 …. 4.32 McGrath v Campbell (2006) NSW ConvR 56-159 …. 8.84, 8.94, 12.24, 12.26, 12.50, 12.51, 12.52, 12.53 McGreal v Wake (1984) 269 EG 1254 …. 11.40 McGuigan Investments Pty Ltd v Dalwood Vineyards Pty Ltd [1970] 1 NSWR 686 …. 13.6 McGuiness v NSW Land and Housing Corporation [2014] NSWCATAP 98 …. 11.125 — v Registrar-General (1998) 44 NSWLR 61 …. 5.120, 8.87 — v Registrar-General; Barrett v McGuiness [1998] NSWSC 215 …. 5.120 McGuren v Simpson [2004] NSWSC 35 …. 5.141 McHugh v Union Bank of Canada [1913] AC 299 …. 14.101 McIntyre v Porter [1983] VR 439 …. 12.56 McKean v Maloney (1988) ANZ ConvR 31 …. 14.111

McKean’s Caveat, Re [1988] 1 Qd R 524 …. 8.145 McKenzie v McAllum [1956] VLR 208 …. 11.43 McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303 …. 2.3 McMahon v Docker (1945) 62 WN (NSW) 155 …. 11.16 — v McMahon [1979] VR 239 …. 8.149 McManus v Cooke (1887) 35 Ch D 681 …. 12.17 McNamara and the Conveyancing Act, Re (1961) 78 WN (NSW) 1068 …. 9.63 McPhail v Persons, Names Unknown [1973] Ch 447; [1973] 3 All ER 393 …. 5.46, 5.57 Mears v London and South Western Railway Co (1862) 11 CBNS 850 …. 2.60 Measures v McFadyen (1910) 11 CLR 723 …. 11.56, 14.56 Medforth v Blake [2000] Ch 86 …. 14.102 Mediservices International Pty Ltd v Stocks and Realty (Security Finance) Pty Ltd [1982] 1 NSWLR 516 …. 14.92 Mellor v Walmesley [1905] 2 Ch 164 …. 12.31 Mercantile Credits Ltd v Comblas (1982) 56 ALJR 499 …. 14.47 — v Shell Co of Australia Ltd (1976) 136 CLR 326 …. 8.40, 8.41, 8.42, 8.43, 8.46 Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32 …. 8.92, 8.96, 8.98 Meriton Apartments Pty Ltd v McLaurin & Tait (1976) 133 CLR 671; 50 ALJR 743 …. 8.181 Mervin, Re [1891] 3 Ch 197 …. 10.26 Metropolitan Fire Brigades Board v Tait [1949] VLR 231 …. 11.5 Metropolitan Railway Co v Fowler [1892] 1 QB 165 …. 5.10 Metropolitan Trade Finance v Coumbis (1973) 131 CLR 396 …. 11.14 Meux v Cobley [1892] 2 Ch 253 …. 3.51, 3.53

— v Jacobs (1875) LR 7 HL 481 …. 14.63 Michael v Onisforou (1977) 1 BPR 9356 …. 8.87 Middle Harbour Investments Ltd, Re [1977] 2 NSWLR 652 …. 3.19 Middleton v Arthur (2002) 11 BPR 20,263 …. 12.39 Midland Bank Trust Co Ltd v Green [1983] AC 513 …. 7.12 Midland Brick Co Pty Ltd v Welsh [2006] WASC 122 …. 8.170 Mihalic v Mihalic (1987) 73 ALR 304 …. 8.145 Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 …. 1.8, 1.59, 3.36, 4.1, 4.2, 4.3, 4.5, 4.9, 4.10, 4.11, 4.13, 4.40 Millar v Candy (1981) 58 FLR 145 …. 2.62 Miller v Emcer Products Ltd [1956] Ch 304; [1956] 1 All ER 237 …. 12.9 — v Jackson [1977] QB 966 …. 12.7 — v Minister of Mines [1963] AC 484 …. 8.107, 8.109, 8.143 — v Sutherland (1990) 14 Fam LR 416 …. 6.36, 6.55 Mills v Renwick (1901) 1 SR (NSW) Eq 173 …. 7.38, 7.39 — v Ruthol Pty Ltd (2002) 10 BPR 19,381 …. 7.33 — v Stokman (1967) 116 CLR 61 …. 12.65 Milmo v Carreras [1946] KB 306 …. 11.45 Milne v James (1910) 13 CLR 168 …. 12.33 Milroy v Lord (1862) De GF & J 264; 45 ER 1185 …. 6.45, 8.126 Milutinovic v Milutinovic [2004] NSWSC 1110 …. 8.124 Minister for Education and Training v Canham [2004] NSWSC 274 …. 8.93 Minister for the Interior v Brisbane Amateur Turf Club (1949) 80 CLR 123 …. 11.19 Minister of State for the Army v Dalziel (1944) 68 CLR 261 …. 4.50, 5.10 Minshall v Lloyd (1837) 2 M & W 450 …. 2.18 Minter v Minter (2000) 10 BPR 18,133 …. 9.21

Mir Bros Projects Pty Ltd v 1924 Pty Ltd [1980] 2 NSWLR 907 …. 14.86, 14.92 Mischel Holdings Pty Ltd (in liq) v Mischel [2013] VSCA 375 …. 9.27 Mitchell v Arblaster [1964–65] NSWR 119 …. 9.20 Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297 …. 11.82 M’Leod v M’Ghie (1841) 2 Man & G 326 …. 2.49 Modular Design Group Pty Ltd, Re (1994) 35 NSWLR 96 …. 14.31 Moffett v Dillon [1999] 2 VR 480 …. 7.27, 7.28, 7.29, 8.170 Mogo Local Aboriginal Land Council v Eurobodalla Shire Council [2002] NSWCA 12 …. 8.120 Monash City Council v Melville (2000) V ConVR 54-261 …. 5.109 Moncrieff v Jamieson [2007] 1 WLR 2620 …. 5.9, 12.7, 12.36 Monds v Stackhouse (1948) 77 CLR 232 …. 10.12 Money v Westpac Banking Corp (1988) ANZ ConvR 553 …. 14.34 Monsell v Team Link Management Pty Ltd (1997) 8 BPR 15,401 …. 14.3 Moody v Steggles (1879) 12 Ch D 261 …. 12.5, 12.6, 12.9 Moon v Diroan Pty Ltd (RTT 96/024196) …. 11.135 Moonking Gee v Tahos (1961) 63 SR (NSW) 935 …. 7.37, 7.39 Moore, Re [1901] 1 Ch 936 …. 10.27 Moore v Dimond (1929) 43 CLR 105 …. 11.13 — v Regents of the University of California 793 P 2d 479 (1990) …. 1.60 — v Ullcoats Mining Co [1908] 1 Ch 575 …. 11.68 Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445 …. 12.34 Moorgate Tobacco Pty Ltd v Philip Morris Pty Ltd (1984) 156 CLR 414; 56 ALR 193 …. 1.69 Moran v Buckinghamshire County Council (1988) 86 LQR 472 …. 5.113 Morgan v Coulson [1981] 2 NSWLR 801 …. 14.37

— v Jeffreys [1910] 1 Ch 620 …. 14.25 Morison v Edmiston [1907] VLR 191 …. 11.13 — v London, County and Westminster Bank Ltd [1914] 3 KB 356 …. 2.61 Morley v Bird (1798) 3 Ves 628 …. 9.18 Morris v Tarrant [1971] 2 QB 143 …. 5.88 Morrison, Jones & Taylor Ltd, Re [1914] 1 Ch 50 …. 2.24 Mortimer v Bailey [2005] 2 P & CR 9 …. 13.41 Morton v Suncorp Finance Ltd (1987) 8 NSWLR 325 …. 14.95 Mostyn v Mostyn (1989) 16 NSWLR 635 …. 6.5 Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 8 BPR 15,565 …. 8.179 Moule v Garrett (1870) LR 5 Ex 132 …. 11.44 — v — (1872) LR 7 Ex 101 …. 11.49, 11.56 Mount Carmel Investments Ltd v Peter Thurlow Ltd [1988] 1 WLR 1078 …. 5.140 Mount Cathay v Pty Ltd v Lend Lease Funds Management Ltd [2012] QCA 274 …. 12.45 Mualgal People v Queensland [1999] FCA 157 …. 4.66 Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 …. 5.45, 5.70, 5.84, 5.86, 5.100, 5.102, 5.135, 5.136, 5.144, 5.145 Multiservice Bookbinding Ltd v Marden [1979] Ch 84 …. 14.32 Mumford v Stohwasser (1874) LR 18 Eq 556 …. 7.31, 7.32, 7.44, 14.133 Munday v Australian Capital Territory (2000) 173 ALR 1 …. 2.67 — v Prowse (1878) 4 VLR (Eq) 101 …. 3.79 Municipal District of Concord v Coles (1905) 3 CLR 96 …. 12.4 Munro v Stuart (1924) 41 SR (NSW) 203 …. 8.68 Murnane v Findlay [1926] VLR 80 …. 5.112 Murrell, Re (1984) 57 ALR 85 …. 14.125

Murtagh v Murtagh [2013] NSWSC 926 …. 9.58 Muschinski v Dodds (1985) 160 CLR 583; 62 ALR 429 …. 6.34, 6.49, 6.55, 7.33, 7.45 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 …. 11.23, 11.73

N Nadrak Pty Ltd v Permanent Custodians Ltd (1994) 6 BPR 13,344 …. 14.32 Naish and the Conveyancing Act, Re [1960] 77 WN (NSW) 892 …. 13.34 Napper v Miller [2002] NSWSC 1122 …. 10.48 — v — (2003) 11 BPR 21,175 …. 10.26 National Australia Bank Ltd v Blacker (2000) 179 ALR 97 …. 2.18, 2.21 — v Bridge Wholesale Acceptance Corp (Aust) Ltd (1990) 21 NSWLR 96 …. 8.152 — v Garrett [2016] FCA 714 …. 14.8 — v New South Wales (2009) 260 ALR 115 …. 3.19, 3.30 — v Smith [2014] NSWSC 1605 …. 14.35 National Bank of Greece SA v Pinios Shipping Co (No 1) [1989] 3 WLR 185 …. 14.64 National Bank of Tasmania Ltd v McKenzie [1920] VLR 411 …. 14.90 National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 …. 11.77 National Provincial and Union Bank of England v Charnley [1924] 1 KB 431 …. 14.16 National Trust v White [1987] 1 WLR 907 …. 12.36 Natva Developments Pty Ltd v McDonald Bros Pty Ltd (2004) 12 BPR 22,287 …. 12.36, 12.64, 12.65 Natwest Markets Australia Ltd v Mannix (1995) NSW ConvR ¶55–743 …. 14.47 Naziridis v Rimis (1999) 9 BPR 16,201 …. 9.65 Neighbourhood Association DP No 285220 v Moffat (2008) NSW ConvR

¶56-208 …. 12.36 Nelson v Kimberley Homes Pty Ltd (1988) NSW ConvR ¶55-394 …. 8.152 — v Nelson (1995) 184 CLR 538 …. 6.30 Nemesis Australia Pty Ltd v Commissioner of Taxation (2005) 225 ALR 576 …. 10.44 New South Wales v Koumdjiev (2005) 63 NSWLR 353 …. 9.76 — v Watton (1999) NSW ConvR ¶55-885 …. 11.37 New South Wales Co-operative Ice & Cold Storage Co, Re (1891) 12 LR (NSW) Eq 87 …. 2.23, 2.28 New South Wales Department of Housing v Hume [2007] NSWCA 69 …. 11.37 New South Wales Land and Housing Corporation v Green (NSWSC, Graham AJ, 31 October 1997, unreported, BC9705949) …. 11.125 New Zealand Government Property Corp v H M & S Ltd [1982] 1 All ER 624 …. 2.28 Newcastle City Council v Kern Land Pty Ltd & Commonwealth Bank of Australia (1997) 42 NSWLR 273 …. 3.113 Newcomen v Coulson (1877) 5 Ch D 133 …. 12.37 Newington v Windeyer (1985) 3 NSWLR 555 …. 5.33, 5.102 Newton Abbot Co-op Society v Williamson & Treadgold Ltd [1952] Ch 286 …. 13.7, 13.29, 13.38 Nguyen v Kaha [2008] NSWCA 794 …. 8.144 Nicholas v Andrew (1920) 20 SR (NSW) 178 …. 5.143 Nicholls v Ely Beet Sugar Factory Ltd (No 1) [1931] 2 Ch 84 …. 12.71 Nilan v Nilan (1951) 68 WN (NSW) 271 …. 2.35 Nisbet and Potts’ Contract, Re [1905] 1 Ch 391; [1906] 1 Ch 386 …. 7.23, 13.17, 13.19 No Fuss Finance Pty Ltd v Miller [2006] NSWSC 630 …. 14.35 Noakes & Co Ltd v Rice [1902] AC 24 …. 14.23, 14.25, 14.30

Noblett and Mansfield v Manley [1952] SASR 155 …. 11.92 Nordern v Blueport Enterprises Ltd [1996] 3 NZLR 450 …. 11.23 North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595 …. 4.63 North Sydney Council, Re (1998) NSW ConvR ¶55-828 …. 5.72 North Sydney Printing Pty Ltd v Sabemo Investment Corp Pty Ltd [1971] 2 NSWLR 150 …. 12.29 Northern Counties of England Fire Insurance Co v Whipp (1884) 26 Ch D 482 …. 7.7, 7.8, 14.128 Northern Land Council v Commonwealth (No 2) (1987) 61 ALJR 616 …. 4.13 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 …. 11.37, 11.109 Norton v Dashwood [1896] 2 Ch 497 …. 2.19, 2.23, 2.26 NRMA Insurance Ltd v B & B Shipping and Maritime Salvage Co Pty Ltd (1947) 47 SR (NSW) 273 …. 5.44 NSW Trustee and Guardian v State of New South Wales [2015] NSWSC 1121 …. 9.8 Nullagine Investments Pty Ltd v Western Australia Club Inc (1993) 67 ALJR 739 …. 9.63 Nulyarimma v Thompson; Buzzacott v Minister for the Environment (1999) 96 FCR 153; 165 ALR 621 …. 4.81 NZI Capital Corp Pty Ltd v Child (1991) 23 NSWLR 481 …. 14.45

O OBG Ltd v Allen [2008] 1 AC 1 …. 2.49, 2.61 O’Brien v Robinson [1973] 1 All ER 583 …. 11.40, 11.109 Ocean Accident and Guarantee Corporation Ltd v Ilford Gas Co [1905] 2 KB 493 …. 14.51 Ocean Estates v Pinder [1969] 2 AC 19 …. 5.113

Oertel v Hordern (1902) 2 SR (NSW) Eq 37 …. 8.140 Ofulue v Bossert [2009] 2 WLR 749 …. 5.92, 5.141, 5.142 Ogilvie v Ryan [1976] 2 NSWLR 504 …. 6.13, 6.33, 6.49, 6.55 Oh Hiam v Tham Kong (1980) 2 BPR 9451 …. 8.95 Old Grovebury Manor Farm v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504 …. 11.64 Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 …. 11.51 Olivieri v Olivieri (1993) 38 NSWLR 665 …. 6.30 Olsson v Dyson (1969) 120 CLR 365 …. 6.43 Olympic Holdings Pty Ltd v Windslow Corp Pty Ltd (in liq) (2008) 36 WAR 342 …. 14.134 On v On [2002] NTSC 18 …. 9.45 O’Neil v Hart [1905] VLR 107 …. 5.119, 5.140 O’Neill v Commonwealth Bank of Australia [2013] NSWSC 836 …. 14.60 OneSteel Manufacturing Pty Ltd (admins apptd), Re [2017] NSWSC 21 …. 14.9 Orr Ewing v Colquhoun (1877) 2 App Cas 839 …. 2.14 O’Shea v Athanasakis (2009) 14 BPR 27,093 …. 12.34 Osmanoski v Rose [1974] VR 523 …. 8.168 Otter v Lord Vaux (1856) 6 De GM & G 638 …. 14.99 Owen v Gadd [1956] 2 QB 99 …. 11.23 Owners — Strata Plan No 70798 v Bakkante Constructions Pty Ltd (2014) 88 NSWLR 513 …. 9.111 Owners — Strata Plan No 73943 v Gazebo Penthouse Pty Ltd [2014] NSWSC 1536 …. 9.110 Owners Corporation of Strata Plan 71623 v Waldorf Apartments Hotel, The Entrance Pty Ltd [2015] NSWSC 1658 …. 8.105 Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action

Supermarkets Pty Ltd (2008) 37 WAR 498 …. 12.7 Owners of Strata Plan No 3397 v Tate (2007) 70 NSWLR 344 …. 9.108, 9.110, 9.134 Owners SP 35042 v Seiwa Australia Pty Ltd (2007) 13 BPR 24,789; [2007] NSWCA 272 …. 9.71, 9.84 Owners Strata Plan 50276 v Thoo (2013) 17 BPR 33,789 …. 9.84 Owners Strata Plan No 60919 v Consumer Trader and Tenancy Tribunal (2009) 16 BPR 31,673 …. 9.108 Oxford Meat Co Pty Ltd v McDonald [1963] SR (NSW) 423 …. 5.33 Oxley v Imperial Charter Pty Ltd (1996) NSW ConvR ¶55-783 …. 11.144

P P & A Swift Investments v Combined English Stores Group plc [1989] AC 632 …. 11.46 Pacific Film Laboratories Pty Ltd v Federal Commissioner for Taxation (1970) 121 CLR 154 …. 2.5 Page’s Application, Re (1996) 71 P & CR 440 …. 13.49 Paine & Co v St Neots Gas & Coke Co [1939] 3 All ER 812 …. 12.45 Palais Parking Ltd v Shea (1980) 23 SASR 425 …. 8.31 Palmer v Hendrie (1859) 27 Beav 349; 54 ER 136 …. 14.47 Palumberi v Palumberi (1986) NSW ConvR ¶55-287 …. 2.17, 2.22 Pampris v Thanos [1968] 1 NSWR 56 …. 11.25 Pangallo Estate Pty Ltd v Killara 10 Pty Ltd [2007] NSWSC 1528 …. 2.46 Pantalone v Alaouie (1989) 18 NSWLR 119 …. 12.11 Papadopoulos v Goodwin [1982] 1 NSWLR 413 …. 12.23 — v — (1983) 2 NSWLR 113 …. 12.50 Pareroultja v Tickner (1993) 42 FCR 32 …. 4.27 Park v Brady [1976] 1 NSWLR 119 …. 5.122

— v — [1976] 2 NSWLR 329 …. 5.122 Parker v British Airways Board [1982] 1 QB 1004; [1982] 1 All ER 834 …. 2.67 — v Clark [1960] 1 All ER 93; [1960] 1 WLR 286 …. 6.8 — v Registrar-General [1977] 1 NSWLR 22 …. 8.192, 8.195 — v Webb (1693) 3 Salk 5; 91 ER 656 …. 11.46 Parker-Tweedale v Dunbar Bank plc [1991] Ch 12 …. 14.102 Parkinson v Braham [1962] SR (NSW) 663 …. 8.89, 11.8 Paroz v Paroz [2010] QCA 362 …. 9.54 — v — [2010] QSC 203 …. 9.54 — v — [2011] HCATrans 205 …. 9.54 Paterson v McCarthy (1892) 18 VLR 133 …. 14.55 Patsios v Glavinic [2006] VSC 92 …. 5.84 Patterson v Mortgage Finance Australia (Securities) Ltd (1991) ANZ ConvR 46 …. 14.116 Paul, Re (1902) 19 WN (NSW) 114 …. 8.145 Paul v Nurse (1828) 8 B & C 486 …. 11.48, 11.56 Paulet v Stewart [2009] VSC 60 …. 6.30 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 …. 2.30 Pawson’s Settlement, Re [1917] 1 Ch 541 …. 14.52 Payne v Dwyer [2013] WASC 271 …. 5.81 — v Rowe [2012] NSWSC 685 …. 9.58 — v Webb (1874) LR 19 Eq 26 …. 9.13 PD Consultants Pty Ltd v Childs [2004] NSWSC 1076 …. 12.34 Pearson v Spencer (1861) 1 B & S 571 …. 12.29 Peat v Chapman (1750) 1 Ves Sen 542 …. 9.13 Peden Pty Ltd v Bortolazzo [2006] 2 Qd R 574 …. 11.23

Pedulla v Panetta [2011] NSWSC 1386 …. 8.183, 8.193, 8.195, 8.204 Peldan v Anderson (2006) 229 ALR 432 …. 9.25, 9.53 Pelenoy Pty Ltd v Donovan Oates Hannaford Mortgage Corp [2004] NSWSC 4 …. 8.129 Pells v Brown (1620) Cro Jac 590 …. 10.5 Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676 …. 14.104, 14.109, 14.111 Penfolds Wines v Elliott (1946) 74 CLR 204 …. 2.46, 2.48, 2.50, 2.60 Pennant Hills Golf Club v Roads and Traffic Authority of New South Wales (1999) 9 BPR 17,011 …. 12.65 Penrith Whitewater Stadium Ltd v Lesvos Enterprises Pty Ltd (2007) 13 BPR 24,799 …. 11.5 Penton v Barnett [1898] 1 QB 276 …. 11.64 — v Robart (1801) 2 East 88; 102 ER 302 …. 2.25, 2.26 Perera v Vandiyar [1953] 1 WLR 672 …. 11.23 Permanent Finance Corp Ltd v Flavel [1968] Qd R 84 …. 14.55 Permanent Mortgages Pty Ltd v Cook [2006] ASC 155-082 …. 14.35 Permanent Trustee Australia Ltd v Shand (1992) 27 NSWLR 426 …. 12.65, 12.73 Permanent Trustee Co Ltd v Frazis [1999] NSWSC 319 …. 14.35 Permanent Trustee Co of NSW v Campbelltown Municipal Council (1960) 105 CLR 401 …. 12.31 — v Richardson (1948) 48 SR (NSW) 313 …. 10.37 Perpetual Finance Corporation Ltd v Blain (1996) 9 BPR 16,243 …. 11.131 Perpetual Nominees Pty Ltd v Springfield Retail Pty Ltd [2009] NSWSC 188 …. 8.144 Perpetual Trustee Co Ltd (original plaintiff); Performance Capital Mortgage Pty Ltd v Motive Finance & Leasing Pty Ltd [2010] NSWSC 429 …. 8.168

Perpetual Trustee Co Ltd v Khoshaba (2006) 14 BPR 26,639 …. 14.35 — v Motive Finance & Leasing Pty Ltd (2011) 15 BPR 29,267 …. 6.8 — v Smith (2010) 273 ALR 469; [2010] FCAFC 91 …. 7.29, 8.168, 8.170, 11.7 Perpetual Trustee Victoria Ltd v English [2009] NSWSC 478 …. 8.52 Perpetual Trustees Australia v Richards [2008] NSWSC 658 …. 8.47 Perpetual Trustees Company Ltd; Application of Chen [2010] NSWSC 808 …. 9.17 Perpetual Trustees of Victoria v Tsai [2004] NSWSC 754 …. 8.50 Perpetual Trustees Victoria Ltd v Cipri [2009] NSWSC 335 …. 8.190 Perpetual Trustees Victoria Ltd v English [2009] NSWSC 478 …. 8.51, 8.52 — v — [2010] NSWCA 32 …. 8.47, 8.53, 8.56 — v Tsai (2004) 1 BPR 22,811; [2004] NSWSC 745 …. 8.46, 8.48 — v Van den Heuvel [2010] NSWCA 171 …. 8.45, 8.56 Perrot’s Case (1594) Moo KB 368; 72 ER 634 …. 10.4 Perry v Clissold [1907] AC 73 …. 2.32, 2.35, 5.33, 5.43, 5.44, 5.47, 5.48, 5.70, 5.135, 5.145 — v Fitzhowe (1846) 8 QB 757 …. 12.43 — v Rolfe [1948] VLR 297 …. 14.139 Perry-Herrick v Attwood (1857) 2 De G & J 21; 44 ER 895 …. 7.8 Person-to-Person Financial Services Pty Ltd v Sharari [1984] 1 NSWLR 745 …. 8.164, 8.165 Pertsoulis, In the Marriage of (1980) 6 Fam LR 39 …. 9.47 Peter v Russel (1716) 1 Eq Ca Abr 321 …. 7.8 Peters v Commonwealth Bank of Australia (1992) NSW ConvR ¶55–629; (1992) ANZ ConvR 497 …. 14.40 Pettey v Parsons [1914] 2 Ch 653 …. 12.39, 12.45 Phillips v Halliday [1891] AC 228 …. 12.5, 12.9

— v Lamdin [1949] 2 KB 33 …. 2.23 — v Martin (1890) 11 LR (NSW) 153 …. 8.92 Philos Pty Ltd v National Bank of Australasia Ltd (1976) 5 BPR 11,810 …. 14.137 Phipps v Acker (1842) 9 Cl & F 583; 8 ER 539 …. 10.14 — v Pears [1965] 1 QB 76 …. 12.7, 12.10, 12.27 Picken v Matthews (1878) 10 Ch D 264; 39 LT 531 …. 10.20 Pickering v Rudd (1815) 4 Camp 219 …. 2.9 Pieper v Edwards [1982] 1 NSWLR 336 …. 12.59, 13.46 Pigot’s Case (1614) 11 Coke 26b; 77 ER 1177 …. 8.57 Pike v Venables (1984) NSW ConvR ¶55-170 …. 13.47 Pilcher v Rawlins (1872) LR 7 Ch App 259 …. 7.9, 8.171, 14.128 Piles Caveats, Re [1981] Qd R 81 …. 8.142 Pinhorn v Souster (1853) 8 Exch 763 …. 11.41 Pink v Lawrence (1978) 36 P & CR 98 …. 9.16 Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of New South Wales Ltd (1970) 2 BPR 9562 …. 11.71 Pirrie v Saunders (1961) 104 CLR 149 …. 6.8 Plaister, Re, Perpetual Trustee Co v Crawshaw (1934) 34 SR (NSW) 547 …. 9.50 Platzer v Commonwealth Bank of Australia [1997] 1 Qd R 266 …. 7.20 Plymouth Corporation v Harvey [1971] 1 WLR 549 …. 11.64 Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353 …. 2.31 — v — [2005] HCATrans 365 …. 2.31 Porter v Associated Securities Ltd (1976) 1 BPR 9279 …. 14.109 Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598 …. 13.45 Potter v Edwards (1875) 26 LJ Ch 468 …. 14.32

Powell v Langdon (1944) 45 SR (NSW) 136 …. 12.39 — v McFarlane (1979) 38 P & CR 452 …. 5.81, 5.93, 5.106, 5.112, 5.113 Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] NSWCA 8 …. 14.4, 14.7, 14.8 Powley v Walker (1793) 5 Term Rep 373; 101 ER 208 …. 11.28 Powys v Blagrave (1854) 4 de GM & G 448; 43 ER 582 …. 3.51 Pratten v Warringah Shire Council (1969) 90 WN (Pt 1) (NSW) 134 …. 8.107, 8.108, 8.201 Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd (2007) 13 BPR 24,969 …. 8.68 Proctor v Bishop of Bath and Wells (1794) 2 Hy Bl 358; 126 ER 594 …. 10.35 Production Printing (Aust) Pty Ltd (in liq), Re [2017] NSWSC 505 …. 14.9 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 …. 11.59, 11.60, 11.61, 11.77, 11.79 Proprietors — Strata Plan No 6522 v Furney [1976] 1 NSWLR 412 …. 9.71, 9.78 Proprietors Strata Plan No 30234 v Margiz Pty Ltd (1993) 32 NSWLR 294 …. 9.78 Proprietors Strata Plan No 9968 v Proprietors Strata Plan No 11173 [1979] 2 NSWLR 605 …. 12.62 Prosser v Rice (1859) 28 Beav 68 at 74; 54 ER 291 …. 14.123 Proudfoot v Hart (1890) 25 QBD 42 …. 11.30, 11.39 Provident Capital Ltd v Papa (2013) 84 NSWLR 231 …. 14.35 — v Printy (2008) 13 BPR 25,199; [2008] NSWCA 131 …. 8.46, 8.48; 8.50, 8.52 Prowse v Johnstone [2012] VSC 4 …. 13.49 Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 …. 11.4, 11.11, 11.84

Pryke v Blazai (2000) 10 BPR 18,489 …. 6.16 PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643 …. 8.37, 8.47, 14.56 Pua Hor Ong v Wu You Yang Pty Ltd (2008) 103 SASR 9 …. 8.151 Public Transport Commission (NSW) v Perry (1977) 137 CLR 107 …. 2.31 Public Trustee v Bellotti (1986) 4 BPR 9196 …. 5.155 — v Bennett [2004] NSWSC 955 …. 10.44, 10.63 — v Evans (1985) 2 NSWLR 188 …. 9.49 — v Grivas [1974] 2 NSWLR 316 …. 9.47 — v Paradiso (1995) 64 SASR 387 …. 8.32 Public Trustee (NSW) v Fitter [2005] NSWSC 1188 …. 9.51 Purefoy v Rogers (1671) 2 Wms Saund 380; 85 ER 1181 …. 3.109, 10.10 Putz v Registrar of Titles [1928] VLR 348 …. 14.142 Pwllbach Colliery Co Ltd v Woodman [1915] AC 634 …. 12.30, 12.42 Pyramid Building Society (in liq) v Scorpion Hotels Pty Ltd [1998] 1 VR 188 …. 8.46, 8.72 Pyrmont Point Pty Ltd v Westacott (2016) 91 NSWLR 170 …. 11.138

Q Quach v Marrickville Municipal Council (No 2) (1990) 22 NSWLR 55 …. 5.100, 5.115, 5.119, 5.147, 8.112 Quarmby v Keating [2008] TASSC 71 …. 5.115, 5.149 Queanbeyan Leagues Club v Poldune Pty Ltd (1996) 7 BPR 15,078 …. 8.151 Queensland v Congoo (2015) 256 CLR 239 …. 4.58 Queensland National Bank Ltd v MacBriar [1902] St R Qd 268 …. 14.63 Queensland Premier Mines Pty Ltd v French (2007) 235 CLR 81 …. 14.56 Quennell v Maltby [1979] 1 WLR 318 …. 14.49

R

R v Ballard [1829] NSWSupC 26 …. 4.6 — v Bonjon [1841] NSWSC 92 …. 4.6 — v Hussey (1924) 18 Cr App R 160 …. 11.69 — v Mitton (1827) 3 C & P 31; 172 ER 309 …. 2.63 — v Murrell and Bummaree [1836] NSWSupC 35 …. 4.6 — v NTC Smokehouse Ltd [1996] 2 SCR 672; (1996) 137 DLR (4th) 528 …. 4.28 — v Pamajewon [1996] 2 SCR 821 …. 4.28 — v Symonds [1847] NZPCC 387 …. 4.13 — v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327; 44 ALR 63 …. 3.26, 12.65 — v Van der Peet (1996) 137 DLR (4th) 289 …. 4.28 R & J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2006] NSWCA 177 …. 3.80 R (Beresford) v Sunderland City Council [2004] 1 AC 889 …. 12.33 Radaich v Smith (1959) 101 CLR 209 …. 11.5 Rains v Buxton (1880) 14 Ch D 537 …. 5.85 Ramsay v Trustees Executors and Agency Co Ltd (1948) 77 CLR 321 …. 3.93 Rance v Elvin (1985) 50 P & CR 9 …. 12.10 Randall v Stevens (1853) 2 El & Bl 641; 118 ER 908 …. 5.140 Randwick Municipal Corporation v Rutledge (1959) 102 CLR 54; 5 LGRA 127 …. 3.23 Ranger v Giffin (1968) 87 WN (Pt 1) NSW 531 …. 2.66 Rasmanis v Jurewitsch (1969) 70 SR (NSW) 407 …. 9.47 Rasmussen v Rasmussen [1995] 1 VR 613 …. 8.124, 8.125, 8.206 Ratcliffe v Watters (1969) WN (NSW) (Pt 1) 497 …. 8.78 Ravenseft Properties Ltd v Davstone (Holdings) Ltd [1979] 2 WLR 897 ….

11.39 Red House Farms (Thorndon) Ltd v Catchpole [1977] 244 EG 295; 121 Sol J 136 …. 5.97 Reef Health Pty v Vines [2014] NSWSC 70 …. 2.50 Refina Pty Ltd v Binnie [2009] NSWSC 914 …. 5.142, 5.158 Refuge Assurance Co Ltd v Pearlberg [1938] Ch 687 …. 14.44 Regent v Millett (1976) 133 CLR 679 …. 6.11 Regis Property Co Ltd v Dudley [1959] AC 370 …. 11.26, 11.38 — v Redman [1956] 2 QB 612 …. 12.27 Regis Towers Real Estate Pty Ltd v Kin Fung (2001) NSW ConvR ¶55-960 …. 9.127 Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 …. 8.116, 8.192 — v Spencer (1909) 9 CLR 641 …. 8.195 Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321 …. 12.7, 12.48, 12.50 — v LawCover [2013] NSWSC 1471 …. 8.193 — v Wood (1926) 39 CLR 46 …. 9.24 Registrar-General v Cleaver (1996) 41 NSWLR 713 …. 8.195, 13.9 Reid v Smith (1905) 3 CLR 656 …. 2.21 Reitano v Reitano [2012] NSWSC 1127 …. 6.11 Reliance Permanent Building Society v Harwood-Stamper [1944] Ch 362 …. 14.109 Renals v Cowlishaw (1878) 9 Ch D 125 …. 13.4 Residential Housing Corporation v Esber (2011) 80 NSWLR 69 …. 14.125 Residential Tenancies Tribunal of New South Wales v Offe (NSWSC, Abadee J, 1 July 1997, unreported) …. 11.129 Residential Tenancies Tribunal of New South Wales and Henderson, Re; Ex parte Defence Housing Authority (1997) 146 ALR 495 …. 11.88

Reynolds v Ashby & Son [1904] AC 466 …. 2.24, 2.30 — v Clarke (1725) 2 Ld Raym 1399 …. 2.31 Rhone v Stephens [1994] 2 AC 310 …. 13.12, 13.14, 13.15 Rice v Rice (1853) 2 Drew 73; 61 ER 646 …. 7.26, 7.28, 7.30, 8.168, 8.171, 8.180, 14.128, 14.129 Richards v Rose (1853) 9 Ex 218 …. 12.30, 12.40 Richardson v Greentree (NSWSC, Einstein J, 1 December 1997, unreported) …. 5.87, 5.88, 5.108 — v Langridge (1811) 4 Taunt 128 …. 11.13 Richmond City Local Board of Health v Victorian Permanent Building and Investment Society (1890) 16 VLR 845 …. 14.20 Rickett v Green [1910] 1 KB 253 …. 11.54, 11.86 Ricketts v Enfield Churchwardens [1909] 1 Ch 544 …. 11.46 Rigby v Chief Constable [1985] 1 WLR 1242 …. 2.31 Riley v Penttila [1974] VR 547 …. 5.998, 5.110, 5.112, 5.118 Riley and the Real Property Act, Re (1964) 82 WN (Pt 1) (NSW) 373 …. 5.84, 5.100 Risk v Northern Territory of Australia [2006] FCA 404 …. 4.32 — v — (2007) 240 ALR 74 …. 4.32 — v — [2007] HCATrans 472 …. 4.32 RM Hosking v Barnes [1971] SASA 100 …. 8.97 Roads and Traffic Authority of New South Wales v Swain (1997) 41 NSWLR 452 …. 11.123 Roake v Chadha [1984] 1 WLR 40 …. 13.4 Roberts v IAC (Finance) Pty Ltd [1967] VR 231 …. 14.12 — v Rose (1865) LR 1 Ex 82 …. 12.43 — v Swangrove Estates Ltd [2008] 2 WLR 1111 …. 5.75 Robertson v Butler [1915] VLR 31 …. 5.140

— v Wilson (1958) 75 WN (NSW) 503 …. 11.77 Robinson v Hardcastle (1788) 2 TR 241; 100 ER 131 …. 10.26 — v Kilvert (1889) 41 Ch D 88 …. 11.24 — v Kingsmill (1954) 71 WN (NSW) 127 …. 11.76 — v Registrar-General (1983) NSW ConvR ¶55-138 …. 8.194 Roblin v the Public Trustee for the Australian Capital Territory and Labservices Pty Ltd [2015] ACTSC 100 …. 1.65 Roche v Douglas [2000] WASC 146 …. 1.65 Roche and the Conveyancing Act, Re (1960) 77 WN (NSW) 431 …. 13.6 Roda v Roda [2013] FamCAFC 27 …. 9.19, 9.46 Rogers v Hosegood [1900] 2 Ch 388 …. 13.3, 13.4, 13.5, 13.25, 13.26 — v Resi-Statewide Corp Ltd (1991) 101 ALR 377 …. 8.32 Rose, Re [1952] Ch 499 …. 6.45 Rose v Spicer [1911] 2 KB 234 …. 11.72 Rosedale Farm (NSW) Pty Ltd, Re (2010) 15 BPR 28,791 …. 12.60 Rosher, Re (1894) 26 Ch D 801 …. 3.91 Ross Cook & Brett Cook Pty Ltd v Bli Bli 1 Pty Ltd [2009] QSC 300 …. 8.152 Routledge v Dorrill (1794) 2 Ves Jun 357; 30 ER 671 …. 10.26 Roy v Lagona [2010] VSC 250 …. 5.77, 5.82, 5.89, 5.135 Royal Bank of Scotland v Etridge (No 2) [2001] 4 All ER 449 …. 1.45 Rubibi Community v Western Australia (No 7) [2006] FCA 459 …. 4.32 Rugby School (Governors) v Tannahill [1934] 1 KB 695 …. 11.64 Russel v Russel (1783) 1 Bro CC 269; 28 ER 1121 …. 6.12, 14.16 Russell v Russell [1903] 1 IR 168 …. 10.14 Russo v Bendigo Bank Ltd [1999] 3 VR 376 …. 8.77, 8.78 Ruthol Pty Ltd v Mills (2003) 11 BPR 20,793 …. 7.35, 7.45

Ryan v Brain [1994] 1 Qd R 681 …. 13.34 — v Dries (2002) 10 BPR 19,497 …. 6.29, 9.57, 9.58 — v Kalocsay [2009] NSWSC 1009 …. 8.142 — v O’Sullivan [1956] VLR 99 …. 14.90 — v Starr (2005) 12 BPR 22,803 …. 12.51 Rye v Rye [1962] AC 496 …. 11.75

S S & D International Pty Ltd (in liq), Re [2009] VSC 225 …. 14.125 S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 …. 11.18 S O Lovely Foods Pty Ltd v Macquarie Bank Ltd (CT, Cavanagh C, 28 March 1996, unreported) …. 11.144 Saade v Registrar-General (1993) 179 CLR 58 …. 8.192, 8.194 Sackville-West v Viscount Holmesdale (1870) LR 4 HL 543 …. 3.78 Safari 4 x 4 Engineering Pty Ltd v Doncaster Motors Pty Ltd [2006] VSC 46 …. 2.49 Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395 …. 8.116 Sahade v Owners Corporation SP 62022 [2013] NSWSC 1791 …. 8.116 — v The Owners — Strata Plan 62022 (2014) 87 NSWLR 261 …. 9.122 Saibai People v Queensland [1999] FCA 158 …. 4.66 Sakoua v Williams (2005) 64 NSWLR 588 …. 11.37, 11.109 Saleeba v Wilkie (2007) ANZ ConvR 664 …. 9.46 Salerno v Proprietors of Strata Plan No 42724 (1997) 8 BPR 15,457 …. 9.108 Saliba v Saliba [1976] Qd R 205 …. 3.91 Sammon, Re (1979) 94 DLR (3d) 594 …. 9.41 Sampi v Western Australia (2010) 266 ALR 537 …. 4.32 Samuel v Jarrah Timber and Wood Paving Corp Ltd [1904] AC 323 ….

14.24 Samuel Allen & Sons Ltd, Re [1907] 1 Ch 575 …. 2.25 Sander v Twigg (1877) 13 VLR 765 …. 14.20 Sanders v Cooper [1974] WAR 129 …. 11.95 Sanderson v Berwick-upon-Tweed Corporation (1884) 13 QBD 547 …. 11.23 Sandhu v Farooqui [2004] 1 P & CR 3 …. 5.91 Sandhurst Trustees Ltd v 72 Seventh Street Nominees Pty Ltd (in liq) (1998) 45 NSWLR 556 …. 3.19, 3.30 Sandilands, Re (1871) LR 6 CP 411 …. 6.5 Sandon v Hooper (1843) 6 Beav 246; 49 ER 820 …. 14.57 Santai v The Owners — Strata Plan No 77971 [2010] NSWSC 628 …. 9.104, 9.127 Santley v Wilde [1899] 2 Ch 474 …. 14.1, 14.25 Sardon Pty Ltd v Registrar of Titles [2004] WASC 56 …. 5.123 Saunders’ Case (1599) 5 Co Rep 12A; 77 ER 66 …. 3.52 Saviane v Stauffer Chemical Co (Australia) Pty Ltd [1974] 1 NSWLR 665 …. 11.30 Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1486 …. 10.6 Say v Smith (1561) 1 Plowd 269; 75 ER 410 …. 11.4 Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309 …. 8.104 Scanlon v Campbell (1991) 11 SR (NSW) 239 …. 5.140 Schmidt v 28 Myola Street Pty Ltd (2006) 14 VR 447 …. 8.143 Scholes v Blunt (1916) 17 SR (NSW) 36 …. 7.39 Schwann v Cotton [1916] 2 Ch 459 …. 12.26 Sclanders v Cole (1918) 18 SR (NSW) 216 …. 3.51

Scotney v Lomer (1886) 31 Ch D 380 …. 10.14 Scott v Scott [2009] NSWSC 567 …. 9.45 Seager v Copydex Ltd [1967] 2 All ER 415 …. 1.71 Secretary, Department of Social Security v James (1990) 95 ALR 615 …. 6.24 Seddon v Smith (1877) 36 LT 168 …. 5.113, 5.118 Segal Securities Ltd v Thoseby [1963] 1 QB 887 …. 11.66 Segal v Barel (2013) 84 NSWLR 193 …. 9.64, 9.68 — v Obsborne [2016] NSWSC 941 …. 2.22 Segulin v Car Owners’ Mutual Insurance Co Ltd (1984) NSW ConvR ¶55– 191 …. 14.93 Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157 …. 9.84 Selby v Nettlefold (1873) 9 Ch App 111 …. 12.39 Sertari Pty Ltd v Nirimba Developments Pty Ltd (2008) NSW ConvR ¶56200 …. 12.36 Seton v Slade (1802) 7 Ves 265 at 273; 32 ER 108 …. 14.24 Sewell v Agricultural Bank of Western Australia (1930) 44 CLR 104 …. 14.98 Sexton v Horton (1926) 38 CLR 240 …. 3.77 Seyffer v Adamson [2001] NSWSC 1132 …. 5.150, 5.152 Seymour v Seymour (1996) 40 NSWLR 358 …. 5.134 Shanly v Ward (1913) 29 TLR 714 …. 11.43 Shaw v Garbutt (1996) 7 BPR 14,816 …. 5.86, 5.92, 5.119, 5.136, 5.140 Shawyer v Amberday Pty Ltd (in liq) (2001) 10 BPR 18,869 …. 7.35 Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287 …. 13.41 Shell Co of Australia Ltd v Zanelli [1973] 1 NSWLR 216 …. 11.75 Shelley’s Case (1581) 1 Co Rep 93b; 76 ER 206 …. 3.71 Shelmerdine v Ringen Pty Ltd [1993] 1 VR 315 …. 5.135 Shepherd v Houston [1927] SASR 144 …. 8.146

Shevill v Builders Licensing Board (1989) 149 CLR 629 …. 11.59, 11.60 Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568 …. 12.34 Shiloh Spinners Ltd v Harding [1973] AC 691 …. 11.72 Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 …. 11.35 Short v Gill (1892) 13 LR(NSW) Eq 155 …. 7.21 — v Patrial Holdings Pty Ltd (1994) 6 BPR 13,996 …. 12.5 Shrimpton v Shrimpton (1862) 31 Beav 425 …. 10.14 Shropshire County Council v Edwards (1982) 46 P & CR 270 …. 13.5 Shropshire Union Railways & Canal Co v R (1875) LR7HL 496 …. 7.30 Sibbles v Highfern (1987) 164 CLR 214 …. 14.136 Sidebotham v Holland [1895] 1 QB 378 …. 11.11 Sidhu v Van Dyke (2014) 251 CLR 505 …. 6.41, 6.42 Siemenski v Brooks Nominees Pty Ltd 1990 Tas R 236 …. 8.81 Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317 …. 14.119 Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405 …. 8.97 Simpson v Forrester (1973) 132 CLR 499 …. 14.72 — v Mayor of Godmanchester [1897] AC 696 …. 12.5 — v North West County District Council (1978) 4 BPR 9277 …. 5.140 Sims v Landray [1894] 2 Ch 318 …. 6.9 Sinclair v Jut (1996) 9 BPR 16,219 …. 12.396 Singer Co v Clark (1879) 5 Ex D 37 …. 2.49 Singh v Kaur Bal (No 2) [2014] WASCA 88 …. 9.2, 9.25 Sirtes v Pryer [2006] ANZ ConvR 188 …. 6.34 Sistrom v Urh (1993) 117 ALR 528 …. 9.52 Slater v Slater (1987) 12 Fam LR 1 …. 9.44

Smilevska v Smilevska (No 2) [2016] NSWSC 397 …. 6.13, 6.42, 8.96 Smith v City Petroleum Co Ltd [1940] 1 All ER 260 …. 2.26, 2.28 — v Deane (1889) 10 LR (NSW) Eq 207 …. 7.41 — v Jones [1954] 1 WLR 1089 …. 7.19, 7.33, 7.45 — v Lawson (1997) 75 P & CR 466 …. 5.87 — v Marrable (1843) 11 M & W 5; 152 ER 693 …. 11.25, 11.60 — v Miller (Bryson J, 23 April 1993, unreported, BC9301695) …. 14.32 — v Scott [1973] 1 Ch 314 …. 11.23 — v Smith [1934] Ch 322 …. 14.33 Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500 …. 13.3, 13.4, 13.5, 13.10 Smith, Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health (1990) 95 ALR 87 …. 1.71 Solak v Bank of Western Australia Ltd [2009] VSC 82 …. 8.48 South Eastern Sydney Area Health Service v Wallace (2003) 59 NSWLR 259 …. 10.27, 10.32 South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716 …. 5.101, 5.104, 5.109, 5.110, 5.112 South Staffordshire Water Co v Sharman [1896] 2 QB 44 …. 2.66 South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603 …. 8.107, 8.114 Southern Centre of Theosophy Inc v South Australia [1982] AC 706 …. 2.15 Southern Rhodesia, Re [1919] AC 211 …. 4.9 Southwark London Borough Council v Mills [2001] 1 AC 1 …. 11.23 Southwell v Roberts (1940) 63 CLR 581 …. 14.57, 4.124 Sovmots Investments Ltd v Secretary of State for the Environment [1979] AC 144 …. 12.26 Spackman v Foster (1883) 11 QBD 99 …. 2.51

Spark v Whale Three Minute Car Wash (Cremorne Junction) Pty Ltd (1970) 92 WN (NSW) 1087 …. 5.33, 5.45 Spencer’s Case (1583) 5 Co Rep 16a; 77 ER 72 …. 11.47, 13.1, 14.17 Spencer v Commonwealth (1907) 5 CLR 418 …. 9.122 Spina v Conran Associates Pty Ltd (2008) 13 BPR 25,435 …. 8.96 Sporle v Whayman (1855) 20 Beav 607; 52 ER 738 …. 14.16 Spotswood v Hand (1874) 5 AJR 85 …. 3.52 Sprott v Harper [2000] QCA 391 …. 9.44 Spyer v Phillipson [1931] 2 Ch 183 …. 2.19, 2.26 Squire v Rogers (1979) 39 FLR 106 …. 9.56 SS & M Ceramics Pty Ltd v Kin [1996] 2 Qd R 540 …. 12.36 St Catherine’s Milling and Lumber Co v R (1888) 14 App Cas 46 …. 4.42 Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410 …. 14.101 Stanford v Stanford (2012) 247 CLR 108 …. 6.51 Stanhill Pty Ltd v Jackson (2005) 12 VR 224 …. 13.49 Stanwell Park Hotel v Leslie (1952) 85 CLR 189 …. 14.32 Stapleford Colliery Co, Re (1880) 14 Ch D 432 …. 7.25 Star Energy Weald Basin Ltd v Bocardo SA [2011] AC 380 …. 2.6 State Bank of New South Wales Ltd v Chia (2000) 50 NSWLR 587 …. 14.41 State Bank of New South Wales v Berowra Waters Holdings Pty Ltd (1986) 4 NSWLR 398 …. 8.31, 8.116, 14.78 State Electricity Commission of Victoria and Joshua’s Contract, Re [1940] VLR 121 …. 12.30, 12.42 State Transit Authority of NSW v Australian Jockey Club (2003) 11 BPR 21,107 …. 7.21 Staughton v Brown (1875) 1 VLR (L) 150 …. 5.99 Steadman v Steadman [1976] AC 536 …. 6.12

Steel-Maitland v British Airways [1981] SLT 110 …. 2.9 Stefanovic v Petrovic (NSWCA, Gleeson CJ, Meagher JA, Hope AJA, 30 October 1989, unreported) …. 8.126 Stellard Pty Ltd v North Queensland Fuel Pty Ltd …. 6.8 Stening v Abrahams [1931] 1 Ch 470 …. 11.42 Stephens v Stephens (1736) Cas t Talb 228; 25 ER 751 …. 10.26 Stern, Re [1962] Ch 732 …. 10.26 Stern v McArthur (1988) 165 CLR 489 …. 6.14 Stevens v Williams (1886) 12 VLR 152 …. 8.83 Stevenson v Yasso [2006] 2 Qd R 150 …. 4.28 Stewart v Williams (1914) 18 CLR 381 …. 3.25 Sticklehorne v Hatchman (1586) Owen 43 …. 3.51 Stieper v Deviot Pty Ltd (1977) 2 BPR 9602 …. 11.71 Stokes v Costain Property Investments Ltd [1983] 1 WLR 907 …. 3.39 — v Mixconcrete (Holdings) Ltd (1978) 38 P & CR 488 …. 12.37 Stone v Farrow Mortgage Services Pty Ltd (in liq) (1999) 12 BPR 22,175 …. 14.103 Stone Leaf Capital v Daley [2014] NSWSC 477 …. 8.180, 8.181 Stoneham, Re; Stoneham v Stoneham [1919] 1 Ch 149; [1918–19] All ER Rep 1051 …. 6.45 Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722 …. 8.93, 8.100, 8.101, 8.202, 8.205 Stow v Mineral Holdings (Australia) Pty Ltd (1977) 180 CLR 295; 14 ALR 397 …. 1.6, 1.75, 12.12 Street v Mountford [1985] AC 809 …. 11.5 Strode v Parker (1694) 2 Vern 326 …. 14.32 Strong v Bird (1874) LR 18 Eq 315 …. 8.126 Stroyan v Knowles (1861) 6 H & N 454 …. 12.11

Stuart v Hishon [2013] NSWSC 766 …. 6.8 — v Joy [1904] 1 KB 362 …. 11.44 — v Kingston (1923) 32 CLR 309 …. 8.74 — v Marshall (1958) 75 WN (NSW) 252 …. 11.5 Sturges v Bridgman (1879) 11 Ch D 852 …. 12.33 Summers v Salford Corp [1943] AC 283 …. 11.109 Sun North Investments Pty Ltd (as Trustee of Sun Development Trust) v Dale [2014] 1 Qd R 369 …. 14.23, 14.31 Sundara Ptd Ltd, Re [2015] NSWSC 1694 …. 8.114 Sunny Corporation Pty Ltd v Elkayess Nominees Pty Ltd [2006] VSC 314 …. 5.112 Super 1000 v Pacific General Securities [2008] NSWSC 1222; (2008) 221 FLR 427 …. 8.105 Surtees v Surtees (1871) LR 12 Eq 400 …. 9.13 Sutherland v Peel (1864) 1WW & A’B 18 …. 7.41 Sutton v Sutton (1883) 22 Ch D 511 …. 14.45 Suttons Motors (Temora) Pty Ltd v Hollywood Motors Pty Ltd [1971] VR 684 …. 2.63 Swain v Residential Tenancies Tribunal of New South Wales (NSWSC, Rolfe J, 22 March 1995, unreported, BC9504317) …. 11.118 Swan v Sinclair [1924] 1 Ch 254 …. 12.56 Sweet & Maxwell v Universal News Service Ltd [1964] 2 QB 699 …. 11.42 Swettenham v Wild [2005] QCA 264 …. 6.30 Swindon Waterworks Co Ltd v Wilts and Berks Canal Navigation Co (1875) LR 7 HL 697 …. 12.11 Sydney & Suburban Mutual Permanent Building Society Ltd v Lyons [1894] AC 260 …. 7.39 Sydney City Council v Parker (NSWSC, Cantor J, 1 March 1984, unreported) …. 2.36

Symes v Pitt [1952] VLR 412 …. 5.140 Sze To Chun Keung v Kung Kwok Wai David [1997] 1 WLR 1232 …. 5.142 Sze Tu v Lowe [2014] NSWCA 462 …. 8.105

T T Choithram International SA v Pagarani [2001] 1 WLR 1 …. 8.126 Taddeo v Catalano (1975) 11 SASR 492 …. 8.168 Tadrous v Tadrous [2009] NSWSC 407 …. 8.151 Taleb v National Bank Australia Ltd (2011) 82 NSWLR 489 …. 8.162, 8.166, 8.173, 8.182 Tancred v Allgood (1859) 4 H & N 438; 157 ER 910 …. 2.60 Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 …. 6.14, 6.18 Tara Shire Council v Garner [2003] 1 Qd R 556 …. 8.104 Tataurangi Tairuakena v Mua Carr [1927] NZLR 688 …. 8.96, 8.101 Tate v Commonwealth (NSWSC, Loveday J, 17 June 1988, unreported, BC8801829) …. 11.112 Taylor v Beal (1591) Cro Eliz 222; 78 ER 478 …. 11.81 — v London and County Banking [1901] 2 Ch 231 …. 7.30 — v Parkinson (1911) 31 NZLR 354 …. 14.98 — v Stibbert (1794) 2 Ves 437; 30 ER 713 …. 7.19 Taylor d Atkyns v Horde (1757) 1 Burr 60; 97 ER 190 …. 3.9 Teasdale v Sanderson (1864) 33 Beav 534; 55 ER 476 …. 9.58 TEC Desert Pty Ltd v Commissioner of State Revenue (2010) 241 CLR 576 …. 2.18 Tecbild Ltd v Chamberlain (1969) 20 P & CR 633 …. 2.32, 5.98 Tempe Recreational Reserve Trust v Sydney Water Corporation (2014) 88 NSWLR 449 …. 12.36

Templeton (Registrar of Titles (Vic)) v Leviathan Pty Ltd (1921) 30 CLR 34 …. 8.172 Tenstat Pty Ltd v Permanent Trustee Australia Ltd (1992) 28 NSWLR 625 …. 8.40 Tewkesbury Gas Company, Re [1911] 2 Ch 279 …. 14.46 Texaco Antilles Ltd v Kernochan [1973] AC 609 …. 13.34, 13.45 Thamesmead Town Ltd v Allotey (2000) 79 P & CR 557 …. 13.14 The Winkfield [1902] P 42 …. 2.52, 2.61, 2.62, 2.70 Thellusson v Woodford (1799) 4 Ves 227; 31 ER 117; (1805) 11 Ves 112 …. 10.56 Theodore v Mistford Pty Ltd (2005) 221 CLR 612; 219 ALR 296 …. 6.12, 8.16, 14.16 Thompson v Ward (1871) LR 6 CP 327 …. 11.92 Thompson’s Mortgage Trusts, Re [1920] 1 Ch 508 …. 14.124 Thomson v McInnes (1911) 12 CLR 562 …. 6.8 Thoo v Owners — Strata Plan No 50276 [2014] HCASL 79 …. 9.84 Thorndike v Hunt (1859) 3 De G & J 563 …. 7.11 Thorner v Major [2009] 3 All ER 945 …. 6.41 Thorpe v Commonwealth (1997) 71 ALJR 767 …. 4.35 Threlfall, Re (1880) 16 Ch D 274 …. 11.11 Thrift v Thrift (1975) 10 ALR 332 …. 9.54 Thwaites v Brahe (1895) 21 VLR 192 …. 12.33 Ticehurst v Cross (2006) NSW ConvR ¶56-136 …. 11.143, 11.144 Tichborne v Weir (1892) 67 LT 735; [1891–94] All ER Rep 449 …. 11.50 Tickle v Brown (1836) 4 Ad & E 369 …. 12.33 Tidex v Trustees Executors and Agency Co Ltd [1971] 2 NSWLR 453 …. 10.29 Tierney v Loxton (1891) 12 LR (NSW) 308 …. 8.143

Tillack v Tillack [1941] VLR 151 …. 9.65 Tiller v Hawes (2005) 13 BPR 24,203 …. 12.7 Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 29 …. 11.60, 11.77 Timpar Nominees Pty Ltd v Archer [2001] WASCA 430 …. 12.36 Todd v Jingalong Pty Ltd [2014] NSWSC 362 …. 8.68 Todrick v Western National Omnibus Co Ltd [1934] 1 Ch 561 …. 12.5 — v — [1934] 1 WLR 589 …. 12.38 Toogood v Mills (1896) 23 VLR 106 …. 6.8 Toohey v Gunther (1928) 41 CLR 181 …. 8.82, 14.23, 14.296 Tooheys Ltd v Municipal Council of Sydney (1946) 71 CLR 407 …. 14.21 Topfelt Pty Ltd v State Bank of New South Wales (1993) NSW ConvR ¶55– 676 …. 14.91 Tophams Ltd v Earl of Sefton [1967] 1 AC 50 …. 13.12 Torrisi v Oliver [1951] VLR 380 …. 11.92 Toscano v Holland Securities Pty Ltd (1985) 1 NSWLR 145 …. 14.35 Town and Country Sports Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) ATPR ¶40–911 …. 14.116 Townsend v Waverley Council (2001) 120 LGERA 224; [2001] NSWSC 384 …. 5.72, 5.73 Toyota Finance Australia Ltd v Dennis (2002) 58 NSWLR 101 …. 2.63 Travinto Nominees Pty Ltd v Vlattas [1972] 1 NSWLR 24 …. 8.57, 8.58, 8.59 — v — (1973) 129 CLR 1 …. 8.39, 8.42, 8.107, 8.108 Travis v Proprietors — Strata Plan No 3740 (1969) 90 WN (Pt 1) (NSW) 711 …. 9.78 Treloar v Nute [1976] 1 WLR 1295 …. 5.106 Trevallyn-Jones v Owners Strata Plan No 50358 [2009] NSWSC 694 …. 9.84

Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274 …. 12.56, 12.59, 12.62 Trieste Investments Pty Ltd v Watson (1963) 64 SR (NSW) 98 …. 8.186 Tristmire Ltd v Mew [2012] 1 WLR 852 …. 2.21 Troja v Troja (1994) 33 NSWLR 269 …. 9.49 Troncone v Aliperti (1994) 6 BPR 13,291 …. 8.143 Truman, Hanbury, Buxton and Co Ltd’s Application, Re [1956] 1 QB 261 …. 13.48 Trust Company Ltd v Chief Commissioner of State Revenue (2007) 13 BPR 25,019 …. 5.26 Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394 …. 3.92 Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278; 224 ALR 280 …. 6.29, 6.54, 9.8, 9.17, 9.19, 9.53 Trustees, Executors and Agency Co Ltd v Short (1888) 13 App Cas 793 …. 5.137 Tse Kwong Lam v Wong Chit Sen [1983] 3 All ER 54; (1983) ANZ ConvR 520 …. 14.111 Tsilhqot’in Nation v British Columbia 2014 SCC 44 …. 4.32 Tubantia, The [1924] P 78 …. 2.41, 2.42 Tuck’s Settlement Trusts [1978] Ch 49 …. 3.93 Tucker v US Department of Commerce 958 F 2d 1411 …. 4.52 Tujilo v Watts [2005] NSWSC 209 …. 12.63 Tulk v Moxhay (1848) 41 ER 1143 …. 13.15, 13.16, 13.17, 13.18, 13.23 Turnbull v National Mutual Royal Bank (1992) 26 NSWLR 361 …. 14.95 Turner v Jackson (1856) 1 VLT 127 …. 3.54 — v York Motors Pty Ltd (1951) 85 CLR 55 …. 11.14, 11.15 Tutt v Doyle (1997) 42 NSWLR 10 …. 8.93 Twentieth Century Banking Corporation Ltd v Wilkinson [1976] 2 WLR

489 …. 14.72

U Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646 …. 14.106 Underwood Estate Acts and Account (No 2), Re (1888) 9 LR (NSW) (Eq) 105 …. 3.47 Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557 …. 12.29, 12.33 United Star Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331 …. 8.89, 8.181 United States v Alcea Band of Tillamooks 329 US 40 (1946) …. 4.36 United States of America and Republic of France v Dollfus Mieg et Compagnie SA and Bank of England [1952] AC 582 …. 2.43, 2.48 Universal Music Australia Pty Limited v Pavlovic [2015] NSWSC 791 …. 6.8 Usborne v Usborne (1740) Dick 75; 21 ER 196 …. 14.63

V Vacuum Oil Co Ltd v Ellis [1914] 1 KB 693 …. 14.51 Valoutin Pty Ltd v Furst (1998) 154 ALR 119 …. 8.124 Van den Bosch v Australian Provincial Assurance Association Ltd (1968) 88 WN (Pt 1) (NSW) 357 …. 4.75, 4.79 Van den Heuvel v Perpetual Trustees Victoria Ltd; Registrar General of NSW v Van den Heuvel [2010] NSWCA 171 …. 8.47, 8.54, 8.55, 8.56, 9.38, 14.35, 14.36 Van der Peet v R [1996] 2 SCR 507 …. 4.28 Vanderplank v King (1843) 3 Hare 1; 67 ER 273 …. 10.26 Vane v Lord Barnard (1716) 2 Vern 738; 23 ER 1082 …. 3.54 Vantage Systems Pty Ltd v Priolo Corp Pty Ltd [2015] WASCA 21 …. 6.8 Vasiliou v Westpac Banking Corp (2007) 19 VR 229 …. 14.106

Vassos v State Bank of South Australia [1993] 2 VR 316 …. 8.32, 8.93, 8.94, 8.99, 8.202, 8.203 Vaudeville Electric Cinema Ltd v Muriset [1923] 2 Ch 74 …. 2.22 Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343 …. 8.46, 8.48, 8.50 — v Wah Lai Investment (Aust) Pty Ltd (2004) 12 BPR 22,671 …. 11.7, 11.18 Vernon v Smith (1821) 5 B & Ald 1; 106 ER 1094 …. 11.46 Vero Insurance Ltd v Owners of Strata Plan No 69352 (2011) 81 NSWLR 227 …. 9.76 Verrall v Nott (1939) 39 SR (NSW) 89 …. 2.13 Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 …. 1.66, 1.68, 2.7, 12.7, 12.10 Victorian Farmers’ Loan and Agency Co Ltd, Re (1897) 22 VLR 629 …. 8.142 Villar, Re [1929] 1 Ch 243 …. 10.27 Vopak Terminal Darwin Pty Ltd v Natural Fuels Darwin Pty Ltd (2009) 258 ALR 89 …. 2.18, 2.26, 2.28 Votrubec Investments Pty Ltd v Hospital Foods and Services Pty Ltd (1981) 5 BPR 11,712 …. 14.57

W W v D (2012) 115 SASR 61 …. 9.58 W R Carpenter Australia v Ogle [1999] 2 Qd R 327 …. 14.75 Waanyi People’s Native Title Application, Re (1994) 129 ALR 100 …. 4.73 Wadham, In the matter of a Caveat by (1879) 13 SALR 70 …. 8.145 Wadi Wadi People’s Native Title Application, Re (1995) 129 ALR 167 …. 4.35 Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1926] AC 101 …. 8.21, 8.65, 8.66

Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1923] NZLR 1137 …. 8.71 Wakeham v Wood (1982) 43 P & CR 40 …. 13.41 Walker v Bridgewood (2006) 12 BPR 23,537; [2006] NSWSC 149 …. 12.36, 12.38, 12.61 — v Linom [1907] 2 Ch 104 …. 7.6, 7.30, 8.163, 14.128 — v Puvesi Pty Ltd (RTT 86/000006) …. 11.92 Wallis’ Cayton Bay Holiday Camp Ltd v Shell Mex and BP Ltd [1975] QB 94; [1974] 3 All ER 575 …. 5.106, 5.107 Walsh v Lonsdale (1882) 21 Ch D 9 …. 6.15, 11.7, 11.76, 12.17, 12.20, 12.68, 14.16, 14.51 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 …. 6.41, 6.42, 11.7, 11.18 Wandsworth Board of Works v United Telephone Co (1884) 13 QBD 904 …. 2.6 Wanner v Caruana [1974] 2 NSWLR 301 …. 14.33 Ward v Kirkland [1967] Ch 194 …. 12.26, 12.27 — v Western Australia (1998) 159 ALR 483 …. 4.17, 4.42, 4.58 Wardell v Usher (1841) 10 LJCP 316 …. 2.26 Warmington v Miller [1973] QB 877; [1973] 2 All ER 372 …. 11.7 Warren v Keen [1954] 1 QB 15 …. 11.26, 11.38 Watson v Royal Permanent Building Society (1888) 14 VLR 283 …. 14.20 Watt v Lord (2005) 62 NSWLR 495 …. 8.19 Watts v Public Trustee (1949) 50 SR (NSW) 130 …. 8.126 Watu-Ofei v Danquah [1961] 1 WLR 1238 …. 5.118 Waverley Borough Council v Fletcher [1996] QB 334 …. 2.60 Weatherhead v Deka New Zealand Ltd (No 2) [1999] 1 NZLR 453 …. 11.39 Webb v Austin (1844) 7 Man & G 701 …. 11.18

Webeck v Foley (1992) 5 BPR 11,694 …. 5.153 — v — (1992) NSW ConvR 59, 717 …. 5.126 Weber v Ankin (2008) 13 BPR, 25,231 …. 5.74, 5.151, 12.31 Websdale v S & J D Investments Pty Ltd (1991) 24 NSWLR 573 …. 14.92 Webster v Bradac (1993) 5 BPR 12,032 …. 12.63, 13.50 Weg Motors Ltd v Hales [1961] Ch 176 …. 11.46 Weld-Blundell v Wolseley [1903] 2 Ch 664 …. 3.54 Wellaway v Courtier [1918] 1 KB 200 …. 2.31 Weller v Williams [2010] NSWSC 716 …. 8.181 Wernher’s Settlement Trusts, Re [1961] 1 WLR 136 …. 10.18 West v AGC (Advances) Ltd (1986) 5 NSWLR 610 …. 14.35 — v Williams [1899] 1 Ch 132 …. 14.135 West Bank Estates Ltd v Arthur [1967] 1 AC 665 …. 5.105 West Bromwich Building Society v Bullock [1936] 1 All ER 887 …. 14.45 West Coast Hotel Co v Parrish 300 US 379 (1937) …. 1.17 West Ham Central Charity Board v East London Waterworks Co [1900] 1 Ch 624 …. 3.50 West London Commercial Bank v Reliance Permanent Building Society (1885) 29 Ch D 954 …. 14.124 West Sussex Constabulary’s Widows, Children and Benevolent (1930) Fund Trusts, Re [1971] Ch 1 …. 6.27 Western Australia v Brown (2014) 253 CLR 507 …. 4.23, 4.58, 4.62 — v Commonwealth (1995) 183 CLR 373 …. 4.23, 4.33, 4.63 — v Sebastian (2008) 173 FCR 1 …. 4.32 — v Thomas (1996) 133 FLR 124 …. 4.87 — v Ward (2000) 99 FCR 316; 170 ALR 159 …. 4.22, 4.54, 4.58, 4.86 — v — (2002) 213 CLR 1; 191 ALR 1 …. 4.23, 4.27, 4.39, 4.42, 4.44, 4.45,

4.47, 4.49, 4.54, 4.55, 4.56, 4.58, 4.59, 4.60, 4.62, 4.73, 4.74, 4.86, 5.8, 5.29 Westfield Holdings Ltd v Australian Capital Television Pty Ltd (1992) 32 NSWLR 194 …. 14.31 Westfield Management Ltd v Perpetual Trustee Co Ltd (2006) NSW ConvR ¶56-163 …. 12.36 — v — (2007) 233 CLR 528 …. 12.36 Westpac Banking Corporation v Ollis [2008] NSWSC 824 …. 6.14, 8.181 — v Sansom (1995) NSW ConvR ¶55-733 …. 8.203 Westpoint Corporation Pty Ltd v Registrar of Titles [2004] WASC 189 …. 13.18, 13.38 Whaley, Re [1908] 1 Ch 615 …. 2.16, 2.19 Wheeldon v Burrows (1879) 12 Ch D 31 …. 8.84, 12.24, 12.26, 12.32, 12.40 Whitby v Mitchell (1890) 44 Ch D 85 …. 10.4, 10.5 — v Von Luedecke [1906] 1 Ch 783 …. 10.10 White v Betalli [2006] NSWSC 537 …. 9.74, 9.104, 9.108, 9.134 — v — (2007) 71 NSWLR 381 …. 9.74, 9.108, 9.134, 11.7 — v Grand Hotel, Eastbourne Ltd [1913] 1 Ch 113 …. 12.38 — v Hunter (1868) 5 WW & A’B (E) 178 …. 7.37 — v Neaylon (1886) 11 App Cas 171 …. 7.37, 7.38 — v Spiers Earthworks Pty Ltd (2014) 99 ACSR 214 …. 14.9 — v Taylor (No 2) [1969] 1 Ch 160 …. 12.26 — v Tomasel [2004] 2 Qd R 438 …. 8.93, 8.94 White Rose Cottage, Re [1964] Ch 483 …. 14.90 Whitham v Kershaw (1886) 16 QBD 613 …. 11.38 Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 …. 5.51, 5.77, 5.82, 5.109, 5.111, 5.115, 5.116, 5.118 Wicks v Bennett (1921) 30 CLR 80 …. 8.97

Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129 …. 3.7, 3.11, 3.20, 3.22, 3.23, 3.24, 3.25, 3.26, 3.30, 3.32, 3.34, 4.1, 4.9, 4.17, 4.22, 4.37, 4.39, 4.42, 4.44, 4.57, 4.58, 4.62, 4.68, 4.73, 4.74, 11.1 — v — (1996) 63 FCR 450; 134 ALR 637 …. 4.73 Wilcox v Richardson (1997) 43 NSWLR 4 …. 12.51, 12.53 Wilde v Spratt (1986) 70 ALR 171 …. 7.39 Wilford’s Estate, Re; Taylor v Taylor [1934] VLR 129 …. 9.44 Wilkes v Greenway (1890) 6 TLR 449 …. 12.29 — v Spooner [1911] 2 KB 473 …. 7.25, 8.177, 13.19 Wilkie v Blacktown City Council (2002) 121 LGERA 444 …. 11.23 Wilkinson v Haygarth (1847) 12 QB 837; 116 ER 1085 …. 9.54 — v Rogers (1864) 2 De GJ & S 62; 46 ER 298 …. 11.46 Willey v Synan (1937) 57 CLR 200 …. 2.65 Williams v Clark (1851) 4 De G & Sm 472 …. 10.14 — v Earle (1868) LR3QB 739 …. 11.46 — v Hensman (1861) 1 J & H 546 …. 9.27, 9.44, 9.45 — v James (1867) LR 2 CP 577 …. 12.25 — v Legg (1993) 29 NSWLR 687 …. 9.63 — v Marac Australia Ltd (1985) 5 NSWLR 529 …. 8.23 — v Minister, Aboriginal Land Rights Act (1994) 35 NSWLR 497 …. 4.35 — v Papworth [1900] AC 563 …. 8.186 — v State Transit Authority of New South Wales (2004) 60 NSWLR 286 …. 5.7, 7.21, 8.86, 12.33, 12.50, 12.51, 12.52, 12.76 — v — [2005] HCA Trans 296 …. 12.52 — v Wellingborough Borough Council [1975] 1 WLR 1327 …. 14.97 Williams Bros Direct Supply Ltd v Raftery [1958] 1 QB 159 …. 5.105, 5.110 Williamson v Bors (1900) 21 NSWLR (Eq) 302 …. 7.16 — v Friend (1901) 1 SR (NSW) (Eq) 23 …. 2.8

Wilson v Anderson (2002) 213 CLR 401; 190 ALR 313 …. 4.62 — v Knox (1884) 13 LR Ir 349 …. 10.14 — v Lombank [1963] 1 WLR 1294 …. 2.48 — v Registrar-General of New South Wales (2004) 12 BPR 22,667 …. 8.87 — v Stewart (1889) 15 VLR 781 …. 11.66 Wilson, Ex parte; Re Bannister (1925) 25 SR (NSW) 375 …. 14.55 Wily as Administrator of Macquarie Medical Holdings Pty Ltd v Endeavour Health Care Services Pty Ltd (2003) 12 BPR 22,447 …. 14.31 Windella (NSW) Pty Ltd v Hughes (1999) NSW ConvR ¶55–926 …. 14.19 Wirth v Wirth (1956) 98 CLR 228 …. 6.29 Wogama Pty Ltd v Harris [1969] 1 NSWR 245; (1968) 89 WN (Pt 2) (NSW) 62 …. 5.103 Wollondilly Shire Council v Picton Power Lines Pty Ltd (1994) 33 NSWLR 551 …. 10.2 Wong v Beaumont Property Trust Ltd [1965] 1 QB 173 …. 12.29 Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 …. 11.65, 11.76 Wood, Re; Tullett v Colville [1894] 3 Ch 381 …. 10.31 Woodall v Clifton [1905] 2 Ch 257 …. 8.43, 11.46 Woodbury v Gilbert (1907) 3 Tas LR 7 …. 8.146 Woodhouse v Walker (1880) 5 QBD 404 …. 3.50 Woodland v Manly Municipal Council (No 1) (2003) 11 BPR 20,903 …. 12.34 Woodward v Wesley Hazell Pty Ltd (1994) ANZ ConvR 624 …. 5.109 Woollerton v Costain [1970] 1 WLR 411 …. 2.8 Worimi (aka Gary Dates) v Worimi Local Aboriginal Land Council (2010) 181 FCR 320 …. 4.27 World Best Holdings Ltd v Sarker [2010] NSWCA 24 …. 11.65

Worssam v Vandenbrande (1858) 17 WR 53 …. 5.140 Worthington v Morgan (1849) 16 Sim 547; 60 ER 987 …. 7.23 Wortley v Birkhead (1754) 2 Ves Sen 571 …. 7.44 Wratten v Hunter [1978] 2 NSWLR 367 …. 6.24 Wrey, Re (1885) 30 Ch D 507 …. 10.14 Wright v Gibbons (1949) 78 CLR 313 …. 9.3, 9.25, 9.29 — v Macadam [1949] 2 KB 744 …. 12.7, 12.27 — v Madden [1992] 1 Qd R 343 …. 6.11 — v New Zealand Farmers Co-operative Association of Canterbury Ltd [1939] AC 439 …. 14.96 — v Williams (1836) 1 M & W 77 …. 12.42 Wurridjal v The Commonwealth of Australia (2009) 237 CLR 309 …. 4.50 Wyatt v Harrison (1832) 3 B & Ad 871 …. 12.11 Wynne v Green (1901) 1 SR (NSW) 40 …. 2.34 — v Moore (1870) 1 AJR 156 …. 14.97 Wynstanley v Lee (1818) 36 ER 643 …. 12.32

X Xenos v Wickham (1867) LR 2 HL 296 …. 6.5

Y Yanner v Eaton (1999) 201 CLR 351; 166 ALR 258 …. 3.2, 4.27, 4.28, 4.57, 4.58, 4.61, 4.85 Yazgi v Permanent Custodians Ltd (2007) NSWCA 240 …. 8.47, 8.48, 8.49, 8.50, 8.197 Yearworth v North Bristol NHS Trust [2009] 3 WLR 118; [2009] EWCA Civ 37 …. 1.64, 1.65 Yeoman’s Row Management Ltd v Cobbe [2008] 4 All ER 713 …. 6.41

Yerkey v Jones (1939) 63 CLR 649 …. 14.40 Yip v Frolich (2004) 89 SASR 467 …. 12.36 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 …. 12.34 Yorkshire Bank plc v Hall [1999] 1 All ER 879 …. 14.102 Yorta Yorta Aboriginal Community v Victoria [1998] FCA 1606 …. 4.17, 4.28, 4.29, 4.66 — v — (2001) 110 FCR 244; 180 ALR 655 …. 4.27, 4.29 — v — (2002) 214 CLR 422; 194 ALR 538 …. 4.18, 4.31, 4.32, 4.56, 4.66 Young v Hichens (1844) 6 QB 606 …. 2.41, 2.64 — v Hoger (2002) Q ConvR 54-557 …. 8.71 — v Owners Strata Plan No 3529 (2001) 54 NSWLR 60; [2001] NSWSC 1135 …. 9.110

Z Zanzoul v Westpac Banking Corp (1995) NSW ConvR ¶55–749 …. 14.54 Zapletal v Wright [1957] Tas SR 211 …. 3.81, 3.114, 3.116 Zegir v Woop [1955] VLR 394 …. 11.16 Zeutmint Pty Ltd v Scottish Amicable Life Assurance Society [1984] 3 NSWLR 293 …. 14.116 Zisti v Ryde Joinery Pty Ltd (1996) 7 BPR 15,217 …. 8.173

Table of Statutes References are to paragraph numbers

Commonwealth Aboriginal Land Rights (Northern Territory) Act 1976 …. 4.11 Aged Care Act 1997 …. 11.103 Australian Bicentennial Act 1980 …. 1.74 s 22 …. 1.74 s 22(1)(a) …. 1.74 s 22(6)(d)(i) …. 1.74 s 22(6)(d)(ii) …. 1.74 Australian Consumer Law …. 14.39 Pt 2-2 …. 14.34 Pt 2-3 …. 14.34 s 12BAA(7)(a) …. 14.34 s 18 …. 14.34 s 23(3)(b) …. 14.34 s 26(1) …. 14.34 Australian Securities and Investments Commission Act 2001 …. 14.34 Pt 2 Div 2 …. 14.34 Pt 2 Div 2 Subdiv BA …. 14.34 s 12BAA …. 14.34 s 12CB …. 14.34 s 12DA(1) …. 14.34

s 12GF …. 14.34 s 12GM …. 14.34 Bankruptcy Act 1966 …. 3.30 s 58(1) …. 9.52 s 58(2) …. 9.52 s 121 …. 6.29, 9.53 s 121(1) …. 9.53 s 121(9)(b) …. 9.53 s 133(9) …. 14.17 s 135 …. 7.39 Bills of Exchange Act 1909 s 29 …. 8.205 Cheques and Payment Orders Act 1986 s 32 …. 8.205 Commonwealth of Australia Constitution Act 1901 (Cth) (the Constitution) …. 4.70 s 51(xxxi) …. 1.59, 4.33, 4.50, 14.9 s 109 …. 8.107 s 116 …. 4.1, 4.86 Competition and Consumer Act 2010 …. 14.34 s 4 …. 14.34 s 45 …. 14.34 s 45B …. 14.34 s 47 …. 14.23 s 131A …. 14.34 Sch 2 …. 14.34 Contracts Review Act 1980 …. 14.35

s 6(1) …. 14.35 s 6(2) …. 14.35 s 7(1) …. 14.35 s 9(1) …. 14.35 s 9(2) …. 14.35 s 9(4) …. 14.35 Corporations Act 2001 s 129 …. 8.191 s 420A …. 14.105 s 588FL …. 14.5 s 588FL(4) …. 14.5 s 588FM …. 14.5 s 1346 …. 10.58 Crown Lands Consolidation Act 1913 …. 14.22 s 145A(6A) …. 14.22 s 261A …. 14.22 s 270(3) …. 14.22 s 274(3) …. 14.22 Family Law Act 1975 …. 6.47, 6.51, 6.52, 8.142, 9.17, 9.47, 9.132, 9.133 s 4AA(2) …. 6.51 s 79 …. 6.51, 6.52, 9.47 s 79(1) …. 6.51 s 79(2) …. 6.51 s 79(4)(a)–(c) …. 6.52 s 79(4)(d) …. 6.52 s 79(4)(g) …. 6.52 s 87 …. 9.47

Judiciary Act 1903 s 23 …. 4.58 s 35(3)(b) …. 1.72 National Consumer Credit Protection Act 2009 …. 14.12, 14.34 National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011 …. 14.12 National Consumer Credit Protection Regulations 2010 r 79A …. 14.27 National Credit Code …. 14.12, 14.16, 14.27, 14.34, 14.36, 14.39, 14.94, 14.141 Pt 3-2 …. 14.141 Pt 3-2A …. 14.12 Pt 3-2B …. 14.12 s 5 …. 14.12, 14.36, 14.141 s 5(1)(b) …. 14.36 s 5(1)(b)(i) …. 14.12 s 5(1)(b)(ii) …. 14.12 s 5(1)(b)(iii) …. 14.12 s 5(1)(d) …. 14.12 s 7 …. 14.36 s 14(1) …. 14.12 s 15 …. 14.12 s 42 …. 14.12 s 42(1) …. 14.12 s 42(2)(b) …. 14.36 s 42(4) …. 14.16 s 76 …. 14.36

s 82 …. 14.27 s 88(2) …. 14.94 s 88(4) …. 14.94 Native Title Act 1993 …. 4.4, 4.9, 4.29, 4.31, 4.32, 4.33, 4.49, 4.51, 4.57, 4.58, 4.63, 4.64, 4.66, 4.67, 4.68, 4.69, 4.70, 4.71, 4.72, 4.73, 4.74, 4.76, 4.77, 4.78, 4.80, 4.82, 4.84, 4.87 Preamble …. 4.64, 4.71, 4.73 Pt 2 Div 2A …. 4.75 Pt 2 Div 2B …. 4.76 Pt 2 Div 3 …. 4.71 Pt 2 Div 3 Subdiv B …. 4.67 Pt 2 Div 3 Subdiv C …. 4.67 Pt 2 Div 3 Subdiv D …. 4.67 Pt 2 Div 3 Subdiv E …. 4.71, 4.67 Pt 2 Div 3 Subdivs E–N …. 4.71 Pt 2 Div 3 Subdiv G …. 4.77 Pt 2 Div 3 Subdiv J …. 4.77 Pt 2 Div 3 Subdiv JA …. 4.82 Pt 2 Div 3 Subdiv P …. 4.72 Pt 8A …. 4.67 s 7(2) …. 4.65 ss 15–16 …. 4.68 s 15(1)(d) …. 4.68 s 17 …. 4.70 s 17(2) …. 4.70 s 17(2)(a) …. 4.70 s 17(3) …. 4.70

s 18(1) …. 4.70 s 19 …. 4.68 s 20 …. 4.70 ss 21–22H …. 4.75 ss 23A–23JA …. 4.76 s 24AA(4) …. 4.71 s 24AA(4)(a)–(k) …. 4.71 s 24AB …. 4.71 s 24EB(3) …. 4.71 ss 24GA–24GE …. 4.77 s 24GB …. 4.71 s 24GB(6) …. 4.71 s 24HA …. 4.78 ss 24JA–24JB …. 4.77 s 24JAA …. 4.82 s 24JB(2) …. 4.71 s 24MD …. 4.33 s 24MD(6B) …. 4.80 s 24OA …. 4.71 s 26 …. 4.72 s 26(1)(c)(iii) …. 4.80 ss 26A–26C …. 4.80 s 42 …. 4.72 s 43A …. 4.72, 4.80 s 51(1) …. 4.70 s 51(3) …. 4.70 s 51(6) …. 4.70

s 51A …. 4.79, 4.87 s 51A(2) …. 4.79 s 53 …. 4.79 s 201 …. 4.65 s 211 …. 4.21, 4.34 s 223 …. 4.29, 4.30, 4.31, 4.32, 4.66, 4.83, 4.84 s 223(1) …. 4.36 s 223(1)(c) …. 4.66 s 228 …. 4.65 s 229 …. 4.68 s 230 …. 4.68 s 231 …. 4.68 s 232 …. 4.68 s 238 …. 4.71 s 240 …. 4.70 s 249C …. 4.76 Native Title Amendment Act 1998 …. 4.4, 4.9, 4.69, 4.70, 4.71, 4.74, 4.75, 4.77, 4.79, 4.81, 4.87 Native Title Amendment Act (No 1) 2010 …. 4.82 Native Title Amendment (Indigenous Land Use Agreements) Bill 2017 …. 4.32 Native Title Amendment (Reform) Bill 2011 …. 4.83 Personal Property Securities Act 2009 …. 14.3, 14.4, 14.5, 14.6, 14.7, 14.8, 14.10, 14.12 Ch 4 …. 14.10, 14.12 Pt 2.5 …. 14.10 Pt 5.3 …. 14.5 s 6(2) …. 14.8

s 8 …. 14.8 s 8(1)(j) …. 14.8 s 10 …. 14.8 s 12(1) …. 14.6 s 12(2)(e) …. 14.12 s 12(3)(c) …. 14.6, 14.7 s 13 …. 14.6 s 13(2)(a) …. 14.6 s 13(3) …. 14.6 s 19(2) …. 14.5 s 19(5) …. 14.5 s 20 …. 14.5 s 21 …. 14.5 s 21(2) …. 14.5 s 42 …. 14.10 s 43 …. 14.10 s 44 …. 14.10 s 46 …. 14.10 s 55 …. 14.5 s 55(3) …. 14.5 ss 107–144 …. 14.10 s 109(1)(c) …. 14.10 s 119 …. 14.12 s 267 …. 14.6, 14.7, 14.9 s 308 …. 14.5 s 311 …. 14.5 s 320 …. 14.5

s 322(3) …. 14.5 Personal Property Securities Amendment (PPS Leases) Act 2017 …. 14.6 Personal Property Securities Regulations 2010 Pt 4 …. 14.12 reg 9.2 …. 14.5 Plant Breeder’s Rights Act 1994 …. 1.70 Plant Variety Rights Act 1987 …. 1.70 Racial Discrimination Act 1975 …. 4.23, 4.33, 4.35, 4.63, 4.64, 4.65 s 8 …. 4.64 s 10 …. 4.14 Statute of Westminster Adoption Act 1942 …. 3.28

Australian Capital Territory Human Rights Act 2004 …. 1.78, 5.65 s 12 …. 1.78 Land Titles Act 1925 (formerly Real Property Ordinance 1925) s 94(2) …. 11.118 s 94(3) …. 11.118

New South Wales Aboriginal Land Rights Act 1983 …. 4.12 Access to Neighbouring Land Act 2000 …. 2.8, 12.74 s 7 …. 12.74 s 11 …. 12.74 s 12 …. 12.74 s 17(c) …. 12.74 s 21 …. 12.74

s 26 …. 12.74 Administration of Estates Act 1954 …. 3.30 Administrative Decisions Review Act 1997 …. 11.130 Agricultural Tenancies Act 1990 …. 2.29 s 10 …. 2.29 s 13 …. 11.28 Bills of Sale Act 1898 …. 14.3 Catchment Management Authorities Act 2003 Sch 4 …. 8.201 Civil and Administrative Tribunal Act 2013 …. 9.112, 9.117, 9.125, 11.126, 11.128, 11.130, 11.144 s 7 …. 11.126 s 32 …. 9.125 s 34(1)(a) …. 11.130 s 36(1) …. 11.126 s 37 …. 11.126 s 38(2) …. 11.126 s 38(3)(b) …. 11.126 s 38(4) …. 9.120, 11.126 s 40(1) …. 11.130 s 45 …. 9.120 s 45(1)(a) …. 11.128 s 45(1)(b) …. 11.128 s 45(4) …. 11.128 s 49 …. 11.127 s 50(2) …. 11.127 s 54(1) …. 11.130

s 54(2) …. 11.130 s 54(4) …. 11.130 s 55 …. 11.127 s 59(1) …. 11.126 s 60 …. 9.120 s 60(1) …. 11.128 s 60(2) …. 11.128 s 60(3) …. 11.128 s 60(3)(e) …. 9.120 s 60(5) …. 11.128 s 67 …. 11.126 s 80(1) …. 11.130 s 80(2)(b) …. 9.125, 11.130 s 80(3) …. 11.130 s 82(3) …. 9.125, 9.127 s 83 …. 9.125 s 83(1) …. 11.130 s 83(3) …. 11.130 Sch 4 …. 11.126, 11.144 Sch 4 Pt 3 cl 3(1) …. 9.112, 9.125 Sch 4 Pt 5 cl 3 …. 11.126 Sch 4 Pt 5 cl 4 …. 11.126 Sch 4 Pt 6 cl 12(1) …. 11.130 Sch 4 Pt 6 cl 12(2)(b) …. 11.130 Civil and Administrative Tribunal Rules 2014 r 31 …. 11.128 Civil Liability Act 2002

Pt 12 …. 2.9 s 72(1) …. 2.9 s 73 …. 2.9 Civil Procedure Act 2005 s 20 …. 2.35, 5.26, 5.28 Closer Settlement and Public Reserve Funds Act 1906 …. 8.187 Coal Acquisition Act 1981 s 5(4) …. 8.201 Coastal Protection Act 1979 s 55N …. 2.15 Community Land Development Act 1989 …. 9.70 Confiscation of Proceeds of Crime Amendment Act 2005 …. 9.51 Consumer Credit (New South Wales) Act 1995 …. 14.12, 14.35 Consumer Credit Code …. 14.12 s 70 …. 14.35 Contracts Review Act 1980 …. 14.34, 14.35, 14.36, 14.39 Conveyancing Act 1919 …. 3.27, 3.66, 9.20, 9.22, 11.87, 14.18, 14.72, 14.87, 14.128 Pt 2 Div 3C …. 8.191 Pt 23 …. 7.36, 14.77 Pt 23 Div 1 …. 14.128, 14.135, 14.137 s 7 …. 6.5, 6.53, 14.15 s 7(1) …. 6.5 s 9 …. 3.54 s 12 …. 11.45, 13.8 s 16(1) …. 3.110 s 19 …. 3.44, 3.69

s 19(1) …. 3.66, 3.69 s 19(2) …. 3.69 s 19A …. 3.69 s 21 …. 3.48 s 23 …. 6.53 s 23A …. 10.4 s 23A(1) …. 10.4 s 23B …. 6.23, 14.15 s 23B(1) …. 6.5, 9.29, 9.40, 11.6, 11.76, 12.16, 12.55, 12.67 s 23B(2)(c) …. 11.76 s 23B(2)(d) …. 6.6, 11.6 s 23B(3) …. 6.5 s 23C …. 6.22, 6.23, 6.46, 6.53, 14.16 s 23C(1) …. 6.22, 6.23, 6.53, 11.7, 12.17, 12.68, 13.38, 13.43 s 23C(1)(a) …. 6.22, 6.23, 6.24, 6.53, 9.34 s 23C(1)(a)–(c) …. 6.23 s 23C(1)(b) …. 6.23, 6.24, 6.46, 6.53, 9.42 s 23C(1)(c) …. 6.23, 6.24, 6.53, 13.29 s 23C(2) …. 6.25, 6.26 s 23D(1) …. 11.13 s 23D(2) …. 5.7, 6.6, 8.129, 8.161, 11.6, 11.8, 11.10, 11.131 s 23E …. 14.16 s 23E(c) …. 5.70 s 23E(d) …. 6.10, 12.17, 13.38 s 23G(1b) …. 8.6 s 24 …. 9.40 s 26 …. 9.15, 9.21, 9.22, 9.23, 9.24, 9.133

s 26(1) …. 9.20, 9.21, 9.22, 9.23 s 26(2) …. 9.20, 9.21, 9.23 s 31 …. 10.56 s 31A …. 10.56 s 35 …. 9.8 s 36 …. 10.37, 10.45 s 36A …. 9.65 s 36C …. 13.10, 13.31, 13.53 s 38 …. 6.5, 9.40, 14.15 s 38(1) …. 6.5 s 38(3) …. 6.5 s 44(2) …. 3.110, 3.112, 3.113, 9.40, 10.10 s 45A …. 12.19 s 46 …. 12.16, 14.15 s 47 …. 3.62, 3.79 s 47(1) …. 3.62, 3.66 s 47(2) …. 3.66, 3.70 s 50(1) …. 3.83, 3.89, 3.100 s 53 …. 5.30, 7.43 s 53(1) …. 7.23 s 53(3) …. 7.23 s 54A …. 6.8, 6.9, 6.10, 6.22, 6.23, 9.43, 9.46, 11.7, 12.14, 12.68 s 54A(1) …. 6.8, 6.22, 12.17 s 54A(2) …. 6.10, 12.17, 14.16 s 66G …. 9.64, 9.132, 9.133 s 66G(1) …. 9.63 s 66G(4) …. 9.64

s 66K …. 6.16 s 66L …. 6.16 s 66M …. 6.16 s 67 …. 12.25, 12.27, 12.28, 13.9 s 67(1) …. 12.27 s 67(5) …. 12.27 s 68 …. 13.9 s 69 …. 12.6, 12.22, 12.23 s 70 …. 13.4 s 70(1) …. 13.4, 13.5, 13.9, 13.12, 13.25, 13.31, 13.52 s 70A …. 11.45, 13.15 s 70A(1) …. 11.49, 13.12, 13.21, 13.52 s 74 …. 11.87 s 74(2) …. 11.29, 11.33 s 78(1)(D) …. 14.17 s 84 …. 11.29, 14.58 s 84(1)(a) …. 11.31 s 84(1)(b) …. 11.30 s 85 …. 11.29 s 85(1)(a) …. 11.32 s 85(1)(b) …. 11.32 s 85(1)(c) …. 11.32 s 85(1)(d) …. 11.33, 11.34, 11.59, 11.62, 11.63, 11.64 s 87A …. 12.65 s 88(1) …. 12.23, 13.7, 13.17, 13.22, 13.27, 13.31, 13.35, 13.36, 13.37, 13.38 s 88(1)(c) …. 12.23

s 88(1)(d) …. 12.23 s 88(3) …. 13.19, 13.37 s 88(3)(a) …. 13.43 s 88A …. 12.4 s 88A(1) …. 12.75 s 88A(1)–(1C) …. 12.4 s 88A(3) …. 12.4 s 88AA …. 12.66 s 88AB …. 12.65 s 88B …. 12.2, 12.6, 12.22, 12.59, 13.37, 13.40, 13.45, 13.46 s 88B(3)(c)(ii) …. 12.6 s 88B(3)(c)(iii) …. 12.6, 13.45 s 88B(3A) …. 12.22 s 88BA …. 12.37 s 88BB …. 12.40 s 88D …. 13.20 s 88E …. 13.20 s 88K …. 2.8, 5.159, 12.2, 12.34, 12.34, 12.76 s 88K(1) …. 12.34 s 88K(2)(a) …. 12.34 s 88K(2)(b) …. 12.34 s 88K(2)(c) …. 12.34 s 88K(4) …. 12.34 s 89 …. 5.159, 8.201, 12.59, 12.62, 13.46 s 89(1) …. 12.56, 12.59, 12.60, 12.62, 13.42, 13.46 s 89(1)(a) …. 12.60 s 89(1)(b) …. 12.62, 13.44

s 89(1)(c) …. 12.63, 13.50 s 89(1A) …. 12.62 s 89(3) …. 12.56, 12.62 s 89(8) …. 12.59, 13.46 s 91(1) …. 14.56, 14.77 s 91(3) …. 14.77 s 91(3)(a) …. 14.77 s 91(4) …. 14.56 s 91(5) …. 14.77 s 91(6) …. 14.56, 14.77 s 92 …. 14.86 s 92(1) …. 14.46 s 92(2) …. 14.46 s 92(3) …. 14.46 s 92(4) …. 14.46 s 93 …. 14.33, 14.79 s 94(1) …. 14.77 s 96 …. 8.18 s 96A …. 9.18 s 98 …. 14.79 s 99 …. 9.18 s 100 …. 14.67, 14.71, 14.70 s 100(1) …. 14.75 s 100(2) …. 14.75 s 102 …. 14.45, 14.72 s 103(2) …. 14.67, 14.114 s 106 …. 14.58, 14.60, 14.61, 14.62

s 106(1) …. 14.62 s 106(3) …. 14.58 s 106(6) …. 14.58 s 106(7) …. 14.58 s 106(8) …. 14.58 s 106(8A) …. 14.58 s 106(11) …. 14.58 s 106(17) …. 14.61, 14.62 s 108(1) …. 14.96 s 109 …. 14.65, 14.91 s 109(1) …. 14.82 s 109(1)(a) …. 14.82, 14.89, 14.96, 14.97 s 109(1)(c) …. 14.65 s 109(1)(e) …. 14.82, 14.96 s 109(1)(f) …. 14.82, 14.96 s 109(2) …. 14.84, 14.85 s 109(3) …. 14.65, 14.82 s 109(5) …. 14.65, 14.96, 14.97 s 110 …. 14.82, 14.91, 14.96 s 110(4) …. 14.82 s 111 …. 14.82, 14.87, 14.116 s 111(2)(a) …. 14.23, 14.84 s 111(2)(b) …. 14.86, 14.88 s 111(2)(b1) …. 14.84, 14.86 s 111(2)(c) …. 14.84 s 111(2)(d) …. 14.86 s 111(3) …. 14.87

s 111(3)(a) …. 14.86 s 111(3)(b)(i) …. 14.86 s 111(3)(b)(ii) …. 14.86 s 111(3)(c) …. 14.86 s 111(4) …. 14.88, 14.95 s 111A …. 14.107, 14.143 s 111A(5) …. 14.107 s 111A(6) …. 14.107 s 112 …. 14.125 s 112(1) …. 14.90 s 112(2) …. 14.17, 14.83 s 112(3) …. 14.118, 14.120, 14.121, 14.122 s 112(3)(a) …. 14.121 s 112(3)(b) …. 14.121 s 112(4) …. 14.124, 14.125 s 112(9) …. 14.125 s 113(3) …. 14.84, 14.121 s 115(3) …. 14.65 s 115(6) …. 14.64 s 115(7) …. 14.64 s 115A(2)(c) …. 14.65 s 116 …. 11.52 s 117 …. 11.52, 11.54, 11.56, 11.69, 11.86 s 117(1) …. 11.52 s 117(8) …. 14.64 s 118 …. 11.52, 11.53, 11.54, 11.56, 11.86 s 119 …. 11.54

s 120 …. 11.66 s 120A(3) …. 11.20 s 120A(5) …. 11.19 s 122 …. 11.75 s 127 …. 6.6, 8.57, 8.129, 11.4, 11.14, 11.18, 11.38, 11.57, 11.85 s 127(1) …. 11.14 s 128 …. 11.64, 11.86 s 129 …. 11.64, 11.65, 11.72 s 129(1) …. 11.64 s 129(2) …. 11.72, 11.73 s 129(6)(a) …. 11.64, 11.73 s 129(8) …. 11.64, 11.71 s 129(10) …. 11.64 s 130 …. 14.17 s 130(1) …. 11.74 s 132 …. 11.43 s 133A …. 11.79 s 133B …. 11.43 s 133B(2) …. 2.27 s 164 …. 7.15, 7.23, 7.24 s 164(1)(b) …. 7.24 s 170 …. 14.88 s 170(1)(b1) …. 14.88 s 177 …. 12.8, 12.11, 12.40 s 177(3) …. 12.11 s 177(4) …. 12.11 s 177(5)–(7) …. 12.11

s 177A …. 14.53 s 178 …. 12.33 s 179 …. 12.33 s 181B(1) …. 12.40 s 184B(1) …. 7.37 s 184C …. 7.37 s 184D(1) …. 14.77 s 184G …. 2.24, 7.37 s 184G(1) …. 7.37, 7.38, 7.39, 7.40, 14.128 s 184G(2) …. 7.39 Conveyancing Amendment (Law of Support) Act 2000 …. 12.11 Conveyancing Amendment (Rule in Pigot’s Case) Act 2001…. 8.57 Conveyancing and Law of Property Act 1898 …. 10.2 s 37 …. 10.2 s 68 …. 3.56 s 69 …. 3.56 s 77 …. 10.2 Credit Act 1984 …. 14.12 Credit (Commonwealth Powers) Act 2010 …. 14.141 s 3(1) …. 14.141 Crimes (Sentencing Procedure) Act 1999 s 17 …. 9.85, 11.104 Criminal Law Amendment Act 1883 …. 3.30 Crown Lands Act 1884 …. 2.10 Crown Lands Act 1989 …. 11.94 s 170 …. 5.30, 5.72, 5.73, 5.74 s 170(1) …. 5.73

s 170(1)(c) …. 5.73 s 170(2) …. 5.73 s 172 …. 2.14 s 172(4) …. 2.15 Crown Lands (Combined Tenures) Act 1989 …. 11.94 Crown Lands Occupation Act 1839 …. 3.24 Damage by Aircraft Act 1952 …. 2.9 Deeds Registration Act 1898 …. 8.1 Dividing Fences Act 1991 s 10 …. 12.41 Dower Act 1837 …. 3.48 Drug Misuse and Trafficking Act 1985 …. 11.125 Electronic Conveyancing (Adoption of National Law) Act 2012 …. 8.17 App …. 8.17 Electronic Conveyancing National Law …. 8.5, 8.17 s 9 …. 8.182 s 10 …. 8.182 s 22 …. 8.17 s 23 …. 8.17 Electronic Transactions Act 2000 …. 6.8 Environmental Planning and Assessment Act 1979 Pt 4 …. 9.63 s 4(1) …. 9.63 s 4B(1)(a) …. 9.63 s 28(2) …. 12.64, 13.42, 13.51 s 146A …. 11.112 Fair Trading Act 1987 …. 11.127, 14.37, 14.39

s 18 …. 11.127 Farm Debt Mediation Act 1994 …. 8.114 Fisheries Management Act 1994 …. 8.7 Forfeiture Act 1995 Pt 3 …. 9.51 s 4 …. 9.51 s 5 …. 9.51 s 5(2) …. 9.51 s 5(3) …. 9.51 ss 10–14 …. 9.51 Holiday Parks (Long-term Casual Occupation) Act 2002 …. 11.90 s 3 …. 11.90 s 5 …. 11.90 Human Tissue Act 1983 s 32 …. 1.62 Imperial Acts Application Act 1969 …. 3.6, 3.44, 3.69, 9.133 s 8 …. 6.7, 9.60 s 18 …. 2.38, 11.69 ss 18–20 …. 2.38 s 32 …. 3.50, 3.52 s 32(1) …. 11.38 s 32(3) …. 11.38 Inclosed Lands Protection Act 1901 s 3 …. 2.39 s 4 …. 2.39 s 4(1) …. 2.39 Industrial Arbitration Act 1940

s 88B …. 8.108 s 88F …. 14.37 Industrial Relations Act 1996 …. 14.34, 14.37 s 106 …. 14.37 Land and Environment Court Act 1979 s 40 …. 12.2, 12.34 Landlord and Tenant (Amendment) Act 1948 …. 11.87, 11.103, 11.116 Limitation Act 1939 …. 5.88 Limitation Act 1969 …. 3.82, 4.35, 5.2, 5.71, 5.124, 5.128, 5.147, 5.149 s 11 …. 5.128 s 11(1) …. 5.147 s 11(2)(a) …. 5.78 s 11(3)(a) …. 5.132 s 11(3)(b)(i) …. 5.132 s 11(3)(b)(ii) …. 5.132 s 11(3)(b)(iii) …. 5.132 s 11(3)(b)(iv) …. 5.132 s 27 …. 5.70, 5.130 s 27(1) …. 5.71, 5.72, 5.135 s 27(2) …. 5.2, 5.71, 5.78 s 28 …. 5.70, 5.76, 5.77, 5.86 s 31 …. 5.78 s 36 …. 5.128 s 37 …. 5.130 s 37(2) …. 5.131 s 37(3) …. 5.131 s 38 …. 5.77

s 38(1) …. 5.70, 5.77 s 38(2) …. 5.135, 5.136 s 38(3) …. 5.137, 5.143 s 38(5) …. 5.126, 9.62 s 39 …. 5.140 s 41 …. 5.122 s 42 …. 14.47 s 43 …. 14.47 s 47(1) …. 5.129 s 51 …. 5.132 s 52(e) …. 5.133 s 54(1) …. 5.141 s 54(4) …. 5.141 s 55 …. 5.134 s 65 …. 5.122 s 65(1) …. 5.146 Sch 4 …. 5.122 Local Government Act 1919 …. 8.111 s 398 …. 5.100, 8.108 Local Government Act 1993 …. 5.153, 8.112 s 42 …. 8.112 s 45 …. 8.112 s 45(1) …. 8.110 Nature Conservation Trust Act 2001 …. 13.1 Perpetuities Act 1984 …. 3.97, 10.6, 10.7, 10.8, 10.24, 10.26, 10.27, 10.41, 10.43, 10.44, 10.48, 10.52, 10.53, 10.61, 10.64 s 3(1) …. 10.41

s 3(2) …. 10.41 s 4(3) …. 10.37, 10.41, 10.43, 10.53, 10.64 s 6(1) …. 10.57 s 7 …. 10.6, 10.41, 10.43, 10.56 s 7(1) …. 10.53 s 8 …. 10.24, 10.41, 10.44, 10.46, 10.47, 10.48, 10.56 s 8(1) …. 10.44, 10.46, 10.47 s 9 …. 10.45, 10.48 s 9(1) …. 10.44, 10.45, 10.46, 10.47 s 9(4) …. 10.17, 10.24, 10.44, 10.46, 10.48 s 10 …. 10.46, 10.47, 10.48 s 13 …. 10.58 s 14 …. 10.55 s 14(2) …. 10.54, 10.55 s 15 …. 10.42 s 17(1) …. 10.52 s 18 …. 10.56 s 18(1) …. 10.56 s 19 …. 10.37, 10.56 s 20(2) …. 10.37 Sch 1 …. 10.37, 10.56 Personal Property Securities Amendment (PPS Leases) Act 2017 …. 14.6 Personal Property Securities (Commonwealth Powers) Amendment Act 2009 …. 14.4 s 4 …. 14.3 Probate Act 1890 …. 10.10 Probate and Administration Act 1898 …. 3.19, 14.138

s 40 …. 3.47 s 44 …. 14.138 s 52 …. 3.48, 3.49 Property Legislation Amendment Act 2005 …. 13.45 Property (Relationships) Act 1984 …. 6.47, 6.48, 6.49, 6.50, 6.51, 8.142, 9.132, 9.133 s 4(1) …. 6.48 s 4(2) …. 6.48, 6.49 s 4(2)(e) …. 6.49 s 4(2)(f) …. 6.49 s 4(3) …. 6.48 s 5 …. 6.48 s 5(1)(b) …. 6.50 s 5(2) …. 6.50 s 17 …. 6.50 s 18(1) …. 6.48 s 20 …. 6.13, 6.48, 6.50 s 20(1) …. 6.48 s 20(1)(b) …. 6.48 Property, Stock and Business Agents Act 2002 …. 9.80 Public Parks Act 1884 s 4 …. 5.73 Real Estate (Limitation of Actions) Act 1837 (8 Will IV No 3) …. 5.71 Real Estate of Intestates Distribution Act 1862 (Lang’s Act) (26 Vic No 20) …. 3.27, 3.30, 3.55, 3.56 Real Property Act 1862 …. 3.27, 8.5 Real Property Act 1900 …. 5.7, 5.30, 5.148, 5.156, 5.160, 6.5, 8.6, 8.11, 8.14, 8.16, 8.19, 8.21, 8.25, 8.56, 8.60, 8.64, 8.69, 8.71, 8.74, 8.79, 8.84,

8.85, 8.105, 8.107, 8.110, 8.111, 8.113, 8.114, 8.117, 8.122, 8.123, 8.124, 8.135, 8.136, 8.139, 8.159, 8.172, 8.183, 8.187, 8.188, 8.189, 8.191, 8.194, 8.195, 8.196, 8.199, 8.201, 9.23, 11.52, 11.104, 12.27, 12.28, 12.46, 12.47, 12.50, 14.1, 14.18, 14.19, 14.22, 14.46, 14.56, 14.58, 14.78, 14.82, 14.94, 14.95, 14.129 Pt 3 …. 8.155 Pt 4 …. 8.6 Pt 4A …. 8.6 Pt 4B …. 8.6 Pt 6A …. 5.70, 5.148, 5.149, 5.150, 5.158, 8.106 Pt 7A …. 8.131, 8.136, 8.160 Pt 7B …. 8.160 Pt 13 …. 8.196 Pt 14 …. 8.183, 8.188, 8.196, 8.198 s 3 …. 8.159, 14.21, 14.126 s 3(1) …. 8.13, 8.33, 8.155, 8.159, 12.28 s 3(1)(a) …. 8.19, 11.52, 11.55 s 12(1) …. 8.6 s 12(1)(d) …. 8.116 s 12(1)(e) …. 8.132 s 12(1)(f) …. 8.133 s 12(1A) …. 8.6 s 12(3) …. 8.118 s 12(3)(b) …. 8.117 s 12(3)(d) …. 8.117 s 12A …. 8.196 s 12A(2) …. 9.33, 9.131 s 12A(3) …. 9.33

s 12C …. 8.207 s 12D …. 8.12 s 13 …. 14.22 s 13D(3) …. 8.7 s 13J …. 3.38 s 14(2) …. 5.150, 8.15 s 14(2)(b) …. 8.6 s 17(1) …. 8.6 s 17(2) …. 8.6 s 17(3) …. 8.6 s 20 …. 5.46 s 23(2) …. 8.6 s 23E(c) …. 6.6 s 28A …. 8.7 ss 28C–28EA …. 8.155 s 28P(1)(d) …. 8.7 s 28T …. 8.7, 8.155 s 28O …. 8.196 s 31B …. 8.14 s 31B(2) …. 8.12 s 31B(3) …. 8.12 s 32(1) …. 8.13, 8.14 s 32(3) …. 8.15 s 32(7) …. 8.12 s 33 …. 8.16 s 33(4) …. 8.16 s 33(6) …. 8.16

s 33A …. 8.201 s 33AA …. 8.18 s 33AA(2)(b) …. 8.18 s 33AA(3) …. 8.18 s 33AAA …. 8.18 s 33AAA(1) …. 8.18 s 33AAA(2) …. 8.18 s 33AAA(3)(b) …. 8.18 s 33AAA(3)(c) …. 8.18 s 33AAA(3)(d) …. 8.18 s 33AB(1) …. 8.18 s 34(1) …. 8.18 s 36 …. 8.182 s 36(1A) …. 8.19 s 36(1B) …. 8.137 s 36(C) …. 8.19 s 36(5) …. 8.23, 14.129 s 36(6A) …. 12.50 s 36(9) …. 8.23, 14.129, 14.136 s 36(11) …. 8.19, 14.65 s 38 …. 8.16 s 39 …. 14.20 s 39(1)(g) …. 8.191 s 39(1B) …. 8.19, 8.189, 8.191 s 39(2) …. 8.19 s 39(3) …. 8.19 s 39C …. 14.20

s 40 …. 8.19, 8.25 s 40(1) …. 8.19 s 40(1A)(a) …. 8.19 s 40(1A)(b) …. 8.19 s 40(1B)–(3) …. 8.19 s 41 …. 8.25, 12.50 s 41(1) …. 8.128 s 42 …. 8.25, 8.27, 8.36, 8.44, 8.52, 8.53, 8.61, 8.62, 8.63, 8.66, 8.80, 8.81, 8.97, 8.98, 8.103, 8.104, 8.113, 8.114, 8.124, 8.125, 8.127, 8.128, 8.192, 8.201, 9.29, 11.8, 12.18, 12.46, 12.69, 13.19, 13.36, 14.56, 14.120, 14.122, 14.129, 14.136 s 42(1) …. 8.25, 8.60, 8.61 s 42(1)(a) …. 8.83 s 42(1)(a1) …. 5.7, 8.84, 8.85, 12.18, 12.47, 12.48, 12.50, 12.51 s 42(1)(b) …. 8.85, 8.123, 12.70 s 42(1)(c) …. 8.83, 8.87 s 42(1)(d) …. 8.88, 8.90, 8.91, 11.131, 14.62 s 42(3) …. 8.113, 8.114, 8.201 s 43 …. 8.25, 8.27, 8.61, 8.65, 8.97, 8.124, 8.172, 8.179 s 43(1) …. 8.61, 8.67 s 43A …. 8.90, 8.159, 8.171, 8.172, 8.173, 8.174, 8.175, 8.177, 8.178, 8.179, 8.181, 8.182, 14.120, 14.122, 14.129 s 43A(1) …. 8.90 s 44 …. 8.25 s 45 …. 8.25 s 45(1) …. 8.25 s 45(2) …. 8.25, 8.62 ss 45B–45G …. 5.49, 8.106

s 45C …. 5.56, 5.155 ss 45C–45E …. 5.155 s 45D …. 5.74, 5.151, 5.155 s 45D(1) …. 5.149, 5.150, 5.154, 8.154 s 45D(1)(b) …. 5.120 s 45D(2A) …. 5.151, 5.160 s 45D(2B) …. 5.151, 5.160 s 45D(3) …. 5.153 s 45D(4) …. 5.120, 5.153 s 45D(5) …. 5.151 s 45D(6) …. 5.150 s 45D(8) …. 5.153 s 45D(9) …. 5.153 s 45E …. 8.188, 8.189 s 45E(1) …. 5.155 s 45E(3) …. 5.155 s 46 …. 12.18 s 46A …. 12.6, 13.39 s 47 …. 13.39 s 47(1) …. 12.18, 12.50, 12.69, 13.19 s 47(6) …. 12.55, 12.58 s 47(7) …. 12.6, 13.45 s 49 …. 12.56, 12.62 s 49(2) …. 12.56 s 51 …. 11.52, 11.55, 11.56, 12.28, 13.9, 14.56 s 52 …. 11.55, 11.56, 14.56 s 53 …. 8.89, 8.91, 11.8

s 53(3) …. 8.43 s 53(4) …. 11.131, 14.62 s 54(1) …. 11.76 s 54(3) …. 11.76 s 56(1) …. 14.18 s 56C …. 8.34, 8.44, 8.56, 8.79, 8.122, 8.197, 8.205, 14.35 s 57 …. 14.18, 14.21, 14.54, 14.75, 14.82, 14.91 s 57(1) …. 14.18, 14.20, 14.91, 14.116 s 57(2) …. 14.120, 14.122 s 57(2)(a) …. 8.48, 14.91 s 57(2)(b) …. 14.92 s 57(2)(b)(ii) …. 14.91 s 57(2)(b1) …. 14.91 s 57(3) …. 14.87, 14.92, 14.94 s 57(5) …. 14.95 s 58 …. 14.82, 14.91 s 58(1) …. 14.96, 14.97, 14.122 s 58(2) …. 14.120, 14.122 s 58(3) …. 14.125, 14.126 s 58A …. 14.82, 14.91 s 59 …. 14.120, 14.122 s 60 …. 14.19, 14.54, 14.61 s 61 …. 14.74, 14.75 s 61(2)(c) …. 14.75 s 62 …. 14.75 s 62(3) …. 14.75 s 64 …. 14.21

s 65 …. 5.155, 14.78 s 65(1) …. 14.78 s 74 …. 8.151 s 74A(1) …. 8.136 s 74A(2)(b) …. 8.136 s 74B …. 8.134 s 74B(1) …. 8.6 s 74C …. 8.134 s 74F …. 8.135, 8.136, 8.142, 8.153, 8.155, 8.156 s 74F(1) …. 8.128, 8.129, 8.131 s 74F(2) …. 8.137, 8.142 s 74F(3) …. 5.155, 8.153, 8.154 s 74F(4) …. 8.153, 8.155 s 74F(5) …. 8.136 s 74F(6) …. 8.136 s 74G …. 8.135, 8.136 s 74H(1)(b) …. 8.139 s 74H(3) …. 8.155 s 74H(4) …. 8.139 s 74H(5) …. 8.139 s 74I …. 8.135, 8.147, 8.150 s 74I(1) …. 8.136, 8.147, 8.148 s 74I(5) …. 8.147 s 74J …. 8.150 s 74J(1) …. 8.136, 8.147, 8.148 s 74J(4) …. 8.147 s 74K …. 8.135

s 74K(2) …. 8.150, 8.151 s 74L …. 8.136 s 74MA …. 8.135, 8.136, 8.148, 8.150, 8.151 s 74MA(1) …. 8.148 s 74MA(2) …. 8.151 s 74N …. 8.160 s 74O …. 8.135 s 74P …. 8.135, 8.152, 8.160 s 74P(1)(a) …. 8.152 s 74P(1)(b) …. 8.152 s 74P(1)(c) …. 8.152 s 74Q …. 8.135, 8.136 s 74R …. 8.141, 8.135 s 74T …. 8.159 s 74T(1) …. 8.159 s 74T(5) …. 8.160 s 74U …. 8.159 s 74V(1)(a) …. 8.159 s 74V(1)(b) …. 8.159 s 74V(2)(a) …. 8.160 s 74V(2)(b) …. 8.160 s 74V(2)(c) …. 8.160 s 74V(3) …. 8.159 s 74V(4) …. 8.159 s 74W(1) …. 8.159 s 74W(2) …. 8.159 s 74W(3) …. 8.160

s 74X(1) …. 8.160 s 74X(2)(a) …. 8.159 s 74X(2)(b) …. 8.160 s 74X(2)(d) …. 8.160 s 74Y …. 8.160 s 74Z …. 8.160 s 76 …. 14.48 s 79 …. 14.48 s 82 …. 8.128, 8.132 s 82(1) …. 8.19 s 82(2) …. 8.19 s 82(3) …. 8.19, 8.132 s 96 …. 8.19 s 97 …. 9.33, 9.34, 9.41, 9.131 s 97(1A) …. 8.136 s 97(2)(b) …. 9.33 s 97(5) …. 9.33, 9.131 s 100(1) …. 9.23 s 100(2) …. 3.97, 8.15, 8.16 s 104(1) …. 8.19 s 104(2) …. 8.19 s 111 …. 8.16 s 117 …. 14.35 s 117(1A) …. 8.19 s 117(1B) …. 8.19 s 118 …. 8.25 s 118(1)(d)(ii) …. 8.62, 8.63, 8.125, 8.127

s 120 …. 8.188, 8.189, 8.191, 8.192 s 120(1) …. 8.188, 8.192 s 120(2) …. 8.188 s 120(2)(a) …. 8.188 s 120(2)(b) …. 8.188 s 121 …. 8.23 s 122 …. 8.23 s 126 …. 8.192 s 129 …. 8.188, 8.189, 8.191, 8.192, 8.193 s 129(1) …. 8.189, 8.190, 8.193, 8.203 s 129(1)(e) …. 8.192, 8.194, 8.203 s 129(2) …. 8.191, 8.193 s 129(2)(a) …. 8.195 s 129(2)(c) …. 8.195 s 129(2)(g) …. 8.207 s 129(2)(h) …. 8.195 s 129(3)(a) …. 8.207 s 129A(2)(j) …. 14.35 s 131 …. 8.198 s 131(2) …. 8.199 s 131(6) …. 8.199, 8.199 s 131(7) …. 8.199 s 131(7)(a) …. 8.199 s 131(7A) …. 8.199 s 131(9) …. 8.199 s 131(10) …. 8.199 s 132 …. 8.198

s 132(1) …. 8.198 s 132(2)(a) …. 8.198 s 132(2)(b) …. 8.198 s 132(2A) …. 8.198 s 133(2)(a) …. 8.200 s 134 …. 8.187 s 135 …. 8.123 s 135(2) …. 8.200 s 136 …. 8.121 s 137 …. 8.121 s 138 …. 8.120, 8.121 s 138(1) …. 8.119, 8.120 s 138(3) …. 8.119 s 188(1)(d) …. 8.33 Real Property (Amendment) Act 1970 …. 8.16 Real Property Amendment (Compensation) Act 2000 …. 8.184, 8.187, 8.188, 8.198, 8.207 Real Property Amendment (Electronic Conveyancing) Act 2014 …. 8.18 Real Property Amendment (Electronic Conveyancing) Act 2015 …. 8.157 Pt 7B …. 8.157 Sch 1.6 …. 8.18 Real Property and Conveyancing Amendment Act 2009 …. 8.113 Sch 2 cl 4 …. 14.107 Sch 3 …. 8.107, 8.113 Real Property (Computer Register) Amendment Act 1979 …. 8.11, 8.16 Registration of Interests in Goods Act 1986 …. 14.3 s 3 …. 14.3

Registration of Interests in Goods Regulation 2004 cl 10 …. 14.3 Residential Tenancies Act 1987 …. 3.55, 11.87, 11.88, 11.116, 11.117, 11.123, 11.136 s 16(2)(d)(iii) …. 11.129 s 33 …. 11.136 s 68(2) …. 11.125 s 76 …. 11.131 Residential Tenancies Act 2010 …. 3.55, 11.25, 11.84, 11.87, 11.88, 11.89, 11.90, 11.91, 11.92, 11.93, 11.94, 11.95, 11.97, 11.98, 11.99, 11.100, 11.101, 11.102, 11.104, 11.106, 11.107, 11.108, 11.113, 11.114, 11.15, 11.116, 11.117, 11.118, 11.119, 11.131, 11.132, 11.133, 11.134, 11.136 s 3 …. 11.88 s 4 …. 11.88 s 7 …. 11.88, 11.89, 11.103 s 8 …. 11.89 s 8(1)(a) …. 11.90 s 8(1)(b) …. 11.91 s 8(1)(c) …. 11.90, 11.92 s 8(1)(d) …. 11.93 s 8(1)(e) …. 11.94 s 8(1)(f) …. 11.95 s 8(1)(g) …. 11.96 s 8(1)(h) …. 11.97 s 8(1)(i) …. 11.98 s 8(1)(j) …. 11.99 s 9(2) …. 11.88 s 10 …. 11.88, 11.101

s 13 …. 11.88, 11.100, 11.131 s 13(2) …. 11.104 s 15 …. 11.104 s 15(4) …. 11.104 s 15(5) …. 11.104 s 18 …. 11.106 s 21(1) …. 11.104 s 29(1) …. 11.105 s 29(1)–(3) …. 11.105 s 29(4) …. 11.105 s 29(6) …. 11.105 s 41(1) …. 11.117 s 41(2) …. 11.117 s 42(2) …. 11.117 s 42(3) …. 11.117 s 43(1) …. 11.118 s 43(2) …. 11.118, 11.122 s 44(1) …. 11.117 s 44(5) …. 11.117 s 44(6) …. 11.117 s 47 …. 11.117 s 50 …. 11.108 s 50(2) …. 11.108 s 50(3) …. 11.108 s 51(2)(a) …. 11.109 s 51(2)(b) …. 11.109 s 51(3)(b) …. 11.109

s 51(3)(c) …. 11.109 s 51(4) …. 11.109 s 52 …. 11.109 s 62 …. 11.109, 11.110 s 63 …. 11.109 s 63(2) …. 11.109 s 64 …. 11.110 s 66(1) …. 11.111 s 66(2) …. 2.27, 2.69, 11.111 s 66(3) …. 2.27, 2.69 s 67 …. 2.29, 11.111 s 67(2) …. 2.29 s 68 …. 11.111 s 69 …. 11.111 s 70 …. 11.112 s 71 …. 11.112 s 74 …. 11.113 s 75 …. 11.113 s 75(2) …. 11.113 s 76 …. 11.131 s 77 …. 11.114, 11.134 s 77(5) …. 11.114 s 81 …. 11.119 s 81(2) …. 11.120 s 81(4) …. 11.131 s 81(4)(a) …. 11.131 s 81(4)(b) …. 11.131

s 81(4)(c) …. 11.131 s 83 …. 11.120 s 84 …. 11.106 s 84(3) …. 11.123 s 85 …. 11.106 s 85(3) …. 11.123 s 86 …. 11.106 s 86(4) …. 11.123 s 87(1) …. 11.121 s 87(2) …. 11.121 s 87(4) …. 11.123 s 87(5) …. 11.123 s 88(1) …. 11.121 s 89(4) …. 11.124 s 90(1) …. 11.125 s 90(2) …. 11.125 s 90(3) …. 11.125 s 90(5) …. 11.125 s 91(1)(a) …. 11.125 s 91(1)(b) …. 11.125 s 91(4) …. 11.125 s 92(1) …. 11.125 s 92(3) …. 11.125 s 93(1) …. 11.125 s 96 …. 11.106 s 97 …. 11.106 s 98(1) …. 11.121

s 104 …. 11.125 s 109 …. 11.122 s 113 …. 11.123 s 114 …. 11.124 s 115 …. 11.124 s 119 …. 11.120 s 120 …. 2.37 s 120(1) …. 11.120 s 125 …. 11.131 s 126 …. 11.115 s 127 …. 11.115 s 127(1) …. 11.115 s 128 …. 11.115 s 129 …. 11.115 s 130 …. 11.115 s 130(4) …. 11.115 s 131(2) …. 11.115 s 131(3) …. 11.115 s 132 …. 11.115 s 132(5) …. 11.115 s 133 …. 11.115 s 134 …. 11.115 s 135 …. 11.115 ss 138–441 …. 11.88 ss 143–154 …. 11.88 s 187(1)(a) …. 11.129 s 187(1)(b) …. 11.129

s 187(1)(c) …. 11.129 s 187(1)(d) …. 11.129 s 187(1)(i) …. 11.129 ss 192–195 …. 11.127 s 196(1) …. 11.127 s 219(1) …. 11.104 s 219(2) …. 11.104 Sch 2 …. 11.105 Residential Tenancies Regulation 2010 reg 4(1) …. 11.104 reg 4(2) …. 11.104 reg 6 …. 11.105 reg 14(1) …. 11.93 reg 14(2) …. 11.93 reg 15 …. 11.102 reg 16 …. 11.102 reg 16(3) …. 11.102 reg 19 …. 11.102 reg 20 …. 11.102 reg 21 …. 11.105 reg 22(1) …. 11.117 Sch 1 …. 11.104 Sch 2 …. 11.105, 11.112 Retail Leases Act 1994 …. 11.137, 11.138, 11.139, 11.140, 11.141, 11.142 Pt 2 …. 11.139 Pt 2A …. 11.139 Pt 8 …. 11.143

Pt 8 Div 3 …. 11.144 s 3 …. 11.138, 11.139 s 3(a) …. 11.138 s 3(b) …. 11.138 s 5 …. 11.138 s 6(1)(b) …. 11.138 s 6(1)(c) …. 11.138 s 6A …. 11.138 s 7 …. 11.139 s 9 …. 11.139 s 11 …. 11.139 s 11A …. 11.139 s 14 …. 11.139 s 14(1) …. 11.139 s 16(1) …. 11.139 s 16(2) …. 11.139 s 16(3) …. 11.139 s 18(2) …. 11.140 s 18(3) …. 11.140 s 18(4) …. 11.140 s 19 …. 11.140 s 19A …. 11.140 s 20(1) …. 11.140 s 20(4) …. 11.140 ss 22–30 …. 11.140 s 34A …. 11.142 s 35 …. 11.142

s 36 …. 11.140 s 39 …. 11.141 s 39(1)(a) …. 11.141 s 39(1)(b) …. 11.141 s 39(2) …. 11.141 s 40(1) …. 11.141 s 40(3) …. 11.141 s 41 …. 11.141 s 41(d) …. 11.141 s 41A …. 11.141 s 42 …. 11.141 s 44(1) …. 11.142 s 44(2) …. 11.142 s 44(3) …. 11.142 s 44(4) …. 11.142 s 58 …. 11.142 s 62B(8) …. 11.144 s 63 …. 11.144 s 66 …. 11.143 s 68 …. 11.143 s 70 …. 11.144 s 71 …. 11.144 s 71A …. 11.144 s 72(1) …. 11.144 s 72AA …. 11.144 s 73 …. 11.144 s 75(1) …. 11.144

s 77 …. 11.144 s 79 …. 11.138 Sch 1 …. 11.138 Retirement Villages Act 1999 …. 11.91 s 5 …. 11.91 Roads Act 1993 s 6(1) …. 12.31 Sale of Goods Act 1898 …. 14.3 Security Interests in Goods Act 2005 …. 14.3 Pt 2 …. 14.3 s 5(3) …. 14.3 s 31(1) …. 14.3 s 31(2) …. 14.3 s 31(3) …. 14.3 s 31(4) …. 14.3 State Revenue Legislation Amendment Act 2010 …. 8.187 Strata Schemes Development Act 2015 …. 9.69, 9.70, 9.71, 9.75, 9.74, 9.75, 9.76, 9.129, 13.52 Pt 3 …. 9.70 Pt 5 …. 9.70 Pt 6 …. 9.70 Pt 10 …. 9.97, 9.129, 9.134 s 4(1) …. 9.71, 9.72, 9.73, 9.76 s 4(1)(a) …. 9.71 s 4(1)(b) …. 9.71 s 4(1)(c) …. 9.71 s 5(1) …. 9.71

s 6 …. 9.71 s 9(4) …. 9.73 s 10(1)(a) …. 9.73 s 10(1)(b) …. 9.73, 9.107 s 13(4) …. 9.75 s 17(3) …. 9.75 s 23 …. 9.76 s 24(2)(a) …. 9.76 s 24(3) …. 9.76 s 25 …. 9.76 s 28 …. 9.73, 9.78 s 28(1) …. 9.76 s 33 …. 9.77 s 34 …. 9.77 s 36(2) …. 9.75 s 135 …. 9.128 s 136 …. 9.128 s 142(3) …. 9.128 s 153(2) …. 9.129 s 154 …. 9.129 s 158 …. 9.129 s 160 …. 9.129 s 171(2) …. 9.129 s 182(1)(e) …. 9.129 s 176(3) …. 9.129 Sch 2 cl 2 …. 9.73 Sch 8 …. 9.97

Strata Schemes (Freehold Development) Act 1973 …. 9.69, 9.74, 9.108 s 5 …. 9.76 s 5(1) …. 9.71, 9.72, 9.73 s 5(1)(a) …. 9.73 s 6 …. 9.74 s 7 …. 9.73 s 8(1) …. 9.73 s 8(1)(a) …. 9.73 s 8(4) …. 9.73 s 8(4B) …. 9.74, 9.107 s 9(3A) …. 9.75 s 13(3A) …. 9.75 s 18(1) …. 9.76 s 18(2) …. 9.76 s 19 …. 9.76 s 20 …. 9.73, 9.76 s 20(b) …. 9.76 s 21 …. 9.76 s 24 …. 9.78 s 26 …. 9.77 s 28(4) …. 9.75 s 50 …. 9.74 s 50(2) …. 9.75 s 50(3) …. 9.75 s 51(1) …. 9.128 s 51(4) …. 9.128 s 51(6) …. 9.128

s 51A …. 9.128 s 51A(3) …. 9.128 s 54 …. 9.78 s 61(2)(a) …. 9.78 s 62(1) …. 9.78 s 62(3) …. 9.78 s 65A …. 9.78 s 78(2) …. 9.73 s 113(1) …. 9.74 s 113(2) …. 9.75 s 113(3) …. 9.75 Dictionary …. 9.74 Strata Schemes (Leasehold Development) Act 1986 …. 9.70 Strata Schemes Management Act 1996 …. 9.69, 9.83, 9.105, 9.108, 13.1 Ch 2 Pt 4A …. 9.81 Ch 3 …. 9.83 Ch 4 …. 9.101 s 8(2) …. 9.79 s 11 …. 9.79 s 13 …. 9.79 s 16(4) …. 9.79 s 18 …. 9.79 s 21(1) …. 9.79 s 21(2) …. 9.79 s 21(3) …. 9.79 s 21(4) …. 9.79 s 26 …. 9.80

s 27 …. 9.80 s 28(3) …. 9.80 s 28(7) …. 9.80 s 40B(2)(a) …. 9.75 s 41 …. 9.105 s 42 …. 9.105 s 43 …. 9.104 s 43(4) …. 9.105 s 44(1) …. 9.106 s 44(2) …. 9.106 s 45 …. 9.126 s 45(1) …. 9.111 s 45(2) …. 9.111 s 45(3) …. 9.111 s 46 …. 9.106 s 47 …. 9.107 s 48(1) …. 9.107 s 48(2) …. 9.107 s 49 …. 9.108 s 49(1) …. 9.108 s 49(3) …. 9.109 s 49(4) …. 9.109 s 51(1) …. 9.110 s 52 …. 9.110 s 53 …. 9.110 s 54 …. 9.110 s 55 …. 9.110

s 61(2) …. 9.83 s 62 …. 9.84 s 63 …. 9.84 s 64 …. 9.84 s 65(2) …. 9.85 s 65(3) …. 9.85 s 65(5) …. 9.85 s 66 …. 9.87 s 67 …. 9.87 s 68(1)(a) …. 9.88 s 69(2) …. 9.89 s 70 …. 9.89 s 71 …. 9.90 s 72(1) …. 9.90 s 72(2) …. 9.90 s 75(1) …. 9.88 s 75(5) …. 9.100 s 75A(1) …. 9.91 s 76(1) …. 9.92 s 76(2) …. 9.92 s 76(4) …. 9.92 s 78(1) …. 9.92 s 78(2) …. 9.92 s 78(3) …. 9.92 s 79(2) …. 9.92 s 79(3) …. 9.92 s 80 …. 9.92

s 80A …. 9.100 s 80C …. 9.100 s 80D …. 9.111 s 81 …. 9.93 s 82 …. 9.93 s 83 …. 9.93 s 85 …. 9.94 s 87(1)(a) …. 9.95 s 87(1)(b) …. 9.95 s 87(2) …. 9.95 s 89(1) …. 9.95 s 95(2) …. 9.95 s 96 …. 9.96 s 97(1) …. 9.96 s 98(2) …. 9.97 s 101 …. 9.98 s 102 …. 9.98 s 106 …. 9.98 s 107(2) …. 9.100 s 108(2) …. 9.99 s 110 …. 9.82 s 111 …. 9.82 s 113(1)(c) …. 9.75 s 116(1) …. 9.101 s 116(2) …. 9.101 s 117(1)(a) …. 9.102 s 117(1)(b) …. 9.102

s 117(1)(c) …. 9.102 s 118 …. 9.96 s 118(1) …. 9.103 s 119 …. 9.96, 9.103 s 120 …. 9.103 s 125(1)(a) …. 9.114 s 125(1)(b) …. 9.114 s 125(1)(c) …. 9.114 s 125(3) …. 9.115 s 127 …. 9.114 s 128 …. 9.115 s 130 …. 9.115 s 132 …. 9.115 s 133(c) …. 9.115 s 182(1) …. 9.121 s 182(2) …. 9.121 s 182(4) …. 9.121 s 183 …. 9.122 s 183(2) …. 9.122 s 183(3)–(5) …. 9.122 s 183(6) …. 9.122 s 183(8) …. 9.122 s 183A …. 9.124 s 183B …. 9.124 s 186(2) …. 9.120 s 192 …. 9.120 s 193(2) …. 9.120

s 203 …. 9.111 s 203(1) …. 9.126 s 206 …. 9.126 Sch 1 …. 9.105 Sch 3 cl 6(1) …. 9.100 Dictionary Pt 2 cl 5 …. 9.100 Strata Schemes Management Act 2015 …. 9.69, 9.74, 9.75, 9.79, 9.81, 9.83, 9.84, 9.85, 9.88, 9.92, 9.93, 9.94, 9.95, 9.97, 9.103, 9.104, 9.105, 9.108, 9.111, 9.112, 9.114, 9.115, 9.116, 9.118, 9.120, 9.121, 9.127 Pt 5 …. 9.83 Pt 5 Div 3 …. 9.98 Pt 6 …. 9.83 Pt 7 Div 3 …. 9.110 Pt 8 …. 9.101 Pt 9 …. 9.83 Pt 10 …. 9.83 Pt 11 …. 9.69, 9.84, 9.86, 9.89, 9.90 Pt 12 …. 9.117 s 4(1) …. 9.74, 9.93, 9.95, 9.98, 9.115 s 5(1) …. 9.77 s 6 …. 9.100 s 8 …. 9.79 s 9 …. 9.79 s 13 …. 9.79 s 22 …. 9.96, 9.103 s 26 …. 9.74, 9.75 s 27 …. 9.121

s 27(3) …. 9.121 s 27(4) …. 9.121 s 29 …. 9.79 s 36 …. 9.79 s 36(2) …. 9.79, 9.80 s 36(4) …. 9.79 s 41 …. 9.79 s 49 …. 9.80 s 52 …. 9.80 s 53(3) …. 9.80 s 66 …. 9.81 s 68(1) …. 9.75 s 72 …. 9.124 s 73 …. 9.87 s 74(1) …. 9.89 s 74(2) …. 9.89 s 74(4) …. 9.88, 9.90 s 75(5) …. 9.89 s 77 …. 9.90 s 79 …. 9.92 s 79(6) …. 9.100 s 80 …. 9.91 s 81 …. 9.92 s 81(4) …. 9.92 s 83(1) …. 9.92 s 83(2) …. 9.73, 9.92 s 84(1) …. 9.92

s 85 …. 9.92 s 86 …. 9.92 s 95 …. 9.100 s 100 …. 9.82 s 102 …. 9.100 s 102(4) …. 9.100 s 103 …. 9.111 s 103(2) …. 9.111 s 103(4) …. 9.111 s 106 …. 9.76, 9.84 s 106(3) …. 9.78 s 106(5) …. 9.84 s 108 …. 9.78 s 117 …. 9.82 s 119 …. 9.84 s 120 …. 9.84, 9.85 s 122(2) …. 9.85 s 122(3) …. 9.85 s 122(5) …. 9.85 s 134(1) …. 9.105 s 134(2) …. 9.105 s 134(3) …. 9.105 s 135(1) …. 9.106 s 135(2) …. 9.106 s 136 …. 9.104 s 136(2) …. 9.105 s 137 …. 9.109, 9.126

s 139 …. 9.108, 9.109 s 139(1) …. 9.108 s 139(2) …. 9.108 s 139(4) …. 9.109 s 139(5) …. 9.109 s 139(6) …. 9.109 s 140 …. 9.75 s 140(1) …. 9.74 s 141(1) …. 9.107 s 141(2) …. 9.107 s 141(4) …. 9.107 s 143(1) …. 9.110 s 143(2) …. 9.110 s 145 …. 9.110 s 146 …. 9.111, 9.126 s 146(3) …. 9.111 s 146(4) …. 9.111 s 147 …. 9.111, 9.126 s 147(2) …. 9.126 s 147(3) …. 9.126 s 150 …. 9.108 s 151 …. 9.101 s 152 …. 9.101 s 153 …. 9.102 s 153(1) …. 9.102 s 153(1)(b) …. 9.102 s 153(1)(c) …. 9.102

s 160 …. 9.93 s 160(4) …. 9.93 s 161(1) …. 9.93 s 161(3) …. 9.93 s 161(4) …. 9.93 s 164 …. 9.95 s 164(2) …. 9.95 s 167 …. 9.95 s 176 …. 9.127 s 177 …. 9.96 s 178 …. 9.96 s 178(2) …. 9.97 s 179 …. 9.98 s 180(1)(b) …. 9.98 s 180(1)(c) …. 9.98 s 182 …. 9.99 s 186 …. 9.106 s 199 …. 9.86, 9.127 s 200(1) …. 9.127 s 200(2) …. 9.127 s 201 …. 9.86 s 207 …. 9.86 s 209 …. 9.86 s 216 …. 9.112 s 217 …. 9.114 s 218(1) …. 9.115 s 218(3) …. 9.115

s 223 …. 9.115 s 224(c) …. 9.115 s 227(1) …. 9.114 s 227(1)(c) …. 9.114 s 227(2) …. 9.114 s 227(4) …. 9.114 s 228 …. 9.118 s 236 …. 9.122, 9.123 s 236(1) …. 9.122 s 236(3) …. 9.122 s 236(4) …. 9.122 s 236(5) …. 9.122 s 236(6) …. 9.122 s 237 …. 9.124 s 239 …. 9.127 s 242 …. 9.119 s 248 …. 9.126 s 253(2) …. 9.127 s 258 …. 9.96, 9.103 s 259 …. 9.103 Sch 2 cl 4(1) …. 9.100 Sch 3 cl 16 …. 9.86 Strata Schemes Management Regulation 2010 cl 15 …. 9.111 Sch 1 item 9 …. 9.99 Strata Schemes Management Regulation 2016 cl 26 …. 9.111

cl 26(2) …. 9.111 cl 36 …. 9.109 Strata Titles Act 1973 …. 9.69, 9.113 Strata Titles (Part Strata) Amendment Act 1992 …. 9.70 Strata Titles (Staged Development) Amendment Act 1993 …. 9.70 Succession Act 2006 …. 3.19, 3.49, 3.100, 10.1 Ch 4 …. 3.43 Pt 3 …. 3.49 Pt 4.2 …. 3.43 Pt 4.3 …. 3.43 Pt 4.4 …. 3.43 s 4 …. 3.47, 3.100 s 4(1) …. 3.83 s 38 …. 10.17 s 38(1) …. 3.67, 3.71 s 41 …. 10.1 s 44 …. 14.138 s 136 …. 3.19, 3.43 s 137 …. 3.43 Supreme Court Act 1970 s 23 …. 14.70 s 58 …. 14.70 s 68 …. 13.41 s 70 …. 5.26 s 73 …. 11.70 s 79 …. 5.26 Supreme Court Rules 1970

Pt 42 r 4(2) …. 2.36 Sydney Water Act 1994 s 37(4) …. 8.201 Trustee Act 1925 s 12 …. 8.139 s 77 …. 14.73 Uniform Civil Procedure Rules 2005 …. 5.28, 5.46 r 1.12 …. 2.36 r 6.8 …. 5.46 r 10.15 …. 5.46 r 14.5 …. 5.46 r 16.4 …. 5.46 r 36.5 …. 2.36 r 36.8 …. 5.46 Water Industry Competition Act 2006 s 64(2) …. 8.201 Water Management Act 2000 …. 1.4, 12.11 s 55 …. 4.19 s 173(3) …. 8.201 Western Lands Act 1901 …. 4.62, 11.94 Wills, Probate and Administration Act 1898 …. 3.19 see also Probate and Administration Act 1898 s 5 …. 3.47, 3.83 s 24 …. 3.67, 3.71 s 61B(7) …. 3.19 Sch 1 Pt 2 …. 3.19

Northern Territory Electronic Conveyancing (National Uniform Legislation) Act 2013 …. 8.17

Queensland Consumer Credit (Queensland) Act 1994 …. 14.12 Electronic Conveyancing National Law (Queensland) Act 2013 …. 8.17 Fisheries Act 1994 s 14 …. 4.28 Land Title Act 1994 Pt 7A …. 8.157 s 185(1)(a) …. 8.92 Property Law Act 1974 s 13(1) …. 13.53 s 43(1) …. 9.133 s 55 …. 13.53 s 97 …. 14.72 ss 195–198 …. 2.68 s 196 …. 2.68 s 197 …. 2.68 s 210 …. 10.44 Queensland Coast Islands Declaratory Act 1985 …. 4.14 s 3 …. 4.14 Stamp Act 1894 s 53(5) …. 8.30

South Australia Electronic Conveyancing National Law (South Australia) Act 2013 …. 8.17

Law of Property Act 1936 …. 10.62 s 61 …. 10.62 s 62(1) …. 10.62 s 62(2) …. 10.62 s 62(4) …. 10.62 Natural Resources Management Act 2004 s 146(8) …. 1.4 Real Property Act 1886 …. 8.1, 8.4, 8.107, 8.114 Pt 13A …. 8.157 s 6 …. 8.114

Tasmania Electronic Conveyancing (Adoption of National Law) Act 2013 …. 8.17 Land Titles Act 1980 s 3(1) …. 8.159 s 52 …. 8.157 s 63 …. 9.131 s 138U …. 5.115, 5.149 Mining Act 1929 …. 1.75 s 15C(1) …. 1.75 Water Management Act 1999 s 60 …. 1.4

Victoria Charter of Human Rights and Responsibilities Act 2006 …. 1.78, 5.65, 5.66 s 13 …. 1.78 s 20 …. 1.78

Electronic Conveyancing (Adoption of National Law) Act 2013 …. 8.17 Limitations of Actions Act 1958 s 14(1) …. 5.127 s 14(4) …. 9.9 Transfer of Land Act 1958 …. 8.142 Pt V Div 1B …. 8.157 s 43 …. 8.203 s 44(1) …. 8.32 s 77 …. 14.106 s 77(1) …. 14.106

Western Australia Electronic Conveyancing Act 2014 …. 8.17 Land Act 1933 …. 4.58 s 32 …. 4.62 s 109 …. 4.59 Land (Titles and Traditional Usage) Act 1993 …. 4.67 Noongar (Koorah, Nitja, Boordahwan) (Past, Present, Future) Recognition Act 2016 …. 4.32 Property Law Act 1969 s 34(1)(a) …. 6.22 Public Works Act 1902 …. 4.58, 4.59 s 18 …. 4.59 Rights in Water and Irrigation Act 1914 …. 4.59 s 3 …. 4.59 Titles Validation Act 1995 …. 4.67

Brazil Constitution of the Federative Republic of Brazil Art 5(xxiii) …. 5.52, 5.53

Malaysia National Land Code 1965 s 340 …. 8.35

New Zealand Personal Property Securities Act 1999 …. 14.4 Property Law Act 2007 s 212 …. 11.84

United Kingdom Accumulations Act 1800 (Thellusson Act) …. 10.56 Administration of Justice Act 1705 …. 9.133 Australia Act 1986 …. 3.28, 3.29 Australian Courts Act 1828 …. 3.6 Common Law Procedure Act 1852 …. 5.28 Contracts (Rights of Third Parties) Act 1999 …. 13.53 s 1 …. 13.53 s 1(3) …. 13.53 Crown Suits Act 1769 …. 3.12, 3.36, 5.135 Forfeiture Act 1870 …. 3.30 Human Rights Act 1998 …. 1.76, 1.77, 1.78 s 2 …. 5.63 s 3 …. 5.63 Inclosure Act 1773 …. 3.16

Judicature Act 1873 …. 3.74, 11.51 Land Registration Act 1925 …. 3.28 Land Registration Act 2002 …. 5.61, 5.63, 5.64, 5.117, 8.4 Pt 9 …. 5.69 Sch 6 …. 5.69 Landlord and Tenant (Covenants) Act 1995 …. 11.86 Law of Property Act 1922 …. 3.16 Law of Property Act 1925 …. 3.28, 3.30, 5.63 s 36 …. 9.131 s 56(1) …. 13.10 s 62 …. 12.27 s 78 …. 13.4 Limitation Act 1980 s 15(6) …. 5.106, 5.109 Sch 1, para 8(4) …. 5.106, 5.109 Magna Carta 1215 Ch 34 …. 5.20 New South Wales Constitution Act 1855 …. 3.25, 3.26 Prescription Act 1832 …. 12.32 Real Property Limitation Act 1833 (3 & 4 Will IV c 27) …. 5.28 Sale of Waste Lands Act 1842 …. 3.24 Settled Land Act 1925 …. 3.28 Statute of De Donis Conditionalibus 1285 …. 3.44, 3.69 Statute of Frauds 1677 …. 3.47, 6.7, 6.8 s 1 …. 11.13 Statute of Marlborough 1267 …. 3.50, 3.52 Statute of Quia Emptores 1290 …. 3.17, 3.43

Statute of Uses 1535 …. 1.3, 3.106, 3.108, 3.109, 3.112, 3.113, 6.3, 10.5 Statute of Westminster 1931 …. 3.28 Statute of Wills 1540 …. 3.18, 3.43, 3.67, 3.106, 10.5 Statutes of Forcible Entry …. 2.38 Tenures Abolition Act 1660 (12 Car 2 c 24) …. 3.18 Torts (Interference with Goods) Act 1977 s 7 …. 2.70 Trustee Act 1925 …. 3.28 Wills Act 1837 s 28 …. 3.67 s 34 …. 3.67

United States of America Constitution …. 1.15 Fifth Amendment …. 1.15 Fourteenth Amendment …. 1.15 Uniform Commercial Code Art 9 …. 14.4

International European Convention on Human Rights …. 5.63, 5.65 Art 1 …. 5.14, 5.63 Art 8 …. 5.14, 5.67 Art 41 …. 5.63 European Convention on Human Rights — Protocol No 1 …. 1.76, 5.14 Art 1 …. 1.76, 1.78, 5.62, 5.63, 5.64, 5.67, 5.159 Art 8 …. 1.77, 1.78

International Convention on the Elimination of All Forms of Racial Discrimination Art 1(4) …. 4.64 International Covenant on Civil and Political Rights …. 1.76, 5.65 International Covenant on Civil and Political Rights — Second Optional Protocol …. 5.65 International Covenant on Economic, Social and Cultural Rights …. 1.76 Art 11 …. 5.68 Universal Declaration on Human Rights …. 5.65 Art 17(1) …. 5.65

[page 1]

Chapter 1

The Concept of Property Connections to Property 1.1 Property, and in particular real property, plays a significant role in all our daily lives. For a start we all live somewhere, whether it be in a house, apartment, shed, tent or caravan, or simply on the bare earth itself. Some people own the property they live in, while others may be tenants, guests or squatters. Others still simply have a right to use another’s property as a shortcut to get to the beach or bus stop, for example. Additionally, lenders may take security over property to reduce their risk or developers may decide to place ongoing restrictions on the height or use of materials in certain developments, for example. In short, the range of property interests is extensive. However, what is clear is that every day we engage with property1 and are expected not to violate the property rights of others, just as we expect them not to violate ours. In most societies, certainly capitalist ones, the accumulation of property is also generally associated with wealth and power. Meanwhile, people with few or no property rights are likely to become part of an underclass linked to poverty.2 Given property’s importance, it is perhaps unsurprising that disputes over property are both common and bitterly contested.3 Further, debate around property issues often dominates political and social agendas. For example, in Australia, particularly in the eastern capital cities of Sydney and Melbourne,

the question of housing affordability and, especially, the way in which law, policy and governance impact on the capacity of young people to access the housing market has become very topical.4 [page 2] 1.2 The question of the compulsory acquisition, by government, of privately owned land, for public benefit has also been of concern. For example, the resumption of private land to build motorways or tunnels aimed at decreasing traffic congestion for the wider community has been the subject of robust debate.5 So, too, has the issue of the privatisation of New South Wales’s land titling services, the running of which is to be the subject of a 35year concession in favour of a private operator.6 Given that the security of registered land titles is the cornerstone of the New South Wales Torrens land titling system, the move to privatisation has raised several concerns. These include: whether the integrity of the titling system will be compromised; the likelihood of increased costs for home buyers;7 and whether the extensive and specific expertise of Land Property Information (LPI)’s skilled workforce may be lost.8 Hence, we can see that property issues are commonly connected to social, legal and political arrangements. 1.3 However, the importance of property and its capacity to excite great passion is hardly a new phenomenon. Historically, wars have been fought over property, particularly land,9 but arguably also over property in oil10 and water.11 Marriages have been organised on the basis of prior property holdings and potential entitlements.12 Kings, queens, the legislature and the Church have all at various times come into conflict over the distribution of property and the taxes that are commonly associated with it.13 The state has also been at [page 3] odds with individuals over property, particularly in relation to the preservation of historic and cultural sites.14

Yet, what we mean by ‘property’ is often not clearly spelt out. Indeed, the term’s meaning may vary according to who is using it and in what context it is being used. Several scholars point out that property is a complex and contested term,15 while, according to others, it may even defy definition.16 Despite such difficulties, it is helpful to explore ideas about property’s definition and the various theoretical justifications for property given that property is so fundamental to society’s functioning, in many cases acting as a tool of social organisation and being closely connected to the notion of democracy.17 Real property (ie, property in land), for a long time, has assumed a place of great importance in the property pantheon. Like personal property rights, real property rights have a vast sphere of enforceability. They are enforceable against all the world, not simply against a limited range of parties (such as the parties to a contract). Hence, I do not need to have a special agreement with an individual not to harm my land. I am entitled to expect that everyone will uphold my property rights in my land. Further, the remedies for breach of a real property right historically have been more extensive than for some other rights, such as personal property rights, contractual rights or rights in tort. This is the case because remedies for real property relied on ‘real actions’. Real actions permitted a breach of a real property right to sound in restoration of the res (Latin for ‘the thing’) itself. Hence, if person A forcibly evicted person B from person B’s freehold land, person B could obtain an order that the land be returned to him or her. He or she did not have to settle for damages. The freeholder could receive the res, that is, the particular block of land itself.18 That the remedy for deprivation of land was a return of the land itself was thought appropriate because land was regarded as both unique and valuable. As no two pieces of land are the same, damages were not regarded as adequate compensation for loss of, or infringement to, real property rights. Historically, land was also the most valuable asset anyone would have been likely to hold. Therefore, it made sense to protect real property rights by way of extensive remedies over and above the protection afforded to other rights, such as personal property and personal rights, breach of which sounded in damages.19 [page 4]

Cooke argues that the public aspects of land ownership have also been responsible for land law being treated as special. She observes that, ‘arguably, if rights in land become chaotic, the resulting disruption is greater than if other forms of ownership are threatened’.20 Although referring to a non-common law jurisdiction,21 Fitzpatrick’s work on land rights’ disruption in East Timor (including the destruction of land records) offers some support for Cooke’s proposition.22 Property, therefore, is important in a political and economic sense. A secure property system arguably helps enhance order. However, property is also important environmentally, culturally and socially. We engage with property both directly and indirectly. Kevin Gray notably underscores property’s importance when he states that land [real property] ‘is where life begins and where life ends’.23 To some, particularly Indigenous Australians, property may also have a spiritual element. They see themselves as belonging to the land and the land belonging to them.24 With this general understanding of our connectedness to property in mind, we now turn to a more specific and theoretical consideration of the concept of property, especially property’s definition and the justifications for property.

Introduction to the Concept 1.4 In 1765, in his influential Commentaries on the Laws of England, Sir William Blackstone offered the following definition of property: Property is that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.25

A little further on in this work, he was moved to add: ‘There is nothing which so generally strikes the imagination, and engages the affections of mankind, as the right of property’.26 Little difficulty arises in trying to identify the different character of these statements. The first is in the nature of a description which purports to identify what the essential elements of property are and what distinguishes it from other areas of substantive law. The latter is a prescriptive or evaluative assessment, which expresses the author’s moral or political approval of the institution. Each statement is an aspect of the

conceptual analysis of property. By contrast, an examination of the concrete rules of property law is a different form of inquiry again. [page 5] While it is important to keep these questions separate, it is nonetheless evident, as will be seen in the following chapters, that conceptual questions as to the nature of property law, and evaluative assessments as to the appropriate boundary of property rights, repeatedly intrude into the judicial and legislative elaboration of those doctrinal rules. For this reason, it is important to examine these conceptual questions; a fuller, critical understanding of those rules should follow from a study of both descriptive and evaluative aspects of property law. For instance, when a legislature enacts a statute regulating rights over water,27 it is expressing some clear values about appropriate levels of ‘dominion’ and ‘exclusion’. Similarly, where it falls to a court to determine whether ownership of land allows the proprietor to prevent aircraft from flying overhead in the light of common law rules developed long before the invention of mechanised flight, judges are forced to develop principles which, in turn, reflect some underlying, evaluative concept of property, such as assessments about the ‘ordinary’ uses of land.28 There are, therefore, basically three dimensions to the concept of property. These dimensions are: 1.

Analytical. What do we mean by the term ‘property’?

2.

Philosophical. What justifications are there for a particular regime of property rights?

3.

Doctrinal. What are the legal rules that classify, define and delimit property rights, and so mark out the boundary between property rights and other rights?

The purpose of this chapter is to explore in parallel fashion these three aspects of conceptual inquiry, and to examine how they bear in a general way on the more specific, doctrinal rules internal to property law to be canvassed in detail in later chapters.

Analytical Dimension What do we mean by the term ‘property’? 1.5 As observed above, the definition of the term ‘property’ has been, and continues to be, the subject of intense debate among philosophers, political theorists and economists. The debate has not been far from the concerns of lawyers either. The chief reason for this is that every definition of property has direct consequences for questions of the distribution of economic wealth and power, the role of governments and the autonomy [page 6] of citizens. This is demonstrated by an example offered by Bowles and Gintis.29 They point to an episode in 1960 in North Carolina where four black students refused to leave a café after being refused service on racial grounds. The authors emphasise that this act of defiance was not merely an instance of civil disobedience. It was, at a deeper level, a clash of two qualitatively different classes of rights: the civil rights of the customers as citizens and the property rights of the owner. Likewise, in Davis v Commonwealth.30 In each of these instances, a broad definition of the rights of the property holder will reduce correspondingly the civil rights, or liberties, of others; a narrow one will tip the balance in favour of the non-proprietors, or the public. The drawing of the boundary of property rights is, therefore, commonly an exercise that extends far beyond the question of what an owner may do with his or her property. And this issue sometimes raises controversial questions of power and responsibility.31 We will examine the various arguments that suggest where this line ought to be drawn later in this chapter. As a preliminary approach to addressing the question of the boundary between property rights and other forms of rights, it is necessary to determine as an analytical matter the general nature of a property right. Blackstone’s definition above (at 1.4) is a useful starting point. It involves the identification of three basic elements in any property right. They are:

1.

dominion;

2.

exclusion; and

3.

external things.

1.6 First, the term ‘property’ directs attention to the dominion or control exercised by a person or legal subject over an object. Dominion denotes some form of legally authorised power. The rights I exercise in relation to my bicycle, my books or my bag clearly fall within this category. This ‘bundle of rights’, as Kevin Gray describes them,32 is necessarily concentrated in one or more specific persons; it makes little sense to say that everyone has dominion. It follows that the term ‘property’ is inappropriate to describe my rights of access and use of the local public library or park. Because these rights are widely enjoyed and distributed among citizens generally, they cannot be described as private property.33 1.7 Second, a supplement to this right of dominion is the right to exclude others from enjoying the same rights or interfering with the property holder’s rights. If there is no right to exclude, it is inappropriate to describe anyone as having dominion. In turn, this means that there are no property rights in existence in relation to the thing. In so far as the [page 7] property holder can call on the state to enforce those rights of dominion and exclusion, it can be concluded that property is a matter of law, rather than physical power. As Jeremy Bentham put it: The savage who has killed a deer may hope to keep it for himself … How miserable and precarious is such a possession! … Property and law were born together and die together. Before laws there was no property; take away laws and property ceases.34

1.8 The third element of property is a ‘thing’ or, in Blackstone’s words, ‘the external things of the universe’. This may be a physical thing, or chattel, such as a car or painting. The term also extends to land, which includes airspace, and to intangible things such as shares (the ownership of rights in a corporation), patents (the right to develop an invention exclusively) and copyright (the right to reproduce an original work). One further standard

feature of a property right, glossed over by Blackstone, is the right to transfer, or alienate, the thing. This was noted by Blackburn J in Milirrpum v Nabalco35 where the issue before the court was whether Aboriginal customary rights over land qualified as property. His Honour argued as follows: I think that property in its many forms, generally implies the right to use or enjoy, the right to exclude others, and the right to alienate. I do not say that all these rights must co-exist before there can be a proprietary interest, or deny that each of them may be subject to qualifications.36

It followed from this definition that the Aboriginal plaintiffs, who held the land in accordance with traditional customs which, among other things, prohibited transfer, could not be said to have property rights in their land.37 1.9 As a result of this analysis, it is possible to identify, as Snare does, a set of rules that must be present for ownership to arise.38 Thus, if we say ‘A owns P’, we imply that: 1.

A has the right to use P;

2.

others may use P if, and only if, A consents; and

3.

A may permanently transfer the rights under 1 and 2 to other, specific persons by consent.

These primary rules are commonly supplemented by other rules from the areas of criminal law and tort. They can be summarised as: 4.

punishment rules, which detail what may happen to B if he or she wrongfully interferes with A’s use of P; [page 8]

5.

damage rules, which require B to pay compensation if he or she damages P without A’s consent; and

6.

liability rules, which specify that if A’s use of P results in damage to others he or she will be held responsible.

1.10 Property law is conventionally concerned with the first three of these sets of rules, though in spelling out the consequences of different types of transactions (such as an instance of double dealing where A purports to sell P to both B and C), the liabilities, damages and punishment that the unsuccessful

party may incur are often addressed. Equally, certain damage rules may both be relevant to questions of responsibility to others and constitute the basis for a person’s right to ownership. Thus, where A takes possession of land without the consent of the owner and remains in occupation for 12 years, he or she may use that wrongful act to claim property rights against others, including the former owner. This book will follow a broadly similar course, with a central focus on rules in categories 1–3, and only tangential treatment of the remaining categories of rules. The basic reason for this is one of convenience: the latter set of rules is remedial, or consequential, on the former. They are appropriately dealt with in specialised works. 1.11 Honoré provides a more detailed analysis of the substantive elements of property. He identifies no fewer than 11 elements that may form the basis of a property right. Like Blackstone, his analysis also contains clear, evaluative elements. This is not a criticism in itself; it is merely to acknowledge that evaluation is never far from the surface of legal analysis, however objective it presents itself as being. For Honoré, these 11 elements are the mark of any ‘mature’ legal system.39 The elements comprise the following: 1.

The right to possess. This is the right to exclusive physical control of a thing over which ownership is claimed. For non-physical things, such as copyright, control denotes enjoyment in the sense of being able to reap the rewards of using the thing and prevent others from doing so.

2.

The right to use. This is the right to actually make use of or enjoy the thing.

3.

The right to manage. This is the right to determine who may use a thing and how.

4.

The right to the income. This is the right to the value generated by the thing.

5.

The right to the capital. This is the right to consume, waste or destroy.

6.

The right to security. This is the right to exclude others, including the state.

7.

The power of transmissibility. This is the right to transfer the thing to others, either inter vivos (ie, during one’s lifetime), or on death.

8.

The absence of term. This is the right to enjoy the thing indefinitely.

9.

The prohibition of harmful use. This is the duty to refrain from using the thing in ways that interfere with the property or personal rights of others. [page 9]

10. Liability to execution. This is the liability to have the thing taken away for the satisfaction of debts. 11. Residuary rights. These are rights that govern the entitlements of other persons to the thing when present ownership has lapsed. 1.12 As we will see in the following chapters, it is not necessary for all of these rights to exist for it to be possible to say that a property right exists. Indeed, the study of property law involves an examination of how these various rights can be divided up between different persons. Honoré emphasises that in most instances of property ownership an owner will be able to demonstrate only some of these rights. Where a building is leased, for example, both landlord and tenant can point to some of these rights, but not others. However, it is the mark of ‘mature’ or ‘liberal’ legal systems that they accommodate this particular, complex patchwork of rights. Why only liberal systems have such a wide range of elements in the property list will be explored below. A preliminary question, however, is whether property is about things or relations. Moreover, a secondary question arises: Does this definition have any political consequences?

Is property a relationship or a thing? 1.13 When we talk about rights to exclude as an integral element of property, we focus on the rights the property holder may exercise with respect to third parties and, conversely, the limitations on the rights of third parties in relation to that object. If we talk about property as essentially a legal relationship between a person (the property holder) and a thing, or indeed as a thing itself (for instance, when we say ‘this is my property’), two habits of

thought tend to follow. First, we obscure the extent to which rights over property are almost always limited. In Snare’s and Honoré’s lists, for example, property rights invariably involve prohibitions against certain classes of harmful use. This is the case with land, if it is developed in such a way as to cause environmental damage; where chattels are used recklessly, such as cars driven dangerously; and even intangible property, if directed to harmful ends, as in the case of tobacco trade marks or computer malware. Put another way, these obligations demonstrate both the impossibility and undesirability of absolute or unlimited property rights. Second, where property is seen predominantly as thing–ownership, as it is in Blackstone’s work, it may, on one reading at least, downplay the ‘public interest’ side of property; that is, the fact that property rights are invariably modified by the rights of others. Property as thing–ownership emphasises instead the rights exercisable by the property holder over the thing. It follows from this perspective that attempts to restrict these rights will be seen in light of this theory as a restriction on freedom rather than a balancing of private and public interest. 1.14 These tendencies inherent in the thing–ownership view of property led to a range of critiques of this definition of property in the early part of the 20th century by a group of American jurists known as the ‘legal realists’.40 One such critique was advanced by [page 10] Hohfeld. He objected to the idea that the concept of property was about things at all. His central contention was that all rights, including property rights, are not concerned with things but legal relations. Thus, to own property is to stand in a particular relationship with others. This relationship can be broken down into powers, duties, rights, immunities and so on. In this way, Hohfeld rejected two elements of Blackstone’s theory: first, its notion of property as an absolute right; and second, its characterisation of property as a physical thing. Thus, he concluded: Since all legal interests are “incorporeal” — consisting, as they do, of more or less limited

aggregates of abstract legal relations — such a supposed contrast as that sought to be shown by Blackstone can but serve to mislead the unwary.41

1.15 This debate was as much political as academic. Around the time that Hohfeld was writing, Blackstone’s ‘physicalist’ and John Locke’s ‘labour’42 theories of property were having considerable influence on the development of property law by the United States Supreme Court. This process began in the late 19th century and continued until the late 1930s. To some extent, this was due to the fact that the drafting of the United States Constitution was undertaken by people who were heavily influenced by Locke’s labour theory. In particular, the Fifth Amendment, and later the Fourteenth, offered protection to citizens against appropriation of property ‘without due process of law’.43 This meant that property could not be taken by the state (for instance, in cases of compulsory acquisition) unless appropriate compensation had been paid. Originally drafted to restrict state acquisition of property for public purposes without full compensation, the concept of property in the Amendments was expanded in later decisions along Blackstonian lines, to the effect that property rights were absolute and, further, that any interference by the state was, therefore, a curtailment of those rights. 1.16 A sequence of judicial decisions extended this principle — which came to be known as ‘substantive due process’ — to legislation that purported to regulate business activities, particularly in relation to the setting of prices.44 In the leading case of Lochner v New York,45 legislation regulating working hours was struck down on the basis that it amounted to a constitutionally invalid interference with freedom of contract. Later, Pitney J of the United States Supreme Court summed up the philosophy behind such decisions as follows: It is impossible to uphold freedom of contract and the right of private property without at the same time recognizing as legitimate those inequalities of fortune that are the necessary result of those rights.46

[page 11] For Keynes, this represents the emergence of ‘fidelity to laissez-faire constitutionalism’.47

1.17 Another realist, Felix Cohen, described this approach as the ‘thingification’ of property, on the ground that it presumed to derive legal principles from the nature of the thing itself.48 Yet to argue in this way was to invert the process by which property rules developed. First, a policy was decided in relation to how a thing should be enjoyed; later, a rule was devised to regulate that thing. In other words, political choices gave rise to legal rules. They did not issue from the nature of things. Moreover, if property was seen in a broader way as a set of legal relations among many people, the social impact of particular rules would be more readily brought into focus. In this way, private right and public interest could be more effectively balanced. The United States Supreme Court eventually abandoned this approach. In 1937, after threats that the court might be stacked to ensure New Deal legislation would not be ruled unconstitutional, the court overturned earlier authority which had heavily restricted the regulation of private property.49 This can be seen as a triumph of the relational view of property. Equally, it better accords with the totality of rights and obligations listed under the definition of ‘property’ by Snare and Honoré. 1.18 An argument similar to this relational one was advanced by the realist Morris Cohen who sought to attack a different aspect of the thesis of property as thing–ownership.50 Cohen focused on how our legal thinking tends to draw a broad distinction between property and sovereignty; the former is an element of civil or private law, whereas the latter properly belongs to the sphere of the political, or public law. In parallel fashion, the underlying principle of the first is dominium, or control over things. The latter by contrast is underpinned by the principle of imperium, or rule over citizens. This is a modern idea, Cohen emphasises. Feudalism was characterised by a fusion of these two principles: ownership of land meant direct control over tenants, evidenced by oaths of fealty, and rights on the part of lords, such as power to consent to the tenant’s marriage or to be the local magistrate. But on closer examination, Cohen adds, while political power and property ownership have been formally and institutionally separated in law in highly industrialised societies, they often continue to involve analogous exercises of rule by property owners. Thus, he gives the example of the power that ‘bankers and financiers exercise when they determine the flow of investment’,

dramatically evident in the case of ‘needy countries’.51 It follows that ‘[t]here can be no doubt that our property laws do confer sovereign power on our captains of industry and even more so on our captains of finance’. He concluded that this [page 12] ought to be restricted in the same way that autocratic rules have been curbed by the public law of liberal democratic societies. 1.19 A further criticism of the notion of property as thing–ownership is largely historical. It addresses the dramatic changes in property over time. While the notion of property as thing–ownership mirrored patterns of resource distribution in the pre-industrial era, where small-scale, individual ownership of goods and enterprises was the dominant form of property, industrialised societies are organised along completely different lines. In the latter societies, the great proportion of industrial property is held by corporations, where legal control is fragmented into very specific entitlements spread across large numbers of individuals and institutions, such as managers, directors, shareholders, debenture-holders, mortgagees, unions, workers, insurers and so on. In this context, property as thing –ownership begins to look increasingly implausible.52 Perhaps it is closer to the mark to conclude that the variety of property rights — and, therefore, the boundary between property rights and other rights — makes it more difficult to identify a set of core characteristics than it was in Blackstone’s time. This idea is not so novel. It is reflected in most law curricula: corporations law, securities law and industrial relations law, to take a few examples, are not widely seen as sub-branches of property law, but rather as distinct areas of legal relations underpinned by principles which are unhelpfully reduced to notions of ownership, even if some elements of ownership illuminate aspects of these laws (for instance, in relation to the transfer of shares). 1.20 Political and philosophical justifications of property have become a little hazier too, given this changed landscape of property rights. Grey

exaggerates when he says that ‘[t]he dissolution of the traditional conception of property erodes the moral basis of capitalism’.53 He bases his argument on the powerful force that flows from seeing property as an individual’s exclusive right over a thing he or she has made, bought, or derives a livelihood from. However, there is a germ of truth in his assessment: it is surely the case that the moral claims that an individual worker has in the fruits of his or her labour are generally seen as more justifiable and, therefore, generate more popular resistance to any state interference, than the very different bundles of rights owned by shareholders, creditors, mortgagees, and managers of large corporations. More topically, these differences can be seen in relation to current political debates around aged care user-pays policies, which impinge on rights over ‘the family home’. These distinctions and others feature prominently in the philosophical arguments about property which are the subject of the next section. 1.21 Despite the weaknesses of the ‘thing-ownership’ approach to property outlined above and despite the considerable support for Alexander’s view that ‘[n]o [page 13] expression better captures the modern legal understanding of ownership than the metaphor of property as a bundle of rights’,54 the thing-ownership approach to property has undergone somewhat of a revival in recent times.55 Proponents of a means-based (rather than ends-based) approach to property have played an important part in this revival. Means-based theorists focus on the tools or strategies of property while ends-based theorists focus on the outcomes that property is to serve, and the values, such as democracy and/or human flourishing, which underpin those outcomes. Baron observes that means-based theorists emphasise the ‘mechanics of how property operates’, including property’s ‘use of qualities such as “modularity”56 or “boundaries”57 or “residual managerial authority”58 to solve problems of social organization and information economy’.59 Meansbased property theorists also argue that the bundle of rights approach obscures

critical features of property such as the right of exclusion, indirectness and the in rem nature (or ‘thingness’) of property.60 Heller alluded to this obscurity when he observed that: … while the modern bundle-of-legal relations metaphor reflects well the possibility of complex relational fragmentation, it gives a weak sense of the “thingness” of private property.61

Yet ‘thingness’ may be important. In the environmental sphere, a focus on ‘thingness’ may prove attractive. It may serve to help emphasise the physicality and materiality of natural resources, leading to enhanced environmental awareness and improved ecologically sustainable outcomes. The ‘thingification’ of property may arguably help refocus attention on the object or thing itself, meaning that property is not seen as a series of disaggregated [page 14] rights disconnected from the ‘thing’ those rights govern.62 Accordingly, recasting focus on the ‘thing’ may help direct attention to the status and condition of the natural resources themselves and facilitate easier recognition of environmental harm.63

Philosophical Bases of Property 1.22 In addition to the question of what we mean when we use the term ‘property’, there is the question of our evaluation of it. Property is always a reflection of some of the most deeply held values in any society. This is unsurprising given that property is the institution which determines the precise nature and distribution of the means of production, consumption and exchange. In doing so, it is also the primary determinant of wealth and the means of sustenance, and much more besides. Furthermore, as Macpherson argues, it may be more accurate to suggest that it is the ideas and values of the dominant classes that determine the meaning and ambit of ‘property’ at any time.64 This statement is as true of Blackstone’s theory as any other. The Blackstonian definition of ‘property’ (at 1.4) contains many clear resonances

with the philosopher John Locke’s earlier ‘labour theory’ of property. As one of the dominant modern theories of property, it will be examined first.

Labour theory of property 1.23 This theory owes its existence to the philosophy of John Locke as the first philosopher to ground the institution of private property exclusively in labour. The basic idea of this theory is that people are entitled to own both what they produce by means of their own efforts and whatever they have laboured on. Central to this argument is its individualism. Thus, for Locke, the starting point in justifying the institution of private property was the individual human being. In so far as an individual has an inviolable property right in his or her own person, that individual has an analogous right in his or her labour. Equally, individuals have a property right in the external things of the world with which they have ‘mixed their labour’. So, the catching of a wild animal, or the staking out of a field for agriculture, gives rise to a property right in the animal and field respectively: For this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joyned to, at least where there is enough, and as good, left in common for others.65

[page 15] The labourer is justified in keeping the thing worked on because he or she has ‘added something to them more than nature … had done’.66 Locke’s theory is based on ‘natural rights’. Legal rights to property, to the extent that they derive from these natural acts, pre-exist the positive laws of any state. They originate in the act of appropriation or creation of an object. This act is protected by the law of nature which gave property rights to individuals. On Locke’s reasoning, individuals later came together to form states premised on the protection of these pre-existing rights. A further element of this theory is that it applies universally: any individual can, at least in principle, become a property holder. This marks it out from earlier theories which confined property to certain classes or groups.

1.24 Locke suggests that individuals may appropriate as much property as they can by labouring on it, subject to two limits. First, there must be ‘enough, and as good, left in common for others’;67 that is, as long as others suffer no reduced opportunities to acquire property as a result of the initial appropriation. Second, no one should appropriate so much property as would ‘spoil’ in his or her possession. Taken together, these would both seem to impose considerable restrictions on individual wealth maximisation and at the same time introduce a significant egalitarian counterweight to the otherwise unlimited individualism of this theory. Yet Locke imposes significant limitations on each. In relation to the first proviso, there is no objection to unlimited acquisition of land, for example, because — far from worsening the position of others — such appropriation actually improves their situations. Why? Because in order to provide for his or her own sustenance, a person would need to enclose and cultivate, say, a 10-acre block of land. The same person might need 100 acres of uncultivated land to provide food to live on. Accordingly, such an act of appropriation actually increases the amount of land available to others. Locke concludes that in effect it involves giving ‘ninety acres to Mankind’.68 In the case of spoilage, the conversion of perishable foodstuffs into money will ensure that the producer will not commit any unacceptable offence to principles of property. First, money does not spoil; second, the surplus produce will be for the benefit of others. 1.25 These arguments give rise to many difficulties. First, Locke makes no distinction between the mixing of labour with something and the mere act of appropriation. If it is the former that yields a strong moral argument in favour of affording an individual a property right, because labour gives an object the impress of the labourer’s personality, the same cannot be said of the appropriator who does no meaningful mixing of labour at all; for example, someone who merely encloses land. This is particularly so in light of Locke’s other rationale for giving property rights to the ‘labourer’, namely that the labourer has added value to the thing. It is hard to avoid the conclusion here that his theory operates to justify the unlimited private expropriation of land and goods held in common. This seems especially true in light of the contrast he consistently draws between individual enclosure

[page 16] and collective waste. He returns again and again to the image of hunter– gatherers on ‘waste’ land on the one hand, and individuals cultivating and, therefore, making productive use of land on the other. In the former case, there is no question of property rights coming into existence. Locke’s theory, therefore, seems blind to the possibility of collective or communal productive use of land beyond the narrow example of individual agriculture. 1.26 Such inconsistencies may be explained by the fact that Locke’s theory was written at a time of the enclosure movement in Britain and imperial expansion abroad. Both these exercises involved the removal of traditional owners from their land. These owners had shared characteristics. They held the land in some form of collective ownership. They used the land in traditional ways such as hunting, gathering and small-scale crop production, which was very different from methods of modern agriculture and intensive farming. Clearly, a labour theory of Locke’s hue tends to de-legitimate these forms of landholding. This point is underscored by the fact that, throughout his work, Locke makes use of the examples of the indigenous Indians in North America and the Europeans who had settled there. While he had no difficulty in seeing how the Indians could acquire rights over animals killed or fruit picked, he rejected the idea that they might have property in the land.69 This has led Williams to conclude that this theory provided a ready-made justification for the appropriation of the land of American Indians.70 1.27 Another difficulty with Locke’s theory is the selectivity of persons capable of ownership. He says that the ‘turves my servant has dug’ belong, not to the servant, but to the owner. It is not clear why this should be so, given that his theory is based on the personality of the appropriator. If this is a problem in the context of servants and agricultural labour, there are even greater difficulties in modern societies, where the dominant form of economic activity is industrial production. Industrial production is characterised by massive division of labour in the manufacture of goods. A labour theory based on individual appropriation gives little guidance in these cases. Much the same argument applies to the position of women. The domestic labour of married women, for example, appears to give rise to property rights

in their husbands. Yet, as Clark suggests, this is another example of the longstanding sexism in political and social theory: ‘In regarding marriage as he does, Locke is clearly making the relationship between men and women subservient to the needs of ensuring certainty of ownership under male control’.71 This theory also runs into difficulties in relation to his own provisos limiting the amount of property that an individual may acquire. Locke’s conclusion that enclosure actually leads to more land being available to others greatly exaggerates the benefits that the private [page 17] property of one person has for others. Where one person effectively acquires a monopoly, the opportunities for others are dramatically reduced. Further, the vast holdings of one person can lead to power to dominate others. Locke’s argument derives some superficial plausibility from his examples of the unlimited expanses of land in North America. The argument seems less convincing where, as in most cases, there is not enough to go around. At a deeper level, it tends to delegitimate non-economic values by placing an unqualified faith in the productive use of land: unused land, or wilderness, is waste, lacking in value, which can only be introduced by labour. Environmental values have no place in this productivist theory. Moreover, land is something to be exploited or owned. The notion of some symbiotic relationship with land, as exists in many pre-modern societies, is implicitly rejected. 1.28 Despite these weaknesses, Locke provides a powerful, and popular, moral argument for property rights. The notion that a labourer ought to receive the fruits of his or her efforts expresses a profound justification for private property, and one not necessarily confined to the property regimes of advanced Western liberal democracies. Arguments in favour of Indigenous land rights and rights to cultural heritage are often articulated, and compellingly so, in terms of the labour exerted in the use, custodianship and production of such property. Its flaws may make it an unsatisfactory single

rationale for a just property regime; but this does not undermine its claim to offer one basis among many for a particular distribution of property rights.

Utilitarian justifications for private property 1.29 The utilitarian justification for private property starts by rejecting the natural rights argument as too unstable a basis for justifying a private property regime. A more secure footing is the empirically more verifiable proposition that the objective of all human beings is to maximise their own happiness. This leads to the normative claim that the good society ought to be organised in such a way as to achieve the greatest happiness for the greatest number of its people. Thus, for Jeremy Bentham, utilitarianism’s most famous proponent, property is conceived as a means to achieving happiness, because people need and want to possess and consume various things to achieve some measure of happiness. This utilitarian objective of protecting property yields four subsidiary principles: subsistence, security, abundance and equality. Of these, it is security that is pre-eminent and, therefore, this, for Bentham, is the principal object of law. Unlike Locke, he sees the state of nature as a lawless one which leads to endless wasteful conflict for resources. The insecurity of the lawless state of nature undermines any possibility of industry, for its fruits may be appropriated by those who have not laboured. If law comes to guarantee security in the fruits of labour, then industry will flourish. It is, therefore, law that creates property, not labour. In this way, Bentham develops an idea taken up more systematically in the work of the efficiency theorists (see 1.32–1.35); he presents an image of the individual as a selfish, rational calculator who needs incentives protected by law to foster industriousness. 1.30 Bentham is keen to emphasise that legislators should not seek to achieve equality in the distribution of property, even though it is one of his property principles. The [page 18] major reason for this is that the benefit conferred on the person to whom

property is redistributed will always be less than pain caused. Why? Because the pain will be felt by all property holders: An attack upon the property of an individual excites alarm among other proprietors. This sentiment spreads from neighbour to neighbour, till at last the contagion possesses the entire body of the state.72

The principle of equality is achieved in a different way under a private property regime. Where people are secure in the fruits of their labour, subsistence and abundance will increase. This will lead in turn to a greater level of overall equality among citizens. To prove his point, Bentham draws a comparison between feudalism and 19th-century capitalist societies. In the former, a far greater level of inequality prevailed, as evidenced by the vast number of serfs under a small number of large land-holders. In capitalist societies, by contrast, a more equal distribution of wealth prevails, with greater access for all. This theory articulates a persuasive set of arguments justifying private property; but it also presents difficulties. First, the traditional utilitarian calculus ignores the question of marginal utility. Taking some small amount of property from a millionaire (for instance, in the form of taxes) and giving it to the destitute may involve only a minor level of pain for the former but a considerably greater increase in pleasure for the latter. In this way, the argument that security of property is paramount and inviolable is weakened. Second, it is not necessarily the case that redistributive policies of government cause uniform anxiety among all property holders. Wealth taxes, for example, are sometimes supported by more affluent citizens. Third, no distinction is drawn in this theory between different types of property. The security afforded by food, clothing, housing and basic commodities will undoubtedly deliver significant measures of utilitarian happiness. Yet it is difficult to extend this argument to those commodities that are merely forms of conspicuous consumption. 1.31 A related argument can be applied to the pattern of property rights identified by Honoré.73 Does property in the utilitarian scheme require the maximum of this list of property rights, or will some lesser proportion do? It is arguable that if more individuals have some property rights over a particular thing, rather than one person having all of those rights to the exclusion of others, this will generally increase the overall sum of happiness that property

can deliver. These objections and others have led to a range of refinements of the utilitarian position. These are represented in the law and economics literature.

Economic justification for private property 1.32 The economic justification for private property lies in the objective of promoting the twin goals of efficiency and wealth maximisation. These are seen to be rather more concrete and measurable than the utilitarian’s ‘greatest happiness of the greatest number’, [page 19] though the emphasis on the need for the law to provide incentives for a wealth-maximising individual, in conjunction with the belief that increases in overall wealth redound to the benefit of all society, indicates clear affinities between the two schools of thought. Munzer sees the differences in the following way: [U]tility and efficiency both have something in common and differ in a key respect. What they have in common is the concept of individual preference-satisfaction. They differ in that the principle of utility, but not efficiency, supposes that interpersonal comparisons of individual preference-satisfaction are possible.74

In other words, the economic or efficiency theorists avoid the sort of calculation of individuals’ comparative happiness so common in, for instance, Bentham’s work. 1.33 For the economic theorist, there are three conditions necessary for an efficient and, therefore, wealth-maximising property regime. First, owners of property ought to have an exclusivity of ownership protected by law. My ownership, in other words, must be protected from infringement by the state. Second, the rights associated with my ownership must be legally transferable, either in sum or in part. This is said to further the objective of efficiency as follows: transferability allows acquisition by the person most capable of putting the property to most efficient use. Posner, one of the leading proponents of an economic theory of law, offers the following example of a farmer to

demonstrate the practical operation of this principle. Farmer A makes $100 a year from working his land, and that leads him to value the land at $1000. Farmer B feels that he could make more than this, and so values the land at $1500. At a price of $1250, both would be better off: Thus there are strong incentives for the parties voluntarily to exchange A’s land for B’s money, and if B is as he believes a better farmer than A, the transfer will result in an increase in the productivity of the land. Through a succession of transfers, resources are shifted to their most valuable uses and efficiency in the use of economic resources is thereby maximised.75

The third principle follows directly from this argument. Given the objective of the maximisation of wealth and the fact that private property with the characteristics of untrammelled rights to exclude and alienate furthers efficient use, the more private property, the more efficiency and, consequently, the greater the increase in wealth. Thus, the law should guarantee a universality of property. All things should be privately owned, with the exception of things so plentiful that common ownership will not jeopardise the rights of others. Examples include sunshine and air. This argument warns against regimes of common property on grounds of inefficiency of use. It originates in the economic theorist’s view of the individual as an individual wealth-maximiser, which is strikingly similar to that of the utilitarians. Where there is common property, such as the medieval commons used for the public grazing of livestock, over-use and ultimately degradation of such land invariably occurs. Why? Because there is an incentive for a particular right-holder to increase the number of livestock on the commons without regard to the [page 20] ultimately damaging effects. In a collective regime, the benefits of this activity will accrue to the over-grazer in the form of higher livestock sales, while the cost will be spread over all the right-holders. As this cost to the individual will in most instances be considerably less than the benefit he or she gains, this practice will proliferate.76 1.34 This is a powerful argument, and supported by various studies examining the comparative levels of efficiency of private and common property regimes.77 Yet, it also has its weaknesses and many objections have

been voiced against it. One of these is advanced by Carter, who suggests that the problem here is not so much the collective ownership of the commons, as the private ownership of livestock.78 Another is that this argument misdescribes the way in which commons were actually regulated. There were detailed customary rules about unfair use79 — which might explain why this type of property holding lasted for much longer than our present property regime has done so far. A related counter-argument is that it is the very unregulated nature of some commons that was the root cause of the over-grazing and degradation. A parallel might be drawn with public parks. Restrictions on what people may do in public parks ensure that they and the amenities they offer remain undiminished for all. The commons versus private property analogy also plays down the extent to which private property has its own (public) costs in terms of public policing of protection and preservation of property which are paid for by all, and private insurance to achieve the same results, the costs of which are, in commercial property, passed on to all in the form of increased prices for commodities. The policy question then becomes: Which form of regulation — private ownership or a regulated system of public use — is the most efficient? This type of argument has particular relevance for the debate about the privatisation of state-owned and, therefore, collectively held assets, such as utility services and utility infrastructure.80 1.35 Whatever answer is given to the broader questions of social justice in the case of particular exercises of privatisation policy, there is something clearly counter to the public interest in too vigorous an application of the universality principle, the third principle in the economic justification argument. If all roads, schools, hospitals and social services were in private hands, it is difficult to see how provision for the most disadvantaged citizens [page 21] would improve.81 Markets depend on exchange to operate. Where certain individuals have nothing to exchange, the market has nothing to offer them.82 This latter point exposes something of a blind spot in the economic theories:

they are generally unconcerned about redistribution. No limits to the amount of property are imposed, and vast inequalities of wealth are consistent with their proposals, even where the poorest in society are destitute. This general problem with the market and its productive and distributive mechanisms forms the basis of another set of property theories which have equality as their primary value.

Justice and equality 1.36 Many theorists have asserted that principles of justice and equality ought to be the primary goals in any property regime. This has led to the proposal of a number of different solutions. Perhaps the most famous is that of Karl Marx, who saw private property, particularly in its most developed form in capitalist societies, not so much as a means of wealth maximisation, but primarily as a tool of oppression. In class societies where some people own economic resources, or the ‘means of production’, and others own only their labour, a striking power imbalance arises. This is because the property owners can dictate the terms of employment, including wages, under which workers are engaged. This continues to be the case where workers become unionised, for at the same time capital becomes even more powerful.83 The need for owners to make a profit ensures that labourers never get a return for their work commensurate with the value of what they produce. Accordingly, the gap between what they receive in wages and the value of what they produce — the ‘surplus value’ — is extracted by the employer. Moreover, some of this value will be reinvested in more private property (eg, factories) that in turn form the basis of even more exploitation of workers. The result for Marx is an ever-increasing cycle of exploitation.84 This will produce periodic crises that provide opportunities for workers collectively as a class to revolt and institute a system that, ultimately, is the only way of breaking the link between property and exploitation: a communist society where the means of production would be owned by all. 1.37 The history of the 20th century bears witness to many attempts to put this theory into practice. By the time of the fall of the Berlin Wall in 1989, however, even those who had most fervently advocated such reforms felt compelled to admit failure on a number of grounds. This economic and

political model was incapable of delivering meaningful justice, equality or efficiency. Principles of justice were offended both by the preferential [page 22] treatment in terms of property entitlement given to party elites and the denial of rights to the produce arising from forms of individual enterprise. Equality was undermined by tolerance of wide disparities of wealth distribution — even though these were dwarfed by patterns of unequal distribution in capitalist societies — and power. Efficiency was compromised significantly by a centralised, command economy that choked private initiative and discouraged foreign investment of resources and information.85 1.38 One theory that proposes a less revolutionary version of this critique is that put forward by Tawney. He suggested that it was not the institution of private property generally, but ‘the unregulated operation, under modern conditions of industrial production, of the institution of private property’ that caused economic evils. The moral justification that allowed small producers property rights in their smallholdings and produce was irrefutable; its extension to types of property such as capital, interest and rent is indefensible. The former is active and productive; the latter by contrast is passive, unproductive and inefficient: There is no more fatal obstacle to efficiency than the revelation that idleness has the same privileges as industry, and that for every additional blow with the pick or hammer an additional profit will be distributed among shareholders who wield neither.86

Accordingly, he suggested a function-based justification for private property. Private property for smallholders fulfils a positive function utterly lacking in the case of capital, interest and rent. This too is a powerful critique in its central message: more protection ought to be given to property that is created than that which merely yields income to its owner. No loss of efficiency would result if some of this were redistributed to the needy. And it avoids the objections that are fatal to Marxist accounts of private property. Present tax laws that treat income derived from investment property differently from, say, wages or the residential home, demonstrate this principle at work.

1.39 Yet Tawney’s theory oversimplifies the position of ‘passive’ property if it suggests that such property does not play any useful role. In a highly industrialised and internationalised economic system, ‘capital flight’ is a real problem for the development of active, productive property. Such passive property is often necessary for active property to get off the ground. Take the example of a small, income-strapped information technology company wishing to expand. It needs investment to do so. Denying such investors profits may lead to the loss of this source of capital altogether. Tawney’s individual, self-employed and self-reliant labourer producing a livelihood represents a small fraction of economic activity today. A further development that undermines the force of this argument is the fact that most ‘passive’ property holders are now institutional investors who hold workers’ funds in the form of superannuation, life insurance, and so on. In this way, a form of socialisation of the economy is taking place.87 Of course, this suggests the desirability of greater levels [page 23] of regulation to ensure that socially beneficial investment is encouraged.88 But to deny it the protection of property would be to disadvantage many of those ‘active’ property holders Tawney would seek to protect. Nonetheless, his central philosophical project of drawing distinctions between the different types of property, and the different principles that should regulate them, remains a persuasive one for those who see present distributions of property as indefensibly unequal. This line of argument spells out values that seem to underpin the critiques of the realists above.89 1.40 Values have also been a key concern of another school of property theorists. That school is concerned with ‘progressive property’. It argues that property ‘implicates plural and incommensurable values’.90 Some of those values promote ‘individual interests, wants, needs, desires and preferences while others promote social interests including environmental stewardship, civic responsibility, and aggregate wealth’.91 Other values still govern human interaction permitting people to interact with each other respectfully.

According to this school, values can generate moral demands and obligations that underpin judgments about where the limits of property lie; that is, of what is and is not within the proprietary paradigm. On this reasoning, the values with which property is concerned include ‘life and human flourishing, the protection of physical security, the ability to acquire knowledge and make choices, the freedom to live one’s life on one’s own terms … wealth, happiness, and other aspects of individual and social well-being’.92

Women and property 1.41 A further set of theoretical analyses of property law has come from feminism. These approaches to property have tended to focus on three separate aspects of property law. First, in relation to the philosophical debates, some feminists have argued that these accounts ignore the ways in which women are systematically disadvantaged by the law of property in patriarchal societies, and offer no reasons to redress this. A good example of this line of critique is that of Clark, who points out the gender-blindness of Locke’s labour theory and, by implication, other labour and desert theories that ignore the way in which women have traditionally laboured. Not only are women generally invisible in this work, either as labourers or creators of property, but their position in the social division of [page 24] labour (in which they are more likely to be restricted to various forms of domestic labour) is completely ignored.93 1.42 A second strand of theory examines doctrinal questions and, in particular, analyses how particular legal principles contribute to gender-based inequality.94 The general trajectory of feminist doctrinal critique is an examination of how the detailed rules of property law specifically work against women. They are considered to operate to this effect in two different ways. First, the critique identifies how the formal rules are actually different for men and women. Thus, Otto describes how the rules in relation to constructive

trusts over matrimonial property are systematically stacked against women.95 A second, more common line of critique focuses on how the rules, though formally the same for men and women, are insufficiently sensitive to the different and, crucially, unequal positions of the parties to various transactions. This is a version of the anti-discrimination notion that to treat unequals equally is to perpetuate inequality. So, Neave concludes that one consequence of the operation of traditional property rules in the domestic setting is to unfairly compensate women for the labour they contribute.96 1.43 A third approach to women and property might be described as a functional approach. This category of critique attempts to look at the outcomes of current regimes of property law. In particular, these analyses attempt to show how the present operation of property rules creates a general condition where women own far less property than men. As Rose puts it: A quite common perception about women and property is that women do not have much, at least in comparison to men … In the ordinary course of things, we are surprised to find women of great wealth, just as we are surprised to find women who lead Fortune 500 companies.97

One aspect of this process is captured by the notion of ‘the feminisation of poverty’, where studies have found that women seem to outnumber men significantly in the ranks of the officially recognised poor.98 These analyses generally attempt to show how the present matrix of property laws contributes to create a general condition of disadvantage for women.99 [page 25] 1.44 This is not to suggest that there is an uncontested unitary feminist approach to questions of property law. As with feminist approaches to law and society generally, feminist approaches to property law retain an enriching diversity of perspectives and opinions. 1.45 Hunter, McGlynn and Rackley note that there is no one single feminist position on legal issues arising in any one case; rather, there are multiple feminist positions that will take different approaches and yield different results when put into practice. This was one of the key lessons from the Feminist Judgments Project.100

1.46 West seeks to show significant incompatibilities between different feminist approaches by identifying a basic distinction between liberal and radical feminists.101 The former seek, by means of laws such as antidiscrimination law, to be treated as formally equal to men, and presume that this will be enough to ensure a general level of sex equality. Other feminists, by contrast, suggest that this will merely perpetuate a patriarchal order; its peculiar values of a selfish competitive individualism, as extolled by Locke and others, would remain untouched. An example of this in the area of land law is Green’s characterisation of various key concepts as either masculine or feminine.102 So landscapes, she argues, are commonly conceived as feminine — local, physical, emotional — while land is conceived in masculine terms as space — transparent, infinitely knowable, real, natural and unproblematic. Modern land law’s registration systems can be seen as reflecting this by means of their ‘distancing from the material and subjectively known (feminine) place to an intellectual (masculine) space’.103 A similar argument is advanced by Schroeder. She concludes that the definition of property as a ‘bundle of rights’ is a phallic metaphor for property.104 1.47 Against this style of critique, liberal and other feminists suggest that this argument over-simplifies matters because it presumes an essential and unshifting set of characteristics of the feminine and masculine.105 They add that men and women change as cultural expectations and social environments and opportunities change. Consequently, the sharp [page 26] contrasts drawn between men and women are exaggerated and politically unhelpful. It follows that to suggest, as Green does, that the rule certainty required by the market is essentially masculine, and therefore at odds with a different set of feminine values, reduces a much more complex phenomenon to a purely gendered one; both the principle and reality of market efficiency embrace many more factors than this. Also, what follows politically from this critique? That feminists should oppose the market? Would uncertainty be a virtue? This type of feminist theorising appears to say very little about these important questions.

Meanwhile, Carr and Wong seek to apply feminist approaches to very practical issues encountered in the legal system. They explore the distinctiveness of feminist approaches to property law and the role that feminist approaches can play in exposing the gendered dimension of what would appear to be a neutral project. They focus on: (a) how feminist scholarship has interrogated the assumption that the home is a domain free from state and commercial interference; and (b) judicial responses to claims on the family home made by former cohabitants in consequence of relationship breakdowns.106 Carr and Wong conclude that feminist approaches to property law help unravel the gendered consequences of the contemporary redistribution of property, which they see as being closely connected to the prevailing neoliberal ideology.107

A pluralist approach? 1.48 One question that immediately arises in the context of the above discussion is: Does one have to choose between the various theories of property? Is it being merely eclectic, or worse, incoherent, to rely on a number of justifications to support particular property rules? For example, is the privatisation of energy infrastructure justifiable only in Lockean terms? Or will utilitarian terms suffice? Is it possible to advance both at the same time? Each of these theories regularly surfaces in popular and legal justifications for private property, yet, as we have seen, all are subject to their separate deficiencies. Can a defensible case be made to amalgamate the best elements of the best of these theories while simultaneously avoiding the worst? Munzer attempts just such a project, and produces a compelling analysis and convincing integration. Munzer commences his thesis with the claim that there are three main pillars of property justification theory: 1.

utility and efficiency;

2.

justice and equality; and

3.

labour and desert. Munzer argues that the virtues of each of these pillars, or principles — and

each of them expresses some important virtues that the others omit — can be combined in ways [page 27] that blunt the ills to which each is separately prone. In particular, he accepts the force of the first as providing a level of wealth which allows for much social benefit. It follows that those critiques — from Rousseau and Proudhon to Marx — that emphasise the injustice and inequality of the market are at their weakest in failing to attend to the importance of providing incentives to increased levels of production. They are too single-mindedly and exclusively distribution oriented. 1.49 A justice and equality principle mitigates the harshness of this principle in practice. This principle is derived primarily from the Kantian idea of the equal moral worth of all human beings, though supplemented with some ‘Aristotelian and Marxian bricks’.108 It leads Munzer to develop two theses: (i) the ‘floor’ thesis; and (ii) the ‘gap’ thesis. In every society, he concludes, a generalised respect for a principle of equal moral worth would lead to a distribution of property that would ensure a basic minimum below which no person would be allowed to fall (the floor thesis).109 Second, in order to ensure a fully human life, the gap between the very rich and poor should not be too great, because ‘inequalities that are extreme and visible can wound selfesteem and create justified moral resentment’ and ‘the wide inequalities rest on no differences in moral merit and are instead an affront to equal moral worth’.110 Dramatic inequalities also ‘can distort the legal and political process and reinforce myths offensive to equal moral worth’. Finally, Munzer preserves a form of Locke’s labour or desert theory, but revises it by imposing limitations on those property rights in some situations; for example, in times of scarcity. This principle is further modified by the operation of the other master principles above. Having developed in detail his justifications for the institution of private property, Munzer puts it to work in three controversial problem areas: (i) business enterprise in capitalist and socialist economies; (ii) the justifiability of

the taxation of gifts and bequests; and (iii) government powers to acquire or resume private property. In doing so, his property regime resembles somewhat the distributional practices of social-democratic states where incentives for private enterprise and abolition of poverty or propertylessness form twin, and equally important, public policy objectives. One important point about pluralist analyses is that they are expressly context dependent. Pluralist analysis is a philosophy that must be tailored to the circumstances of particular economies and societies at particular stages of their development. Thus, one might expect a greater emphasis on the question of redistribution in an economy of vast disparities of wealth where the poor are in abject poverty, than would be the case, even using Munzer’s general criteria, in a society where there was a great level of underdevelopment yet a broadly equal economic distribution. [page 28]

Historical Changes in the Nature and Function of Property 1.50 The philosopher C B Macpherson has attempted a historical sketch of the way in which property has changed from the period of early feudalism to the latter part of the 20th century. He sees feudalism as marked by forms of property that were inclusive in nature. Property was largely both perceived to be, and in reality was, a right of access to the accumulated productive resources of society. He adduces much evidence to support this claim. First, economic production was organised on a predominantly collective basis; property rights gave expression to this in the form of rights of access to land. Second, land was held in common; the notion of common property was, therefore, widely current. Third, the right to exclude, far from being central to the meaning of property, was peripheral to it. Fourth, land was not readily marketable. This further militated against seeing property in terms of exclusion. A dramatic change in the concept of property occurred in the ‘liberal

seventeenth century’.111 For the first time in history, the concept of property was narrowed. It came to be seen in individualist terms and was no longer something that was owned collectively. Property shifted from being a right not to be excluded to a right to exclude others. And this, Macpherson argues, originates with the labour theory. In so far as this view of labour is exclusively individualist, any rights that derive from it will inevitably be so. This change was intimately bound up with, and fostered, the rise of market-based production and consumption. It resulted in habits of thought that focused exclusively on an individual’s rights to the ‘thing’ at the expense of how those rights intersected with the rights of other individuals. As a result, Macpherson concluded, in 1973: Property, nowadays, in the general understanding, at all levels from the usage of social and political theorists to that of the ordinary newspaper writer and reader, is usually equated with private property … So much is this the case that the very notion of “common property” is almost a contradiction in terms.112

This development is directly traceable to what he calls ‘the modern world of the full capitalist economy’.113 1.51 By the middle of the 20th century, a change occurred in this conception of property. It was caused by the emergence of the welfare state. The characteristic of this state is that it fulfils many of the roles that were traditionally performed by private property. Thus, income is provided as of right to those individuals who cannot find employment offered by the owners of private property or who cannot produce their own wealth. Also, the state itself becomes an employer of vast numbers of people in its own right. This development is accompanied by the exponential increase in government contracts, so that more and more citizens depend indirectly on the state for their living. Finally, the state as regulator confers, through licences, the power on individuals to be able to work in particular trades and occupations. How do these changes impact on property? Here, Macpherson follows [page 29] the work of Reich.114 Reich argued that the myriad of ways in which the state impacts on citizens in their productive lives requires much greater levels

of protection against the arbitrary withdrawal of the means of subsistence. To the extent that the state could do this, it could tyrannise the people. In consequence, constitutional protection similar to that preventing the expropriation of other forms of property by the state was in order. 1.52 Macpherson concludes that these changes suggest that we are witnessing the emergence of a new concept of property where the dominant element is not a right to exclude (as it was in the height of liberal capitalism), but a right not to be excluded from a share in the collective productive resources of society: ‘The rise of the welfare state has created new forms of property and distributed them widely — all of them being rights to revenue’.115 This reflects an element of the concept of property in precapitalist, feudal times. This concept should be expanded, he argues, to embrace the right to a fully human life. This would entail seeing property as not merely a right to an income, but a right to the means of labour or a job. Writing in the 1960s and early 1970s, Macpherson identified democratic pressures nudging governments in this direction. Further, as Grey notes,116 while seeing property as a bundle of rights undermines unqualified proposals for unregulated private property, this more complex vision is not convincing enough to induce electorates to vote for political parties proposing to provide further protections for the poor. 1.53 Kamenka and Tay have argued in a similar way.117 They focus on the ideologically less significant role that the concept of property now plays. Where property rights have become so complex that in more developed societies even the poorer classes have some private property, older ideological claims such as the Marxist call to abolish private property completely, or the laissez faire idea that it should remain completely free from governmental interference, have diminishing appeal. Where most members of society have a stake in the regime of property rights, and a parallel interest in not being unduly affected by the damaging effects of the unregulated property rights of others, it becomes impossible to say simply that one is either ‘for’ or ‘against’ private property. Or, as one of Seabrook’s respondents tersely and cynically put it: ‘When we had nowt we threatened the rich. Now we act like they did’.118 1.54

These arguments have a somewhat dated feel to them now. Written

during a time of welfare state expansion and unparalleled economic growth, promises that property rights might afford all an opportunity to share in the collective goods of society seemed quite plausible. But, at present, notions of public ownership guaranteeing all citizens access to socially created wealth appear to have given way to policies favouring privatisation [page 30] and deregulation, with attendant high levels of economic inequality and social exclusion. An ascendant neo-liberal philosophy prevails in most developed states today, with an attendant valorisation of private property over common, or public, property. Accordingly, governments increasingly transfer stateowned industries, enterprises and services to private ownership in the belief that increased efficiency and quality of service delivery will result. A pervasive sense of property as a right to exclude is now the dominant idea of property, as the sheer scale of private ownership overtakes public property.119 In this climate, pinning so much on the positive value attached to private property may not be enough to provide strong political justifications for a property right in one’s work, or in rights of access to accumulated resources, as Macpherson suggested. However, if Kevin Gray is correct, the focus on property as a right to exclude may be undergoing some radical changes. He argues that expanding rights of access where monopoly service infrastructure has been opened up to third party competition has resulted in the birth of a new form of property — regulatory property.120 1.55 Many of these points of philosophical argument and historical change may be examined and tested in specific legal contexts where courts and legislators have been asked to extend or narrow the rights to be accorded property holders, on the one hand, and other citizens, on the other. Another way of putting this point is this: On what basis are the relations between property holders and others to be drawn, or what is the extent of the property owner’s right to exclude others as compared with the (emerging) rights of others?

Doctrinal Dimension — The Boundary Between Property and Other Rights Property and contract 1.56 An enforceable contract entitles a party to the contract to sue for damages in the event of breach by the other. This basic remedy is intended to make good any damage suffered by the innocent party. The right in question is a right, not to any specific thing (even if the transfer of a thing is the subject matter of the contract), but a personal right enforceable against the other party to get damages for breach of an obligation. As a general principle, this right is not enforceable against third parties. [page 31] This contrasts with a property right, which confers a right over a thing. This right may be enforceable against third parties. For instance, where the remedy of specific performance of a contract is available, and the contract involves a promise to transfer or create rights over things, the plaintiff may be said to have acquired a proprietary interest. In consequence, the plaintiff has two separate remedies: (i) a contractual remedy against the original party; and (ii) a proprietary remedy against a third party. So, where a landlord agrees to grant me a lease, and this agreement attracts the remedy of specific performance, but before I take possession of the premises he or she grants a lease to a third party who knows of my agreement, I have two very different remedies available to me. I can either: sue the landlord for damages on the grounds of breach of contract; or sue the third party under the principles of property law on the basis that the contract gave me a property right that confers protection against those with whom I have not contracted. The former remedy is personal, the latter proprietary.121 1.57 Even where contracts purport to confer rights over things, there may be some question as to whether those rights are proprietary or not. In order to be proprietary rights, they must come under one of the recognised categories of proprietary rights. If they do not, only personal remedies will be available

against the person who purported to grant them. An example of the former is the purchase of a cinema ticket. The owner contracts to admit the purchaser to the cinema for a single showing of a film. However, even though this gives rights of access to property, it does not confer property rights on the patron. This is because he or she cannot assert any temporary rights over the cinema itself. The only remedy available, in the event that the cinema owner does not make good his or her promise, is to sue in damages. Thus, in Cowell v Rosehill Racecourse,122 a patron who was forcibly ejected from a racecourse argued that his licence had been invalidly revoked. The High Court held that a court would not grant decrees of specific performance in relation to such contracts. 1.58 A further example of this principle at work is the case of King v David Allen.123 The appellant gave the respondent a right to use the side of a theatre wall for affixing bills and posters for a period of five years. The appellant then granted a lease of the premises to a tenant who refused to acknowledge this right. The House of Lords held that the respondent had no property right to enforce against the tenant. The rights conferred by the original contract were purely contractual. They gave the respondent a right to use the wall — a licence — but did not purport to grant any rights to the property itself. The only remedy against the theatre owner was a right in damages. To achieve the latter the contract would have had to expressly give something in the nature of a lease, which is a recognisable proprietary interest. This principle was affirmed in the recent New South Wales Supreme Court decision in Georgeski v Owners Corp SP49833.124 The plaintiff, who [page 32] was the grantee of a licence over the foreshore and an adjacent stretch of water in the Georges River, was held to have no right to sue third parties who trespassed on the land. Two propositions emerge from these cases, therefore. First, a licence is not a recognised proprietary interest and cannot be enforced against third parties.125 Second, even if a contract purports to transfer a recognised

proprietary interest, such an interest will only arise if the remedy of specific performance can be obtained.126

Property and Indigenous rights 1.59 In Milirrpum v Nabalco Pty Ltd,127 Blackburn J concluded that it made ‘little sense to say that the clan has the right to use and enjoy the land’ in so far as their rights extended only to performing certain rituals on it. Also, the members of the clan had no meaningful right to exclude members of other clans. Finally, they expressly acknowledged that they had no right to alienate the land. Adding all these elements together, it was impossible to find that the traditional rights of Aboriginal clans — however much those rights were identifiable legal rights over their own land according to their own customs — were property within the Anglo-Australian meaning of the term. This authority has been swept aside by Mabo v Queensland (No 2) (Mabo (No 2)),128 where a majority of the High Court held that native title was indeed recognised by the common law. It followed that it did not matter that particular aspects of native title — such as the right to collective use of land for purely spiritual purposes — did not neatly fit into a Western definition of property rights for it to be enforceable. If a right were established under traditional custom, it would be recognised by the common law. But native title, nonetheless, has features not shared by other forms of property. First, it is not generally alienable. It can be passed from one generation of a clan to another pursuant to customary rules, and can be transferred to the Crown in accordance with the Crown’s right of preemption. But it cannot be transferred to others. Second, native title is vulnerable to the Crown’s right to extinguish it by the exercise of its radical title. Yet it is still a special form of property, as Brennan J emphasised: Whether or not land is owned by individual members of a community, a community which asserts and asserts effectively that none but its members has any right to occupy or use the land has an interest in the land that must be proprietary in nature: there is no other proprietor. It would be wrong, in my opinion, to point to the inalienability of land by that community and, by importing definitions of “property” which require alienability under the municipal laws of our society … to deny that the indigenous people owned their land.129

[page 33]

In a similar vein, Bartlett argues that the various dimensions of native title rights make it appropriate to describe them as, in aggregate, amounting to property rights, even by reference to a strict criterion of what constitutes property. He concludes that the fact that native title can now form the basis for compensation under s 51(xxxi) of the Commonwealth of Australia Constitution Act 1901 (Cth) (the Constitution), that it allows rights to exclude others by means of a variety of equitable and common law remedies, and that it is a burden on the title of the Crown, all point to the rights being proprietary, rather than personal.130 Nonetheless, it might be concluded from this that there is a dualistic property regime in Australia: a Western model premised on the individualistic principles of modern markets; and a traditional model based on customary, communal forms of social organisation where the meaning of property does not require rights of exclusion or alienation, and may indeed include particular bundles of personal rights as identified in King v David Allen.131

Body parts and property rights 1.60 Advances in technology and science have put pressure on concepts of property in relation to body parts, such as organs and cells, by making it feasible to transplant them from one person to another, or use them for research purposes.132 This problem arose in the Californian case of Moore v Regents of the University of California.133 In this case, a team of medical researchers removed the diseased spleen of the plaintiff. Unbeknown to him, it was used to develop a cell-line that proved to be enormously valuable in the manufacture of pharmaceutical products. Estimates suggested that, from the time of registration of the patent of the cell-line in 1984, until 1990 when the Supreme Court of California came to hear the matter, the value of the cellline had increased to US$3 billion. The question for the court was: Is it possible to have property rights in human tissue — and therefore to be the owner of the cell-line? Moore claimed to own the cells as chattels and that their removal and use for a purpose to which he did not consent gave him a right to sue the wrongdoer for conversion. 1.61 The majority of the Supreme Court held that there was a complete absence of authority for the proposition that excised cells are sufficiently like

chattels to support an action in conversion. Statutory provisions that governed the disposal of such tissue were held to further undermine this argument. Also, wrongful publicity cases — where famous persons’ likenesses are deployed without consent for advertising purposes — did not extend to cases such as this. It followed that Moore had no proprietary remedy against the Regents. He did have a personal remedy, though: he was awarded damages against the defendants for breach of their fiduciary duty to inform him in advance about what they proposed to do with the cells and why. It followed that the defendants had exclusive property rights over the cell-line, in the form of patents. [page 34] It is interesting to observe the important and, arguably, decisive part played by philosophical arguments in the various judgments. For the majority, an efficiency argument largely prevailed. If researchers were not protected in cases such as this, the community as a whole would lose a valuable resource because, deprived of the possible profits, a significant disincentive would be placed in the path of such research. The minority emphasised the dual philosophical issues of ownership of property in one’s ‘body and its products’ in the Lockean sense, and the unethical nature of this practice through nondisclosure.134 They also argued that the economic arguments of the majority were weak, on the basis that the cell-lines could still be sold if the plaintiff succeeded. Research could, therefore, proceed once a sale price was concluded. 1.62 There are doubts about whether this case is good law in New South Wales. In New South Wales, s 32 of the Human Tissue Act 1983 (NSW) prohibits the sale of human tissue while a person is living or dead except in designated circumstances, which include the tissue having been processed or treated and the sale or supply being for the purpose of enabling the tissue to be used for therapeutic, medical or scientific purposes.135 1.63 The leading Australian common law authority on property in body parts is the High Court decision in Doodeward v Spence.136 The appellant

purchased the preserved body of a two-headed baby for the purpose of display for profit. After police confiscated the item, the appellant sued to recover it. The High Court held that, unlike a corpse awaiting burial in respect of which there can be no rights of property, where a body or body part had had the ‘lawful exercise of work or skill’ performed on it, the person in whose possession it lies can bring an action to recover it. 137 1.64 English case law is also relevant. In Yearworth v North Bristol NHS Trust,138 the Court of Appeal of England and Wales recognised human sperm, stored on behalf of men undergoing chemotherapy, as an object of property. The court held that the men owned their sperm because they ‘had generated and ejaculated’ it for the sole purpose of using it for their own benefit. The Court of Appeal stated that, while it could find that the men had property in their sperm based on the Australian case of Doodeward v Spence, it preferred to base its decision on a broader principle that did not rely on the exercise of work or skill. 1.65 The basis for proprietary rights in human sperm, and other tissue, was examined in the case of Edwards; Re the Estate of Edwards.139 The court relied on Doodeward to find that [page 35] sperm stored for the purposes of fertility treatment was property on the basis of the work and skill applied to preserve and store it. The most recent Australian case on whether semen is personal property is the Supreme Court of the Australian Capital Territory case of Roblin v the Public Trustee for the Australian Capital Territory and Labservices Pty Ltd.140 However, as this case distinguished between sperm taken with consent prior to death and sperm taken after death, the court in Roblin did not rely on Doodeward.141 It did, however, conclude that the case law is uniform in its view that stored sperm provided by a man prior to his death is property (relying on Roche v Douglas,142 Yearworth v North Bristol NHS Trust143 and Bazley v Wesley Monash IVF Pty Ltd144).

Is there property in a spectacle? 1.66 In 1937, the High Court in Victoria Park Racing and Recreation Grounds Co Ltd v Taylor145 had to determine whether the owners of a racecourse could prevent, by means of an injunction, an unauthorised broadcast of races and results from a platform erected on adjacent land. By a majority of three to two, the High Court held that there was no cause of action at common law protecting the plaintiffs’ rights. Unlike some United States authorities, who found a ‘quasi-property’ in cases where an individual has expended considerable effort and incurred significant expense in creating something of value, the majority held that there was no such principle of property law in Anglo-Australian law. As Dixon J in the majority concluded: Briefly, the answer is that it is not because the individual has by his efforts put himself in a position to obtain value for what he can give that this right to give it becomes protected by law and so assumes the exclusiveness of property, but because the intangible or incorporeal right he claims falls within a recognised category to which legal or equitable protection attaches.146

1.67 It is clear that Dixon J sees a basic philosophical difference between the law of ‘British jurisdictions’ and that of the United States in its treatment of the concept of property. The United States courts have tended to give protection of ‘broadcasting rights’ on the basis that they constitute ‘quasiproperty’ where the plaintiff demonstrates enterprise, organisation and labour. In doing so, his Honour suggested that they have [page 36] developed the concept of property ‘under a wide generalisation’. As has been noted above, this concept originates in, or at the very least is consonant with, a Lockean or utilitarian philosophy. By contrast, courts in ‘British’ jurisdictions have not given protection to all ‘intangible elements of value, that is, value in exchange’ where enterprise and labour have been shown, but have instead proceeded on a much more incremental basis by developing the ‘special heads of protected interests’ such as copyright, trade marks, and so on. Furthermore, this practice has unfolded without reference to broader policy or philosophical justifications.

These divergent approaches to the definition of property and judicial reasoning indicate important differences between the jurisprudence of the United States Supreme Court and courts in other former British colonies and Britain itself. 1.68 By contrast, Evatt J, in dissent in Victoria Park Racing, was inclined to consider precisely these broader justificatory or philosophical issues in determining the appropriate boundaries of property rights. Accordingly, this was a case where the defendant ‘endeavoured to reap where it had not sown’ and also ‘cannot be regarded as honest’. Rich J added that the law needed to keep pace with technological developments and, therefore, protection of the plaintiff was consistent with the policy underlying nuisance law. The result of the decision was to declare legal the defendants’ activities on their land. But the message from the court was that, as a property holder, the appellant was not left defenceless in this situation: as a property holder, it was in a position to protect itself by building a fence tall enough to prevent ‘overlooking’ by the respondent. 1.69 The general principle underpinning the approach of courts to these questions was affirmed in Moorgate Tobacco Pty Ltd v Philip Morris Pty Ltd,147 where Deane J concluded that: Neither legal principle nor social utility requires or warrants the obliteration of that boundary [between legal restraint and unrestricted competition] by the importation of a cause of action whose main characteristic is the scope it allows, under high-sounding generalisations, for judicial indulgence of idiosyncratic notions of what is fair in the market place.

As in many such boundary disputes, a comprehensive legislative solution, where all possible policy implications and interests can be considered, represents a preferable expression of public policy. It has resulted, for example, in the enactment of broadcasting services legislation.

Property and information 1.70 In the context of what is commonly described as an ‘information’ society, courts and legislatures are regularly called on to confer property rights on certain forms of knowledge and information, or to expand existing protections to cover new forms of intellectual creation.148 Thus, original literary and artistic works in material form are protected by

[page 37] copyright, original inventions by patents, and business reputation and goodwill by the tort of passing off. These categories of ‘intangible property’ have been long protected by statute and common law. For example, the Commonwealth enacted the Plant Variety Rights Act 1987 (Cth) (replaced by the Plant Breeder’s Rights Act 1994 (Cth)) to create property rights in newly propagated varieties of plants. It is an example of a new form of property rights. Obviously, in the process of enacting this legislation, many of the philosophical arguments canvassed above were ventilated.149 1.71 An example of the judicial development of this area of property law is the case of Foster v Mountford.150 The plaintiff successfully sought an injunction to prevent publication of a book that contained details of Aboriginal tribal secrets given in confidence to the defendant, an anthropologist. The court relied on a series of earlier cases where there were unauthorised uses of confidential information in commercial settings and plaintiffs were able to get equitable relief.151 It would seem to follow that, in so far as legally protected confidential information affords the right to transfer it, the right to enjoy it — for instance, in cases of commercial exploitation, if desired — and the right to exclude others from unauthorised use, then, as recognised in these cases, it is a form of proprietary right. This was acknowledged by Gummow J in Smith, Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health,152 where he concluded: The degree of protection afforded by equitable doctrines and remedies to what equity considers confidential information makes it appropriate to describe it as having a proprietary character.

Property and the right to work 1.72 As noted above, the law has traditionally drawn a distinction between property rights and other types of rights. For present purposes, however, it is important to note that property rights are usually defined in contradistinction to personal or contractual rights, on the one hand, and political or civil rights on the other. The issue of where to draw the boundary between these discrete categories arose in the case of Dorman v Rogers.153 The appellant had been struck off the Register of Medical Practitioners in New South Wales after

having been convicted of making dishonest claims for payment of medical services. He appealed to the High Court, relying on s 35(3)(b) of the Judiciary Act 1903 (Cth), which provided an appeal of right to the High Court where a Supreme Court judgment involved ‘directly or indirectly a … question … respecting any property or any civil right amounting to or of the value of $20,000 or upwards’. The respondents argued, among other things, that it was not a property right. [page 38] 1.73 A majority of the High Court in Dorman agreed. Gibbs CJ cited the unanimous judgment of the High Court in Clyne v NSW Bar Association,154 which concluded that, in the case of a right to practise a profession, ‘[t]here is no “property” that can be said to be involved’. He added that: What is valuable is the person’s own earning capacity, which is personal to him. The right is, of course, not transmissible, and the financial consequences of possessing the right will depend on the skill, ability and fortune of the individual concerned.155

The necessary requirement of transferability of the interest was also the basis of the judgment of Stephen J (Brennan and Mason JJ concurring), who drew a sharp contrast between rights to practise law and medicine and rights to ‘conduct hotels or lotteries or the growing of certain primary products where quota limits on production exist’.156 He noted that the former derived exclusively from the possession of personal qualities. By contrast: The latter have value not by virtue of registration which is merely certification of the possession of personal qualities inherently incapable of transfer to another, whereas the right to enter upon and share in an activity, entry to which is controlled by the state and is not dependent merely upon the personal qualities of an intending entrant, will be readily transferable, and its scarcity value realizable, so long as the law permits such transfer.157

As this judgment suggests, the concept of property as evidenced in prevailing legal doctrine does not extend to purely personal rights — such as the right to reputation or the right to work — or civil rights in the broader sense, such as the right to vote, freedom of association and freedom of speech.158

Property and civil rights

1.74 In Davis v Commonwealth,159 the High Court was asked to decide where to draw the line between the property rights of the defendant and the civil rights — specifically the right to freedom of speech — of the plaintiff. This was evidenced in an assertion by the defendant that its rights as owners of designs under the Australian Bicentennial Act 1980 (Cth) were infringed by the production of shirts with designs ‘bearing a discernible similarity’, as the court found, to the official symbols of the Australian Bicentennial Authority (the Authority). The symbols in question were the figures ‘1788’ and ‘1988’. The inner symbol was surrounded by an outer ring containing the words ‘200 years of suppression and depression’. The plaintiffs had already been refused consent by the Authority to use the [page 39] symbols produced on the shirts. The Authority relied on s 22 of the Act, which made it an offence to use a symbol ‘capable of being mistaken for’ official symbols. The High Court unanimously accepted the plaintiffs’ argument, holding that: … the framework of regulation created by s 22(1)(a) with s 22(6)(d)(i) and (ii) reached far beyond the legitimate objects sought to be achieved and impinges on freedom of expression by enabling the Authority to regulate the use of common expressions …160

The court went on to consider a range of possible uses of these symbols, such as ‘Melbourne 1988’ to illustrate the ‘extraordinary power to regulate the use of everyday expressions in this country’. The framework was, therefore, beyond the power of the Commonwealth. However, it may be that freedom of expression as a civil right will give way to rights of the Commonwealth where those rights are ‘reasonably and appropriately adapted to achieve the ends that lie within the limits of constitutional power’.

Public property, private property, common property 1.75

The case of Stow v Mineral Holdings (Australia) Pty Ltd161 demonstrates

the essentially private, or privative, nature of property rights. The appellants lodged objections under the Mining Act 1929 (Tas) with the warden to mining and prospecting activity in an area adjoining Tasmania’s South-West National Park. The respondents opposed this action on the ground that the appellants had no jurisdiction under the Act to object because they did not have any estate or interest in the land within s 15C(1) of the Mining Act. The High Court had to consider whether the appellants as bushwalkers, campers and naturalists had a sufficient proprietary interest to make an objection. A majority held that they did not. Though the Act offered no definition of ‘interest in land’, it was held to be of a proprietary nature that does ‘not embrace interests in which the person concerned has no greater claim than any other member of the public’. In this way, the rights of the bushwalkers and others are to be seen as ‘public rights’. Moreover, the greater use of these rights by some people, as in the case of keen bushwalkers, ‘does not elevate that which is a public right enjoyed by all members of the public equally into a private right capable of being described as an estate or interest in the land’.162 In this scheme, therefore, property may be private if held by an individual; it may be public if held by a public institution, or by the state; but the notion of common property seems to be a contradiction in terms. This would suggest that we are as far away as ever from Macpherson’s claim that a notion of property is emerging which is ‘a right not to be excluded’.163 Does this mean that we devalue the rights of the public against those who hold private property? [page 40]

Property rights and human rights 1.76 To the extent that property rights entail a right to exclude and to use and enjoy, they have the potential of impacting adversely on the human rights of others.164 We have seen above in Davis v Commonwealth165 that, in certain circumstances, where property rights unreasonably affect civil rights to free expression, they will be curtailed by the courts. Importantly, civil rights are protected not only by municipal law, but also by international instruments

such as the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social and Cultural Rights. Article 1 of Protocol No 1 to the European Convention on Human Rights provides: Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding conditions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions and penalties.

As these instruments increasingly gather force in the domestic law of nation states, international human rights law is beginning to have some bearing on the boundaries of property rights. This has been particularly the case in the European Union where the European Convention on Human Rights binds member states. Some member states have even proceeded to incorporate the Convention directly into domestic law. The United Kingdom, for example, enacted the Human Rights Act 1998 (UK) to achieve this objective. However, with the United Kingdom’s impending departure from the European Union (Brexit), the role of European Union law in United Kingdom law will need to be revisited. 1.77 For the present, it remains useful to consider United Kingdom law and European Law in relation to human rights. The reach of human rights law was referred to pointedly by Lord Bingham of Cornhill in Harrow London Borough Council v Qazi.166 He concluded, in the context of an appeal concerning the validity of a termination of a joint tenancy in light of Art 8 of the European Convention on Human Rights (the right to respect for private and family life, home and correspondence), that ‘few things are more central to the enjoyment of human life than having somewhere to live’.167 By a narrow majority, the House of Lords held that the Human Rights Act did not confer a right on the co-joint tenant that prevailed over the landlord’s common law right to possession. Contrast this case with the decision of the European Court of Human Rights in Connors v United Kingdom,168 where a family of ‘gypsies’ was evicted from a local authority site by the owner. The court held that there were insufficient procedural protections of the family’s rights in the local law as required by Art 8. The family was awarded compensation for its loss of the

[page 41] site. Clearly, this decision qualifies Qazi. Some further elaboration of relevant principles was conducted in the conjoined appeals in Kay v Lambeth London Borough Council and Leeds City Council v Price, where a seven-judge panel of the House of Lords, by a majority of 4:3, largely affirmed the majority view in Qazi.169 1.78 The Parliament of Victoria has introduced the Charter of Human Rights and Responsibilities Act 2006 (Vic) (the Victorian Charter). Section 13 of the Victorian Charter echoes Art 8 of the European Convention on Human Rights (European Convention). It provides that a person ‘has the right (a) not to have his or her … home … unlawfully or arbitrarily interfered with’. Also, s 20 of the Victorian Charter, labelled ‘Property Rights’, contains a provision similar to Art 1 of Protocol No 1 of the European Convention. Section 20 states: ‘A person must not be deprived of his or her property other than in accordance with law’. The courts will be required to interpret legislation consistently with the Victorian Charter wherever possible, as long as this does not disturb the purpose behind the legislation. The European authorities appear to be directly relevant to the interpretation of this provision. Although New South Wales does not yet have a Human Rights Act, there is mounting political pressure to adopt one, so that the overseas jurisprudence may have increasing relevance here. In any event, international developments can influence judicial discretion in hard cases separately, as demonstrated in Mabo (No 2),170 and the delicate balancing act involved when judges in other jurisdictions seek to reconcile human rights law with property law will continue to resonate with policy debates about the legitimate boundaries of property rights in Australia.171

Conclusion 1.79 The rights considered above as property rights involved an examination of the boundary between property rights and other sorts of rights external to property law. It follows that property law can be seen as a subcategory of private law

concerned with the rights individuals have over things, which at the same time directly impact on the property rights and civil rights of others. By contrast to the external boundaries of property law, there is a host of distinctions internal to property law, whereby property rights are classified depending on the nature of the thing over which rights are claimed, and the nature of the rights claimed. This is the subject of the Chapter 2, which will outline the divisions governing the principles that underpin the layout of this book.

1.

We engage with property in land (known as real property) and with other non-land property (known as either personal property, personalty or choses), such as cars, chairs or shares. The term ‘personal property’ is not to be confused with the term ‘personal right’. The latter, although it sounds similar to ‘personal property’, actually denotes a non-proprietary interest such as a licence.

2.

For a discussion on poverty, see A Durbach, B Edgeworth and V Sentas, Law and Poverty in Australia: 40 Years after the Poverty Commission, The Federation Press, Sydney, 2017, particularly C Goldie and B Edgeworth, ‘Law, Poverty and Inequality in Contemporary Australia’, Ch 5, p 73.

3.

G Alexander and E Penalver, An Introduction to Property Theory, Cambridge University Press, New York, 2012, p 1.

4.

V Milligan, J Yates and H Pawson, Submission to the Council for Federal Financial Relations Affordable Housing Working Group, City Futures Research Centre, Faculty of Built Environment, University of NSW Australia, Sydney, 20 16; C Martin, Submission to the Review of the Residential Tenancies Act 2010 (NSW), City Futures Research Centre, Faculty of Built Environment, University of NSW Australia, Sydney, 2016; H Pawson and S Herath, Disadvantaged Places in Urban Australia: Residential Mobility, Place Attachment and Social Exclusion, AHURI Final Report No 243, Australian Housing and Urban Research Institute Limited, Melbourne (accessed 29 May 2017), .

5.

See, eg, the land resumptions associated with the WestConnex motorway in Sydney’s south west (accessed 2 April 2017), .

6.

Legislation approving the sale of land titling services in New South Wales was passed in September 2016, and the concession is expected to commence in 2017. Land Property Information (LPI) (a division of a larger government department) is responsible for land titling services. Other landrelated services such as valuations and titling have been privatised previously.

7.

Note that in the United States, title insurance is common. If such insurance became necessary in New South Wales, it would be likely to increase costs for property owners.

8.

See, eg, The Law Society of New South Wales, Baird Government should follow UK & abandon LPI ‘cash grab’, Sydney, 5 December 2016 (accessed 1 March 2017), .

9.

Nazi Germany’s policies of expansion before and during World War II were commonly explained as a quest for more land, or ‘lebensraum’ (living space).

10.

Eg, ownership of oil was a factor in the Iraqi and Kuwaiti conflicts of the 1990s.

11.

Water lies at the heart of aspects of conflict in the Middle East. See, eg, M Zeitoun, ‘The Influence of Narratives on Negotiations over and Resolution of the Upper Jordan River Conflict’ (2013) 18(2) International Negotiation 293–322.

12.

See the marriages of European royalty and, more generally, the concept of the marriage settlement and contract. See D Wilson, Women, Marriage and Property in Wealthy Landed Families in Ireland, 1750–1850, Manchester University Press, Manchester, 2008; B J Harris, English Aristocratic Women, 1450–1550: Marriage and Family, Property and Careers, Oxford University Press, Oxford, 2002.

13.

See, eg, the rationale for the introduction of the English Statute of Uses 1535. The statute was designed to limit the effect of the use (a precursor to the modern day trust) because putting property behind a use limited the King’s capacity to collect taxes. (Seisin was absent and it was on the basis of seisin that taxes were collected.) See F W Maitland, Equity, Cambridge University Press, Cambridge, 1949, p 34, for a discussion on the statute. See Chapter 6 at 6.3.

14.

As observed above, conflict between the state and individuals concerning property is also evident in relation to compulsory acquisitions; an issue that has been explored in popular culture, in films such as The Castle.

15.

C M Rose, Property and Persuasion: Essays on the History, Theory, Rhetoric of Ownership, Westview Press, Boulder, 1994, discusses how property either defies definition or is a contested term.

16.

J Waldron, The Right to Private Property, Clarendon Press, Oxford, 1998, p 26.

17.

J W Singer, ‘Property as the Law of Democracy’ (2014) 63 Duke Law Journal 1287–1335.

18.

C Harpum, S Bridge and M Dixon, Megarry and Wade: The Law of Real Property, 7th ed, Sweet and Maxwell, London, 2008, pp 6, 93.

19.

Note that, within the sphere of property, there is a range of subcategories (diagrammatically represented in Chapter 2 at 2.1). The range includes real property and personal property. As Cooke explains, the law also upholds personal rights that are not proprietary at all. She observes that the overlap in terminology is unfortunate. See E Cooke, Land Law, 2nd ed, Clarendon Press, Oxford, 2012, p 6.

20.

E Cooke, Land Law, note 19 above, p 6.

21.

None of the pre-colonial, Portuguese colonial nor Indonesian eras of rule in East Timor relied on a common law system.

22.

D Fitzpatrick, Land Claims in East Timor, Asia Pacific Press, Canberra, 2002; D Fitzpatrick, A McWilliam and S Barnes, Property and Social Resilience in Times of Conflict: Land, Custom and Law in East Timor, Ashgate, Aldershot, 2012.

23.

K Gray and S Francis Gray, Elements of Land Law, 5th ed, Oxford University Press, Oxford, 2009, p 2.

24.

See Chapter 4.

25.

W Blackstone, Commentaries on the Laws of England, Dawsons, London, 1966, Vol II, p 2.

26.

Blackstone, note 25 above, Vol II, p 2.

27.

See, eg, Water Management Act 2000 (NSW); ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140. See J Gray and L Lee, ‘National Water Initiative Styled Water Entitlements as Property: Legal and Practical Perspectives’ (2016) 33 Environmental Planning and Law Journal 284; J Gray and L Lee, ‘Water Entitlements as Property: A Work in Progress or Watertight Already?’ in C Holley and D Sinclair, Reforming Water Law and Governance: Lessons from Leading-Edge Australian Water Strategy,

Springer, Singapore, forthcoming, 2017. Note that in Tasmania and Queensland, unlike New South Wales, the legislature specifically declares that a water licence is the personal property of the licensee. See Natural Resources Management Act 2004 (SA) s 146(8); Water Management Act 1999 (Tas) s 60. More generally, see A Scott, The Evolution of Resource Property Rights, Oxford University Press, 2008, Oxford. 28.

See, eg, Griffiths J in Bernstein v Skyviews & General Ltd [1978] QB 479 at 488. See also Chapter 8. This question is explored in detail in S Grattan, ‘Judicial Reasoning and the Adjudication of Airspace Trespass’ (1996) 4 APLJ 128.

29.

S Bowles and H Gintis, Democracy and Capitalism: Property, Community and the Contradictions of Modern Social Thought, Routledge, London, 1986, p 27.

30.

Davis v Commonwealth (1988) 166 CLR 79; 82 ALR 633. See 1.74.

31.

See, eg, J W Singer, The Edges of the Field: Lessons on the Obligations of Ownership, Beacon Press, Massachusetts, 2000; J W Singer, Entitlements: The Paradoxes of Property, Yale University Press, Yale, 2000.

32.

K Gray, ‘Property in Thin Air’ (1991) 50 Cam LJ 252.

33.

Stow v Mineral Holdings (Australia) Pty Ltd (1977) 180 CLR 295; 14 ALR 397. For further discussion of this case, see 1.75. However, it should be noted that increased rights of access, according to scholars such as Gray, may be characterised as a new form of property. See K Gray, ‘Regulatory Property and the Jurisprudence of Quasi-Public Trust’ (2010) 32 Syd LR 22.

34.

J Bentham, Principles of the Civil Code, C K Ogden (ed), 1931, Ch VIII; cited in C B Macpherson (ed), Property: Mainstream and Critical Positions, Blackwell, Oxford, 1978, p 52.

35.

Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141.

36.

Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 at 171. As will be seen later, this case was overturned in Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 (Mabo (No 2)).

37.

For the present law in relation to native title, see Chapter 4.

38.

F Snare, ‘The Concept of Property’ (1972) 9 American Philosophical Quarterly 200 at 202–4. See also G Calabresi and A Douglas Melamed, ‘Property Rules, Liability Rules, and Inalienability: One View of the Cathedral’ (1972) 85 Harv L Rev 1089. This enormously influential theoretical framework was celebrated in the 1997 special issue of the Yale Law Journal: (1997) 106(7) Yale LJ. The relevant articles come from a symposium: Property Rules, Liability Rules, and Inalienability: A Twenty-Five Year Retrospective, pp 2083–213.

39.

A M Honoré, ‘Ownership’, in Oxford Essays in Jurisprudence, A G Guest (ed), Clarendon Press, Oxford, 1961, pp 107–47.

40.

See, generally, W Twining, Karl Llewellyn and the Realist Movement, Weidenfeld and Nicolson, London, 1973.

41.

W Hohfeld, ‘Some Fundamental Legal Conceptions As Applied in Judicial Reasoning’ (1913) 23 Yale LJ 16 at 24.

42.

For details of this theory, see 1.23–1.26.

43.

See the Fourteenth Amendment, US Constitution: ‘No individual can be deprived of property without due process of law’.

44.

For an excellent discussion of this and related issues, see E Keynes, Liberty, Property and Privacy: Toward a Jurisprudence of Substantive Due Process, Pennsylvania State University Press, Pennsylvania,

1996, especially Chs 5 and 6. 45.

Lochner v New York 198 US 45 (1905).

46.

Coppage v Kansas 236 US 1 at 17 (1915).

47.

Keynes, Liberty, Property and Privacy, note 44 above, p 128.

48.

F Cohen, ‘Transcendental Nonsense and the Functional Approach’ (1935) 35 Colum L Rev 809.

49.

See, eg, West Coast Hotel Co v Parrish 300 US 379 (1937). For a detailed account of this period, see Keynes, Liberty, Property and Privacy, note 44 above, Ch 6.

50.

M Cohen, ‘Property and Sovereignty’ (1927) 13 Cornell L Rev 8.

51.

Cohen, ‘Property and Sovereignty’, note 50 above, at 14.

52.

On this general point, see T C Grey, ‘The Disintegration of Property’ in J R Pennock and J W Chapman (eds), Nomos XXII: Property, New York University Press, New York, 1980, pp 69–85; and, from a Marxist perspective, K Renner, The Institutions of Private Law in Relation to their Social Function, O Kahn-Freund (ed), A Schwarzschild (trans), Routledge, London, 1949.

53.

Grey, ‘The Disintegration of Property’, note 52 above, pp 76–7.

54.

G Alexander, Commodity and Proprietary: Competing Visions of Property in American Legal Thought, University of Chicago, Chicago, 1997, p 19. Note also that Penner observes that ‘[t]he currently prevailing understanding of property in what might be called mainstream Anglo-American legal philosophy is that property is best understood as a “bundle of rights”’ in J E Penner, ‘The “Bundle of Rights” Picture of Property’ (1995) 43 UCLA L Rev 711 at 712.

55.

Key proponents of property as the law of things include Smith and Penner. See H E Smith, ‘Property as the Law of Things’ (2012) 125 Harv L Rev 1691; J E Penner, The Idea of Property in Law, Clarendon Press, Oxford, 1997, pp 68–73. See also R C Ellickson, ‘Two Cheers for the Bundle-of-Sticks Metaphor, Three Cheers for Merrill and Smith’ (2011) 8 (3) Econ Journal Watch 215. Note that other scholars such as Merrill have chosen to emphasise one stick in the bundle of rights as being paramount. Merrill emphasises the exclusion stick alone rather than a bundle of sticks. See T W Merrill, ‘Property and the Right to Exclude’ (1998) 77(4) Neb L Rev 730; T W Merrill, ‘Property and the Right to Exclude II’ (2014) 3 Brigham-Kanner Property Rights Conference Journal 1.

56.

Eg, see H E Smith, ‘Institutions and Indirectness in Intellectual Property’ (2009) 157 U Pa L Rev 2083 as cited in J Baron, ‘Rescuing the Bundle of Rights Metaphor’ (2014) (82) 1 Cincinnati L Rev 57.

57.

H E Smith, ‘Property as the Law of Things’ (2012) 125 Harv L Rev 1691 at 1703, as cited in Baron, ‘Rescuing the Bundle of Rights Metaphor’, note 56 above.

58.

T W Merrill, ‘The Property Strategy’ (2012)160 U Pa L Rev 2061.

59.

J Baron, ‘Rescuing the Bundle of Rights Metaphor’ (2014) (82) 1 Cincinnati L Rev 57 at 59.

60.

Baron, ‘Rescuing the Bundle of Rights Metaphor’, note 59 above.

61.

M Heller, ‘Boundaries of Private Property’ (1997) 108 Yale LJ 1163 at 1193.

62.

See N Graham, ‘Dephysicalisation and Entitlement: Legal and Cultural Discourses of Place as Property’ in B Jessup and K Rubenstein (eds), Environmental Discourses in Public and International Law, Cambridge University Press, Cambridge, 2012; E Freyfogle, On Private Property: Finding Common Ground on the Ownership of Land, Beacon Press, Boston, 2007, p vii.

63.

For a discussion of property as a thing, see Smith, ‘Property as the Law of Things’, note 57 above, at 1691. For a discussion of the weaknesses in the bundle of sticks approach as it applies to land, see N Graham, Lawscape, Routledge, Abingdon, 2011.

64.

Macpherson (ed), Property: Mainstream and Critical Positions, note 34 above.

65.

J Locke, Second Treatise on Government, P Laslett (ed), Cambridge University Press, Cambridge, 1964, [28].

66.

Locke, Second Treatise on Government, note 65 above, [28].

67.

Locke, Second Treatise on Government, note 65 above, [27]–[28].

68.

Locke, Second Treatise on Government, note 65 above, [37].

69.

Locke, Second Treatise on Government, note 65 above, [26].

70.

R A Williams, The American Indian in Western Legal Thought: The Discourses of Conquest, Oxford University Press, Oxford, 1990.

71.

L M G Clark, ‘Women and Locke: Who Owns the Apples in the Garden of Eden?’ in L M G Clark and L Lange (eds), The Sexism of Social and Political Theory: Women and Reproduction from Plato to Nietzsche, University of Toronto Press, Toronto, 1979, p 33.

72.

J Bentham, The Theory of Legislation, C K Ogden (ed), Kegan Paul, London, 1931, Ch X; cited in Macpherson (ed), Property: Mainstream and Critical Positions, note 34 above, p 55.

73.

See 1.11.

74.

S R Munzer, A Theory of Property, Cambridge University Press, Cambridge, 1990, p 203.

75.

R Posner, Economic Analysis of Law, Little, Brown & Co, Boston, 1973, p 11. For an excellent brief introduction to the economic analysis and justification of property rights, see A Clarke and P Kohler, Property Law: Commentary and Materials, Cambridge University Press, Cambridge, 2005, pp 42–50.

76.

This is explored in detail by G Hardin, ‘The Tragedy of the Commons’ in B Ackerman (ed), Economic Foundations of Property Rights, Little, Brown & Co, Boston, 1975, p 4ff.

77.

See, eg, G G Stevenson, Common Property Economics: A General Theory of Land Use Applications, Cambridge University Press, Cambridge, 1990.

78.

A Carter, The Philosophical Foundations of Property Rights, Harvester, New York, 1989, p 68. See also B Ziff, Principles of Property Law, 6th ed, Carswell, Ontario, 2014; E Ostrom, Governing the Commons, Cambridge University Press, New York, originally published 1990, reprinted 2015.

79.

See D W Bromley, Environment and Economy: Property Rights and Public Policy, Blackwell, Oxford, 1991.

80.

In relation to telecommunications, see K Gray, ‘Regulatory Property and the Jurisprudence of Quasi-Public Trust’ (2010) 3 Syd LR 2. In relation to sewerage infrastructure, see J Gray and A Gardner, ‘Legal Access to Sewage and the Re-invention of Wastewater’ (2008) 12(2) Australasian Journal of Natural Resources Law and Policy 115–59. More generally, see also J Stiglitz, The Price of Inequality, Penguin, London, 2013, especially Ch 4; T Picketty, Capital in the Twenty First Century, Arthur Goldhammer (trans), Harvard University Press, Cambridge, MA, 2014.

81.

So, for example, in the United States, where there are more of these services in private hands than in any other of the advanced capitalist countries, there is extensive poverty, despite the fact that it is one of the wealthiest societies.

82.

Further, in the water trading sector many sellers have been characterised as ‘unwilling sellers’. They have little real freedom to decide if they will sell their privatised water entitlements. Decisions to sell have commonly been driven by drought and ensuing weak financial positions.

83.

See, generally, H Braverman, Labor and Monopoly Capital, Monthly Review Press, New York, 1974.

84.

K Marx, Theories of Surplus Value, Lawrence and Wishart, London, 1969.

85.

See Z Bauman, ‘Communism: A Postmortem’ in Intimations of Postmodernity, Routledge, London, 1992.

86.

R H Tawney, The Sickness of an Acquisitive Society, Allen & Unwin, London, 1920; cited in Macpherson (ed), Property: Mainstream and Critical Positions, note 34 above, p 150.

87.

R Knieper, ‘Property and Contract’ (1980) 4 Int Jnl of the Soc of Law 423.

88.

Note that socially beneficial investment has become a topical issue in the superannuation context.

89.

For an extended discussion of the political preferences of the realists, see A Hunt, The Sociological Movement in Law, Macmillan, London, 1978, Ch 3.

90.

G S Alexander, E M Penalver, J W Singer and L S Underkuffler, ‘A Statement of Progressive Property’ (2009) 94 Cornell L Rev 743.

91.

Alexander, Penalver, Singer and Underkuffler, ‘A Statement of Progressive Property’, note 90 above.

92.

Alexander, Penalver, Singer and Underkuffler, ‘A Statement of Progressive Property’, note 90 above. For further consideration of progressive property, see J A Lovett, ‘Progressive Property in Action: The Land Reform (Scotland) Act 2003’ (2011) 89(4) Neb L Rev 739; E Rosser, ‘The Ambition and Transformative Potential of Progressive Property’ (2013) 101(1) Cal L Rev 107. In response to Rosser, see T M Mulvaney, ‘Progressive Property Moving Forward’ (2014) 5 California Law Review Circuit 349.

93.

Clark, ‘Women and Locke: Who Owns the Apples in the Garden of Eden?’, note 71 above, p 33.

94.

For practical examples of how the application of property principles contribute to gender-based inequality, see S Moa, A Human Rights Approach to Women’s Land Rights in Tonga, PhD thesis, Faculty of Law, University of NSW Australia, Sydney, Australia, submitted 2017.

95.

M Otto, ‘A Barren Future? Equity’s Conscience and Women’s Inequality’ (1992) 18 MULR 808.

96.

M Neave, ‘From Difference to Sameness — Law and Women’s Work’ (1992) 18 MULR 768.

97.

C M Rose, ‘Women and Property: Gaining and Losing Ground’ (1992) 78 Virginia L Rev 421–2.

98.

B Cass, ‘The Feminisation of Poverty’ in B Caine, E A Grosz, and M de Lepervanche (eds), Crossing Boundaries: Feminisms and the Critique of Knowledges, Allen & Unwin, Sydney, 1988.

99.

For a discussion on how the land acquisition process, which is formally gender neutral, fails to consider the ways in which women may be disadvantaged by land acquisition, see M Manuchehri, ‘Large-Scale Land Acquisitions and Applying a Gender Lens to Supply Chain Reform’ (2016) 25(2) Washington International LJ 365. One of Manuchehri’s arguments is that while companies consider international legal norms about free, prior and informed consent and the United Nations Guiding Principles on Business and Human Rights so as to avoid ‘land grabs’ in the Global South, they do not specifically consult with women. She concludes that if women were consulted, there would be fewer adverse effects on communities.

100. The original Feminist Judgment Project was undertaken by a group of socio-legal scholars in the

United Kingdom. They took a selection of significant English judgments and rewrote alternative feminist judgments. The material is published in R Hunter, C McGlynn and E Rackley (eds), Feminist Judgments: From Theory to Practice, Hart, 2010. In particular, see pp 12–13. Note that the book includes a ‘property and markets’ section featuring the following cases: Royal Bank of Scotland v Etridge (No 2) [2001] 4 All ER 449; Baird Textile Holdings v Marks & Spencer Plc [2001] EWCA Civ 274. See also R Hunter, ‘Can Feminist Judges Make a Difference?’ (2008) 15 International Journal of the Legal Profession 7; H Douglas, F Bartlett, T Luker and R Hunter (eds), Australian Feminist Judgments: Righting and Rewriting Law, Hart, 2014. Note that the latter reference contains an equity judgment but not a property law judgment specifically. 101. R West, ‘Jurisprudence and Gender’ (1988) 55 U Chi L Rev 1. 102. K Green, ‘Being Here — What Can a Woman Say About Land Law?’ in A Bottomley (ed), Feminist Perspectives on the Law Curriculum, Cavendish, London, 1996, p 95. 103. Green, ‘Being Here — What Can a Woman Say About Land Law?’ note 102 above, p 95 (italics in original). 104. J L Schroeder, ‘Chix Nix Bundle-O-Stix: A Feminist Critique of the Disaggregation of Property’ (1994) 93 Mich L Rev 239. 105. See, eg, C Smart, ‘Feminist Jurisprudence’ in P Fitzpatrick (ed), Dangerous Supplements, Pluto Press, London, 1991, pp 133–58. 106. H Carr and S Wong, ‘Feminist Approaches to Property Law Research’ (2014) 3 Property Law Review 247. 107. For other feminist approaches to a range of property interactions see C Grant Bowman, ‘Path from Feminist Legal Theory to Environmental Law and Policy’ (2013) 22(3) Cornell Journal of Law and Public Policy 641; H Lim and A Bottomley, Feminist Perspectives on Land Law, Routledge, Abingdon, 2007. 108. Munzer, A Theory of Property, note 74 above, p 247. 109. This line of argument echoes that of John Rawls generally in relation to social justice: see J Rawls, A Theory of Justice, Harvard University Press, Cambridge, Mass, 1971. For a more recent elaboration, see M Nussbaum, Frontiers of Justice, Harvard University Press, Cambridge, Mass, 2006. 110. Munzer, A Theory of Property, note 74 above, p 249. 111. Macpherson (ed), Property: Mainstream and Critical Positions, note 34 above, p 206. 112. C B Macpherson, Democratic Theory: Essays in Retrieval, Clarendon, Oxford, 1973, p 123. 113. Macpherson, Democratic Theory: Essays in Retrieval, note 112 above, p 125. 114. C Reich, ‘The New Property’ (1964) 73 Yale LJ 733. 115. C B Macpherson, ‘A Political Theory of Property’ in Macpherson, Democratic Theory: Essays in Retrieval, note 112 above, p 131. 116. T C Grey, ‘The Disintegration of Property’ in Pennock and Chapman (eds), Nomos XXII: Property, note 52 above, pp 69–85. 117. A Erh-Soon Tay and E Kamenka, ‘Introduction: Some Theses on Property’ (1988) 11 UNSWLJ 1. 118. J Seabrook, What Went Wrong?, Victor Gollancz, London, 1978, p 31. 119. T Prosser and M Moran, Privatization and Regulatory Change in Europe, Open University Press, Buckingham, 1994; B Edgeworth, Law, Modernity, Postmodernity: Legal Change in the Contracting

State, Ashgate, Aldershot, 2003, Ch 5. Note, however, Gray’s proposition that a new kind of more democratic property has been born, that is, regulatory property. This type of property is underpinned by a right of access. See K Gray, ‘Regulatory Property and the Jurisprudence of Quasi-Public Trust’ (2010) 32 Syd LR 22. Note that the 2017 UK election results reflected support, from young voters in particular, for the policies of Labour leader, Jeremy Corbyn. Several of those policies were designed to shift ownership from private back to public (eg, through the renationalisation of the railways). It is too soon to tell, but perhaps the election results reflect the beginning of a turning tide. 120. K Gray, ‘Regulatory Property and the Jurisprudence of Quasi-Public Trust’ (2010) 32 Syd LR 22. 121. See further, Chapter 11. 122. Cowell v Rosehill Racecourse Co Ltd (1969) 56 CLR 605; 43 ALR 69. 123. King v David Allen & Sons, Billposting Ltd [1916] 2 AC 54. 124. Georgeski v Owners Corp SP49833 (2004) 62 NSWLR 534. 125. This is known as the numerus clausus [closed list] principle that limits the creation of new interests, particularly in land. See further, B Edgeworth, ‘The Numerus Clausus Principle in Australian Property Law’ (2006) 32 Mon ULR 387. 126. On this point, see further Chapter 6. 127. Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 at 272. See Chapter 4 more generally for discussion of this case and Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 128. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 129. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 36; 107 ALR 1 at 36. 130. R H Bartlett, ‘The Proprietary Nature of Native Title’ (1998) 6 APLJ 77. 131. King v David Allen & Sons, Billposting Ltd [1916] 2 AC 54. 132. See, eg, B G Hanneman, ‘Body Parts and Property Rights: A New Commodity for the 1990s’ (1993) 22 Sw U L Rev 399. For a wide-ranging and insightful analysis, see M Davies and N Naffine, Are Persons Property? Legal Debates about Property and Personality, Ashgate, Aldershot, 2001. 133. Moore v Regents of the University of California 793 P 2d 479 (1990). 134. See, eg, Moore v Regents of the University of California 793 P 2d 479 (1990) at 510 per Mosk J. 135. For a discussion of the pros and cons of the propertisation of human body parts, see Australian Law Reform Commission, Essentially Yours: The Protection of Human Genetic Information in Australia, ALRC Report 96, Ch 20 (accessed 12 June 2017), . 136. Doodeward v Spence (1908) 6 CLR 406. 137. For the general principles involved in protecting personal property rights, see Chapter 2. 138. Yearworth v North Bristol NHS Trust [2009] 3 WLR 118 at [45]. 139. Edwards; Re the Estate of Edwards [2011] NSWSC 478. For a general discussion, see L Bennett Moses, ‘Property in Sperm’ (2011) 1 Prop L Rev 135–9. 140. Roblin v the Public Trustee for the Australian Capital Territory and Labservices Pty Ltd [2015] ACTSC 100. 141. Doodeward v Spence (1908) 6 CLR 406.

142. Roche v Douglas [2000] WASC 146. 143. Yearworth v North Bristol NHS Trust [2009] EWCA Civ 37. 144. Bazley v Wesley Monash IVF Pty Ltd [2011] 2 Qd R 207. See M Quigley, ‘Property in Human Biomaterials – Separating Persons and Things?’ (2012) 32(4) Oxford Journal of Legal Studies 659. Quigley summarises the English law on property in human biomaterials and argues that separation from a person as a criterion for determining whether something is property is philosophically problematic. See also N Rolf, ‘Making Something into Nothing: Reforming the “No Property” Rule for Human Tissue’ (2013) 21 Journal of Law and Medicine 312, which compares the legal position in Australia regarding property in regenerative tissue to the legal position in the United States and United Kingdom, and proposes a framework for property rights at common law. 145. Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 at 507. 146. Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 at 507. 147. Moorgate Tobacco Pty Ltd v Philip Morris Pty Ltd (1984) 156 CLR 414 at 445–6; 56 ALR 193 at 214. See further, K Gray, ‘Property in Thin Air’ (1991) 50 Cam LJ 252. 148. See M Walpole and J Gray, ‘Taxing Virtually Everything: Cyberspace Profits, Property Law and Taxation Liability’ (2010) 39 Australian Taxation Review 1. 149. For an overview of these arguments, see D Ellinson, ‘A New “Breed” of Intellectual Property Rights’ (1988) 62 LIJ 742. 150. Foster v Mountford (1976) 14 ALR 71. 151. For instance, Seager v Copydex Ltd [1967] 2 All ER 415 (information about an invention). 152. Smith, Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health (1990) 95 ALR 87 at 135. 153. Dorman v Rogers (1982) 148 CLR 365. 154. Clyne v NSW Bar Association (1960) 104 CLR 186 at 205. 155. Dorman v Rogers (1982) 148 CLR 365 at 367. 156. Dorman v Rogers (1982) 148 CLR 365 at 369. 157. Dorman v Rogers (1982) 148 CLR 365 at 370. 158. Note that in Cunningham v Commonwealth of Australia [2016] HCA 39, the High Court considered whether a politician’s retirement allowance (as opposed to a right to work) was property. French CJ and Kiefel and Bell JJ concluded that ‘if a right or entitlement was always, of its nature, liable to variation, apart from the fact that it was created by statute, a variation later effected cannot properly be described as an acquisition of property’: at [46]. 159. Davis v Commonwealth (1988) 166 CLR 79; 82 ALR 633. See also 1.5. 160. Davis v Commonwealth (1988) 166 CLR 79 at 100; 82 ALR 633 at 645 per Mason CJ, Deane and Gaudron JJ. 161. Stow v Mineral Holdings (Australia) Pty Ltd (1977) 180 CLR 295; 14 ALR 397. 162. Stow v Mineral Holdings (Australia) Pty Ltd (1977) 180 CLR 295 at 312; 14 ALR 397 at 411 per Aickin J. 163. See 1.5. Clarke and Kohler, Property Law: Commentary and Materials, note 75 above, add a further refinement by distinguishing between ‘open access communal property’ and ‘state property’: at pp 35–41. Public rights are relevant to the former but not the latter.

164. As an aside, it can be noted that there are proponents of property rights for wild animals as well as for humans. See J Hadley, Animal Property Rights: A Theory of Habitat Rights for Wild Animals, Lexington Books, Lanham, MD, 2015. 165. Davis v Commonwealth (1988) 166 CLR 79; 82 ALR 633. 166. Harrow London Borough Council v Qazi [2004] 1 AC 983. 167. Harrow London Borough Council v Qazi [2004] 1 AC 983 at [8]. 168. Connors v United Kingdom [2004] EHRR 189. 169. Kay v Lambeth London Borough Council; Leeds City Council v Price [2006] 2 AC 465. For a discussion of these cases, see K Gray and S Gray, Elements of Land Law, 5th ed, Oxford University Press, Oxford, 2009, pp 123–31. 170. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 42; 107 ALR 1. See further, Chapter 4. 171. Note that the Australian Capital Territory also has the Human Rights Act 2004 (ACT) (of which s 12 protects the right of a person ‘not to have his or her privacy, family, home [emphasis added] or correspondence interfered with unlawfully or arbitrarily’). Further, in 2016 the Premier of Queensland announced that the Queensland Government will introduce a Human Rights Act following the recommendations of a parliamentary inquiry. See Anti-Discrimination Commission, Queensland, Human Rights Act for Qld, media release, 31 October 2016 (accessed 22 May 2017), .

[page 43]

Chapter 2

Land, Fixtures and Chattels Introduction 2.1 The common law has traditionally classified property rights by reference to the nature of the object over which rights are held, on the one hand, and the specific bundle of rights that are asserted in respect to it, on the other. The objects of property have been divided into two basic categories: 1.

real property, or realty; and

2.

personal property, or personalty. These have been further subdivided, as illustrated in Figure 2.1.1 Figure 2.1:

Categories of property

Land 2.2 Land, also known as ‘realty’ or ‘real property’, is defined as rights over land and anything annexed to it. It may also include a quantum of airspace. This particular category [page 44] of property is also known, for obvious reasons, as ‘immovables’. The distinct physical features of land, including its immovability, in conjunction with its economic and social significance, have given rise to a particular pattern of legal regulation. As can be seen from Figure 2.1, realty is itself divided into two separate categories: corporeal and incorporeal. Corporeal property, or ‘hereditaments’,2 refers to rights to the land itself. Incorporeal property, by contrast, relates to rights over the land. The distinction is somewhat artificial: even someone who owns the land itself generally only values the rights over that land. Still, in so far as the distinction identifies different orders of rights — such as a right of occupation, as opposed to a right of way — it is a useful heuristic device for ranking different types of rights. As a preliminary matter, we need to define ‘land’. In addition to the physical earth, it is generally considered to include anything attached to it, and the airspace above it. Land also includes fixtures; that is, those chattels that have become part of the realty. A chattel will be considered to be affixed to the realty — and therefore a part of it — if it is annexed to the realty. The detailed rules relating to the definition of land, and the doctrine of fixtures, will be discussed below.3

Personalty 2.3 As Figure 2.1 illustrates, there are two distinct classes of personalty, or personal property: chattels real, or leaseholds, and pure personalty. The first category, leaseholds, is more naturally a part of real property and will be treated as such later.4 Leaseholds have been classified as personalty for historical rather than conceptual reasons. Within the framework of the

common law, the lease was originally conceived as affording personal rights only on the lessee. It followed that if, for example, the lessee was dispossessed by a third party, his or her only remedy was an action of damages, which was the same limited remedy as was available in respect of other chattels. To this extent, the lease resembled chattels more than land.5 By contrast, an essential feature of real property was a right to repossession of the land or thing (in Latin, res). The feudal prejudice against the lease disappeared by the middle of the 17th century, but too late to affect the system of classification of property rights that had already developed. Distinguishing between land and chattels on the basis of available remedies has also been largely superseded, since it is now possible to get an order for repossession of a chattel in much the same way as for land.6

Choses in possession 2.4 The words ‘choses in possession’, ‘chattels’ and ‘goods’ denote tangible personal property. The terms refer to physical things that are not land, such as cars, paintings and [page 45] clothing. The tangible nature of such property has direct consequences for the manner in which certain types of proprietary rights are created over it. So, for example, if a person takes a thing into his or her physical possession, he or she will have some proprietary rights over it. Of course, these rights may be limited if superior rights lie in someone else, as in the case where an owner loses an object and a stranger finds it.7

Choses in action 2.5 Choses in action are property rights over intangible things, covering rights as diverse as intellectual property (copyright, patents, industrial designs and confidential information), shares, rights to payment of debts, and money. Clearly, it is not possible to acquire rights over intangible property in the same

manner as it is over tangible property. For instance, intangible property cannot be possessed physically, so it cannot give rise to possessory rights. Similar considerations apply to the transfer of rights over such property. As the economies of advanced industrialised societies become increasingly information based, this area of property has assumed growing social, financial and economic significance. One useful way of distinguishing between the two sets of rights (tangible and intangible) is by comparing ownership of a book with ownership of the right to make copies of the book.8 The former is an example of a chose in possession, or chattel; the latter is a form of intangible property. There is no physical thing over which the copyright owner has rights; he or she only has a right of reproduction.

What is Land? 2.6 The meaning of this term is not self-evident. In addition to the physical earth, land is generally considered to include the airspace above it, as well as the minerals, vegetation and buildings on it. Furthermore, even if the earth is removed, the owner of the land still retains rights to the space it once occupied. The airspace can be sold as land in its own right.9 This sense of land as including both airspace and subsoil is captured in the Latin expression cuius est solum eius est usque ad coelum et usque ad inferos: ‘ownership of land extends up to heaven and down to the centre of the earth’.10 The courts and legislatures have significantly trimmed the expanse of rights implied in the Latin ‘fanciful phrase’.11 To confer such broad rights on owners would clearly impact adversely on others and the public generally, who might have a legitimate need to use the land’s airspace and subsoil.12 [page 46]

Airspace 2.7 Subject to zoning laws, the owner of land may use his or her airspace to build to any height and for any purpose.13 As for excluding others, he or she is entitled to use so much of the airspace as is necessary for the reasonable

enjoyment of the land. In Bernstein of Leigh (Baron) v Skyviews and General Ltd,14 the owner of land objected to aircraft flying some hundreds of feet over his property for sightseeing purposes. The court held that to allow trespass15 in respect of this type of activity would be an unreasonable use of the land, concluding that the owner has exclusive rights to the airspace ‘to such height as is necessary for the ordinary use of the land and the structures upon it’.16 Moreover, in 1937 in Victoria Park Racing Co v Taylor,17 the High Court held that inspecting land and watching activities taking place on it, such as sporting events, from an adjacent property, is not actionable either as a trespass or nuisance. 2.8 Invasions of the airspace over which the owner has exclusive rights, however transient, are actionable as trespass. So, where a horse bit and kicked another through a fence, the defendant was held liable.18 It was once thought that firing a bullet through the airspace of an owner’s land would not of itself amount to trespass, but would if it struck buildings or the land.19 However, in Davies v Bennison,20 where the defendant shot a cat sitting on a shed, it was held that even if the bullet touched nothing on the owner’s land it would be trespass. If the jib of a crane on land intrudes into a neighbour’s airspace, it will constitute trespass.21 The plaintiff may be entitled to an injunction to stop the interference.22 A court may refuse to grant an injunction if the trespass is trivial23 or where the owner has rejected reasonable offers of compensation.24 Statute now provides that courts may grant easements over land25 or rights of access over land,26 for the purposes of building, repair or maintenance of adjoining land. Other examples of trespass are advertising signs protruding into a neighbour’s airspace,27 overhead electric cables28 and encroaching walls.29 Overhanging trees, however, do not constitute trespass. The intrusion caused by trees is considered to be a consequential, rather [page 47] than direct, encroachment. Therefore, the remedy is in nuisance, which requires proof that the protruding branches caused actual damage.30

2.9 By s 72(1) of the Civil Liability Act 2002 (NSW) (contained within Pt 12 ‘Damage by Aircraft’), there is no right to sue in trespass for flight over property at a height: … above the ground that is reasonable (having regard to wind, weather and all the circumstances of the case) so long as the Air Navigation Regulations are complied with.31

This provision is clearly consistent with the extent of the right to sue in trespass spelled out in Bernstein. Section 73 of the Civil Liability Act imposes strict liability for any ‘material loss or damage’ caused by overflying aircraft. It was held that damage resulting from vibrations caused by aircraft is covered by the equivalent English provision.32

Subsoil 2.10 Scant authority exists about the extent of the rights of an owner below the surface. There is no reason why the same policy reasons that impose limits on airspace rights should not equally apply to the subsoil. Yet one Kentucky case held that where a cave entrance on land held by A extended under land held by B at a point 350 feet below the surface, it was trespass for A to use it at that point.33 In the absence of a specific statutory restriction or a reservation to the Crown in the original Crown grant, the owner has a general right to extract minerals below the surface.34 In New South Wales, original Crown grants usually reserved rights to minerals. These reservations continue to operate today, even in respect of Torrens title land, as restrictions noted on the registered title.35 According to Bradbrook,36 a more comprehensive policy of reserving minerals to the Crown was introduced by the Crown Lands Act 1884 (NSW) and continued in later legislation. Special legislation has since been passed conferring rights over specific resources such as coal, petroleum and atomic substances.37

Natural rights 2.11 Ownership of land brings with it a number of ‘natural’ rights, such as the right to support from adjacent landowners, and certain rights to water. As these rights are similar in some respects to particular types of easements, they will be dealt with in Chapter 12.38

[page 48]

Boundaries of Land 2.12 Land may have either artificial or natural boundaries. Artificial boundaries are fixed until such time as the adjacent owners agree to shift them, and remain unaffected by movements in the land itself. Natural boundaries may shift from time to time by the operation of natural forces, especially where the boundary is water. Different rules apply depending on whether the water is tidal or non-tidal.

Land bounded by tidal waters 2.13 If land is bounded by tidal waters, either because it is situated by the sea, or by a tidal river or lake, the owner owns the land up to the mean highwater mark. The mean high-water mark is the mean, assessed on an annual basis, of the highest and lowest high tides of each lunar month of the year.39 The rule applies to land held under the Torrens system.40 Land below the mean high-water mark belongs to the Crown in right of the state.41

Land bounded by non-tidal waters 2.14 At common law, if land contains non-tidal waters (whether in the form of a river or lake) the owner retains exclusive rights to the bed, the alveus.42 But if land is bounded by non-tidal waters, ownership of the land confers rights up to the ‘middle line’ (in Latin, the medium filum) of the water.43 The rule has been held to apply to Torrens title land.44 The common law rule is effectively obsolete in regard to both non-tidal lakes and rivers by virtue of s 172 of the Crown Lands Act 1989 (NSW), so that the owner’s rights end where land and water meet.45

Accretion and erosion 2.15 Though the natural processes of accretion and erosion have the effect of modifying the physical boundaries of land, the legal boundaries will only change if the following requirements are met. The erosion or accretion must

be so gradual as to be imperceptible to the naked eye.46 Rapid transformations of boundaries — for instance, by avulsion, earthquake or flood — will not affect legal boundaries. In the case of land bounded by the sea, where accretion occurs, title to the increase in land will be in the landowner.47 [page 49] The principle of erosion works in a parallel way, so that any decrease in land will accrue to the Crown.48 The principles of accretion and erosion apply equally to tidal and non-tidal land, so that the rights of private, adjacent landowners will be modified in the same way. These principles have been modified by s 172(4) of the Crown Lands Act 1989 (NSW): they no longer apply to non-tidal lakes. In Southern Centre of Theosophy Inc v South Australia,49 the Privy Council held that the doctrine applies to both old system and Torrens title land, but may be excluded by agreement. In that case, the Privy Council upheld a finding that an accretion of 20 acres of land accrued to the owner of land adjacent to water. It was held that the accretion was caused by the gradual and imperceptible deposit of sand by wind and water over a period of some 70 years, notwithstanding some sudden movements of dunes at one point in the boundary. The limitations on the doctrine of accretion can be varied in the conveyance so as to include any changes in the boundaries by the operation of natural forces.50 Such a grant is known as a ‘movable freehold’.51

Fixtures Introduction 2.16 Land includes fixtures. Fixtures are chattels that have become part of the realty by virtue of having been attached to it in a particular way, or annexed to it. Where the owner of the chattel and the owner of the land are one and the same, it is ‘a matter of perfect indifference whether you call the things chattels or whether you call them parts of the house’.52 However,

annexation becomes very important in the following circumstances, for example: There is a sale of land. A contract of sale will only confer rights to the land — rights over any chattels on the land will remain with the vendor, unless the contract provides otherwise. A life tenancy comes to an end and the tenant leaves chattels by will — the remainder person will be entitled to fixtures. The owner of land gives a mortgage over the land, and later annexes chattels to the land. Who has rights over the chattels? After a mortgage is granted, the owner annexes chattels belonging to another person — for instance, pursuant to a bailment. If the mortgagee enforces the security, does the bailor retain rights over the chattels? Fixtures are annexed by a tenant. Do they become part of the landlord’s property, or do they remain the tenant’s? [page 50]

General principles 2.17 It is unsurprising that many of the leading authorities on the contemporary law of fixtures appear in the middle of the 19th century. Historically, this is the very time of the eclipse of agricultural production by industrial production. The emergence of the factory and its need for machinery with an often comparatively short useful working life gave rise to a requirement that these chattels be readily removable. Unlike agricultural fixtures such as fences, gables and barns, which were annexed in ways that paralleled the ways that buildings were constructed, and were therefore easily seen as part of the land itself, industrial machinery tended to be bolted into place. The purpose of the nut and bolt is nothing more than to annex a chattel in a way that also allows it to be easily detached. The facility of removal, however, is not necessarily conclusive as to the key question with which the law of fixtures is concerned: is the chattel to be considered part of the land, or does it retain its status as a chattel? To answer this question, more recent

authorities have come to place a greater measure of reliance on parties’ intentions, objectively construed, than was the case under the old law.53 2.18 The general principle governing fixtures is quicquid plantatur solo, solo cedit (whatever is attached to the soil becomes part of the soil).54 So, building materials delivered to a site remain chattels until they form part of a building on the land, at which time they will be part of the land. When they are severed from the land, they return to their former state as chattels. In the leading case Holland v Hodgson,55 two tests were held to be necessary to determine whether a chattel had been annexed to the land. The court will look, first, to the degree of annexation of the chattel; and second, to the object, or purpose, of annexation. The degree of annexation is a purely physical matter. Some doubt exists as to the true nature of the test for the object of annexation. There is authority that suggests that it is purely subjective.56 However, from Holland v Hodgson the court found that the circumstances surrounding the annexation will indicate the object of annexation. That formulation indicates an objective test, rather than actual intention.57 In National Australia Bank Ltd v Blacker,58 Conti J set out a number of considerations, later described as ‘useful guides’, to determine the object of annexation. These include: whether the attachment is for the better enjoyment of the item or for the land itself; the nature of the item; the purpose of the annexation; and whether the item was to be in position temporarily or permanently. [page 51] 2.19 In Agripower Barraba Pty Ltd v Blomfield,59 Sackville AJA (with whom Bathurst CJ and Beazley P agreed) noted that greater emphasis has been placed on the ‘more amorphous concept of the purpose or object of annexation’ over the degree of annexation. However, the degree of annexation remains central to determining the onus of proof. If the chattel is attached in any way, however slight, there is a presumption that it is a fixture. The question is then: Is the intention clear enough to rebut the presumption? The presumption in favour of an object being a fixture will increase in proportion to the degree of attachment.60 A corresponding presumption operates if the chattel is

unattached: in that case, it is presumed to remain a chattel. As Blackburn J’s oft-quoted dictum in Holland v Hodgson states: Perhaps the true rule is, that articles not otherwise attached to the land than by their own weight are not to be considered part of the land, unless the circumstances are such as to show that they were intended to be part of the land, the onus of showing that they were so intended lying on those who assert that they have ceased to be chattels, and that, on the contrary, an article which is affixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to show that it was intended all along to continue as a chattel, the onus lying on those who contend it is a chattel.61

In Holland v Hodgson, the owner of land installed looms in a mill by means of nails hammered into wooden beams. It was held that the circumstances indicated that they were to be part of the land. Tapestries were the subject of a number of cases, their differing outcomes illustrating the importance of the facts and surrounding circumstances of a case in applying the Holland test. In Leigh v Taylor,62 a life tenant had attached valuable tapestries to the walls by means of mounting them on wooden frames that were nailed onto the walls. The life tenant died before removing the tapestries and the question arose as to whether they passed as part of the deceased’s personal estate, or whether they formed part of the realty, and so passed to the remainderperson. The House of Lords held that the object of annexation was to enjoy the tapestries as chattels, not to annex them to the realty. Further factors indicating that they were to remain as chattels were that they could be removed without causing damage to the walls, and that a life tenant would not be expected to make such an improvement to the land. Leigh v Taylor was distinguished in Re Whaley,63 where tapestries affixed by the owner were held to be fixtures on the basis that because they were affixed by an owner, it would be reasonable to assume that an owner would want the land to be improved by their presence; and the tapestries were designed to enhance the Elizabethan character of the room in which they were displayed. Also, in Norton v Dashwood,64 tapestries were held to be fixtures because they could not be removed without damaging the brickwork, tearing the fabric and leaving the room ‘maimed and disfigured’. [page 52]

2.20 In Hobson v Gorringe,65 a contest arose between a mortgagee and the owner of a gas engine that had been hired to the landowner as part of a hire– purchase agreement. Clearly, as the engine was bolted and cemented into place, there was a strong presumption that it was a fixture. As for the object of annexation, the complicating factor was the agreement between the owner of the engine and the owner of the land, which expressly declared that the chattel would not become the property of the landowner until all instalments were paid and the option to purchase had been exercised. The land was mortgaged and, on default, the mortgagee, Gorringe, claimed ownership of the chattel. The court held that the engine was a fixture because the object of attaching the engine, evident from the circumstances which were ‘patent for all to see’, was to annex it to the land. The ‘chance agreement’ between the parties was not relevant to determining the purpose of annexation. The case is further authority of the objective nature of the ‘object of annexation’ test. Likewise, a belief on the part of a purchaser that he was buying a chattel, rather than a fixture, will not change the fixture’s status.66 2.21 Standard social or architectural practices in relation to the use of certain chattels may form part of the circumstances that indicate whether the object of annexation is to enhance the realty, or to enjoy the chattels as chattels. In Belgrave Nominees Pty Ltd v Barlin-Scott Air-conditioning (Australia) Pty Ltd,67 for example, the disputed chattel was an air-conditioning system. The court held that such systems are common features of modern high-rise office buildings and, therefore, on being attached to the realty, become fixtures. Other relevant circumstances in Belgrave were the relationship of the party making the annexation vis à vis the owner or possessor of the land, the mode of annexation, and the purpose for which the chattel was fixed.68 Similarly, the House of Lords in Elitestone Ltd v Morris69 emphasised the significance of the physical bonding between chattel and land; the practicability of removal of the fixture and its later reconstitution; and the generic character of the building. Likewise, in Reid v Smith70 a house built on brick piers, though not attached to the realty, was found to be a fixture. This was because the intention to affix was found, recognising that buildings were not generally physically annexed to the land in the area (North Queensland) because of white ant infestations. In contrast, in Attorney-General (Cth) v R T Co Pty Ltd (No 2),71 it was held

that printing presses bolted onto the floor of a basement were chattels because the intention of annexation was to steady them, not make them part of the building. In Agripower Barraba Pty Ltd v Blomfield,72 the New South Wales Court of Appeal distinguished between items stored inside and out of a shed in a processing facility. The items outside the shed were fixtures, as they were bolted to the metal bases and frames as part of an integrated [page 53] processing facility. The items inside the shed were connected to the plant and equipment but generally could be easily disconnected. These items were held to be chattels. In National Australia Bank Ltd v Blacker,73 items of irrigation equipment were held not to be fixtures, since the electric pumps and sprinkler heads rested on their own weight for operational purposes, and special valves connected to hosing could be easily removed. They were not ‘integers of the irrigation system’ because the intention was that they could be moved around the property when the need arose. Likewise, in Chelsea Yacht & Boat Co Ltd v Pope74 a houseboat moored next to, and connected to, an electrical circuit board that could be readily disconnected was held not to be a fixture. 2.22 In Palumberi v Palumberi,75 a stove and carpets were held to be fixtures on the sale of land, whereas a television antenna was held to be a chattel. All objects were attached to a small degree, but the purpose of annexation differed from chattel to chattel. So, the stove and carpet were intended to form part of the land, whereas the antenna was intended to enhance enjoyment of the television (another chattel) and, therefore, was not intended to be a fixture. The question of dishwashers arose in the cases of Hawkins v Farley76 and Segal v Obsborne.77 In Hawkins, kitchen cabinets had been constructed to incorporate the dishwasher, and tiling fitted with the dishwasher, in situ. The court found in that case that although the degree of annexation was slight, the gap left by its removal would be ‘unsightly’, and the custom design of the kitchen, to accommodate the dishwasher, meant that the dishwasher was a fixture. In Segal, Darke J distinguished Hawkins to find that the dishwasher was not a fixture. His Honour noted that although dishwashers may be intended to

remain in position for some years, in contemporary Australia they were considered replaceable, portable items; and that it was ‘not uncommon nowadays’ for dishwashers to be removed and reinstalled in another property.78 The dishwasher was located in a space designed to accommodate dishwashers generally, rather than in a custom-design, and there was no suggestion that its removal had damaged the property or the dishwasher. In Australian Provincial Co Ltd v Coroneo,79 a theatre contained rows of seats that were bolted to the floors and fastened together. The Court of Appeal refused to interfere with a finding that the seats remained chattels because they were regularly moved — the best seats went to the back for picture shows and to the front for concerts. By contrast, in [page 54] Vaudeville Electric Cinema Ltd v Muriset,80 where the premises were used exclusively as a cinema, cinema chairs that were bolted in place by the owner were held to be fixtures because the object of annexation was to provide a permanent benefit for the building. Each of these examples indicates how the particular circumstances of each case have a critical effect on whether chattels become fixtures.81 2.23 All chattels annexed to the realty before a contract of sale pass to the purchaser, subject to contrary agreement.82 Where land passes by will or on intestacy, all fixtures are included.83 In the case of mortgages, the mortgagee’s rights extend to fixtures whether they are annexed before or after the execution of the mortgage, unless the agreement provides otherwise.84 2.24 If the fixtures are the property, not of the mortgagor, but of a third party (for instance, where A hires machinery to mortgagor B), A will have a right of entry to remove the fixture, but only if the bailment agreement confers such a right. This right is an equitable interest in the land.85 As noted above,86 a mortgagee will also acquire an interest in the fixture, whether the mortgage was created before the chattel was annexed to the land or after.87 In the case of old system land, the right of the owner of the chattel may take priority over the mortgagee, but only if the mortgagee had notice.88 If the

mortgagee has no notice, he or she will take priority.89 However, if the mortgagee’s interest is equitable, the chattel owner’s right of entry will usually take priority irrespective of notice, in accordance with general equitable principles.90 The position of the equitable interest holder under the Torrens system depends on whether or not the mortgage is registered.91

Tenant’s fixtures 2.25 The law of fixtures poses a particularly acute problem for tenants who annex chattels to the land, for the reason that, once the lease ends, any right to enjoy the fixture, being part of the land, automatically terminates with it. Equally, in the absence of an agreement between the parties, annexing chattels to the land may be a breach of a repairing covenant, as may be the subsequent removal of any fixtures.92 In order to obviate hardship to tenants, the common law developed rules that allowed tenants to remove certain fixtures annexed [page 55] during the tenancy. These fixtures have come to be known as ‘tenant’s fixtures’. In Penton v Robart,93 the court based the rules on the rationale that if the rule were otherwise, the purpose of the letting would often be defeated. During the currency of the lease, the landlord is deemed to be the owner of the fixture (as it is part of the land), but is subject to the tenant’s right to remove it.94

Trade, domestic or ornamental fixtures 2.26 The basic rule is that a tenant may remove fixtures if they are of a trade, domestic or ornamental kind;95 and if the tenant did not intend to make a permanent improvement to the property.96 In determining the tenant’s intention, relevant factors considered are whether removal would cause material injury to the land or would cause destruction of the fixture.97 So, if a tenant puts new doors and windows into the premises, even for trade purposes, they will become part of the land (ie, they will be treated as the

landlord’s, rather than the tenant’s, fixtures) and cannot be removed.98 The rules governing tenant’s fixtures apply equally as between life tenants and remainderpersons, so that trade, domestic and ornamental fixtures may be removed prior to the death of the life tenant.99 Authorities suggest that the rights of the tenant for life to remove are different from those of the leasehold tenant, but how different is unclear. In Norton v Dashwood, Chitty J held that his or her rights were less; whereas in Penton v Robart, Lord Kenyon CJ held that they were greater.100 The category of trade fixtures includes petrol pumps at a garage;101 fittings in a public house;102 shelves and counters;103 and shrubs planted by a market gardener.104 Examples of domestic and ornamental fixtures include stoves and kitchen ranges;105 ornamental chimney-pieces (but not brick pillars resting on a dairy floor to support pans);106 bells, and wires to operate them;107 and wood panelling and period fireplaces.108 2.27 By s 133B(2) of the Conveyancing Act 1919 (NSW), if a right to make improvements, such as annexing fixtures, is granted in the lease, but is expressed to be subject to the [page 56] landlord’s consent, the consent must not be unreasonably withheld. Similarly, a landlord of residential premises must not unreasonably withhold consent to annexing a fixture that is ‘of a minor nature’.109 However, no such restriction applies to landlords to ‘any other’ fixture.110

Time for removal 2.28 Subject to any agreement to the contrary, the tenant may exercise the right to remove the fixtures at any time prior to the termination of the lease.111 If the tenant does not do so, ‘the law presumes that he [sic] voluntarily relinquishes his claim in favour of the landlord’.112 In order to avoid hardship to tenants, there are two exceptions to this rule. First, in tenancies of uncertain duration, such as a tenancy at will or a short-term periodic tenancy, a tenant has a reasonable time after the termination of the

tenancy to remove fixtures.113 Second, if the lease is brought to an end by forfeiture or surrender, the tenant may remove fixtures as long as he or she retains a right to possession, such as by virtue of a new tenancy, a tenancy at sufferance,114 or under a belief that there is a right to remain (eg, where the tenant claims a right under an assignment that is later held to be invalid).115 Once the tenant has quit the premises, he or she loses all rights to remove fixtures.116 The tenant’s right to remove fixtures is subject to a mortgagee’s general rights over the land, whether or not the mortgage was granted before or after the chattels were affixed.117

Exceptions 2.29 The common law rules governing tenant’s fixtures do not apply to certain agricultural tenancies or residential tenancies. The rights of parties under these types of tenancies are governed by statute. In the case of agricultural tenancies, the tenant has a right to remove fixtures.118 However, this right is subject to the landlord’s right to purchase the fixtures at a reasonable price. In the case of agricultural tenancies not covered by the Agricultural Tenancies Act 1990 (NSW) (basically, those where the tenancy is over land less than one hectare in size, or where the land is not used solely or mostly for agricultural purposes), the common law rule in Elwes v Maw119 applies: the tenant has no right to remove fixtures. Residential tenants may remove fixtures from the premises, if the fixtures [page 57] were annexed in accordance with a term of the agreement, or with the landlord’s written consent, before the premises are vacated.120 If the tenant causes damage by the removal of the fixture affixed by the tenant, the tenant must notify the landlord without delay and provide compensation.121

Chattels annexed by mistake or by a person with no title 2.30

What is the position where a chattel is annexed to the land by

mistake? A person may annex a chattel to a parcel of land, erroneously believing that he or she owns it. This happened in Brand v Chris Building Co Pty Ltd,122 where a house was built, by mistake, on a block of land not owned by the plaintiff. The court held that, in the absence of an equity of acquiescence, the plaintiff had no remedy.123 The fact that the chattels in question — building materials — had become attached to the realty ensured that they became the property of the owner of the realty. Developments in the law of unjust enrichment may come to render this decision doubtful, but do not appear to have modified it yet.124 The same principle applies to a chattel that has been innocently misappropriated or stolen, and is later annexed to the land of another innocent person. In this case, the person who affixes the chattel has no title to it; it becomes the property of the landowner.125

Protection of Property Interests in Land Trespass to land — tort 2.31 Trespass to land is established by an intentional unauthorised entry onto land in the actual possession of another person, or remaining on such land after the withdrawal or expiry of permission.126 Land for this purpose includes anything attached to the soil, or a profit à prendre.127 Because of the requirement of possession, a contractual licensee cannot sue in trespass. The intentional propulsion of objects onto another’s land is also trespass.128 But if no volition can be established (eg, if A has a seizure and falls onto another’s land), no liability ensues.129 The interference must also be direct; so, for example, water that ultimately [page 58] reaches a plaintiff’s land after crossing somebody else’s land is not trespass but nuisance.130 There is no defence of necessity to an action for trespass — whether based on homelessness or some other reason131 Nor does a defence of honest and reasonable mistake apply.132

2.32 Where the trespass to land is so extensive that it amounts to possession, the trespasser has a title — in the form of a possessory title — to the land.133 Possession will be established by physical control over the land to the extent that others are excluded, coupled with an intention to possess it (animus possidendi). Trivial acts of trespass, such as tethering ponies and children playing, will not constitute possession.134 The trespasser–possessor can assert this title against all the world except the true owner.135 As we shall see later, this possessory title, or ‘squatter’s title’, will defeat even the title of the documentary owner after a certain period of time.136

Title to sue General 2.33 The tort of trespass is concerned with protecting actual possession of the land. Accordingly, persons out of possession of the land at the time of the wrongful invasion cannot sue. So, a purchaser under a contract of sale cannot sue for trespass until title (and the right to possession) passes.137 Likewise, a landlord cannot sue in trespass during the currency of the lease, but can sue to protect the reversionary interest (ie, the right to future possession), if he or she can prove permanent injury to the land.138 A licence to occupy land, without a right of exclusive possession, will not give the licensee a right to sue in trespass.139 However, if the licence is coupled with the grant of an interest in land, such as a profit à prendre, the owner of the right can sue in trespass for interference with the interest.140

Dispossessors 2.34 Even a person who has dispossessed another can sue in trespass.141 The defendant cannot set up the dispossessed owner’s title (or previous possessor’s title) as a defence. In other words, the defendant cannot plead the jus tertii (the right of a third person).142 [page 59]

Of course, the dispossessed owner, or prior possessor, can sue the ‘squatter’ in trespass for the act of dispossession and continuing acts of trespass. Further, he or she can sue anyone else who trespassed on the land since the time of the original dispossession, by the fiction of trespass by relation.143 In this case, the title to sue is not possession, but the owner’s or prior possessor’s right to immediate possession. It is an exception to the general rule that trespass exclusively protects possession. The fact that the trespasser has forcibly entered the property and, therefore, may be criminally liable144 has no bearing on whether he or she has possession and, therefore, a possessory title.

Recovery of possession 2.35 By s 20 of the Civil Procedure Act (2005) (NSW), a person who has been dispossessed may make a claim for judgment for possession of land. This remedy replaces the older action of ejectment, which was originally a form of the action of trespass.145 All that is necessary for the plaintiff to bring an action under s 20 is that he or she has a better right to possession of the land than the defendant.146 Of course, the best way to prove a better right to possession is by establishing absolute ownership; that is, by: being the registered proprietor of Torrens title land;147 establishing an unbroken chain of documentary old system title back to the original Crown grant;148 or having been in adverse possession for the statutory period (normally 12 years).149 However, any lesser period of possession will do.150 In addition to recovering possession, the plaintiff may seek mesne profits from the trespasser for the loss of the land.151 Mesne profits include the rental value of the property for the period of dispossession, and may even include lost interest on a premium offered by a prospective tenant.152 2.36 The courts have discretion to order a stay of execution of the writ for possession. By rr 1.12 and 36.5 of the Uniform Civil Procedure Rules 2005 (NSW), a judgment for possession may specify the time for compliance. In Sydney City Council v Parker,153 the court, interpreting a similarly worded provision,154 balanced the hardship to the trespassers in possession of the plaintiff’s land, who were in receipt of pensions and were homeless,

[page 60] against the council’s need for immediate possession of the premises. The court suspended the time for compliance with the judgment for two months to allow the squatters time to find alternative accommodation.

Self-help 2.37 In addition to the right to sue for trespass and recovery of possession, an owner or possessor of land may exercise the right of self-help to remove a trespasser from the land. In Hemmings v Stoke Poges Golf Club,155 where an overholding tenant was physically evicted, it was held that the owner would not incur liability if he or she used only so much force as was reasonably necessary to remove the trespasser. The right has been affirmed by the New South Wales Court of Appeal in MacIntosh v Lobel.156 It may be exercised before the institution of court proceedings, or afterwards (as it was in that case), if the court determines that the occupant is a trespasser and has no right to remain. Alternatively, the plaintiff may obtain a writ of possession and have it executed by the sheriff. There is no such right of physically recovering possession from an overholding tenant of residential premises after the termination of a residential tenancy agreement, in the absence of a judgment, warrant or order of a court, or an order of the NSW Civil and Administrative Tribunal (Consumer and Commercial Division). Section 120 of the Residential Tenancies Act 2010 (NSW) makes it an offence to enter premises without such authorisation.

Trespass to land — statutory penalties Forcible entry 2.38 Although a trespasser who has taken possession of land has a title to the land, the act of trespass may give rise to criminal penalties in addition to liability in tort. Interference with land has had a long history of protection by means of the Statutes of Forcible Entry (UK), which date from the 14th century. The relevant provisions have been re-enacted in New South

Wales.157 Section 18 of the Imperial Acts Application Act 1969 (NSW) provides: No person shall make any entry into any land except where such entry is given by law and, in such case, with no more force than is reasonably necessary.

The prohibition contained in s 18 does not restrict the owner’s, or prior possessor’s, right to exercise self-help.158

Inclosed lands 2.39

By s 4(1) of the Inclosed Lands Protection Act 1901 (NSW):

Any person who, without lawful excuse … enters into inclosed lands without the consent of the owner, occupier or person apparently in charge of those lands, or who remains on those lands after being requested by the owner, occupier or person apparently in charge of those lands to leave those lands, is liable to a penalty …

[page 61] ‘Inclosed lands’ means any lands, either public or private, inclosed or surrounded by a fence, wall or other erection.159 ‘Lawful excuse’ in s 4 is not established merely by a person proving that he or she had a mistaken belief, whether the belief is reasonable or not. Rather, a mistaken belief will be a defence only if the circumstances that the trespasser believes to be true would, if in fact true, give that person a lawful right to enter the premises.160 Accordingly, a person who entered a clinic with a view to gathering information in relation to activity suspected of being illegal, but not actually so, does not enter with lawful excuse because no one has a right to enter premises under such suspicion. A claim of a right to possession of the land is a lawful excuse, but only if it is made bona fide, and with a reasonable foundation on substantial grounds. The claim must be known to, and not impossible in, the law.161 In McDermott v Boggs,162 ‘occupier’ for the purposes of s 4(1) was held to include a tenant who occupies a part of premises. It followed that the landlord committed an offence by being on that part of the premises without the tenant’s consent.

Chattels Introduction 2.40 As in the case of land, there are a number of different possible proprietary interests in chattels.163 These particular interests are protected by a variety of tort remedies that are specific to the property interest in question. Equally, there are different types of unauthorised acts that may be committed in relation to a chattel, from the most trivial interference to outright destruction. These various infringements also give rise to different actions. The first question to be addressed in determining what remedy the holder of a proprietary interest has in relation to a particular unauthorised act is: What is the precise property interest that has been infringed? These interests are analogous to the different property interests over land. The chattel interests will be examined separately, and the torts devised to protect them will follow.164

Property interests in chattels Actual possession 2.41 Actual possession, in law, is established when two conditions are met. First, there must be de facto control over the chattel. Second, the possessor must show an intention to possess it, or animus possidendi. These elements, which parallel those necessary to establish a possessory title to land,165 can be seen in the following cases. [page 62] In Young v Hichens,166 two competing fishing vessels were attempting to catch a shoal of fish. The plaintiff sued the defendant in trespass, alleging that the defendants had interfered with their possession of the fish. It was held that the plaintiffs, who had partially enclosed their net around the fish, did not have possession because they did not have custody or control of them. By contrast, in The Tubantia,167 a salvage company was held to have possession of a sunken ship and its contents where it had laid buoys and lights around the

site where the ship was located, and had cut access holes in the ship’s hull. The type of control necessary will vary with the nature of the chattel. 2.42 Possession, rather than full ownership, can arise in many different situations. Some of the more common examples are: bailment, where the owner grants a temporary right of possession to another;168 hire–purchase agreements; contracts for the sale of a chattel where the seller retains custody of the chattel; and cases where a stranger finds a lost or mislaid chattel. In The Tubantia, discussed at 2.41, the possession acquired by the plaintiffs for practical purposes amounted to ownership, since there was no better title to the chattels in anyone else; it was an example of original possession, or discovery. The law gives protection to the possessor, however limited his or her rights are, for a good reason. If only the true owner could sue in cases of wrongful interference, there would be a free-for-all — no possessory title could be safe. As Lord Campbell CJ put it in Jeffries v Great Western Railway Co,169 ‘I think it most reasonable law, and essential to the interests of society, that peaceable possession should not be disturbed by wrongdoers’. An employee who has custody of goods on behalf of an employer is not treated in law as a possessor. In this situation, the employer has ‘constructive possession’ of the chattel, and has title to sue if the chattel is wrongfully dealt or interfered with.

Right to immediate possession 2.43 A person will have a right to immediate possession where he or she is presently out of possession, and has a right to take possession of the chattel immediately.170 So, if A hires her car to B for a week, B has actual possession during the week. A has a right to immediate possession only at the end of the period. However, even though B will have no superior right to possession against A at this time, B will still have actual possession. As we have seen above, actual possession is a proprietary interest that will form the basis

[page 63] for an action in tort against persons, other than A, who wrongfully interfere with the chattel.

Right to future possession, or reversionary interest 2.44 A mere right to future possession, as distinct from actual possession or a right to immediate possession, refers to the right that a person has to possess the chattel at the conclusion of the rights of someone who is presently entitled to possession. By analogy with the landlord’s interest in the law of leases, this right is sometimes referred to as a ‘reversionary’ interest: the right to immediate possession of the chattel reverts to the owner or a person with superior rights to the present possessor at some designated time in the future. As we shall see below, the holder of a reversionary interest in chattels has limited rights to sue.

Ownership 2.45 At common law, the complicated question about ownership arising from the doctrine of tenure — that is, whether a person other than the Crown could ‘own’ land — was not relevant to chattels. Accordingly, it has always been possible to own a chattel absolutely. In the most common situation, the owner will be in possession, and so will have all the rights outlined above subsumed within his or her ownership. Only where ownership rights are fragmented will the question of the precise lesser proprietary interest of the party alleging the wrongful act be of importance. It follows that ownership is not technically relevant to whether it is possible to bring a particular action to protect one’s rights to the chattel (in trespass, detinue, conversion or negligence).171 Rather, the key question is whether the owner, or any other person who was in possession at the time of the wrongful act, had an immediate right to possession, or had merely a reversionary interest in the chattel. There is one situation where ownership of the chattel may be important: where the defendant defends the action on the basis that the plaintiff’s title is in some way inferior to that of a third person who is not a party to the action.

This defence is known as the jus tertii. It will be discussed below.172 First, it may be useful to look at one typical way in which property rights over chattels are fragmented.

Fragmented property interests — bailment Types of bailment 2.46 Bailment173 is one of the most common ways in which property interests in chattels are fragmented. A bailment arises where there is a delivery of chattels by the owner, or a person with a right to possession, into the possession of another person on an express or implied promise that the chattels will be redelivered to the bailor or dealt with in a [page 64] stipulated way.174 So, where A hires a car for a month from B, the contract of hire will detail the terms of the bailment. Bailments may be for a fixed term or may be at will. A fixed-term bailment confers possession on the bailee and a right to future possession on the bailor. At the end of the term, the bailor has an immediate right to possession, which matures into possession on redelivery of the chattel. By contrast, in the case of a bailment at will, the bailor may demand the return of the chattel at any time. It follows that throughout the currency of the bailment, the bailor has an immediate right to possession. Bailments can be created by contract, and the terms of the contract will usually specify certain events that will bring the bailment to an end (eg, using the chattel in an unauthorised way). When such an event occurs, the bailor will get an immediate right to possession. In Penfolds Wines v Elliott,175 allowing bottles to be filled by another wine producer was expressed in the contract of bailment as a factor bringing the bailment to an end.

Bailments at will and gratuitous bailments 2.47

A gratuitous bailment is one that is not for reward or consideration.

Only one party (bailor or bailee) benefits: the other party receives nothing in return for the bailment. A gratuitous bailment may be for a specified term or it may be at will (in which case, the chattel must be returned immediately on the owner’s request). By contrast, the defining feature of a bailment at will is that it is never for a specified term. The basis of the bailment is that the bailee may retain the goods only until the bailor demands their return. A bailment at will may be gratuitous or it may be for reward, as shown in Figure 2.2 below. Figure 2.2:

Bailments at will and gratuitous bailments

Whether the bailment is gratuitous or for reward does not affect the bailor’s standing to sue.176 The determining factor in relation to the remedies available to a bailor is the bailor’s right to possession. In a bailment at will, the bailor always has a right of immediate possession and has a sufficient title to sue in conversion and detinue, irrespective of whether the bailment was one for reward or not.177 [page 65] We now turn to the different actions available to a person with an interest in chattels in the event of wrongful interference.

Actions in tort to protect proprietary interests in chattels Trespass

2.48 The gist of the tort of trespass is wrongful intentional direct interference with a chattel in the possession of another.178 Thus, as Dixon J noted in Penfolds Wines Pty Ltd v Elliott 179 ‘trespass is a wrong to possession’. Persons with merely a deferred, or reversionary, right to possession (such as a bailor during the currency of the bailment), or persons with a right to immediate possession (eg, where the bailment has come to an end but the bailor has not physically recovered the chattel), cannot sue in trespass. In so far as this tort is directed at protecting possession, only a plaintiff who has possession at the time of the interference may sue. There is one exception to this general rule. If the bailment is at will (ie, if it can be revoked at any time), the bailor has a right to immediate possession (rather than actual possession), and this is sufficient to ground an action in trespass where the defendant has committed an act of trespass against the bailee in possession of the chattel.180 In Wilson v Lombank181 it was held that, where a bailor had a standing credit arrangement with a bailee (car repairer) and could repossess a car at any time, he had sufficient title to maintain an action in trespass against a third party who took the car from the bailee. There was no obvious bailment at will here, so the case is at odds with earlier authorities and, therefore, doubtful. Interference is established when physical contact, however slight, is made with a chattel in the possession of another. There is some doubt as to whether trespass to chattels is actionable without proof of actual damage.182

Conversion 2.49 The tort of conversion ‘consists in an act intentionally done inconsistent with the owner’s right, though the doer may not know of, or intend to challenge, the property or possession of the true owner’.183 As the requisite intent relates to intentional wrongful interference with goods, not with the rights of another person, the tort is a ‘tort of strict [page 66] liability’. That is, the defendant may commit conversion ‘without any fault on

their part’.184 Innocence and ignorance of the plaintiff’s rights is therefore no defence. Thus, a person who in good faith buys and sells goods not known to be stolen is nevertheless liable in conversion.185 However, not all wrongful intentional acts will amount to conversion. There must be some dealing with the plaintiff’s goods, or an act of dominion (such as taking them for one’s own use), which is adverse to the plaintiff’s title or right to use or possess. So, mere removal of the goods is not enough to constitute conversion. This principle was established in the leading case, Fouldes v Willoughby.186 The defendant was the master of a ferry boat. After a dispute with the plaintiff, he turned the plaintiff’s horses off the ferry. The plaintiff claimed that this unauthorised act amounted to conversion. The court held that, while the defendant might have been liable in trespass, there was no conversion. A simple removal of the goods, without an intention to make further use of the chattel, did not challenge the property or dominion of the true owner. Conversion is also known by the older name of ‘trover’. Acts which have been held to amount to acts of dominion inconsistent with the plaintiff’s title include mutilation of the chattel;187 unauthorised sale;188 and pawning the chattel.189 If the act is not intentional, as where a person negligently destroys hired furniture, there is no conversion. 2.50 In order to be successful, the plaintiff must have been in possession at the time of the original unauthorised act, or have had a right to immediate possession.190 The facts of Penfolds Wines v Elliott 191 demonstrate some of the key distinctions between this tort and trespass. The appellants were wine producers and sold their wines in bottles that were supplied on condition that they were returned as soon as the contents had been consumed. The effect of this contractual condition was to bring to an end the purchaser’s, or bailee’s, right to possession from the time the wine was drunk. From that moment, therefore, the owner, or bailor, acquired a right to immediate possession. The respondent was the owner of a hotel that sold bulk wine to purchasers who supplied their own bottles. Many of these bottles belonged to the plaintiffs. Was filling the wine bottles trespass, conversion, or both? By majority, the High Court held that the appellants could not sue in trespass because they did not have actual possession of the bottles at the time of the

allegedly tortious act. While there was clearly interference with the chattels, the possession that was interfered with at that time was the possession of the [page 67] bailee, not that of themselves, as bailors. Furthermore, the bailee would not be able to bring an action in trespass because the interference was authorised. As for conversion, the court, again by majority, held that the acts of the respondent amounted to conversion because they constituted an assertion of dominion over the chattels. The filling of bottles provided by the appellant’s bailees was for the purposes of the respondent’s trade, which, far from being a casual interference with proprietary rights, was quite inconsistent with recognition of the appellant’s title.192

Detinue 2.51 Detinue is the tortious or wrongful detention of goods and refusal to hand them over to a person with a right to immediate possession who has formally demanded their return.193 The right exists irrespective of whether the manner of the original acquisition was wrongful or not. The right of action accrues at the time of the refusal to hand over, not at the time of the original acquisition, even if that acquisition is wrongful.194 As in the case of conversion, a person with only contractual rights to possession, without a right to immediate possession, has no right to sue in detinue. Furthermore, a plaintiff without a right to immediate possession, as in the case of a bailor during the term of the bailment, cannot sue in detinue.195

Negligence 2.52 Unlike the torts of trespass, conversion and detinue, negligence is not an intentional tort. Negligence is established if the defendant has breached a duty of care owed to the plaintiff and this breach has caused reasonably foreseeable damage to the chattel. In order to be able to sue in negligence, the plaintiff can be in possession of the chattel, so that a bailee, for example, can

sue in negligence.196 It is also possible to sue if the plaintiff has an immediate right to possession of the chattel, or has a reversionary interest.197

Overlapping of remedies 2.53 One act of a wrongdoer may amount to two different intentional torts. Thus, if a thief takes a bicycle that is in my possession, I will be able to sue him or her in either trespass or conversion. The act would amount to an intentional interference with my possession of the chattel, as well as an act of dominion inconsistent with my title. Equally, it is possible for the torts of conversion and detinue to overlap, as where a bailee, at the end of a bailment, uses a chattel as his or her own instead of returning it. In this case, if [page 68] the bailee makes a demand for return of the chattel, he or she can sue in either detinue or conversion. But for obvious reasons, it is never possible to sue both in trespass or detinue in relation to the same facts; for detinue to arise, the chattel must be in the possession of the wrongdoer. And, because that means that the plaintiff is out of possession (since one or other of the plaintiff and defendant must be in possession at the time of the wrongful act), no action in trespass could arise. This interlinking of torts is illustrated in Figure 2.3.198

Figure 2.3:

Interlinking of torts

Jus tertii defence 2.54 The jus tertii defence has already been examined in the context of title to land. It is a defence whereby a defendant claims that the plaintiff has no cause of action because a third party (the tertius in Latin) has a better title than the plaintiff has. The way the defence works is best illustrated by an example. Suppose A is the owner of a chattel. B becomes his or her bailee for a term. The term has expired. Before A takes action to recover the chattel, C takes it without A’s consent. B sues C in conversion. The jus tertii defence would allow the defect in B’s title — the superior right in A — to be pleaded as a defence to the action. 2.55 The availability of the jus tertii defence arose in Jeffries v Great Western Railway Co.199 The defendants seized trucks in the plaintiff’s possession. In fact, the title of the plaintiff was possibly defective because the person who sold him the trucks had been declared bankrupt. The defendant attempted to assert the superior title of those who took under the order of the Court of Bankruptcy as a defence to an action in conversion. The court held that such evidence was inadmissible, on the ground that possession is title in an action against a wrongdoer. The case is, therefore, authority for the proposition that the jus tertii defence is not available in such actions. However, as Wightman J noted, ‘[i]n some cases the plaintiff was not in actual possession; and, when that is the case, it may well be that the defendant

may shew the jus tertii’.200 The cases are reducible to three distinct situations where the rights of a third party will be [page 69] of direct assistance to an otherwise ‘wrongful’ defendant. A superior right of possession arises when: 1.

the wrongdoer defends the action on behalf of, or with the authority of, the true owner; or

2.

the conduct causing the injury to the chattel was authorised by the true owner; or

3.

the wrongdoer has, since the injury to the chattel occurred, become the true owner.201

2.56 In each of these instances, the rights of the third party are relevant to the defence to this extent: the defendant is able to justify his or her actions on the basis that they were directly traceable to the superior right to immediate possession of the third party. But, defined in this way, this defence is much more restricted than the traditional understanding of the jus tertii defence. It follows that the phrase is unfortunate and only serves to mislead. A better way of describing the defence available to a wrongdoer in these circumstances is to say: if the alleged wrongdoer is, in fact, shielded by the rights of a person who has a better right to possession than the plaintiff, he or she would not be liable in either trespass, conversion, detinue or negligence. To use the facts of Jeffries v Great Western Railway Co to illustrate: if the persons who took under the bankruptcy order in Jeffries case had engaged Jeffries to take possession of the trucks, the act of taking possession is performed under a better right to possess than the present possessor. Wightman J’s point in Jeffries, that the plaintiff out of possession must overcome the jus tertii, is therefore a specific example of the relevance of third party rights; the plaintiff out of possession must show a right to immediate possession, which is better than the right to possess of the alleged tortfeasor. In such a contest, the existence of better rights in a third party, behind whom the defendant can shield, will be decisive to the defence.

2.57 As noted at 1.56, there is a fundamental conceptual distinction between contractual and proprietary rights. This has clear consequences for the right to bring actions in either trespass or conversion. Thus, where A contracts to purchase a car from B, but the car is taken from B’s possession by C prior to formal transfer of ownership or delivery, A has only contractual remedies against B. A cannot sue C in trespass because, at the time of the wrongful act, the car was in the possession of B. Also, though A had a contractual right to compel B to deliver the car, he had no immediate right to possession of it, since at that time he had not been given any proprietary rights under the terms of the contract.202 Of course, the terms of the contract may provide otherwise.

An exception — permanent loss or damage to a reversionary interest General rule 2.58 As we have seen above, the basic rule is that a person with a right to future possession, as opposed to immediate possession, such as a bailor during the currency of the bailment, cannot sue a third party in trespass, conversion, detinue or negligence [page 70] while the bailment is subsisting. Because this person, the reversionary interest holder, has neither actual possession nor a right to immediate possession, he or she has no sufficient proprietary interest capable of protection. Thus, if A lends her car to B for three months, A has no legal possession or right to possession during the term of the bailment. Accordingly, if B immediately lends the car to C for a week, and C causes damage to it, A cannot sue B or C in trespass, conversion, detinue or negligence during the three-month period of the bailment. So, in Donald v Suckling,203 A deposited debentures with B as security for money owed to B. Before the money was tendered to B, B pledged them with C. The court held that A could not maintain detinue against C for recovery of the debentures without having paid or tendered the

amounts owing to B. The bailment between A and B was still subsisting and was not affected by the pledge by B to C. It was held in Lord v Price204 that where goods remain in the possession of the vendor after purchase, subject to the vendor’s lien for unpaid purchase money, the purchaser cannot maintain an action of conversion against a wrongdoer. In the above example of the loan of the car, the result would be otherwise if a term of the contract of bailment both prohibited sub-bailments and declared the bailment at an end if the bailee acted in breach of any of its terms. On the loan (sub-bailment) to C, the bailor A would have a right to immediate possession. Also, the act of sub-bailment would be an act of dominion inconsistent with the rights of the bailor and would give the bailor a right to sue the bailee in conversion. Note that there would be no right to sue in trespass in this case, as the bailor was not in possession at the time of the wrongful act. 2.59 Regardless of whether there had been a prohibition on sub-bailments, B as bailee would be able to sue C in conversion or detinue if, for example, she sold the car to D.205 D would also be liable in conversion and detinue as a result of his purchase, even without notice of C’s defective title.206 Thus, the bailor has three options if he or she wishes to pursue one of the above actions to compensate for the loss or damage to a chattel: 1.

wait until the term of the bailment expires and the right to immediate possession arises;

2.

pursue an action on the basis that the actions of the bailee (in causing the loss or damage to the chattel) are repugnant to, and have therefore determined, the bailment, and hence the bailor’s right to immediate possession arises; or

3.

if the damage or loss to his or her chattel is permanent, pursue an action on the case for the damage to his or her reversionary interest. It is to the last of these remedies that we now turn. [page 71]

Nature of the exception 2.60 In special circumstances, the holder of a reversionary interest may have what many authors describe as an action on the case.207 In Penfolds Wines v Elliott, Dixon J remarked that it is: … a special action on the case and does not depend on the plaintiff’s having immediate right to possession … the foundation of the action is the damage and “permanent” damage to the chattel must have occurred, that is damage which would enure to the reversioner.208

The leading case is Mears v London and South Western Railway Co.209 Mears owned a barge and hired it to Russell. During the term of the hire, Russell employed the defendants to unload a boiler from the barge and their negligence in carrying out this operation caused the boiler to drop through the bottom of the barge. As a result, the barge was out of commission for some considerable time. In answer to the defendants’ argument that there was no precedent for an action by a reversioner for any damage to a chattel, Williams J said that, unlike the case of a temporary injury, ‘where there is a permanent injury, the owner may maintain an action against the person whose wrongful act has caused that injury’.210 Trindade and Cane conclude that, although the damage in Mears was caused by negligence, the principle of the case also extends to intentional damage, and that even where the injury to the chattel is caused by negligence, the action still appears to be framed as an action on the case.211 The decision in Mears was applied by the Supreme Court of Victoria in Dee Trading Co Pty Ltd v Baldwin.212 In that case, the owner of a motor vehicle was able to sue a third party for damage caused to the vehicle, despite the fact that the car was actually in the possession of a bailee under a hire–purchase agreement. The court found that the fact that the owner also had a right to recover the damages from the bailee did not preclude him from pursuing an action on the case for the damage caused to his reversionary interest in the vehicle. But the nature of such an injury must be clearly demonstrated.213 A ‘mere wrongful taking’ may not be sufficient to ground such an action because the loss (and thus the damage to the reversionary interest) must be permanent.214

Rights of a bailee

2.61 The fragmentation of interests and the types of remedy available for wrongful interference with chattels intersect in the context of bailment. The issue is particularly acute in an action for damages for conversion. The measure of damages for conversion is the full value of the chattel. There is a special rule in the case of documents that provide [page 72] evidence of title to a debt: the converter is liable for the face value of the document rather than the piece of paper.215 Thus, each person who interferes with the chattel to the extent that he or she would be treated in law as claiming ownership is, in effect, compelled to pay the full purchase price. A consequence of this principle is that a number of different tortfeasors may each be liable to the owner, so that the owner might acquire the value of the chattel many times over if it passes through a number of hands. The leading case establishing the bailee’s right of action based on his or her possessory interest is The Winkfield.216 A steamship, the Winkfield, collided with a mail steamship, the Mexican, which sank; most of the Mexican’s cargo of mail and parcels was lost. The Postmaster-General (the bailee) sued the owners of the Winkfield for the total value of the mail lost.217 The court found that: … the law is that in an action against a stranger for loss of goods caused by his negligence, the bailee in possession can recover the value of the goods. This is the case even though the bailee would have had a good answer to an action by the bailor for damages for loss of the thing bailed.218

Where the defendant has paid full damages to the bailee, he or she has a complete defence against a further claim by the bailor.219 2.62 On the authority of The Winkfield, therefore, not only can a bailee in possession of a chattel sue in trespass, conversion or detinue, but he or she can also sue in negligence.220 In Anderson Group Pty Ltd v Tynan Motors Pty Ltd221 a bailee was able to sue the sub-bailee for the full value of the car when it was stolen from the sub-bailee’s premises in circumstances where the sub-bailee had failed to take reasonable care of the car. This was the case even though the bailee was in breach of the terms of a bailment of a car. Additionally, the bailee can sue the bailor for wrongful acts during the currency of the term of

bailment. In City Motors v Southern Aerial Super Service,222 a bailor repossessed a truck in circumstances not authorised under the hire–purchase agreement. The High Court held that the bailee could sue in detinue. A bailee in possession may sue for any injury to the chattel and, in the case of acts that constitute conversion, may recover the full value, irrespective of whether the: chattel has been destroyed or merely damaged;223 damage to the chattel exceeds the value of the bailee’s own limited interest; [page 73] bailee is answerable to the bailor for the damage or loss in question;224 or bailee is a bailee at will or a bailee for a term that is still subsisting when the wrong occurred.225

Self-help 2.63 A person who has committed trespass by taking a chattel from the possession of another is subject to the remedy of ‘recaption’, or the physical recapture of the chattel.226 This remedy, which parallels the self-help remedy in relation to land,227 is equally available in conversion and detinue. In Blades v Higgs,228 the defendant’s servants forcibly recovered rabbits from a dealer who purchased them from a trespasser. The trespasser had shot them on the defendant’s land. The court held that the remedy of recaption applied to the dealer’s refusal to hand them over in the same way as for a trespassory taking. The New South Wales Court of Appeal in Toyota Finance v Dennis,229 however, decided that the right of forcible recaption is restricted to trespassory takings of chattels ‘that that person knows he or she is not entitled to’. The owner may use such force as is reasonably necessary to repossess the chattel;230 or they may lawfully recover the chattel by means of a trick.231 The self-help remedy extends to a right to enter onto the land of the wrongdoer to retake the chattel.232

Finders 2.64 Particular problems arise in the context of cases where chattels are lost and later found by strangers. As we have seen above, the starting point for determining whether a right to sue in trespass, conversion, detinue or negligence has arisen is the question of the plaintiff’s possession or immediate right to possession. In the case of bailment, this is a relatively straightforward matter because of the express or implied terms relating to the right to possession. It is a more difficult question where original possession is at issue — that is, where chattels are taken from a state of nature — as the case of Young v Hichens233 shows. The basic principle governing the rights of finders was established in Armory v Delamirie.234 In that case, a boy employed by a chimney sweep found a jewel. He took it to a goldsmith for valuation. The goldsmith refused to hand it back. The boy sued in conversion, and was [page 74] successful. The court concluded that a finder in actual possession of a chattel, though not an owner, has a sufficient title to sue a stranger. The case is also authority for a narrow definition of the jus tertii defence because the clear defect in the finder’s title was no bar to success in an action in conversion. While Armory v Delamirie settled the question of a finder’s rights in a contest with a complete stranger, it had no direct bearing on the issue of the rights of the employer of the finder, or the rights of the owner of the land on which the chattel was found. In the case of employees, the rights of the finder will be determined by the terms of the employment relationship. In the case of occupiers, the degree of attachment of the chattel to the land becomes crucial.

Finder versus employer or principal 2.65 Where the employee or agent finds a chattel in the course of employment or agency, he or she does so on behalf of his or her employer or principal. The latter acquires finder’s rights superior to those of the actual

finder.235 If the employment or agency is wholly incidental or collateral to the finding, the employee or agent will hold as against all but the true owner.236 So, where a boatswain found contraband coins on a ship and passed them immediately to customs officials, he did not have the requisite possession to maintain an action against the officials when the owner of the coins (unsurprisingly) failed to claim them.237 More recently, in Burnett v Randwick City Council,238 possession of gymnasium equipment was held to be vested in the company, not in the directors who were physically in possession. Tobias JA observed in that case that while ‘[a]n officer may well carry on the company’s business and his or her decisions may control the manner in which the company’s property is held, used, acquired or disposed of … this does not vest in that officer … such control and dominion over the property of the company as to change the physical custody of that property from the possession of the company to the possession of the officer’. 239

Finder versus occupier 2.66 As we have seen above, where a chattel has become a fixture, it becomes part of the realty.240 It follows that if that chattel has been lost and is later annexed by someone other than the owner of the land without the landowner’s knowledge or consent, then the owner of the realty has best title to it, even in a contest with the owner.241 In relation to finders, the general rule is that an occupier of land has rights superior to those of a finder over chattels in or attached to the land if he or she has manifested an intention to exercise control over the area where the chattel was found. Where the chattels are attached to or [page 75] buried in the land, such an intention is presumed, even though the occupier is unaware of the presence of the chattel. So, where banknotes were found under the foundations of a house,242 a ring was found in a pool,243 a prehistoric boat was discovered embedded in soil,244 or a brooch was found

nine inches below the surface in a public park by means of a metal detector,245 the occupier of the land prevailed. 2.67 The occupier will also have superior rights to the finder with regard to chattels found on, but not in or attached to, the land if he or she has manifested an intention to exercise control over the land and the things on it or in it before the chattel is found. The intention is a question of fact, and is indicated, for example, by the nature of the land. Where the relevant land was the executive lounge of an airport,246 or where banknotes were found on the floor of a shop by a customer,247 the finder was successful. An ‘occupier’ of a chattel such as a ship, motor car, caravan or aircraft is to be treated as if he or she were the occupier of a building for the purposes of the foregoing rules.248 In Flack v Chairperson, National Crime Authority,249 the National Crime Authority searched the house occupied by the plaintiff, suspecting that drugs were stored there. The searchers found a large sum of money in a bag in a wardrobe. The plaintiff claimed to know nothing about the bag or its contents. The defendants took it away. No person was charged in relation to the money, so the plaintiff brought an action seeking the return of the bag and the money. It was held that an intention to exercise control over land will be presumed in the case of residential premises where the occupier has exclusive possession. The plaintiff was successful. A finder of a chattel cannot prevail over an occupier if he or she takes possession with dishonest intent or in the course of trespassing. In Hibbert v McKiernan,250 trespassers on a golf course were held to have no rights to lost balls. In Parker v British Airways Board,251 trespassers or dishonest finders were held to have ‘very limited rights’. However, it is arguable that as against a complete stranger who is not an occupier of the land on which the chattel is found, the trespasser would have sufficient possession to prevail.252 Rights over a chattel will be lost where the chattel is physically abandoned, that is, left with a renunciation of rights over it, but only if another person acquires a possessory title over it.253 Until that time, the chattel remains the property of the prior possessor. [page 76]

Reform Fixtures by mistake 2.68 The obvious injustice of the rule that if someone annexes chattels to land by mistake he or she will lose all rights over them should be remedied. There is no good reason supporting the windfall to the landowner in these circumstances, or the disproportionate penalty to the mistaken party. One valuable reform would be to adopt ss 195–198 of the Property Law Act 1974 (Qld). These provisions confer a wide discretion on the court to apportion rights between the parties. By s 196, where a person makes a lasting improvement on land owned by another in the genuine but mistaken belief that such land is his or her property, or is the property of someone on whose behalf he or she makes the improvement, the court may make a variety of orders. The orders include: vesting the land, or part of it, in the improver; removing the improvement; compensation; or granting possession of the land on specified terms and conditions.254

Unreasonable refusal of consent to annex 2.69 If a right to annex fixtures is given in the lease but is expressed to be subject to the landlord’s consent, the consent may be unreasonably withheld in the case of landlords of residential premises.255 This rule confers an excessive right on landlords. The policy reason why landlords of nonresidential premises must not unreasonably withhold consent in such circumstances is because it allows tenants to enjoy and make the most use of the premises without jeopardising the rights of landlords. There appears to be no sound reason why residential tenants should not have the same rights.

Right to implead a third party in an action in conversion 2.70 It is arguable that the extensive protection offered to persons with possession, or an immediate right to possession (as manifested in the right to sue in conversion all those who wrongfully exercise dominion over the chattel, and to get damages to the full value of the chattel), is far too great.

Thus, where a bailee, X, in breach of the terms of the bailment disposes of the chattel to Y, both X and Y are liable in conversion, and both are liable to pay damages to the full value of the chattel. In such a case, the plaintiff is compensated in a way that may far exceed his or her actual loss.256 Likewise, a finder of a ring embedded in soil on A’s land who removes it is liable to both A and the true owner. In its 1971 report on detinue and conversion, the English Law Commission (the Commission) identified three objectives that the law should aim to meet: 1.

to give any interested party the right to be joined in an action for wrongful interference in order to avoid multiplicity of actions; [page 77]

2.

to protect defendants, so far as practicable, from the risk of double liability; and

3.

to limit the plaintiff’s damage to his or her actual loss.257

There is some limited protection for the wrongdoer. As we have seen above, if sued by a bailee, the wrongdoer has a defence to any further action from the bailor, and the bailee must generally account to the bailor for any excess over his or her own interest.258 As Fleming notes,259 s 7 of the Torts (Interference with Goods) Act 1977 (UK), which largely implemented the recommendations of the Commission, has effectively resolved these problems. While not significantly removing the complexity of this area of law, it is a desirable and overdue reform that would strike a more appropriate balance between property owners and those who interfere with chattels, often unwittingly. ______________________________ 1.

Based on a table devised by J H Baker in An Introduction to English Legal History, Butterworths, London, 1971, p 137.

2.

This ancient term was used to describe land because, in feudal times only, land was capable of passing to an heir on intestacy.

3.

See 2.6–2.30.

4.

See Chapter 9.

5.

For a further discussion, see Chapter 7.

6.

See, eg, McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303 (order granted for specific restitution of a yacht).

7.

As to the rights of finders, see 2.64–2.67.

8.

For a case which raised the distinction, see Pacific Film Laboratories Pty Ltd v Federal Commissioner for Taxation (1970) 121 CLR 154 (different rights over film prints and the right to produce copies).

9.

Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73, discussed at 8.81–8.82. Strata schemes legislation is a further example of the principle. See, generally, Chapter 10.

10.

See Star Energy Weald Basin Ltd v Bocardo SA [2011] AC 380; R Balkin and J Davis, Law of Torts, 5th ed, LexisNexis Butterworths, Sydney, 2013, p 117.

11.

Wandsworth Board of Works v United Telephone Co (1884) 13 QBD 904 at 915 per Brett MR.

12.

For an exploration of the competing moral arguments courts have deployed to address this question in a number of jurisdictions, see S Grattan, ‘Judicial Reasoning and the Adjudication of Airspace Trespass’ (1996) 4 APLJ 128.

13.

Victoria Park Racing Co v Taylor (1937) 58 CLR 479.

14.

Bernstein of Leigh (Baron) v Skyviews and General Ltd [1978] QB 479.

15.

For the requirements necessary to establish this tort, see 2.31.

16.

Bernstein of Leigh (Baron) v Skyviews and General Ltd [1978] QB 479 at 488 per Griffith J.

17.

Victoria Park Racing Co v Taylor (1937) 58 CLR 479.

18.

Ellis v Loftus Iron Co (1874) LR 10 CP 10.

19.

Pickering v Rudd (1815) 4 Camp 219.

20.

Davies v Bennison (1927) 22 Tas LR 52.

21.

Woollerton v Costain [1970] 1 WLR 411; Graham v KD Morris & Sons Pty Ltd [1974] Qd R 1.

22.

Graham v KD Morris & Sons Pty Ltd [1974] Qd R 1; Jaggard v Sawyer [1995] 1 WLR 269.

23.

Attorney-General v Mosman Council (1910) 11 SR (NSW) 113.

24.

LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490.

25.

Conveyancing Act 1919 (NSW) s 88K.

26.

Access to Neighbouring Land Act 2000 (NSW); see further, 12.74.

27.

Kelsen v Imperial Tobacco Co Ltd [1957] 2 QB 334.

28.

Barker v Corporation of the City of Adelaide [1900] SALR 29.

29.

Williamson v Friend (1901) 1 SR (NSW) (Eq) 23.

30.

Lemmon v Webb [1895] AC 1.

31.

Civil Liability Act 2002 (NSW) Pt 12 re-enacted the Damage by Aircraft Act 1952 (NSW).

32.

Steel-Maitland v British Airways [1981] SLT 110.

33.

Edwards v Sims 24 SW 2d 619 (Ky 1929).

34.

Bulli Coal Mining Co v Osborne [1899] AC 351.

35.

See 8.80.

36.

A Bradbrook, ‘The Relevance of the Cuius Est Solum Doctrine to the Landowner’s Claims to Natural Resources Located Above and Beneath the Land’ (1988) 11 Adel LR 462.

37.

See, generally, Bradbrook, ‘The Relevance of the Cuius Est Solum Doctrine to the Landowner’s Claims to Natural Resources Located Above and Beneath the Land’, note 36 above.

38.

See 12.11.

39.

Attorney-General v Chambers (1854) 4 De GM & G 206.

40.

Verrall v Nott (1939) 39 SR (NSW) 89.

41.

Hill v Lyne (1893) 14 LR (NSW) 449.

42.

Orr Ewing v Colquhoun (1877) 2 App Cas 839.

43.

Lord v Commissioners for the City of Sydney (1859) 12 Moo PC 473; 14 ER 991.

44.

Lanyon Pty Ltd v Canberra Washed Sand Pty Ltd (1966) 115 CLR 342.

45.

See, generally, P Butt, Land Law, 6th ed, Thomson Reuters/Lawbook Co, Sydney, 2010, pp 33–6.

46.

Gifford v Lord Yarborough (1828) 5 Bing 163; 130 ER 1023; Hazlett v Presnell (1982) 43 ALR 1 at 7; Elroa Nominees Pty Ltd v Registrar of Titles [2003] QCA 165 at [37].

47.

Note, however, the provisions of s 55N of the Coastal Protection Act 1979 (NSW), restricting the circumstances in which a court may make a declaration about the increase by way of accretion of an area of private land adjacent to the coast.

48.

Hill v Lyne (1893) 14 LR (NSW) 449.

49.

Southern Centre of Theosophy Inc v South Australia [1982] AC 706.

50.

Baxendale v Instow PC [1981] 2 All ER 620.

51.

For difficulties that arise in relation to these interests, and an argument that they should be abolished, see R Annand, ‘Movable Fees’ [1982] Conv 208.

52.

Re Whaley [1908] 1 Ch 615 at 620 per Neville J.

53.

See, eg, Palumberi v Palumberi (1986) NSW ConvR ¶55-287 at 596 per Kearney J; May v Ceedive Pty Ltd (2006) 13 BPR 24,147 at [66] per Santow JA. For a commentary see R Abbs, ‘The Law of Fixtures: Informed Principle or Independent Predilection?’ (2004) 11 APLJ 31.

54.

Minshall v Lloyd (1837) 2 M & W 450 at 459 per Parke B. See also TEC Desert Pty Ltd v Commissioner of State Revenue (2010) 241 CLR 576 at [23]. For a general discussion of this principle, see B Collier, ‘Distinguishing Chattels and Fixtures: Intent and Annexation’ (1994) 2 APLJ 45.

55.

Holland v Hodgson (1872) LR 7 CP 328.

56.

Ball-Guymer v Livantes (1990) 102 FLR 327.

57.

Vopak Terminal Darwin Pty Ltd v Natural Fuels Darwin Pty Ltd (2009) 258 ALR 89.

58.

National Australia Bank Ltd v Blacker (2000) 179 ALR 97 at [13]–[14] per Conti J.

59.

Agripower Barraba Pty Ltd v Blomfield (2015) 317 ALR 202 at [76] per Sackville AJA.

60.

Spyer v Phillipson [1931] 2 Ch 183.

61.

Holland v Hodgson (1872) LR 7 CP 328 at 335. See also May v Ceedive Pty Ltd (2006) 13 BPR 24,147.

62.

Leigh v Taylor [1902] 1 Ch 523.

63.

Re Whaley [1908] 1 Ch 615.

64.

Norton v Dashwood [1896] 2 Ch 497 at 501 per Chitty J.

65.

Hobson v Gorringe [1897] 1 Ch 182.

66.

May v Ceedive Pty Ltd (2006) 13 BPR 24,147.

67.

Belgrave Nominees Pty Ltd v Barlin-Scott Air-conditioning (Australia) Pty Ltd [1984] VR 947.

68.

Belgrave Nominees Pty Ltd v Barlin-Scott Air-conditioning (Australia) Pty Ltd [1984] VR 947 at 951 per Kaye J.

69.

Elitestone Ltd v Morris [1997] 1 WLR 687.

70.

Reid v Smith (1905) 3 CLR 656.

71.

Attorney-General (Cth) v R T Co Pty Ltd (No 2) (1957) 97 CLR 146.

72.

Agripower Barraba Pty Ltd v Blomfield (2015) 317 ALR 202.

73.

National Australia Bank Ltd v Blacker (2000) 179 ALR 97.

74.

Chelsea Yacht & Boat Co Ltd v Pope [2000] 1 WLR 1941. See also Tristmire Ltd v Mew [2012] 1 WLR 852 (three houseboats, originally capable of floating, but later resting on their own weight platforms set into the seabed, were found to be chattels), discussed in P Butt, ‘Is a Houseboat a Fixture?’ (2013) 87 ALJ 163.

75.

Palumberi v Palumberi (1986) NSW ConvR ¶55-287.

76.

Hawkins v Farley [1997] 2 Qd R 361.

77.

Segal v Obsborne [2016] NSWSC 941.

78.

Segal v Obsborne [2016] NSWSC 941 at [82].

79.

Australian Provincial Co Ltd v Coroneo (1938) 38 SR (NSW) 700. For further examples, see A Moore, S Grattan and L Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, 6th ed, Thomson Reuters, Sydney, 2016, pp 794–801.

80.

Vaudeville Electric Cinema Ltd v Muriset [1923] 2 Ch 74.

81.

On this point, see L Griggs, ‘The Doctrine of Fixtures: Questionable Origin, Debatable History, and a Future that is Past!’ (2001) 9 APLJ 51.

82.

Phillips v Lamdin [1949] 2 KB 33.

83.

Norton v Dashwood [1896] 2 Ch 497.

84.

Re New South Wales Co-operative Ice & Cold Storage Co (1891) 12 LR (NSW) Eq 87.

85.

Re Samuel Allen & Sons Ltd [1907] 1 Ch 575.

86.

See 2.16.

87.

Hobson v Gorringe [1897] 1 Ch 182; Reynolds v Ashby & Son [1904] AC 466.

88.

Re Morrison, Jones & Taylor Ltd [1914] 1 Ch 50.

89.

Hobson v Gorringe [1897] 1 Ch 182.

90.

Re Morrison, Jones & Taylor Ltd [1914] 1 Ch 50. The position is further complicated by s 184G of the Conveyancing Act. See, generally, Chapter 7.

91.

See, generally, Chapter 8.

92.

See 11.39, 11.108.

93.

Penton v Robart (1801) 2 East 88 at 91; 102 ER 302 at 303 per Kenyon CJ.

94.

Bain v Brand (1876) 1 App Cas 762 at 772.

95.

Elliott v Bishop (1854) 10 Ex 496 at 507–8; 156 All ER 534 at 539; Vopak Terminal Darwin Pty Ltd v Natural Fuels Darwin Pty Ltd (2009) 258 ALR 89 at [67]. See further, P Butt, Land Law, 6th ed, note 45 above, pp 429–30.

96.

Spyer v Phillipson [1931] 2 Ch 183.

97.

Greita Sebea v Territory of Papua (1941) 67 CLR 544.

98.

Climie v Wood (1869) LR Ex 328.

99.

Lawton v Lawton (1743) 3 Atk 13.

100. Norton v Dashwood [1896] 2 Ch 497 at 500; Penton v Robart (1801) 2 East 88 at 91; 102 ER 302 at 303. 101. Smith v City Petroleum Co Ltd [1940] 1 All ER 260. 102. Elliott v Bishop (1854) 10 Exch 496; 156 ER 534. 103. Harding v National Insurance Co (1871) 2 AJR 67. 104. Wardell v Usher (1841) 10 LJCP 316. 105. Darby v Harris (1841) 1 QB 895. 106. Leach v Thomas (1835) 7 C & P 327; 173 ER 145. 107. Lyde v Russell (1830) 1 B & Ad 394; 109 ER 834. 108. Spyer v Phillipson [1931] 2 Ch 183. 109. Residential Tenancies Act 2010 (NSW) s 66(2). 110. Residential Tenancies Act 2010 (NSW) s 66(3). 111. D’Arcy v Burelli Investments Pty Ltd (1987) 8 NSWLR 317; Vopak Terminal v Natural Fuels Darwin Pty Ltd (2009) 258 ALR 89. 112. Lyde v Russell (1830) 1 B & Ad 394 at 395; 109 ER 834 at 834 per Tenterden CJ. 113. Ex parte Brook; Re Roberts (1878) 10 Ch D 100; Smith v City Petroleum Co Ltd [1940] 1 All ER 260. 114. New Zealand Government Property Corp v H M & S Ltd [1982] 1 All ER 624. 115. Concept Projects Ltd v McKay [1984] 1 NZLR 560. This right is sometimes referred to as an ‘excrescence on the term’: Mackintosh v Trotter (1838) 3 M & W 184 at 186; 150 ER 1108 at 1109. For a discussion of the history of the term, see D’Arcy v Burelli Investments Pty Ltd (1987) 8 NSWLR 317 at 321 per Young J. 116. D’Arcy v Burelli Investments Pty Ltd (1987) 8 NSWLR 317. 117. Re New South Wales Co-Operative Ice & Cold Storage Co (1891) 12 LR (NSW) Eq 87. See also 2.23. 118. Agricultural Tenancies Act 1990 (NSW) s 10. 119. Elwes v Maw (1802) 3 East 38; 102 ER 510. 120. Residential Tenancies Act 2010 (NSW) s 67. 121. Residential Tenancies Act 2010 (NSW) s 67(2). As to this obligation, see 11.111. 122. Brand v Chris Building Co Pty Ltd [1957] VR 625.

123. For discussion of the equity of acquiescence, see 6.37. 124. See, for instance, Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. For a discussion of relevant case law, see S Degeling and B Edgeworth, ‘Improvements to Land Belonging to Another’ in Property and Security: Selected Essays, L Bennett Moses, B Edgeworth and C Sherry (eds), Thomson Reuters, Sydney, 2010, pp 277–90. 125. Reynolds v Ashby & Son [1904] AC 466 at 475 per Lord Lindley. Of course, the owner of the chattel can sue the thief in conversion: see 2.49–2.50. 126. Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353 per Santow JA at [189]–[190]. Special leave to appeal to the High Court was refused: Port Stephens Shire Council v Tellamist Pty Ltd [2005] HCATrans 365. 127. See, eg, Wellaway v Courtier [1918] 1 KB 200 (the removal of turnips); Mason v Clarke [1955] AC 778 (HL) (the right to take rabbits). 128. Rigby v Chief Constable [1985] 1 WLR 1242. 129. Public Transport Commission (NSW) v Perry (1977) 137 CLR 107. 130. Reynolds v Clarke (1725) 2 Ld Raym 1399. For further examples, see generally, Balkin and Davis, Law of Torts, note 10 above, Ch 5. 131. London Borough of Southwark v Williams [1971] Ch 734. 132. Basely v Clarkson (1681) 3 Lev 37. 133. Perry v Clissold [1907] AC 73. 134. Tecbild Ltd v Chamberlain (1969) 20 P & CR 633. 135. Perry v Clissold [1907] AC 73. 136. See, generally, Chapter 5. 137. Cousins v Wilson [1994] NZLR 463. 138. Loxton v Waterhouse (1891) 7 WN (NSW) 98. 139. Hill v Tupper (1863) 2 H & C 121; Georgeski v Owners Corp SP49833 (2004) 62 NSWLR 534. 140. Mason v Clarke [1955] AC 778. 141. Graham v Peat (1801) 1 East 244; 102 ER 95. 142. For this defence, see 5.19. See 2.54–2.57 for the defence in relation to chattels. 143. Wynne v Green (1901) 1 SR (NSW) 40. See also C Sappideen and P Vines (eds), Fleming’s Law of Torts, 10th ed, Thomson Reuters/Lawbook Co, Sydney, 2011, p 50. 144. As to which, see 2.38–2.39. 145. Sappideen and Vines (eds), Fleming’s Law of Torts, note 143 above, p 49. 146. Perry v Clissold [1907] AC 73. For a discussion of the question of relativity of titles, see Chapter 5. 147. See Chapter 8. 148. See Chapter 4. 149. See Chapter 5. 150. Perry v Clissold [1907] AC 73. 151. Nilan v Nilan (1951) 68 WN (NSW) 271.

152. Lee v Blakeney (1887) 8 LR (NSW) 141. 153. Sydney City Council v Parker (NSWSC, Cantor J, 1 March 1984, unreported). For a discussion of this case, see P Ryan, ‘Squatters’ (1985) 2 EPLJ 52. 154. Supreme Court Rules 1970 (NSW) Pt 42 r 4(2). 155. Hemmings v Stoke Poges Golf Club [1920] 1 KB 720. 156. MacIntosh v Lobel (1993) 30 NSWLR 441. 157. Imperial Acts Application Act 1969 (NSW) ss 18–20. 158. Macintosh v Lobel (1993) 30 NSWLR 441. 159. Inclosed Lands Protection Act 1901 (NSW) s 3. 160. Darcey v Pre-Term Foundation Clinic [1983] 2 NSWLR 497. 161. Barns v Edwards (1993) 31 NSWLR 714. 162. McDermott v Boggs (NSWSC, Carruthers J, 12 March 1991, unreported). 163. For the variety of interests in land, see 2.2. 164. For a general discussion, see S Green and J Randall, The Tort of Conversion, Hart Publishing, UK, 2009, pp 94–118; S Douglas, Liability for Wrongful Interference with Chattels, Hart Publishing, UK, 2011. 165. As to which, see 5.42–5.46. 166. Young v Hichens (1844) 6 QB 606. 167. The Tubantia [1924] P 78. 168. For different types of bailment, see 2.46–2.47. 169. Jeffries v Great Western Railway Co (1856) 5 E & B 802 at 805; 119 ER 680 at 681. 170. The expressions ‘right to immediate possession’ and ‘immediate right to possession’ are both commonly used to describe this right, and are sometimes used interchangeably. See, eg, United States of America and Republic of France v Dollfus Mieg et Compagnie SA and Bank of England [1952] AC 582 at 605 per Earl Jowitt. The former placing of the epithet seems more appropriate. 171. As to these torts, see 2.48–2.52. For a general discussion, see Green and Randall, The Tort of Conversion, note 164 above, Ch 4; Douglas, Liability for Wrongful Interference with Chattels, note 164 above. 172. See 2.54–2.56. 173. For a rigorous discussion of the proprietary nature of a bailment, see A Clarke and P Kohler, Property Law: Commentary and Materials, Cambridge University Press, Cambridge, 2005, pp 653–6. 174. Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 at 238. 175. Penfolds Wines v Elliott (1946) 74 CLR 204. See also Pangallo Estate Pty Ltd v Killara 10 Pty Ltd [2007] NSWSC 1528. 176. Houghland v R R Low (Luxury Coaches) Ltd [1962] 1 QB 694; [1962] 2 All ER 159. 177. United States of America and Republic of France v Dollfus Mieg et Compagnie SA and Bank of England [1952] AC 582. 178. See further, Balkin and Davis, Law of Torts, note 10 above, pp 94–101. 179. Penfolds Wines v Elliott (1946) 74 CLR 204 at 225 per Dixon J. See also Allianz Australia Insurance

Ltd v Lo-Guidice [2012] NSWSC 145 at 27. 180. United States of America and Republic of France v Dollfus Mieg et Compagnie SA and Bank of England [1952] AC 582. In other words, the bailee is in the position of an agent or employee. This ‘possession’ is sometimes known as ‘constructive possession’. Compare the rationale offered by Lord Porter (at 611), who concluded that the bailor has possession. 181. Wilson v Lombank [1963] 1 WLR 1294. 182. Sappideen and Vines (eds), Fleming’s Law of Torts, note 143 above, p 50. 183. Caxton Publishing v Sutherland Publishing [1939] AC 178 at 202 per Lord Porter. See also OBG Ltd v Allen [2008] 1 AC 1. 184. Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd (2003) 9 VR 171 at 151. See, eg, Safari 4 x 4 Engineering Pty Ltd v Doncaster Motors Pty Ltd [2006] VSC 460. 185. Hollins v Fowler (1875) LR 7 HL 757. 186. Fouldes v Willoughby (1848) 8 M&W 438. 187. M’Leod v M’Ghie (1841) 2 Man & G 326. 188. Glass v Hollander (1935) 35 SR (NSW) 304. 189. Singer Co v Clark (1879) 5 Ex D 37. 190. Penfolds Wines v Elliott (1946) 74 CLR 204; Reef Health Pty v Vines [2014] NSWSC 70. 191. For a further example, see discussion of Fouldes v Willoughby (1841) 8 M & W 540 in N Foster, Torts Cases and Commentary Supplement: Defamation and Wrongful Interference with Goods, LexisNexis Butterworths, Sydney, 2014, pp 102–3. 192. For a discussion of the difficulties of determining the ratio decidendi of this case, see G Paton and G Sawer, ‘Case Note: Penfolds Wines v Elliott’ (1956) 63 LQR 461 at 469–70. 193. Spackman v Foster (1883) 11 QBD 99. See also Grant v YYH Holdings Pty Ltd [2012] NSWCA 360. See further, Balkin and Davis, Law of Torts, note 10 above, pp 101-7. 194. John F Goulding Pty Ltd v Victorian Railways Commissioners (1932) 48 CLR 157. 195. On the operation of the limitation of actions statutes, and the cause of action, see Grant v YYH Holdings Pty Ltd [2012] NSWCA 360. 196. British Road Services Ltd v Arthur V Crutchley & Co Ltd [1968] 1 All ER 811; The Winkfield [1902] P 42. 197. See 2.60. 198. This diagram is a variation of one produced by H Luntz, D Hambly and R Hayes in Torts: Commentary and Materials, 2nd ed, Butterworths, Sydney, 1985, p 996. 199. Jeffries v Great Western Railway Co (1856) 5 E & B 802; 119 ER 680. 200. Jeffries v Great Western Railway Co (1856) 5 E & B 802 at 807; 119 ER 680 at 681. 201. B Edgeworth, C Rossiter, M Stone and P O’Connor, Sackville & Neave Australian Property Law, 10th ed, LexisNexis Butterworths, 2016, pp 106-9. See also Edwards v Amos (1945) 62 WN (NSW) 204. 202. International Factors v Rodriguez [1979] QB 351. 203. Donald v Suckling (1866) LR 1 QB 585.

204. Lord v Price (1874) LR 9 Ex 54. 205. As for the rights of bailees, see 2.61–2.62. 206. Hollins v Fowler (1875) LR 7 HL 757. It is important to note that legislation in all states protects innocent purchasers in D’s position from liability in certain circumstances. 207. E Tyler and N Palmer (eds), Crossley Vaines on Personal Property, 5th ed, Butterworths, 1973, pp 75– 6; F Trindade and P Cane, The Law of Torts in Australia, Oxford University Press, Melbourne, 1985, pp 139–40. 208. Penfolds Wines v Elliott (1946) 74 CLR 204 at 230. 209. Mears v London and South Western Railway Co (1862) 11 CBNS 850. 210. Mears v London and South Western Railway Co (1862) 11 CBNS 850 at 854–5. 211. Trindade and Cane, The Law of Torts in Australia, note 207 above, p 139; Sappideen and Vines (eds), Fleming’s Law of Torts, note 143 above, p 86. 212. Dee Trading Co Pty Ltd v Baldwin [1938] VLR 173. 213. Tancred v Allgood (1859) 4 H & N 438; 157 ER 910. 214. Trindade and Cane, The Law of Torts in Australia, note 207 above, pp 139–40. 215. Morison v London, County and Westminster Bank Ltd [1914] 3 KB 356; OBG Ltd v Allen [2008] 1 AC 1. 216. The Winkfield [1902] P 42. 217. The defendants did not raise the question of how it was that the Postmaster-General was deemed to be bailee (ie, in actual possession of the chattels), rather than the owners and operators of the Mexican, until it was too late and the court refused to consider the issue. 218. The Winkfield [1902] P 42 at 54 per Collins MR. 219. The Winkfield [1902] P 42 at 61. 220. See also British Road Services Ltd v Arthur V Crutchley & Co Ltd [1968] 1 All ER 811. 221. Anderson Group Pty Ltd v Tynan Motors Pty Ltd [2006] NSWCA 22. 222. City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd (1961) 106 CLR 477. 223. McCauley v Karooz (1944) 61 WN (NSW) 165. 224. The Winkfield [1902] P 42. 225. Millar v Candy (1981) 58 FLR 145. 226. Blades v Higgs (1861) 10 CBNS 713; 142 ER 634. For a recent overview, see C Hawes, ‘Recaption of Chattels: The Use of Force against the Person’ (2006) 12 Canterbury Law Review 253. 227. See 2.37. 228. Blades v Higgs (1861) 10 CBNS 713; 142 ER 634. 229. Toyota Finance Australia Ltd v Dennis (2002) 58 NSWLR 101. 230. R v Mitton (1827) 3 C & P 31; 172 ER 309. 231. Suttons Motors (Temora) Pty Ltd v Hollywood Motors Pty Ltd [1971] VR 684. 232. Cox v Bath (1893) 14 LR (NSW) 263. 233. Young v Hichens (1844) 6 QB 606.

234. Armory v Delamirie (1722) 1 Strange 506; 93 ER 664. 235. Willey v Synan (1937) 57 CLR 200. 236. Byrne v Hoare [1965] Qd R 135. 237. Willey v Synan (1937) 57 CLR 200. 238. Burnett v Randwick City Council [2006] NSWCA 196. 239. Burnett v Randwick City Council [2006] NSWCA 196 at 96. See further discussion in N Foster, Torts Cases and Commentary Supplement, note 191 above, pp 80–1. 240. See 2.16–2.30. 241. Brand v Chris Building Co Pty Ltd [1957] VR 625. 242. Ranger v Giffin (1968) 87 WN (Pt 1) NSW 531. 243. South Staffordshire Water Co v Sharman [1896] 2 QB 44. 244. Elwes v Brigg Gas Co (1886) 33 Ch D 562. 245. Waverley Borough Council v Fletcher [1996] QB 334. 246. Parker v British Airways Board [1982] 1 QB 1004; [1982] 1 All ER 834. 247. Bridges v Hawkesworth (1851) 21 LJQB 75; [1843–60] All ER Rep 122. 248. Parker v British Airways Board [1982] 1 QB 1004; [1982] 1 All ER 834. 249. Flack v Chairperson, National Crime Authority (1997) 150 ALR 153. 250. Hibbert v McKiernan [1948] 2 KB 142. 251. Parker v British Airways Board [1982] 1 QB 1004 at 1017; [1982] 1 All ER 834 at 843 per Donaldson LJ. 252. For a discussion of reform of the law of finding, see J Tooher, ‘Jubilant Jamie and the Elephant Egg: Acquisition of Title by Finding’ (1998) 6 APLJ 117. 253. Haynes Case (1614) 12 Co Rep 113; 77 ER 1389; Munday v Australian Capital Territory (2000) 173 ALR 1. 254. Property Law Act 1974 (Qld) s 197. See further, S Degeling and B Edgeworth, ‘Improvements to Land Belonging to Another’ in L Bennett Moses, B Edgeworth and C Sherry (eds), Property and Security: Selected Essays, Thomson Reuters, Sydney, 2010, pp 277–90. 255. Residential Tenancies Act 2010 (NSW) s 66(2), (3). 256. See A Tettenborn, ‘Damages in Conversion — Exception or Anomaly?’ [1993] CLJ 128. 257. United Kingdom Law Commission, Detinue and Conversion, 18th Report, Command 4774, 1971, pp 21–2. 258. The Winkfield [1902] P 42. 259. Sappideen and Vines (eds), Fleming’s Law of Torts, note 143 above, p 79.

[page 79]

Chapter 3

Fundamental Principles — Tenure and Estates Introduction 3.1 Common law property doctrines are relatively recent phenomena in the Australian context. They were introduced when the British Crown claimed sovereignty over Australia a little more than 200 years ago. The imported English common law (both in terms of judge-made law and statute) together with enactments of the local legislature and decisions of local courts (both of which were also based on English common law principles) have historically provided the recognised sources of property law in Australia. 3.2 In 1992, this position changed to the extent that the landmark decision of Mabo v Queensland (No 2)1 recognised an ongoing Indigenous connection to land as giving rise to a form of title known as ‘native title’. With the Mabo decision, the common law recognised rights and interests in relation to land that went beyond its previous understandings. However, how native title is to be understood has proved complex. According to Pearson, native title, a nonIndigenous construct, provides the tool by which the common law can interpret a parallel system of law contained in Indigenous traditions and customs as far as they relate to land and water.2 Native title, then, is rather like a mirror that reflects different understandings. Yet, whether native title is simply a new form of property right and another source of property law, or

something beyond that, has been the subject of considerable legal debate and analysis.3 Some decisions of [page 80] the High Court have found that native title is a sui generis form of interest in relation to land.4 It is a right recognised by the common law but is not ‘of’ the common law5 and, accordingly, it lies outside the doctrines of tenure and estates.6 (Native title will be explored more fully in Chapter 4.) 3.3 It follows from the above that today our legal system recognises three basic sources of rights in or in relation to land in New South Wales. They are: 1.

the common law brought from England;

2.

enactments of the local legislature and decisions of the local courts; and

3.

native title.7

However, the focus of this chapter is limited to a discussion of the doctrines of tenure and estates: two fundamental property doctrines operating within the common law. In particular, this chapter will explore how the various sources of property law have moulded or impacted on these doctrines. The chapter commences with a consideration of the principles of reception.

Common Law and Principles of Reception 3.4 The common law divided English colonies into three categories for the purposes of determining which principles of English law were to apply on colonisation.8 Colonies could be acquired by: (a) settlement; (b) conquest; or (c) cession. In the case of settlement, the acquired land received as much of the law of England as was applicable to the colonists’ own ‘situation and the condition of the infant colony’.9 By contrast, if land were acquired by conquest or ceded by treaty, the laws of the conquered remained in place until such

[page 81] time as those laws were replaced by the laws of the invader.10 In Australia, land was treated legally as having been acquired by settlement.11 3.5 Settlement was a principle of acquisition appropriate to land that was unoccupied or unpopulated. Put another way, it was legally appropriate where the land was terra nullius (ie, land belonging to no one). But given that Indigenous people had inhabited Australia for between 40,000 and 60,000 years before the arrival of Europeans, Australia could hardly be factually considered land belonging to no one. Land in Australia was not, in the words of Blackstone, ‘desert and uncultivated’.12 Hence, it was necessary to extend the legal doctrine of terra nullius to cases where there were found to be no ‘settled inhabitants or settled law’ (author’s emphasis) in order to cover the Australian position.13 Nowadays, history, anthropology and law have all demonstrated that Australia was not terra nullius and that application of the doctrine in either its ordinary or extended sense was incorrect.14 Accordingly, the relevance of the settlement principle would appear contestable but as it is a principle deeply embedded in Australian law it appears unlikely to be overturned, at least in the near future.15 3.6 As Australia was acquired on the basis of ‘settlement’ (and, in turn, the English law regarded as applicable to Australian conditions was ‘received’ into the colony), it would seem relevant to inquire into which aspects of English law were applicable to Australian conditions. To explain, it is arguable that as English and Australian conditions were so vastly different from each other, very little English law would have been applicable to the infant colony. England was moving towards a political democracy, and in Australia a large antipodean prison was being imposed on a traditional native society.16 Yet, judging from the amount [page 82] of English law that found its way into the Australian jurisdiction, it would

seem that this interpretation of events was either contested or ignored.17 A further question is when was the relevant ‘cut-off’ date for assessing the applicability of English law? The answer remained unclarified until 1828, when the British Parliament passed the Australian Courts Act 1828.18 That statute declared that all the laws and statutes that were in force in England on 25 July 1828 were to be applied if they were relevant to the particular Australian circumstances. It was not until the passing of the Imperial Acts Application Act 1969 (NSW) that the question of which pre-1828 statutes were relevant in the circumstances was resolved.19 3.7 More specifically, the question arose as to whether the two fundamental doctrines of tenure and estates (being English common law principles) were part of the law applicable to the infant colony. Decisions such as AttorneyGeneral v Brown, Cooper v Stuart and, more recently, Mabo v Queensland (No 2) and Wik Peoples v Queensland20 have all confirmed the view that these two fundamental doctrines became part of the law applicable to the infant colony. As they are so entrenched in Australian property law, the doctrines of tenure and estates both deserve further examination, albeit that today the doctrine of tenure is of diminishing practical importance.

Doctrine of Tenure Background and history 3.8 According to Pollock and Maitland, the doctrine of tenure is a system of land holding where ‘the King himself holds land which is in every sense his own’.21 They continue: The person who we may call its owner, the person who has the right to use and abuse the land, to cultivate it or leave it uncultivated, to keep all the others off it, holds the land of the King either immediately or mediately. In the simplest case he holds it immediately of the King; only the King and he have rights in it. But it well may happen that between him and the King there stand other persons.22

[page 83] 3.9

The doctrine of tenure has its roots in feudalism and the associated

concept of seisin.23 Feudalism was the key structure of social organisation in the Middle Ages and was itself a response to the chaos in which Western Europe found itself after the decline of the Roman Empire.24 The postRoman period was marked by regular marauding and a general debilitating decline in political, commercial and social stability. In such circumstances, it is not surprising that the weak looked to their wealthy and powerful neighbours for physical protection, entering into a bond with them under which the vassal (weaker party) provided assistance to the lord (stronger party) in return for protection. This practice came to be known as ‘commendation’. Later, the same principle of mutual obligation was extended to land, whereby the vassal transferred his or her land to a stronger and more powerful neighbour in return for protection. And so there developed a unique system of enmeshing personal ties with ties to the land. This marked the beginnings of European feudalism. 3.10 There is dispute as to how much feudalism had spread from Europe to England before the Norman Conquest in 1066. For example, while Maitland25 asserted that feudalism existed in England before the conquest, others have noted that: Nothing precisely like the fief [or fee] existed in pre conquest England. There, land was usually held either by immemorial inheritance, without specific service, or by an outright grant from the Crown, or else under a lease which, while it would normally require some service from the lessee, did not, like the enfeoffment, burden the land itself with a fixed, permanent (and often military) service.26

Irrespective of the degree of pre-conquest feudalism in England, it was certainly true that after the Norman invasion William, Duke of Normandy, needed a large army of specially trained knights and a system of castles, of a type unfamiliar in England, in order to [page 84] secure and maintain his position.27 As it happened, these needs were satisfied by the feudal system that was implanted in England after 1066. 3.11 Although land was not granted specifically for the purpose of entrenching feudalism, many of the landed estates which had previously

belonged to (English) King Harold and his followers were redistributed among William’s loyal followers, who had fought at the Battle of Hastings.28 The Domesday Book of 1086, which recorded land holdings in England, revealed that about one-half of the surveyed land of England was held by the King’s greater followers.29 The redistribution of the estates did not involve the out-and-out transfer of land to loyal Norman followers.30 Instead, the King retained ownership of the land and his subjects held their estates by virtue of feoffment with livery of seisin.31 Therefore, from this point on, two central principles of English land law were established: 1.

the doctrine of tenure, which addressed the question: ‘Upon what terms is this land held?’; and

2.

the doctrine of estates, which addressed the question: ‘For how long is this land held?’32 [page 85]

Feudalism and free tenures 3.12 Under the feudal compact, the King retained absolute ownership, merely granting something lesser, an estate, to his subject, who became a tenant. What was alienated or inherited was an estate in land rather than the land itself.33 The grant of the estate came with attached duties. Indeed, linked to the grant from the King was an intricate and complex system of dues, obligations and services which bound the subject and the King. The essence of the feudal nature of land law may be seen to lie in these obligations. Without the obligations of services and incidents, the land-holder would have held completely free. This would have amounted to absolute ownership or allodial title, but such a form of ownership did not sit comfortably with feudal conceptions of mutual obligation and was, therefore, virtually unknown in England.34 Indeed, the overwhelming view was that only the Crown had an absolute title, and this was because the Crown owed no obligations to an overlord.

Services 3.13 The different types of tenures could, in part, be differentiated according to the different types of services and obligations that accompanied them. Examples of services attaching to land included the provision of foot soldiers or armed horsemen, the provision of agricultural labour, the saying of masses, the organising of public hangings, and even the holding of the King’s head while he was seasick crossing from Dover to Whitsond.35 ‘Tenure by knight service’ involved the provision of horsemen to the King for 40 days each year.36 Services that related to the provision of personal obligations fell under the head of ‘tenure by serjeanty’, subcategories of which were grand and petty serjeanty. Services of a religious nature gave rise to ‘frankalmoign tenure’ while ‘socage tenure’ was a residuary category for all ‘free’ tenures that did not fall into the other designated categories.37 Naturally, the provision of these services affected, to varying degrees, the way tenants went about their daily lives and hence the provisions had social as well as legal significance.38 [page 86]

Incidents 3.14 In addition to services, there were some other incidental obligations (incidents) that attached to the free tenures. Such incidents were more useful to the lords than services because they were less susceptible to devaluation. Examples of feudal incidents are homage,39 fealty,40 suit of court,41 aids for the knighting of the lord’s eldest son and the marriage of his eldest daughter,42 primer seisin,43 wardship and marriages,44 and escheat.45 3.15 The incidents of fealty and homage were particularly important in symbolising the whole feudal compact.46 The tenant swore an oath to serve his lord in ‘life and limb and earthly honour’.47 He then placed his hands between the lord’s and undertook to become the lord’s man, swearing that he (the tenant) would devote himself to the lord’s service and remain a subject of the lord in many aspects of his daily existence.48 Interestingly, this ceremony took place, not in a general sense, but in regard to a particular piece of land. Once the service and incidents had been delineated, they were fixed and had

to be complied with by the tenant. In return, the tenure of the estate usually became hereditary. The quid pro quo of the feudal arrangement was that the tenant received the lord’s protection both physically and legally, as well as the benefits of ownership, while the lord received the services he needed, at the expense of parting with direct control of the land. Usually, the tenant–lord relationship did not end there. Most commonly, the tenant went on to replicate the process by which he or she had acquired an interest in land; that is, he or she created a tenant of his or her own, who, in turn, created a tenant of his or her own. [page 87] This process, known as ‘subinfeudation’, continued until eventually a large tenurial pyramid represented the pattern of land holding in England, as illustrated in Figure 3.1.49 Figure 3.1:

Tenurial pyramid

Below the tenurial pyramid — unfree tenures, manorial law and villeinage

3.16 Beneath feudalism proper and the system of free tenures was another system of social organisation which was based on the lord of the manor’s authority within the village structure. The lord of the manor’s relationship with the villagers and the peasant agricultural workers, who were essential to, and supported feudalism from the bottom up (eg, by growing the crops that fed those more elevated in the social order), was simply not recognised by the formal feudal framework. Within feudalism proper, the lord of the manor, as the tenant in demesne, held the lowest (in that it was furthermost from the King) recognisable position. The lord’s relationship with the cottars (the lowly peasants who performed much of the agricultural work) and the owners of the small strips of land in the village (the villeins) remained squarely outside (and below) formal feudalism.50 Cottars and villeins did not hold any interests ‘of’ the King or a mesne (or intermediate) lord. In such a context, the lord of the manor himself became a ‘quasi King’, developing his own fiefdom, regulating the lives of those who lived in the village and wielding an authority that went basically unchallenged, even by the monarch himself. Accordingly, village disputes were settled in the manorial courts rather than the King’s courts. Traditionally, fields within the village were divided up into small strips, with villagers owning varying numbers of scattered strips. This was not an efficient way to farm. Consequently, attempts to consolidate land and make it more productive had been made [page 88] since medieval times but the most concerted effort in that regard occurred between 1760 and 1830 when the English Parliament passed the Inclosure Acts.51 These Acts consisted of a series of laws which led to enclosure of ‘the commons’ (and effectively the loss of common land) along with the redistribution of plots and the requirement for farmers to fence their land. Theoretically, the poor were compensated for loss of their rights to use common land as well as their loss of ‘gleaning rights’, as the right to scavenge food left on the land by others was known. However, this compensation (where provided) was commonly inadequate and large numbers of village poor were left indigent and miserable.

Although enclosure enhanced farming efficiencies and permitted the introduction of new agricultural technology, it arguably exacerbated the gap between rich and poor. Bigger areas of land were held by fewer people who rented them out for high prices. In response to worsening circumstances such as these, many impoverished villagers left the rural areas, migrating to the cities in search of work in the burgeoning factories. As early as 1516, the writer Thomas More, in his book Utopia, attacked the principle of enclosure of land and criticised its effect on poor farmers and their workers. He notably drew a link between unemployment as a result of enclosure on one hand, and crime on the other.52 Many after him have written about (a) the connection between enclosure and crime, and (b) the consequent need to accommodate the growing number of convicted criminals — a need that was addressed, at least in part, by the establishment in 1788 of a penal colony in New South Wales.53 Returning to the position within the rural village, it can be observed that one of the reasons for the lord’s power lay in the nature of the villagers’ obligations to him. As we have learned above, obligations such as services were not of themselves unusual in post-conquest (feudal) England but what was different in relation to the services owed by villagers to the lord (compared with those owed within the formal feudal structure) was their ambit.54 Whereas the ambit of the services which a ‘free’ tenant was required to render was known with certainty, the ambit of the services required of an ‘unfree’ tenant (such as a villein) was variable and uncertain. This distinguished the one from the other. Further, the villein had no seisin55 and he or she could not transfer his or her interest without the consent of the lord.56 The villein could not even move to a new village without first [page 89] gaining the permission of the lord. Compliance was ensured through the imposition of heavy taxes and fines. Yet over time all the services owed by the villein were commuted to

monetary obligations and ultimately (perhaps by way of replication of feudalism proper) these services were found to attach not to the person but rather to the land. Hence, the position was that the villein held land ‘of’ the lord of the manor, by virtue of customary services; services that eventually evolved into monetary obligations. This type of tenure was known as ‘villeinage’, but it remained outside feudalism proper and maintained its unfree status. Later, villeinage became known as copyhold tenure. The etymology of this term lies in the fact that, although transfers of the villein’s land were (when permitted by the lord to take place) recorded in court rolls, the rolls proved difficult to access. Therefore, copies of the rolls’ entries were made and used by those wishing to establish and prove title to land. Hence, it was known as copyhold tenure. Notably, the copyhold tenant could not sue or be sued in the common law courts in respect of his or her holding. This left only the manorial (or lord’s) courts as an avenue of redress. Copyhold tenure was finally abolished by the Law of Property Act 1922 (UK) and, although never imported into Australia, is helpful in gaining an understanding of the doctrine of tenure more generally.

Historical development of the free tenures 3.17 The English Statute of Quia Emptores, passed in 1290, was instrumental in simplifying the formal tenurial system. For example, it prevented further subinfeudation of fee simple estates.57 From 1290 onwards, instead of creating further rungs on the tenurial ladder to accommodate newcomers, a system of substitution prevailed, and a new tenant wishing to hold land would step directly into the shoes of a previous tenant.58 Fewer people were involved with the same piece of land. This, together with the incident of escheat (which provided for the taking of land by the immediate lord when a tenant died without an heir [page 90] and in other special circumstances),59 meant that the tenurial pyramid

contracted in size remarkably because there were fewer rungs on it.60 Dealings with the land were also freed up as a result of the statute because the statute allowed the tenant to alienate land without the permission of the lord. Over time, too, feudal incidents associated with socage tenure were commuted to monetary equivalents — but, as the value of money was whittled away by inflation, mesne (or intermediate) lords and overlords were less inclined to expend resources on the collection of these moneys.61 As the role of mesne lords diminished and intermediate holdings dropped out of the feudal arrangement, socage tenants eventually came to hold directly ‘of’ the King.62 3.18 Tenure by knight service (by contrast with socage tenure) did not, however, fall away so simply. The incidents of wardship and marriage63 remained, allowing the mesne lord to retain some control over his or her land. Eventually, however, the Tenures Abolition Act 1660 intervened,64 with the effect of abolishing most — but not all — feudal incidents. That Act also had the effect of converting the tenures of knight service and serjeanty to socage tenure.65 Further, some of the more onerous incidents of socage tenure itself, such as aids, were removed. In fact, the only (valuable) incidents of socage tenure which remained were escheat and forfeiture.66 Yet, even escheat lost its force once it became possible to devise property under a will.67 Weakened by these changes, the real significance of tenurial incidents declined. 3.19 However, the practical importance of the doctrine of tenure has been the subject of much discussion and, at times, confusion. For example, the eminent English property lawyer and scholar Joshua Williams said: [page 91] … the first thing … the student has to do is to get rid of the idea of absolute ownership. Such an idea is quite unknown to English law. No man is in law the absolute owner of lands. He can only hold an estate in them.68

It is claimed that Professor Maitland, when lecturing at Lincoln’s Inn, would quote Williams’ words, but continue, ‘And the next thing a student must do is painfully re-acquire it’.69 According to Cyprian Williams:

… when the student has assimilated the whole history of the law of real property from the time of the Norman conquest down to the year of 1845 and subsequently to the year of 1925, he must arrive at the conclusion that a tenant in fee simple of land enjoys all the advantages of absolute ownership, except the form. For what is ownership and what is absolute ownership, which a tenant in fee simple enjoys: and in what way does the form of ownership, which he undoubtedly has, differ from absolute ownership?70

If the reasoning of Professor Maitland and Cyprian Williams is correct, it may explain, in part, why a failure to preserve the distinction between tenurial (on one hand) and absolute, or allodial, land holding (on the other) does not always result in consternation. For example, it may explain why (on one analysis) the Wills, Probate and Administration Act 1898 (NSW) blurred the distinction, seemingly without dire consequence.71 To explain, the Wills, Probate and Administration Act permitted real property passing as bona vacantia,72 by virtue of s 61B(7) of that Act, to be treated as personalty would have been treated; that is, allodially, rather than tenurially. Under the bona vacantia provisions in the Act, real property passed directly to the Crown by virtue of the Crown succeeding to the rights vested in the deceased. By comparison, under the doctrine of tenure and in the context of escheat, the Crown acquired the deceased’s interest in land by virtue of title paramount. The mesne lord or Crown did not succeed to the deceased’s interest. Once the tenant ‘dropped out of the picture’, through death, the mesne lord or the Crown took back what had always been his or hers, but which, during the tenant’s life, had been subject to the tenant’s intervening interest.73 Since the Succession Act 2006 (NSW) came into [page 92] force on 1 March 2008, s 136 of that Act has dealt with bona vacantia. Section 136 simply states that ‘[I]f an intestate dies leaving no person who is entitled to the intestate estate, the State is entitled to the whole of the intestate estate’. Figure 3.2 shows the different types of tenure in the English tenurial system. Of these, socage tenure was the only kind imported into New South Wales.

Figure 3.2:

Types of tenure

Local Developments and the Doctrine of Tenure New South Wales and tenures — background 3.20 As noted, in New South Wales the only type of imported English tenure was socage tenure, a tenure which evolved into a tenure free of incidents. Socage tenure required the payment of money by the grantee, rather than the performance of services. It is, therefore, not surprising that in New South Wales the notion of property interests being unfettered by obligations gained acceptance. Such a form of tenure has served to encourage relatively easy alienation of interests in land and, in many ways, seems to have brought notions of real property in New South Wales closer to notions of personalty, which notably is not held ‘of’ the Crown. The complexities of the English tenurial system, having never been imported into New South Wales, have often allowed property in New South Wales to be perceived, in practice, as more allodial than traditionally tenurial. Indeed, Fry observed the way in which Australian conditions varied from

those in England when he said: [page 93] Tenurial incidents in medieval England were, however, peculiarly appropriate to the feudal period, and those in modern Australia are of a different nature.74

Further, while in Wik Peoples v Queensland75 Brennan CJ (with whom Dawson and McHugh JJ concurred) indicated a strong willingness to uphold expressly the doctrine of tenure in the Australian context, he spoke of it in terms different from its English counterpart, when he said: By the interlocking doctrines of tenure and estates, the land law provides for the orderly enjoyment in succession of any parcel of land. The doctrine of tenure creates a single devolving chain of title and the doctrine of estates provided for the enjoyment of land during successive periods.76

Brennan CJ’s characterisation of a local version of the doctrine of tenure is without reference to the presence of incidents and services; incidents and services being the essence of tenure as traditionally defined. Indeed, when viewed in these terms, there is, perhaps surprisingly, some similarity between Brennan CJ’s approach and that of Fry. In this context, it is useful to examine some of the distinctive aspects of local property law.

Quit rents 3.21 Property law in New South Wales developed as a subset of the law which generally regulated and ordered the colony. Sometimes it deliberately fashioned itself in response to the distinctive Australian conditions, while at other times it inadvertently moved in a divergent path from its English counterpart. For example, although in New South Wales quit rents were modelled on the English practice of commuting the agricultural service usually associated with socage tenure to money payments (payments which, in turn, permitted the tenants to go ‘quit’ or free from their services), they (quit rents) developed a decidedly local flavour in the colonial conditions. Their substantive features

and their mode of functioning reveal dramatic divergences from the system in place in England. For instance, by 1809 it was the policy of the fledgling colonial administration to grant land to emancipated convicts (in blocks of 30 acres, if single, and 50 acres, if married) free of quit rents for 10 years. Free settlers were granted 100-acre blocks on similar terms.77 Generally, these grants contained a prohibition on alienation for a fixed term, usually seven years, as well as the obligation to clear and cultivate a set proportion of the land. A period of considerable uncertainty followed in the 1820s and 1830s, due in large measure to attempts to put the land on a more commercial footing. So, in 1825, a scheme was introduced whereby land could be bought outright at auction, though it would still be subject to a nominal quit rent. However, land passed [page 94] in could be granted without purchase. After a grace period of seven years, the land was subject to a quit rent of 5% of the market value, redeemable at 20 years. No further obligation to pay quit rents of any form arose once 20 repayments had been duly made. Clearly, nothing like this arrangement was possible under the English system of tenure. In this instance, quit rents were not in any meaningful sense forms of feudal incidents but, rather, a purchase by instalment.78 In 1826, the procedure was finally formalised to allow immigrants to buy all land in this fashion, representing a severe deviation from the English approach.79

Pastoral leases 3.22 In discussing the sui generis nature of a pastoral lease, the decision in Wik Peoples v Queensland80 highlighted how early statutes in Australia were ‘designed to provide for conditions unknown in England and to meet local wants in a fashion unprovided for in England’.81 The statutory pastoral lease represented a modification to one of the types of interests in property recognised by the doctrines of tenure and estates.82 3.23

In order to understand the concept of the pastoral lease and its

relationship to tenures more fully, it is worth considering the historical development of the statutory pastoral lease. Much of the need for statutory regulation of interests in land in New South Wales arose because of people’s propensity to leave the limits of location (ie, the environs of Sydney) and to occupy large tracts of land where stock could be depastured.83 In the course of doing this, the squatters (as they were called) occupied land to which they had no documentary title. The governors wished to regulate and control the squatters’ activities, and were disinclined to grant the squatters fee simple estates in land and thus highly reward the squatters’ uncontrolled straying from the circumjacence of Sydney.84 On the other hand, the squatters themselves were keen to acquire some kind of security with regard to the land, particularly as they usually incurred expense in fencing it, digging dams, clearing paddocks and building homesteads. 3.24 Such a frontier phenomenon was unknown in England, and hence English land law did not need to develop mechanisms for regulating such conditions. Clearly, [page 95] New South Wales did,85 and hence it developed a system of ‘occupation licences’ under the Crown Lands Occupation Act 1839 (NSW). Under this Act, it was illegal to occupy Crown land beyond the limits of location without a valid lease or licence.86 The Sale of Waste Lands Act 1842 (Imp) took control of Crown land a little further by bringing management and disposal of such land under statutory control.87 Thus, according to Fry, ‘the year 1846 saw the first step taken along a road which led to the subsequent invention of a multitude of Australian tenures of new types’.88 In the following year, an Order in Council was issued which gave the Governor of New South Wales the capacity to grant leases in unsettled lands for terms not exceeding 14 years, for pastoral purposes.89 This encouraged land to be taken up beyond the 19 counties around Sydney; hence, land holding in New South Wales, like that in other parts of the country, developed into ‘a patchwork quilt of freeholdings, Crown lease-holdings and Crown reserves’.90

3.25 By 1855, the individual nature of the development of New South Wales land law was left up to the New South Wales legislature, rather than English authorities, by virtue of the New South Wales Constitution Act 1855 (Imp). Under this statute, England surrendered control over Crown lands. Thereafter, it was the colonial legislature which was responsible for passing legislation which met the needs of the developing colony. ‘New forms of tenure’ continued to develop and, according to Gummow J in Wik: … legislative activity illustrated the general propositions that statute may create interests in property which are unknown to the common law.91

Gummow J continued: To these new forms of tenure the terms “lease” and “licence” applied in a new generic sense.92

Clearly, these new forms of tenure were not merely clones of established and known common law concepts. They were unique statutory responses fashioned by peculiar circumstances. Hence, it is not surprising that any historical account of Australian — and, indeed, New South Wales — land law would need to reflect the contributions of both feudal doctrines and these responses to special Australian conditions. [page 96] Millard and Millard summarised the position in writing about the ‘new forms of tenure’93 that were in operation in New South Wales by 1905 and which were created by legislative activity, when they said: The whole of the numerous and elaborate provisions of the Acts for the alienation and occupation of Crown lands are examples of the legislation which has been necessary to meet the peculiar conditions and wants of the colony. Nothing corresponding to the body of laws thereby created is found in English law, there being nothing in England analogous to the vast area of unoccupied lands in this colony, of which the Crown is the nominal, and the public the real owner, the settlement of which is necessary to the welfare and progress of the country.94

3.26 The majority judgments in the Wik decision served to highlight just how far away from traditional English law Australia had positioned itself, in regard to the doctrine of tenure.95 In that case, Toohey J offered a brief account of the initial source of Crown grants. He said that the source lay in the Crown’s prerogative power to dispose of such lands,96 and he explained

how early governors’ commissions contained a power to dispose of Crown lands. Eventually, however, this prerogative power was replaced by statutes;97 one consequence of which was that revenues from the sale of land could not be siphoned off by the Crown, but instead could be directed to colonial needs. The New South Wales Constitution Act was instrumental in these changes. It was not a parochial or domestic statute, but a United Kingdom statute which had paramount force. Hence, its interference with Crown prerogative was in no way problematic. After it was passed, any grants of Crown land had to be made pursuant to statute. New forms of tenure were, therefore, created by operation of statute. Indeed, in Queensland approximately 70 different kinds of Crown leaseholds and Crown perpetual leasehold tenures were created.98 The question then became whether a grant of Crown land made under statute would mirror grants made at common law in regard to the doctrine of tenure. The majority seemed to steer away from accepting this approach, with Toohey J relying on the words of Mason J in R v Toohey; Ex parte Meneling Station Pty Ltd.99 There Mason J said: The grazing licence is the creature of statute forming part of a special statutory regime governing Crown land. It has been characterised in the light of the relevant statutory provisions without attaching too much significance to similarities which it may have with the creation of particular interests by the common law owner of land.100

[page 97] Toohey J found that the rights created by statute should be understood, by reference to their place in the wider statutory scheme and not by the simple application of feudal notions of tenure. An appreciation that the law changes generally to accommodate different circumstances — and, in particular, that it changed historically to accommodate the very different situation in Australia to that in England — was considered relevant.101 By reliance on Fry’s work, Toohey J, along with the rest of the majority, concluded that feudal notions were inappropriate to Australian land tenures. Indeed, Kirby J added that: … it is a mistake to import into the peculiar Australian statutory creation, the pastoral lease, all

of the features of leases in English leasehold tenures dating back to medieval times … it is much more appropriate to give content to the statutory pastoral lease by reference to the statute, unencumbered [by feudal doctrine]. Doing so represents a more orthodox approach to the construction of an Australian statute, made for peculiarly, and in some ways unique, local and land conditions.102

Other statutory modifications 3.27 Lang’s Act103 is yet another example of the independent development of New South Wales property law. That Act dramatically altered the New South Wales law of inheritance on intestacy. Meanwhile, the Real Property Act 1862 (NSW) introduced into New South Wales a scheme of title by registration, and the Conveyancing Act 1919 (NSW) was responsible for extensively codifying much property law. All of these Acts, to some extent, put Australian law at variance with English law.104 3.28 Further, a number of English statutes which were incorporated into New South Wales law were not systematically updated with the English amendments that continued to be passed,105 nor was the spate of English legislation in the mid-1920s (including the Law of Property Act 1925 (UK), the Settled Land Act 1925 (UK), the Trustee Act 1925 (UK) and the Land Registration Act 1925 (UK)) ever replicated in Australia.106 However, had the British Parliament sought to have these statutes enforced in Australia, it could have done so until the late 1930s, under the doctrine of ‘paramount force’.107 ‘Paramount force’ meant that colonial legislation could be overridden and that the British Parliament could legislate for its dominions. Legal history reveals that this power was used infrequently, and hence there was ample opportunity for the nascent state to mould its law according to its own predisposition. [page 98] 3.29 In regard to the common law (as opposed to statute), it was not until the Australia Act 1986 (UK) was passed that the Australian courts were released from the requirement to follow English authority.108 This Act also removed appeals to the Privy Council and effectively established the High Court of Australia as the highest court in the land. English decisions, like those

of Canada, New Zealand and the United States, could be cited and relied on, but they were not authoritative.

Relevance of English Tenure to Australia Differences between English and Australian doctrines 3.30 Gummow J’s comment that ‘traditional concepts of English land law, although radically affected in their own country of origin by the Law of Property Act 1925 (UK) may still exert in this country a fascination beyond their utility in instruction for the task at hand’109 forces us to consider the relevance or otherwise, in the Australian context, of tenure as defined by the English legal system. In this regard, the following issues are relevant, and can be observed from the foregoing discussion: English-defined tenure automatically implies that land is held subject to services and incidents.110 In Australia, no services ever attached to the socage tenure that was imported. Indeed, even quit rents were not substitutes for services. They were, as mentioned above, purchase moneys paid by instalment. Lang’s Act, the development of the bona vacantia jurisdiction and the concurrent demise of escheat on intestacy, together with the Forfeiture Act 1870 (Imp), all accounted for the disappearance of the few incidents that had been imported in the first place.111 3.31 Further, the irrelevance of English tenure in the Australian context is suggested by the fact that the doctrine traditionally implies a spatial fragmentation of rights. It implies that the Crown, the tenant in chief, mesne lords, and tenants in demesne all have co-existing rights in a certain tract of land. Allodial land denotes quite the reverse because parties own it absolutely, totally and separately. Yet, as noted earlier, it is arguably allodial land, or something rather close to it, that has always existed in Australia, despite the words of Brennan J (as he was then) that it is ‘far too late in the day to contemplate an

[page 99] allodial or other system of land ownership’112 in this country. Tenure as redefined in Mabo v Queensland (No 2) (Mabo (No 2)) emphasises this; it describes the Crown’s right to property and its capacity to create title, but no more.113 3.32 By contrast, reliance on English tenure would have many more dramatic consequences in Australia than in England, partly because of the manner in which English tenure would interact with native title. Such a proposition is all the more interesting given that, according to Professor Jenks, writing in 1895: … the theory [of tenure] had almost died a natural death when it sprang to life again in the most unexpected manner with the acquisition of the great English colonies. For if, as was the case, no subject could show a recognised title to any of the countless acres of America and Australia, at a time when those countries were first opened up by white men, it followed that, according to this relic of feudal theory, those acres belonged to the Crown. It may seem almost incredible that a question of such magnitude should be settled by the revival of a purely technical and antiquarian fiction.114

Tenure, allodialism and native title 3.33 Given the above position, it is worth exploring the relationship between tenure, allodialism and native title. Despite the fact that Australian land law did not simply transpose and import English land law to foreign shores, it has been argued that here in Australia ‘the ghost of feudalism hovered over the scene’.115 Indeed, in 1847, Stephen CJ stressed that when a grant of land is made it has to be assumed that the Crown holds the title to the land, and that title is then the source for the creation of lesser estates.116 Later, in 1992, Brennan J stated in Mabo (No 2) that ‘the doctrine of tenure applies to every Crown grant of an interest in land’.117 3.34 Clearly, one of the most significant vestiges of the feudal doctrine of tenure is its fundamental tenet and oft-asserted proposition that land cannot be owned allodially, but only ‘of the Crown’ or tenurially.118 In fact, although the colonial and state legislatures created such tenures as they saw fit, some of

which were typically locally flavoured and described by ever-expanding legal terminology,119 they were created in an environment [page 100] ‘where the local common law recognised no allodial species of estate which was held independently of any grant by the Executive Government or of any grant pursuant to statute’.120 However, as Gummow J pointed out, the assumption that the common law could not recognise allodial title proved to be incorrect in the light of Mabo (No 2).121 3.35 The Mabo (No 2) decision demonstrated that native title, which is a title based on an ongoing Indigenous connection to land, was not dependent on the pre-existence of a tenurial system of land holding.122 Indeed, as the Indigenous connection with land predated both ‘settlement’ and the claim of sovereignty by the Crown of England, native title may be said to exist outside the doctrine of tenure, although it is a title recognised by the common law.123 3.36 Brennan J’s judgment in Mabo (No 2) confirmed the view that Australian freehold titles generally operate by way of Crown grants of estates; but in order to square this proposition with the concept of native title,124 which is not dependent on the existence of tenure, he was forced to revisit the long-held view — outlined in Attorney-General v Brown125 and relied on until and including Milirrpum v Nabalco126 — that absolute beneficial ownership was a concomitant of sovereignty. In doing so, he found that radical title, not absolute beneficial ownership, was a concomitant of sovereignty.127 This revisionist approach permitted the recognition of a dual system of land holding in Australia: the common law tenurial system and allodially held native title. Yet, perhaps surprisingly, the co-existence of two land-holding systems was not a new concept, even in the English context. The continuing Anglo-Saxon holdings after the Norman Conquest128 and the allodial land holdings on the Shetland and Orkney Islands,129 as well as the Nullum Tempus Act,130 demonstrate that English law had some familiarity with the concept of dual systems of land holding. Further, the law pertaining to acquisition by conquest (discussed at 3.4) illustrated in the conquests of the American–Indian peoples,

for example, could also be seen to acknowledge the co-existence of tenure with other [page 101] systems of land holding. For example, as we have noted, if land were acquired by conquest, the law of the conquered remained intact until such time as the conquerors decided to replace it with their own laws. Indeed, Holt CJ in Blankard v Galdy131 noted that ‘in the case of an infidel country, their laws by conquest do not entirely cease, but only such as are against the law of God’. The doctrine of continuity presumed that pre-existing rights would endure. Hence, prior to the conquered’s interests in land being extinguished by the conqueror (which in the case of England was the Crown), two types of land holdings (that of the conquered and that of the conqueror) co-existed. 3.37 Instead of trying to fit recognition of an allodial title (such as native title) around the doctrine of tenure, it is possible that another, simpler approach could have been taken in the Australian context. It may have been possible, for example, to overturn the doctrine of tenure altogether; a course effectively followed in several of the states of the United States of America132 where it appears to have been achieved relatively seamlessly. In Australia, however, the High Court in Mabo (No 2)133 chose to review existing authority and found that the doctrine of tenure was part of the skeleton of Australian common law. The court held that to ignore or deny the doctrine would risk damaging the fabric of the Australian legal system. The result was that the doctrine of tenure was thrust into the limelight in 1992 and has since enjoyed more attention than it had known for some time. But while there has been acceptance on one level that the feudal doctrine forms part of the skeleton of Australian law, there is at the same time, as we have observed, evidence that it was only ever a modified version of the doctrine of tenure that found its way into New South Wales property law in the first place. 3.38 In summary, ambivalence about the role of the doctrine of tenure — and, in particular, its intersection with allodial title — still remains. While Brown forcefully argued that the law respecting property was governed by

feudal principles, we can observe varying degrees of retreat from that position.134 Indeed, the uncertainty surrounding the application of the feudal doctrine of tenure seems to be made plain by s 13J of the Real Property Act 1900 (NSW), which equates the state’s holding with that of a subject; that is, a fee simple. This seems to suggest that the Australian understanding of the feudal doctrine of tenure is clearly at variance with the English understanding of the doctrine.135 [page 102] In this context, it was not surprising to see Deane and Gaudron JJ comment in Mabo (No 2), in words redolent of Professor Maitland and Cyprian Williams, that ‘the primary estate of a subject, the estate in fee simple, became for all practical purposes, equivalent to full ownership of the land itself’.136 In order to explore these ideas further, it is necessary to examine the doctrine of estates more carefully.

Doctrine of Estates Definition of an ‘estate’ 3.39 So far, we have discussed how the common law, as exercised pursuant to local conditions, and with reference to native title jurisprudence, has moulded and shaped the doctrine of tenure since its arrival on Australian shores. In particular, we have observed how, under the feudal system of land holding and the doctrine of tenure, a subject did not ‘own’ land. Only the Crown ‘owned’ land. The tenants to whom the land was granted held something else, but clearly not the land itself. The law described the ‘thing’137 that the tenant held as an ‘estate’.138 This ‘thing’ is the bundle of rights that a tenant is able to exercise at successive times in respect of land.139 It has been described as ‘an abstract entity’ that is ‘interpose[d] … between the tenant and the land’.140 Further, the term ‘estate’ has been said to indicate ‘an interest in land of some particular duration’.141 Where the doctrine of tenure implies a

spatial fragmentation of rights, the doctrine of estates involves a temporal fragmentation of rights. 3.40 The two types of estates that exist in New South Wales (and indeed, Australia) are (i) the freehold estate, and (ii) estates of less than freehold. The leasehold estate is an estate of less than freehold.142 The term ‘freehold’ has its origins in the feudal experience and refers to estates of an uncertain duration; whereas the term ‘leasehold’ refers to estates of certain duration. By historical development, possession of the freehold estate gave rise to seisin and, as a consequence of this distinction, actions for the recovery of land, as opposed to claims for damages, were only available to the freeholder. 3.41 As noted, estates of freehold could be created for different but indefinite durations. For example, an estate could be limited to the life of a person, or could extend for as long as that person had heirs. Hence, A could be granted an interest for A’s life and, subsequently, B could be granted an interest for B’s life, then C could be granted an interest in remainder [page 103] for as long as he or she had heirs.143 This capacity to divide up interests in land on the basis of time (creating successive interests) is what lies at the heart of the doctrine of estates and contributes to the doctrine’s high degree of in-built flexibility; a quality regarded as one of its great virtues. Figure 3.3 details the different categories and subcategories of estates.

Figure 3.3:

Types of estates

Freehold estates 3.42

There are three freehold estates:

1.

the fee simple;

2.

the fee tail; and

3.

the life estate. [page 104]

Fee simple estate 3.43 The fee simple estate is the largest estate in land, in that it lasts the longest. Historically the word ‘fee’ denoted that the estate was heritable (ie, it could be inherited) while the word ‘simple’ denoted that the estate could be taken generally by heirs and was not restricted or limited to a particular line of heirs, as was the case with an entailed fee. An heir inherited automatically on the death of the fee simple holder but the identity of the heir and, therefore, who would actually inherit, was not always a simple matter. It was determined according to a detailed formula of descent which favoured the male rather than female issue of the deceased.144 By the 13th century, and with the passing of the Statute of Quia Emptores 1290, there was another method by which property could pass from one person to another. A new method arose when the law permitted the fee simple holder to alienate (pass) his or her estate inter vivos (ie, during the holder’s own lifetime). One did not have to wait for death for the estate to pass. Originally the fee simple estate only lasted as long as the original grantee was alive or while that original grantee had heirs.145 This remained the case even when the estate had been alienated inter vivos pursuant to the Statute of Quia Emptores. Therefore, it was possible for the estate to evaporate in the hands of the alienee when there were no more heirs of the original fee simple holder. This situation was altered by the 14th century, when the estate in fee simple was permitted to continue as long as the new fee simple holder had heirs. However, it was not until 1540 and the passing of the Statute of Wills that the fee simple holder could avoid having the estate that he or she held at death automatically pass, on death, to his or her heir. When the Statute of Wills 1540 came into operation, it permitted the holder of a fee simple estate to make a testamentary disposition in favour of someone other than an heir. Prior to 1540, however, the creativity of lawyers had to be relied on to achieve a similar effect. In that regard, the development of the ‘use’146 (the trust’s precursor) assisted because it allowed the freeholder to achieve a quasi form of testamentary disposition. Today, the longevity of the fee simple estate is not determined by the availability of heirs. It continues irrespective of heirs. Further, the holder of the fee simple estate can pass his or her estate inter vivos

or can pass it by virtue of testamentary disposition. If the holder of the fee simple dies without a will (ie, intestate), his or her interest will be distributed according to the law of intestacy pursuant to Ch 4 (and particularly Pts 4.2, 4.3 and 4.4) of the Succession Act 2006 (NSW).147 Where ‘an intestate dies leaving no person who is entitled to the intestate estate, the State is entitled to the whole of the intestate estate’ pursuant to s 136 of the Succession Act, although the state may, under s 137 of the Act, [page 105] waive its rights in favour of a dependent or another person who has a just or moral claim, for example. Over time, we have come to see the fee simple estate as the largest known estate and the closest thing to absolute ownership that the doctrine of tenure admits. It is regarded as ‘the most comprehensive estate in land which the law recognises’.148 The fee simple estate can either be absolute, determinable or conditional.149

Fee tail 3.44 The fee tail — or, as it is sometimes called, the ‘estate tail’ or ‘entail’ — is another estate of freehold and inheritance. It was, however, only heritable through a line of lineal heirs. Collateral heirs, such as brothers and sisters, were excluded. It was different from the fee simple in that the sequence of inheritance was defined and restricted (ie, it was not ‘simple’). One purpose of the estate tail was to keep the estate locked into a certain branch of a family.150 A fee tail was expressed in terms such as ‘To Mary and the heirs of her body’. When the line of lineal descendants who could take by virtue of the fee tail had run out, the interest reverted to the donor and his or her heirs. The line of lineal descendants could be further specified by gender if desired, causing only female issue or alternatively male issue to inherit.151 Determinable limitations or conditions subsequent could also be added to restrict grants of fee tail estates.152

Initially, the common law treated fees tail as though they were merely fee simple interests subject to a condition, that condition being that the heirs of the specified class existed. As soon as an heir of the specified class was born, the common law treated the condition as having been satisfied. It followed from this that the interest held was an unfettered fee simple which could be alienated. If the interest could be alienated by the donee or one of his or her heirs, the wishes of the donor could be defeated. Future heirs were deprived of their interest, and the interest did not revert to the donor and his or her heirs on a failure of heirs of the donee. The Statute of De Donis Conditionalibus 1285 rectified this so as to heed the wishes and intention of the donor.153 The statute provided that, in the circumstances outlined above, on the donee’s death, the land should pass to the donee’s issue, but if there were no issue or the line of issue ran out then the land should revert to the donor. Although the holder of the fee tail could still alienate it, that alienation was restricted by the fact that the interest created by the alienation only lasted as long as [page 106] the alienor’s life. When the line of issue ran out, the interest in remainder154 (the fee tail being an interest less than a fee simple) reverted to the donor or, alternatively, passed in remainder to another person who might have been specified. In practice, the fee tail came to be an inalienable estate. Because of this, the tenant in fee found it a less than useful estate, but the large and powerful families, who wished to use the fee tail to tie up wealth in particular family branches, were loath to permit alteration to it. Once again lawyers developed creative responses to overcome the restrictions. In particular, they relied on fictitious procedures and used the common recovery and the fine to bar the rights of the specified line of descendants and anyone taking in reversion or remainder.155 The result was that the fee tail was converted into a fee simple. In Australia, the fee tail was rarely used, partly because our history was that of a traditional Indigenous community meeting with a penal colony. Established wealthy landed families did not form the upper echelon of society in Australia, so there was little need to employ aspects of the law, such as the

fee tail, which preserved the rights of such a group. In New South Wales, the fee tail can no longer be created.156 The result of an attempt to create a fee tail is the creation of a fee simple. Further, s 19 of the Conveyancing Act 1919 (NSW) converted any pre-existing fees tail into fee simple estates, while De Donis Conditionalibus itself was repealed in New South Wales by the Imperial Acts Application Act 1969 (NSW).157

Life estate 3.45 The life estate is an estate of freehold, but it is not an estate of inheritance. The fact that the word ‘fee’ is absent from its name is an indication of this. The life estate ceases on the death of the grantee, and the reversion passes to the grantor or to the tenant in remainder. The life tenant is entitled to possession of the land during his or her lifetime. Possession may take the form of physical possession or possession of rents and profits through leases, licences or agistment. Life estates can either be ordinary or pur autre vie.158 The estates can be subdivided further into absolute, determinable or conditional.159 3.46 Ordinary life estate There are two types of life estates that can be created by express grant (in a settlement or will): (i) the ordinary life estate; and (ii) the life estate ‘pur autre vie’. The former simply arises when a grant is made in the form ‘To A for life’. A receives a life estate; it terminates when A dies. This type of estate is often used in wills [page 107] where the testator does not wish to create an estate of inheritance. For example, where the testator has children from an earlier marriage, and wishes to provide for them in the long term, he or she may grant those children a fee simple estate in remainder, leaving a preceding life estate to his or her second spouse. The life estate is also sometimes used in the context of retirement villages so as to provide security of tenure for residents. It may also exist in the context of a constructive trust. 3.47

Pur autre vie The life estate pur autre vie arises when either:

the original grant measures the life estate against the life of another person rather than the grantee himself or herself, for example, ‘To A during the life of B’; or the present life tenant transfers the life estate. In old French, the words pur autre vie mean ‘through the life of another’. Hence, the life estate exists through the life of another, or is measured against the life of another. The ‘other’ person is not the present holder of the actual life estate. For example, if a grant is made ‘To A for life’ but A then transfers his or her interest to B, B holds an interest only for as long as A lives. At the expiration of A’s life, B’s interest determines (ends), although B might still be living. A is called the cestui que vie160 and B is called the life tenant pur autre vie. Originally, difficulties arose when the tenant pur autre vie (B in the above example) died before the cestui que vie (A in this case). This meant that the person whose life was measuring the life estate, A, was still alive, but the person in whose hands the estate had rested, B, was dead. However, because this was not an estate of inheritance technically the interest could not pass from the tenant pur autre vie, B, to his or her heirs. The way the law dealt with this problem was to treat the land as being without a tenant and, consequently, open to claim by the first person to obtain seisin of it by occupation alone. This approach was known as the doctrine of ‘general occupancy’ because anyone could claim the land. If, however, the grant of a life estate to B was phrased in terms of ‘To B and his heirs for the life of A’, on B’s death B’s heir could enter, but as a ‘special occupant’, rather than an heir.161 In both cases, the term used to describe the processes by which the new tenant took was the ‘doctrine of occupancy’. Since the Statute of Frauds 1677, the doctrine of general occupancy no longer exists. Section 5 of the Wills, Probate and Administration Act 1898 (NSW) provided that life estates pur autre vie were capable of being devised; however, this section was repealed by the Succession Act. Section 4 of the Succession Act permits ‘property to which the person is entitled at the time of the person’s death’ to be devised. This would appear to include a life estate pur autre vie. Presumably, life estates pur autre vie may also pass on intestacy pursuant to s 40 of the now Probate and Administration Act. Naturally, the

life estate pur autre vie still determines when the person whose life is used as the measuring life dies. [page 108] 3.48 Dower This form of life estate was created by operation of law, rather than by express grant. It provided for a widow to receive one-third of her husband’s land for life. The husband had to have been seised of either a fee simple or a fee tail estate and had to have been in possession solely or as a tenant in common during the marriage in order for dower to apply. Finally, it must have been possible for heritable issue of the marriage to have been born. It did not matter that they had not actually been born. If land had been granted ‘To A and the heirs of his body begotten on X’,162 but A had married F and not X, F could not claim dower. Following the Dower Act 1837 (NSW), dower was defeasible by alienation. Further, equitable interests in possession were subject to dower (whereas prior to that Act no dower could be taken out of equitable interests).163 Dower was seen as a means by which women could be provided with security but, in a competition between this objective and the push for fewer restrictions on the free alienability of land, the latter won the day.164 Dower is now obsolete in New South Wales.165 3.49 Curtesy Curtesy describes the life estate that a widower took, by the curtesy of England, on his wife’s death.166 Where the widow (on the basis of dower) was entitled to only one-third of her husband’s property, the widower (on the basis of curtesy) was entitled to the whole of his late wife’s property. In relation to curtesy, equity always followed the law and hence curtesy could be taken out of the widow’s equitable estates. One precondition to the widower taking such a life estate was that his wife must have been entitled to an estate of freehold either solely or by virtue of a tenancy in common, but not by way of joint tenancy. The wife must also have borne live issue who were capable of inheriting the land. Further, the land must not have been disposed of in a will or inter vivos. Since a wife could not alienate her property without her husband’s agreement and could not devise it without her husband’s consent, this requirement could often be satisfied with a little planning.

Curtesy has been abolished in New South Wales, but some of the policy reasons behind dower and curtesy have been incorporated into modern day legislation, such as the Succession Act.167 That Act allows adjustment of the testator’s will to accommodate the interests of parties [page 109] for whom, subject to particular requirements, the court believes it would have been appropriate for the testator to have made some provision.

Doctrine of waste 3.50 The grant of a life estate is different from the grant of a fee simple estate because the grantor of the former retains a continuing interest in the land, which may or may not be disposed of in favour of a third party.168 While the grantee of a life estate will wish to use the land during his or her lifetime, exploiting it to gain profit or advantage, the grantor will have a different agenda. The grantor will wish either to have the land improved, or at least retained in its original condition, so that when it is returned to him or her (or passes in remainder to the person he or she has designated) it will not be devalued. Clearly, the interests of the grantor and grantee of the life estate are not necessarily compatible, and in order to resolve potential conflict the doctrine of waste was developed. Waste in this context means permanently altering the land.169 Initially, the doctrine of waste was applicable only to life estates that were acquired by virtue of dower or curtesy. If waste were committed by a tenant holding pursuant to an express grant, it was not actionable at common law. This was so because it was thought that the grantor of an estate expressly granted, having not availed himself or herself of the opportunity to impose a liability for waste, should bear the consequences.170 The common law position altered as a result of the Statute of Marlborough 1267, a statute received as part of the law of New South Wales and operating today in amended form as s 32 of the Imperial Acts Application Act. Marlbridge, as the statute was sometimes called, made life tenants and tenants for years liable for

waste unless they had a special licence to commit waste. Where a life tenant had a special licence to commit waste, he or she was described as being ‘unimpeachable of waste’. A tenant in remainder who wishes to prevent waste continuing is able to bring an action before his or her own estate vests in possession. The remedies available include an injunction, damages and restitution. An injunction operates to prevent the tenant in possession from committing waste. Damages provide monetary recompense for the harm or loss caused by the waste, and restitution results in a return to the tenant in remainder of the profits gleaned from the waste. At common law, there are three types of waste: (i) permissive; (ii) voluntary; and (iii) ameliorating. There is also the waste that is recognised by a court exercising its equitable jurisdiction. 3.51 Permissive waste Permissive waste occurs when the life tenant permits the property to decay. This is usually demonstrated by allowing the property to fall into a state [page 110] of disrepair.171 A life tenant is not liable for permissive waste unless the instrument which created the life tenancy specifies that the liability to repair falls on the life tenant.172 Hence, if liability is not imposed by the instrument creating the estate, the property is allowed to fall into a state of disrepair without liability attaching;173 for example, ditches do not have to be cleaned out to prevent foundations rotting,174 and buildings do not have to be repaired.175 3.52 Voluntary waste Voluntary waste occurs where there is a positive or deliberate act that results in harm to the property. The consequence of the act means that the tenant in remainder or the reversioner will receive an interest of less value than if the act had not occurred. Examples of voluntary waste include demolishing the internal walls of a house with the result that the character of the house is altered;176 or opening and working a mine that results in the life tenant acquiring more; and the tenant in remainder or the

reversioner acquiring fewer benefits than intended.177 The life tenant will be liable for voluntary waste unless the instrument creating the life estate exempts him or her. This has been so since the commencement of the Statute of Marlborough in 1267.178 It should be noted, however, that even a life tenant who is unimpeachable for waste at common law may still be found liable for equitable waste. 3.53 Ameliorating waste Ameliorating waste describes conduct by the life tenant that improves the land.179 By definition, such cases raise the issue of whether the conduct is indeed properly described by the term ‘waste’.180 Naturally, it is unusual for the tenant in remainder or the reversioner to complain of improvement to the land. Hence, cases of ameliorating waste arise only rarely. Nevertheless, the court did find that ameliorating waste occurred when a disused corn store was converted into dwelling-houses181 and when a farm was converted into intensive market gardens.182 However, in these particular cases it was — and, indeed, generally would be — clearly inappropriate for the court [page 111] to award damages when no loss had been suffered.183 It would also be inappropriate for the court to grant an injunction184 unless there was waste of a ‘substantially injurious nature’.185 One circumstance where it has been suggested that ameliorating waste might conceivably occur and an injunction might be appropriate is where an historical building is demolished to make way for a modern apartment block.186 If the apartment block were more valuable than the historic building then, presumably, the only way the court could find ameliorating waste would be if it were prepared to adjudge the historical building aesthetically superior. Such an exercise would clearly take the court out of its familiar legal terrain and into a sphere where its credentials may be said to be questionable and its skills undeveloped. 3.54 Equitable waste Equitable waste describes the waste that a life tenant is allowed to commit at common law but which equity will restrain. Hence, although a person may, at common law, be regarded as unimpeachable for

waste which has been occasioned by obvious acts of destruction, if equity regards it as unconscionable to commit these acts, it will impose liability for them on the life tenant. Accordingly, a life tenant, who at common law had the right to strip lead, iron, glass and timber from a castle, was found in equity to be liable for waste.187 Further, a tenant who was not liable at common law for felling trees that had provided both shelter and aesthetic appeal was found to be liable in equity.188 Section 9 of the Conveyancing Act provides statutory recognition of the concept of equitable waste. That section also provides that a life tenant can be exempted from liability for waste where the instrument conferring the life estate unequivocally provides for this.

Estates of less than freehold — leasehold Historical development 3.55 Leaseholds are often referred to as estates of less than freehold but, historically, a leasehold was not recognised as an estate in land at all. Technically, it was classified as personalty rather than realty. Consequently, there were some circumstances where the lease was treated differently from other interests in land, which were classified as realty. For example, on intestacy, realty was dealt with by the royal courts which employed feudal principles (such as primogeniture189) but personalty, by contrast, was dealt with by the manorial courts, which, as we learned earlier in this chapter, operated beneath and outside [page 112] feudalism proper. The manorial courts commonly relied on Roman law approaches. Hence, a leasehold on intestacy would be divided equally among the deceased’s next of kin but a fee simple estate would pass to the deceased’s heir. Ultimately, in New South Wales, most of these distinctions fell away, in large part because of the reforms contained in Lang’s Act.190 Categorisation of the lease as personalty also meant that if the lessee were evicted he or she had only contractual remedies against the lessor, for breach of contract.191 The evicted tenant could not recover possession by use of the

possessory remedies, such as the assize of novel disseisin, because use of these remedies was dependent on the tenant having seisin. A leaseholder had possession but did not have seisin. (For the purposes of this discussion, seisin may be seen as possession of a freehold estate.) Bearing in mind the special position that land held in society, it is not surprising that an order for damages, rather than repossession of land, was seen by many leaseholders as an unsatisfactory remedy. 3.56 Developments in the law meant that, by the 15th century, the leaseholder could be protected from third parties, and not merely from the lessor with whom the leaseholder had contracted.192 This protection was provided through the action of ejectment. Although the leaseholder’s occupation came to be as effectively protected as that of the freeholder, it was too late to go back and reclassify a lease as a form of realty. Instead, leasehold interests continued to be categorised as personalty, albeit a type of personalty closely related to land.193 That is why, as perverse as it may seem, technically the hierarchy of estates dictates that a lease of 100 years’ duration remains inferior to a life estate. History aside, in most circumstances today leases are, in practice, no longer seen as inferior to freehold estates. Legislative reforms have assisted the treatment of leaseholds.194 Yet, despite their genesis as personalty, leases have consistently been referred to as ‘estates’.195 This is somewhat anomalous, given that the doctrine of estates does not apply to personalty and, accordingly, at common law there is no facility for interests, such as life estates, to be carved out of leases.196 Hence, at common law, no remainders or reversions [page 113] could exist in leases. Successive interests could only be created by virtue of subleases or with the assistance of equity, through a ‘use’ (which later developed into a trust).197

Key aspects

3.57 A lease necessarily involves a leaseholder (also known as a lessor or landlord/lady) and a lessee (also known as a tenant). A lease grants to the lessee the right of exclusive possession of land for a fixed duration. Leases contain mutual rights and obligations, called covenants.198 For example, the lessee has a right to possess the land during the term of the lease while the lessor has a right to regain possession on expiration of the lease. Other examples of covenants include the lessor covenanting not to interfere with the lessee’s quiet enjoyment of the land. In return, the lessee will usually covenant to pay rent and keep the land in a state of good repair. Most leases contain both implied and express covenants.199 The interest that the lessor is left with after a smaller interest, such as a lease, has been carved out, is known as the ‘reversion’. Put another way, in the context of a lease, the reversion amounts to the lessor’s title minus the lessee’s interest. One of the key discriminators between leasehold and freehold title is duration. A leasehold is said to have a fixed duration based on blocks of time, whereas a freehold has an indefinite duration based on lives.200 In practical terms, this distinction is not always clearly evident. For example, some leases appear to have an indefinite duration, because they do not simply determine (end) on a fixed date. This point will become clearer as we examine the different kinds of leases. There are three main types of leases: 1.

fixed-term tenancy;

2.

periodic tenancy; and

3.

tenancies at will and at sufferance.201

Fixed-term tenancy 3.58 A fixed-term tenancy or lease is one where the starting and ending points are known from the outset. In other words, those points fix the duration of the lease. The dates might be set by reference to the day, month and year, or by reference to other determinants — Christmas or university holidays, for example. Hence, a lease for three weeks, four years, or from Christmas Day until four days after Anzac Day would amount to a fixed-term

lease. That the specific date is not specified at the outset does not matter if the date is ascertainable by reference to some other determinant. [page 114] Further, a fixed-term lease does not require that time runs continuously. Hence, a series of blocks of time can still amount to a fixed-term lease. For example, a lease for the month of January over the next five years would be valid as a fixed-term lease.

Periodic tenancy 3.59 As the name suggests, a periodic tenancy is based on periods of time; for example, one week, one month or one year. This kind of lease is common in residential tenancies. For example, a tenant might first enter a fixed-term lease of one year from a set commencement date and thereafter move to a week-to-week, periodic tenancy. The periodic tenancy does not need to be formally renewed each week. That occurs automatically unless the lessor or lessee brings the tenancy to an end by a breach of covenant or the required notice. Although it is not necessarily obvious in advance when the periodic tenancy will end (because it may be renewed over and over again), it is still considered to be a lease of definite duration. This is because the tenant only has right to possession for the specified period. At the expiration of that period (eg, at the end of the month), the lessor can reclaim possession and bring the lease to an end. Hence, the time when the lease can be brought to an end is known. If the period is not specified in the lease, it can be implied from what is usual in similar circumstances. Non-agricultural leases usually have their periods deduced from the payment periods applicable to the rent.202 For example, if rent has to be paid each week, the lease will be assumed to be a weekly periodic tenancy.203

Tenancies at will and at sufferance 3.60

A tenancy at will occurs when it is understood that possession exists

on the basis that either the lessor or lessee can bring the tenancy to an end at his or her will (or put another way, at any time).204 Although a tenancy at will may be created expressly, it is often implied by law. A tenancy at will commonly arises after a lease of another type (eg, a fixed-term lease) comes to an end and the tenant stays on (holds over) with the consent of the lessor. As noted, the general rule is that the tenancy is brought to an end when either party demonstrates that it is his or her will that the tenancy should end. Yet, somewhat contradictorily, in some circumstances it has been found that the tenancy will not determine until reasonable notice has been given.205 Although the lessee’s possession under a tenancy at will is consensual, and the lessee is able to enforce that possession against the rest of the world, he or she is unable to enforce it against the lessor. In that sense, the tenancy at will does not look like a lease at all; but on [page 115] another view, the requirement of reasonable notice does perhaps make it look rather like a periodic tenancy with only a brief period. A tenancy at sufferance arises when a tenant ‘holds over’ without the lessor’s consent (or dissent). The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance’s original entry onto the premises was not wrongful.

Words of limitation 3.61 At common law, the rules of conveyancing were very strict, and certain specific words had to be used in order to create the kind of freehold estate one intended. Different words were applicable for a fee simple, a fee tail and a life estate. The phrase ‘words of limitation’ refers to the words which defined the extent of the estate, while ‘words of purchase’ defined the person or persons on whom the estate was conferred. The consequences of a failure to use the correct words could be very severe. For example, the failure to use

the correct words of limitation to create a fee simple would result in the grant being construed as a life estate, by default. 3.62 Historically, the courts treated grants inter vivos and dispositions under a will very differently. The courts were far stricter in regard to grants made inter vivos. In those circumstances, the words of limitation had to be correct and deviations were not tolerated, whereas, in wills, the courts were satisfied if the intention of the testator were clear. In New South Wales, since 1 July 1921, statutory provisions have made rigid compliance with formulaic verbal requirements unnecessary in deeds;206 however, in order to understand the way in which the amending provisions operate it remains necessary to understand which words were historically required for the creation of different estates (ie, which words of limitation were needed.)207 3.63 At this point, it should be noted that the Torrens system has never required adherence to words of limitation in regard to registered interests. Under the Torrens system, title is created by registration and not by properly attested deeds, as is the case under old system title. Further, the Torrens system relies on the registration of a standardised memorandum of transfer to transfer property. The memorandum of transfer simply refers to ‘an estate in fee simple’ without any mention of words of limitation.208 Should a lesser interest, such as a life estate, be the subject of the transfer, the memorandum of transfer is simply amended accordingly so as to reference that type of estate. Again, words of limitation are unnecessary.209 [page 116]

Fee simple and words of limitation 3.64 Disposition inter vivos During the Middle Ages, land was conveyed by ‘feoffment with livery of seisin’. This procedure involved: the passing of the estate; and a ceremony that handed over possession. The ceremony required both parties to be present either on or near the land. A clod of dirt, a twig or the branch of a tree was then handed to the

transferee as a symbolic gesture that the interest had passed hands.210 These acts, together with a declaration of delivery, marked the receipt of seisin. The law, however, also needed a way to distinguish what kind of interest was conveyed. For example, it needed to distinguish between freehold estates, because some (like the fee simple and fee tail) were heritable and others (like the life estate) were not. The way of distinguishing between the estates was by use of the correct words of limitation. 3.65 In order to dispose of a fee simple estate inter vivos at common law, it was essential to use the precise terminology, which included the word ‘heirs’ after the grantee’s name.211 Even the slightest variation from this precise terminology would be fatal. For example, leaving off the ‘s’ and writing ‘To A and his heir’ (instead of ‘To A and his heirs’) was insufficient for the interest to be construed as a fee simple estate.212 In the phrase ‘To A and his heirs’, the words ‘and his heirs’ were called ‘words of limitation’, while the words ‘To A’ delineated the person who was to receive the interest, and were called ‘words of purchase’. Although it may seem counter-intuitive, the words ‘and his heirs’ did not actually give the heirs any interest in the land at all. These words simply set the boundaries of the type of estate that had been created, that is, a fee simple (as noted earlier, a fee simple being an estate that could descend to heirs). Indeed, at the time of the grant or conveyance it was technically impossible for A’s heirs to acquire an interest because an heir cannot be ascertained until such time as the ancestor (the father, uncle or whoever it may be) dies. 3.66 In New South Wales, since 1 July 1920 when the Conveyancing Act came into effect, these rigid requirements have not applied to dispositions inter vivos. Section 47(1) permits the words ‘fee’ or ‘fee simple’ to describe adequately a fee simple estate, and hence the words ‘and his [or her] heirs’ are no longer necessary. Section 47(2) also permits a description of an estate which omits words of limitation entirely to be construed as a fee simple estate, unless a contrary intention can be gleaned from the conveyance. Finally, s 19(1) has the effect of creating a fee simple estate from any attempt to create what would once have created a fee tail estate. 3.67 Testamentary dispositions From 1540 onwards, interests in land could be devised under a will, pursuant to the Statute of Wills 1540. Such

dispositions never required the same rigid adherence to exact phraseology as did dispositions inter vivos. It has been [page 117] suggested that this was because the Statute of Wills permitted a testator to devise land ‘at his free will and pleasure’,213 a phrase which the courts interpreted as requiring a less draconian approach. The will merely had to demonstrate an intention to pass a fee simple estate for a fee simple to be construed. Hence, expressions such as ‘To A in fee simple’ and ‘To A forever’ were regarded as sufficient. By comparison, a phrase such as ‘to A’ was prima facie insufficient to demonstrate that the testator intended creating an estate of freehold that could be freely inherited. In those circumstances, a life estate would be created. Before 1840 in New South Wales, the onus was on the devisee to prove that the testator intended to pass a fee simple estate. However, statutes operating in New South Wales since 1 January 1840 ultimately reversed this onus, so that a disposition that neglects to include appropriate words of limitation will now be construed as a fee simple estate unless a contrary intention is evidenced.214

Fee tail and words of limitation 3.68 Dispositions inter vivos The word ‘heirs’ had to be used to create a fee tail because like the fee simple estate this estate was also one of inheritance. However, the fee tail estate included further words, which had the effect of restricting the line of inheritance to lineal descendants of the grantee. These further words were termed ‘words of procreation’. Hence, in a grant ‘To A and the heirs of his [or her] body’ the word ‘heirs’ indicated that a fee was being created, while the words ‘of his [or her] body’ indicated that the fee was restricted rather than simple. Some flexibility was permitted in regard to the words of procreation. ‘To A and the heirs of her body’, ‘To A and the heirs begotten by her’ and ‘To A and the heirs of his flesh’ were acceptable, but ‘To A and any children borne of A’ was unacceptable because the word ‘heirs’ was

missing, and hence it was impossible to create a fee. Instead, a life estate was created by default. The fee tail estate could be restricted further still so that it passed to lineal descendants on the basis of gender. This was achieved by incorporating the words ‘male’ or ‘female’; for example, ‘To A and the heirs female of his body’. Other words could also be incorporated to ensure that the fee tail passed only to lineal descendants of a specified parentage; for example, ‘To A and the heirs male of his flesh begotten to M’. Clearly, words of procreation were capable of severely restricting the scope of the fee tail estate created.215 In New South Wales, until 1920, when s 19(1) of the Conveyancing Act provided that fee tail estates could no longer be created, words of limitation had to be rigorously complied with. Further, s 19(2) of the same Act converted most entailed estates existing at 1 July 1920 [page 118] into fee simple estates. Any entailed estates that were not caught by this section were ultimately caught by s 19A of the Conveyancing Act, which was inserted by an amendment passed after the Imperial Acts Application Act had been passed. The Imperial Acts Application Act repealed the Statute of De Donis Conditionalibus 1285 from 1 July 1971 onwards; the latter being the statute that had permitted the creation of entailed estates in the first place. 3.69 Testamentary dispositions Consistent with the law regarding the creation of fee simple estates and life estates, the courts did not rigidly enforce the words of limitation where testators sought to create fee tail estates in wills. Hence, expressions that would have been insufficient to pass a fee tail inter vivos were capable of passing a fee tail in a will. For example, ‘To A and his issue’ or ‘To A in fee tail’ were acceptable to pass a fee tail if contained in a testamentary disposition. Section 19 of the Conveyancing Act also applies to fee tail estates purportedly created by a will, as well as to grants and conveyances inter vivos. It deems that an interest that, prior to 1920, would have been a fee tail, is, after 1920, a fee simple estate.216

Life estate and words of limitation 3.70 Dispositions inter vivos Before 1920, if a grantor made a grant using the words ‘To A for life’, a life estate was created. Further, before 1920, if the grantor attempted to create a fee simple but failed to use the proper words of limitation, a life estate was created by default. In New South Wales, since 1920, a life estate can only be created if clear words of intention to create a life estate are evidenced;217 for example, ‘To A for life’. Since 1920, a life estate is no longer the default estate. (As noted earlier, the fee simple now bears this role.) Naturally, if a life estate pur autre vie is being created as a result of a transfer it is not necessary to demonstrate clear words of intention, because a life estate is the only kind of estate that exists to be transferred. 3.71 Testamentary dispositions In New South Wales, since 1840, a will without any words of limitation has been effective to pass a fee simple, unless the rest of the will displays a contrary intention.218 If a party wishes to demonstrate a contrary intention, he or she bears the onus of proof. The burden of ‘proving’ a life estate under a will is easily removed by a clear intention to create a life estate being exhibited; for example, ‘To A for life’ or ‘To A for as long as he or she lives’.219 [page 119]

Equitable estates and words of limitation 3.72 The previous discussion of words of limitation in regard to fee simple estates pertained to common law requirements. Now we consider the position in regard to equitable interests. In order to appreciate this fully, we must understand something of the development of the Court of Chancery and the emergence of equitable interests. 3.73 Equitable interests were only possible because first the King and later the Court of Chancery gave recognition to them.220 Prior to 1875, the common law of England was administered by common law courts such as the King’s Bench and Common Pleas.221 These courts recognised and enforced

rights known as ‘legal’ rights. Bringing actions in the common law courts was often difficult, expensive and time consuming, due largely to a complicated and rigid system of writs. So as to bypass the writ system and in the pursuit of justice, parties began to petition the King directly. Initially, the monarch and his council heard these cases, but in time the task was delegated to the Chancellor, who presided over the Court of Chancery. This court sought to temper the rigours of, and fill the gaps in, the common law. At least initially, the jurisdiction sought to provide a contextualised and individualised form of justice.222 Rights enforced in this court were known as ‘equitable’ rights. Hence, two parallel systems of justice developed: common law, on the one hand, and equity, on the other. 3.74 When the Judicature Act 1873 (UK) was passed, it had the effect of merging the administration of common law and equity. Although separate substantive bodies of law continue to exist in the form of common law and equity, today they are heard by a single court exercising jurisdiction over both.223 3.75 One of the finest developments of the Court of Equity is the trust. It is a device which allows A to hold a legal interest in property while B holds an equitable interest in the same property. The holder of the legal interest is known as the ‘trustee’ and the holder of the equitable interest is known as the ‘beneficiary’. The device permits property to be dealt with in a very flexible manner.224 [page 120] 3.76 Now that we appreciate a little of what is meant by the term ‘equitable interest’, we return to discuss the relationship between words of limitation and equitable interests. Historically, whether or not specific words of limitation were needed for equitable interests depended on whether the trust behind which the equitable interest existed was executed or executory. In this context, an executed trust was one where nothing further needed to be done to create it, while an executory trust required some further instrument to be executed in order for the equitable interests to be defined.225 In regard to

executed trusts, if the trust were drawn in technical language, requirements for the correct words of limitation were strictly enforced. Other sections of the instrument could not be relied upon to interpret the words contained in the limitation. 3.77 If, however, an executed trust was not drafted in technical language, but it was still possible to glean the nature of the intended interest from the instrument creating it, equity was likely to give effect to that intention, even if the correct words of limitation were absent.226 3.78 In regard to executory trusts, equity again displayed flexibility. It was prepared to look for evidence of the settlor’s intention concerning the kind of interest to be created, and it was prepared to uphold this intention despite the absence of the technically correct words of limitation.227 3.79 Since 1920, deeds that create either legal or equitable fee simple estates have not had to comply with the rigid requirements that dictated the use of specific words of limitation.228 However, it has been suggested that if the trust is not created under a deed,229 then the pre-1920 regime may still apply.230

Determinable and conditional interests 3.80 As noted earlier, there are three estates of freehold (fee simple, fee tail and life estate). In this section we focus on the fee simple estate, which can (a) exist absolutely or (b) be modified or limited. A fee simple estate may be limited or modified by a determining event or a condition subsequent. If modified by a determining event, the fee is known as a determinable fee or a determinable interest. If modified by a condition subsequent, the fee is known as a fee defeasible by condition subsequent, a conditional fee or a conditional interest.

Determinable fee 3.81 A determinable fee is limited by a happening that may or may not occur. This uncertainty is unavoidable because a fee simple is, by definition, an estate of indefinite

[page 121] duration. To end the fee definitely at a certain point would cause the interest to become one of a fixed duration. The determining or limiting event marks out the boundary of the determinable fee as shown in Figure 3.4.231 Figure 3.4:

Boundary of a determinable fee

3.82 If the determining event does occur, the fee reverts to the grantor. Hence, in a grant in the form of ‘To A in fee simple until she ceases to reside in Australia’, the fee will automatically revert to the grantor if A does, in fact, cease to reside in Australia. The right of reverter arises immediately and requires no further action. After the grant has been made, but before the determining event occurs, the grantor is said to have a ‘possibility of reverter’.232 It should be noted that this is different from a grantor’s reversion,

because a reversion is held when the grantor has passed or created an interest less than a fee simple. For example, ‘To A for life’ gives the grantor a reversion. [page 122] If the determining event becomes impossible to satisfy, then the determinable fee will blossom into an absolute fee. 3.83 In the past, a fee simple could not be created after a determinable fee. For example, it was not possible to make a grant such as, ‘To A and his heirs until A buys a motorbike, and then to B and his heirs’. In this case, B was unable to take an interest even when A had bought a motorbike. Nowadays, s 50(1) of the Conveyancing Act permits the possibility of reverter to be considered an alienable right inter vivos. If the ability to alienate, previously found in s 5 of the Wills, Probate and Administration Act, has been imported into s 4(1) of the Succession Act, the possibility of reverter will also remain alienable by virtue of a disposition in a will. If a determinable life estate has been created, it is possible to follow this gift with another that would come into effect should the determining event occur; for example, ‘To A for life or until she gets a tattoo, and then to B and his heirs’. When a determining event is found to be void, the whole grant will fail, because the determining event cannot be severed from the grant, it being inherently part of the estate itself. 3.84 Certain words are regarded as being indicative, but not definitive, of a determinable interest. These are: while; during; until; so long as; and for as long as.233

Fee simple defeasible by condition subsequent 3.85 An interest limited by a condition subsequent is sometimes called a ‘defeasible’ fee or a ‘modified’ fee. These terms refer to an estate in fee that is subject to a condition subsequent. A condition subsequent, rather than defining the parameters of the interest, is regarded as a specified event that cuts short an already otherwise defined interest. The condition subsequent is not ingrained in the boundary of the interest. It is merely an extra limitation that, if satisfied, will limit the already defined estate. 3.86

Cheshire and Burn state that:

… if the terminating event is an integral and necessary part of the formula from which the size of the interest is to be ascertained, the result is the creation of the determinable interest; but if the terminating event is external to the limitation, if it is a divided clause from the grant, the interest granted is an interest upon condition.234

[page 123] 3.87 If the condition subsequent should occur, the grantor has a right of reentry,235 but the grantor can decide himself or herself whether he or she wishes to exercise this right. It could be the case that, although the condition subsequent has been fulfilled and the grantee’s interest could be brought to an end, the grantor decides not to exercise his or her right. If the grantor does exercise the right of re-entry he or she must either physically retake possession or rely on a court order to regain possession.

Figure 3.5:

Fee simple defeasible by a condition subsequent

3.88 Certain words are regarded as being indicative, but not presumptive, of a conditional interest. These are: on condition that; provided that; and but if.236 3.89 Should the condition subsequent fail because it is found to be void, it can be severed leaving the rest of the grant intact. It is not possible to create a fee simple after a conditional fee, because the fee has already been passed to the grantee. The fact that the condition subsequent, if satisfied, will cut short the interest does not alter the fact that the whole fee has already been granted and cannot be granted again. Nowadays, however, the grantor’s right of re-entry can be alienated according to statutory provisions.237 [page 124]

Historically it was not possible to create a remainder after a conditional life estate. Hence, it would not have been valid to make a grant in the following terms: ‘To A for life but, if he gets divorced, to B and her heirs.’ This would have been construed as a remainder cutting short the life estate. Such a grant then would have offended one or more of the remainder rules.238 Nowadays, a grant of this nature could be affected by putting it behind a trust, which would cause an equitable future interest in B to be created.

Void limitations and conditions 3.90 The classification of the divesting event results in different consequences where that divesting event is found to be void. If a void divesting event is classified as a determinable limitation, the whole grant will fail; but if it is classified as a condition subsequent, the offending condition subsequent may be severed, leaving the rest of the grant intact. Limitations have been found to be void for a number of reasons, including: denying the power to alienate; being against public policy (eg, for immorality or illegality); being directed against the course of action that is prescribed by law; and for uncertainty. 3.91 A condition cannot remove the power to alienate because the power to alienate is generally regarded as being enshrined in ownership, and to deny this power would be to deny a fundamental indicium of ownership.239 In Re Dugdale,240 the court affirmed the view that a general restraint on alienation was void. Hence, ‘To A and her heirs but, if she attempts to sell the property, then to B and his heirs’ would be void. The law is less clear where the limitation places only a partial restriction on alienation. 3.92 In Trustees of Church Property of the Diocese of Newcastle v Ebbeck,241 the High Court found that a clause which required a son and his wife to profess the Protestant faith in order to receive the benefit of a residuary estate, although not void for uncertainty, was void on the grounds of public policy. According to Dixon CJ, on the facts, the disposition created a tension between the wife’s (Roman Catholic) religious beliefs and a serious temporal interest of her husband. If the wife could not, or would not, desert her religious beliefs, the limitation provided an inducement to him to desert the marriage.

3.93 In Clayton v Ramsden,242 a grant in the following terms was found to be void for uncertainty: ‘I give my residuary estate to my daughter provided that if she at any time after my death marries a person who is not of Jewish parentage and of the Jewish faith [page 125] her interest is to cease.’ The term ‘Jewish faith’ was held to be too nebulous. However, in Blathwayt v Baron Cawley243 a condition that referred to what should occur if the donee were to ‘become a Roman Catholic’ was upheld and was not found to be uncertain. It is the ‘certainty of concept’ and ‘not ease of application’ that is at the heart of invalidity for uncertainty.244 Meanwhile, in Ellaway v Lawson245 the court found a condition stating that that the applicant would not receive a bequest until (a) she divorced her husband or (b) her husband died, was not a void condition. By applying Ramsay v Trustees Executors and Agency Co Ltd,246 the court concluded that the standards of ordinary and decent persons would prevent such conditions from providing an incentive for divorce.

Future interests 3.94 As we have seen, the doctrine of estates recognised that successive interests in land can exist. It, therefore, lays the groundwork for the recognition of future interests. By recognising that a grantor could grant an interest that was less than the one he or she held, the doctrine was compelled to recognise that something would be left over and retained by the grantor. If the grantor in so doing denied himself or herself a right to present possession (this being held by the holder of the lesser interest), it became possible to see interests in land as either present interests or future interests. 3.95 A present interest entitled the grantee to an immediate right to possession, use and enjoyment of the land. A future interest, on the other hand, delayed or postponed that right to possession to some time in the future. If the interest were a present interest, it was not subject to the technical and

complicated rules to which a future interest was subject. Initially the common law recognised two types of future interests: 1.

the reversion; and

2.

the remainder. In both cases, the right to possession of the land arose in the future.

Reversion 3.96 As noted at 3.57, the reversion is what the grantor is left with after he or she has granted or carved out an estate less than the one he or she originally held.247 For example, if the grantor holds a fee simple estate but grants only a life estate to another, the grantor is left with the fee simple estate minus the life estate. That residue has come to be known [page 126] as the reversion. A reversion, although a present right in some ways, does not give a right to present possession. The right to present possession rests with the holder of the life estate. The reversion allows the grantor to take possession of the land some time in the future. In that sense, the reversion is a future interest. Thus, if G, the fee simple holder, grants ‘To A for life’, G has carved out a lesser interest for A in the form of a life estate. What is left in the hands of G, the grantor, is the reversion. There is no need for the grantor to grant the reversion specifically to himself or herself. It arises automatically by operation of law. A reversion is not the same as the grantor’s reverter that comes into play if the limitation in a determinable fee occurs. Neither is a reversion the same as the grantor’s right of re-entry, which arises when a condition contained in a conditional fee occurs. The reason for this is that the grantor has already passed the whole fee. He or she has not carved out an interest less than a fee that is passed to the grantee, while simultaneously holding a residue for himself or herself.

The holder of a reversion has a present right to future enjoyment of the land and, in that sense, is said to have a future interest.

Remainder 3.97 A remainder is the interest in a grant which is to be taken by a grantee in the future, after the interest in possession has come to an end. For example, in a grant ‘To A for life, remainder to B and her heirs’, A has a present interest in possession, and B has an interest in remainder — in fact, a fee simple estate in remainder. Although B has a present right, his or her right to possession is in the future and, hence, the remainder is regarded as a future interest in that sense. He or she has no immediate right to possession. B must wait until A dies, some time in the future, before B can take possession and use and enjoy the land. If B is dead by the time A dies, B’s estate will be entitled to possession.248 There is no limit on the number of remainders in a grant. Hence, it is possible for G to grant ‘To A for life, to B for life, to C for life and to D and her heirs’.249

Vested and contingent remainders 3.98

Remainders can either be vested or contingent.

Vested 3.99 An interest may be ‘vested in interest’ or ‘vested in possession’, or vested in both interest and possession. If vested in both interest and possession, it is classified as a present interest, because the grantee is able to use and enjoy the land immediately. If, however, [page 127] the interest is vested in interest, but not possession, it is a future interest, the right to use and enjoy the land being postponed until the future. As we have seen above, reversions are vested in interest, but while the life-estate holder is

alive they are not vested in possession. A remainder will not necessarily be vested in interest. It may be a vested remainder but alternatively it may be a contingent remainder.

Contingent 3.100 A contingent interest gives no interest at all (either in interest or possession) until certain conditions precedent are satisfied. For example, if G grants ‘To A for life, then to B and her heirs’, the remainder to B is vested in interest but not possession until A dies. Nevertheless, B has nothing further to do but to wait until A dies (or, expressed legally, B only has to wait for the natural determination of the prior particular estate). If, however, G grants ‘To A for life, then to B and her heirs when she graduates in law’, A has an interest (a life estate) which is vested both in interest and possession, while B does not have any interest at all until she graduates in law. Until that point, B only has the prospect or possibility of an interest. When B graduates in law, then, if A is still alive, B will have an interest (a fee simple) which has vested in interest but not in possession. When A dies, if B has graduated in law, B will have a fee simple which is both vested in interest and in possession. At common law, B could not assign her possibility of an interest (ie, her expectancy). Nowadays, statutory provisions in New South Wales and other states do permit the assignment of such an expectancy.250 3.101 For a future interest to be regarded as vested rather than contingent, the tenant in remainder (B in the example above) must be clearly identifiable and there must be nothing else for him or her to do other than wait for the life-estate holder to die. 3.102 Even when an interest is vested, it is possible in some circumstances for it to be divested either partially or completely. For example, if G grants ‘To A for life, remainder to such of A’s issue as A shall appoint, and in default of an appointment among all A’s children in equal shares’, the remainders to the children in equal shares are vested, subject to being divested to the extent of any appointment made by A.251 3.103 As we will see in Chapter 10, there are occasions when the wording of the grant makes it difficult to tell whether the interest is vested or

contingent. Where this is the case, the courts will favour finding the remainder vested if at all possible. 3.104 At common law, the legal contingent remainder rules dictated when a legal contingent remainder was valid. These rules could be easily offended and, hence, were not a very efficient way of ‘tying up’ interests in land and directing the behaviour of the grantee — which, of course, was their purpose. [page 128]

Legal remainder rules 3.105 As we have noted, medieval landowners were keen to acquire land but were anxious that it not fall out of the family’s hands. Therefore, once land had been acquired grantors tried to impose restrictions on grantees. For example, grantees were commonly directed towards marrying certain people. Grantors relied heavily on legal contingent remainders to direct the course of conduct of grantees. However, when the contingent remainder offended the remainder rules, the remainder failed and the grantor’s objective went unfulfilled. When we speak of contingent remainders in this context, we are concerned with contingencies that precede the vesting of the estate in interest, not the vesting of the estate in possession. The four legal contingent remainder rules were as follows: 1.

A remainder after a fee simple estate was void. For example, the remainder ‘To A and his heirs and then to B and his heirs’ was void, because the fee simple had already been granted (to A) and the grantor could not give (to B) what the grantor did not have to give.

2.

Any remainder that cut short the prior particular estate252 was void. For example, in the remainder ‘To A for life but, if A becomes a Catholic, then to B and her heirs’, B’s remainder was void and A still took a life estate.

3.

Any remainder that, if it were to take effect, would leave a gap in seisin was void. For example, in the grant ‘To A for life, remainder to B and her heirs when she (B) has a baby’, there was a potential gap in seisin. B

might not have had a baby by the time A died, so there was the possibility of a gap in seisin. Hence, the remainder to B was void and A took a life estate. 4.

A remainder must be supported by a prior particular estate of freehold created by the same interest. For example, in the grant ‘A lease to A for 10 years, remainder to B and her heirs’, B’s remainder was void, because A’s interest was a leasehold and not a freehold estate.

The basis of these rules was mainly to ensure that the person who held seisin could be established, because it was on the basis of seisin that feudal incidents were levied. Even if remainders avoided falling foul of the legal contingent remainder rules, remainders could be artificially destroyed. As a result, the grantor’s attempts to control behaviour (and along with it, land) were again thwarted.253 Alternative means for the protection of remainders were sought by landowners and once the ‘use’ was developed it became a favoured tool serving this end.254 Putting remainders behind a use had [page 129] the effect of creating equitable interests that did not offend the legal contingent remainder rules.

Legal executory interests 3.106 A legal executory interest is another type of legal, future, contingent interest; but, unlike the legal remainders we have considered thus far, it could only be created after the passing of the Statute of Uses 1535. Similarly, legal executory interests created in a will were possible only after the passing of the Statute of Wills 1540. The development of equity generally — and, more specifically, the use — is discussed in Chapter 6. It is enough for present purposes to understand that the common law, with its doctrines of tenure and estates, was insufficient to cater for the changing needs and tolerances of society. For example, as we

have noted, before the Statute of Wills, freeholders were frustrated by their inability to dispose of their estates on death to whomsoever they chose. More generally, they also resented the feudal dues and incidents that were payable on the death of a freeholder (and at other times). Further, they were dissatisfied with the public and formal requirements incumbent on a party wishing to convey land.255 In response to these concerns, the Court of Chancery256 (later Equity) developed the ‘use’, which, as we have observed, was a precursor to the modern-day trust. Placing an interest behind a use resulted in one party (today known as the trustee) holding legal title to the land, while another party (nowadays known as the beneficiary) received an equitable title in the same land. Hence, if B were the freeholder, he or she would structure the conveyance in the following form: ‘To A and his heirs to the use of B and his heirs’. In this example, A is called the ‘feoffee to uses’ (later, the trustee) and B the ‘cestui que use’257 (later, the beneficiary). According to such a conveyance, A held the legal title to the fee simple estate and B held the equitable title to the same fee simple estate. If A refused to acknowledge that he or she held the interest to the use or benefit of B, B could not seek redress at common law, because B’s interest was not recognised at common law. B had to seek the assistance of the Court of Chancery. There, the Chancellor would have asked A if it did not bother his or her conscience not to recognise B’s interest. (If A found that it did not bother his or her conscience, imprisonment often provided the opportunity to rethink the matter.) 3.107 Putting a conveyance behind a use brought many advantages. For example, it had the effect of avoiding the feudal dues usually payable on the death of B, as in the above example. Assuming B conveyed his or her interest to two or more joint feoffees to use, then, as long as the number stayed above two, the interest in land would not have to pass by inheritance, on the death of a feoffee to uses. Instead, it would vest in the remaining feoffees by survivorship, and feudal taxes and burdens would not be payable. Further, if the cestui que use, B, conveyed himself or herself an interest for life behind a use and then

[page 130] granted an interest in remainder to C in fee simple, the effect was to avoid feudal incidents on B’s death and to pass the property to C as might a will. The legal remainder rules (which, we have observed, caused many legal remainders to fail) were not applicable to equitable future (ie, successive) interests. One significant reason allowing equitable future interests to escape the net of the remainder rules lay in the fact that the Court of Chancery was not concerned with the issue of seisin. Under the use, the feoffee to uses held seisin and as his or her estate was one recognised by the common law, the Court of Chancery felt able to operate outside the strictures of the common law remainder rules. 3.108 However, one effect of conveyancers employing the use was a loss of revenue for the King. Unhappy about this outcome, a response came from the King in the form of the Statute of Uses 1535. That statute converted what would have been an equitable interest arising under the use into a legal interest. It was said to ‘execute’ the use. Hence, the situation can be summarised like this: Before 1535. A remainder that simply said ‘To A for life at 21 years’ was void, because A might not reach 21 years before the natural determination of the prior particular estate, and hence there would be a gap in seisin. If, however, the grant in remainder were placed behind a use and it said, ‘To B and her heirs, to the use of A for life at 21 years’ then, before 1535, A’s life estate in remainder would have been equitable and not subject to the remainder rules. A would have had an interest which sprang up when A reached 21 years, at which time the Court of Equity would have enforced that interest against B, the holder of the legal fee simple. After 1535. The Statute of Uses converted A’s equitable life estate into a legal life estate. After 1535, B (in the example above) received no interest at all. Further, where A had not reached 21 years, the grantor held the legal estate (by way of resulting trust) until such time as A reached 21 years. In cases involving what would have been, prior to the Statute of Uses, a shifting interest, the situation was a little more complex. To explain, if the

grant were in the form of ‘To A and his heirs to the use of B and his heirs, but if C graduates in medicine then to the use of C and his heirs’, an issue arose in the post-Statute of Uses era, of how the interest could shift from B to C. If the original use in favour of A had been executed and the legal title existed in B, not A, it was not possible for A to be seised to the use of C should C ultimately graduate in medicine. This difficulty was overcome by somewhat contentiously interpreting the above grant as having allowed A to retain a ‘scintilla’ of title, on which the statute could rely, so permitting the vesting of the fee simple estate in C when C graduated in medicine. 3.109 One of the key issues to be dealt with was whether this new kind of legal interest — created by virtue of the Statute of Uses and known as a ‘legal executory interest’258 — was subject to the legal remainder rules. Broadly speaking, the answer was in the negative. However, there were some exceptions, the most notable being the rule [page 131] in Purefoy v Rogers,259 which stated that, where a gift contained in a grant to uses or a will was at all capable of complying with the legal remainder rules, then it was to be treated as a legal contingent remainder and not as a legal executory interest.260 The result was that the legal contingent remainder would fail if there were a gap in seisin; for example, even though the interest had been created behind a use, or was contained (after 1540) in a will.

Current position on remainder and executory interests 3.110 In New South Wales, the relevant statutory provisions applying to remainder and executory interests are ss 16(1) and 44(2) of the Conveyancing Act. The situation is also affected by the Imperial Acts Application Act (effective 1 January 1971). Section 16(1) Conveyancing Act states that: A contingent remainder existing at any time after the commencement of this Act shall be capable of taking effect notwithstanding the want of a particular estate of freehold to support it in the same manner as it would take effect if it were a contingent remainder of an equitable estate supported by an outstanding legal estate in fee simple.

This section clearly aims at preventing a legal contingent remainder from failing for want of a prior particular estate. 3.111 Unclear drafting leaves the section open to two interpretations. First, the legal contingent remainder could be treated from the outset as though it is actually an equitable contingent remainder. The result would be to save the contingent remainder but it would, nevertheless, be subject to the rule against perpetuities, which may cause it ultimately to fail.261 Alternatively, the legal contingent remainder, if validly created, could be interpreted as existing until the prior particular estate determines. If, on the determination of the prior particular estate, the contingency has not been met, the legal contingent remainder is then treated as though it were an equitable contingent remainder. Again, this approach subjects the remainder to the rule against perpetuities, but doctrinally it is arguably ‘purer’ in that it keeps the remainder subject to the legal contingent remainder rules for as long as possible.262 3.112 Section 44(2) of the Conveyancing Act also modifies the earlier common law position in New South Wales. It states that: Every limitation which may be made by way of use operating under the Statute of Uses or this Act may be made by direct conveyance without the intervention of uses.

The aim of this section is obviously to bypass the need to put springing and shifting limitations behind a use in order to save them from the legal remainder rules. Hence, after s 44(2) was passed and before 1971, when the Statute of Uses was repealed, a conveyance [page 132] in the form of: ‘To A and her heirs in fee simple, but if A buys a motor bike to B in fee simple’ would have been valid. However, s 44(2) of the Conveyancing Act is drafted as though it is still possible to make limitations under the Statute of Uses, which of course is no longer the case. Yet, if the repeal of that statute means that no limitation may now be made ‘by way of a use operating under the Statute of Uses’ (because without the Statute there is no such thing), it is arguable that the grant in favour of B, in the example above, would be void. Why? Because if the

Statute of Uses is no longer valid, nor is s 44(2), and the limitation without the protection of s 44(2) would offend the legal remainder rule prohibiting a grant after a grant in fee simple. Such an interpretation of the operation of s 44(2) has the effect of thrusting the law in this area back into the pre-1535 position. 3.113 On the other hand, it could be argued that s 44(2) of the Conveyancing Act was drafted in accordance with the law that was valid in 1920 and that law included the Statute of Uses. Hence, the section is to be read as if the Statute of Uses were still valid. If this were done, the grant to B would not fail. Despite the obvious uncertainty surrounding the interrelationship of s 44(2) and the repeal of the Statute of Uses, the issue has never been litigated.263

Reform 3.114 A brief discussion of Zapletal v Wright264 and Andrews v Parker265 serves to demonstrate why the law of conditional and determinable interests is in need of reform. Although not a High Court case, Zapletal is worth considering because it serves to demonstrate the practical difficulties encountered in characterising an interest as determinable or conditional in circumstances when the limitation is void. In that case, the (female) plaintiff and the (male) defendant lived together for 15 years. During that time, they had two children and bought land in joint names with the money that had been provided by the defendant. The man agreed to put title in their joint names but subject to the limitation that, if the plaintiff (woman) left him, her interest would terminate. During the time they lived together, the plaintiff contributed extensively to household expenses. Ultimately, the plaintiff left the defendant. She then claimed the property should be sold and that she was entitled to half of the proceeds available. If the limitation were found to be void for immorality because it encouraged the plaintiff to continue living in a de facto rather than a de jure marriage, the characterisation of the fee as either determinable or defeasible/conditional assumed great significance. To explain, if the interest were determinable, the whole grant would fail and the plaintiff would

[page 133] receive nothing; but if it were conditional, the offending limitation could be severed and the plaintiff would retain her share in the property. The court found the interest to be a conditional one, stating: … the form of the gift was an undivided moiety in fee; it was not in terms limited to an estate defined by reference to any prior event … The form of the condition is such that it did not denote the extent of the estate but only the event in which the larger estate conferred may have been cut short.266

3.115 Parker raised similar issues, concerning the characterisation of an interest, in the Queensland Supreme Court. There, the plaintiff (male) and defendant (female) lived together in a house owned by the plaintiff, who transferred title of the house to the defendant on her agreement that if she ever returned to her husband, she would re-transfer the property to the plaintiff. She did not leave the house to return to her husband. Instead, the husband moved into the house as well, and the defendant then asked the plaintiff to move out. He did. Later, the plaintiff took proceedings to recover the property. He was met with the defendant’s claim that the limitation restricting her from returning to her husband was void for immorality. The court held that the gift was in the form of an interest defeasible by a condition subsequent but that the condition subsequent was not designed to induce immorality because it did not induce the woman to live apart from her husband. She had already made that choice. Stable J noted that ‘[s]ocial judgements of today upon matters of “immorality” are as different from those of the last century as is the bikini from the bustle’. Without citing Zapletal, the court found that the plaintiff was entitled to a reconveyance of the property that he had transferred to the defendant because she was more blameworthy in the matter than he was. These cases serve to demonstrate how the consequences of the categorisation may be of great significance; however, in practical terms, the characterisation of an interest as either determinable or conditional seems to rest largely on semantics.267 (Does the grant use the words ‘while’, ‘during’, ‘until’ or ‘for as long as’, or does it use ‘but if’ or ‘provided that’?) Such an

approach emphasises form rather than substance, which does not seem to reflect modern trends in judicial interpretation. 3.116 Following from this, it may well be the case that categorisation as either a determinable or conditional interest could result in discrimination, particularly when the limitations relate to marriage (including same-sex marriage) or religion, for example. It would appear that this area of the law is ripe for reform and, indeed, has been so for some time — at least according to one judge, who as early as 1892 said that the distinction [page 134] between conditional and determinable interests was ‘little short of disgraceful to our jurisprudence’.268 Cases such as Zapletal and Parker acknowledge that gifts can be used in terrorem. This may be repugnant morally, but not legally. Perhaps an alternative and better way of dealing with these issues may be within the framework of constructive trusts, where it is possible to adjust the interests of parties according to accepted equitable doctrines or extensions of those doctrines, rather than within the parameters of conditional and determinable interests. 3.117 Another area that is arguably in need of reform is the doctrine of tenure itself. In this chapter, we have highlighted how the Mabo v Queensland (No 2) (Mabo (No 2))269 decision afforded the doctrine a significance beyond that which it deserves. Since Mabo (No 2), there have been calls for the doctrine’s abolition in the Australian context. Hepburn has put a cogent argument for this, and has suggested replacing the doctrine with an allodial system of land holding for Australia.270 Interestingly, the Law Reform Commission of New Zealand came to the same conclusion for New Zealand in its 1992 report Tenure and Estates in Land.271 Although the Commission’s conclusions have not been implemented, it is arguable that Australia should consider the abolition of the doctrine of tenure. In particular, it would be useful to consider the models used in several states of the United States, where allodial systems of land holding have existed since the time of Thomas

Jefferson despite the fact that that country’s legal system was born (like Australia’s) out of an English legal heritage.272 3.118 In conclusion, this chapter examined some of the fundamental principles underpinning New South Wales property law. It outlined the common law principles relating to the reception of English law into Australia and, in particular, examined two key English property law imports: the doctrines of (i) tenure and (ii) estates. In order to understand the doctrine of estates more fully, it examined the historical development of estates and interests and the rules pertaining to them. Accordingly, one purpose of the chapter was to enrich understandings of the operation of modern property law by familiarising readers with the relevant terminology and the development of concepts and principles, and to introduce them to areas in which law reform is needed. However, another purpose of the chapter was to provide a platform from which those readers interested in legal history may pursue further research and investigation.

1.

Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 (Mabo (No 2)).

2.

See N Pearson, ‘The Concept of Native Title at Common Law’ in Land Rights — Past, Present and Future, Northern and Central Land Councils Conference, Darwin and Alice Springs, 1996, pp 118– 23. Note that native title has also been held to apply to some aspects of water: Commonwealth v Yarmirr (2001) 208 CLR 1. See also V Marshall, Overturning Aqua Nullius: Securing Aboriginal Water Rights, Aboriginal Studies Press, Canberra, 2017, which argues that Aboriginal water rights require legal recognition as property.

3.

See J Webber, ‘Beyond Regret: Mabo’s Implications for Australian Constitutionalism’ in D Ivison, P Patton and W Sanders, Political Theory and The Rights of Indigenous Peoples, Cambridge University Press, Cambridge, 2000, p 61. Discussion of this point may be found at 4.36–4.50; P Lane, ‘The End of Property As We Know It’ (2000) 8 APLJ 1; R Bartlett, ‘The Proprietary Nature of Native Title’ (1998) 6 APLJ 77; J Gray, ‘Is Native Title a Proprietary Right?’ (2002) 3 Murdoch eLaw Journal, (accessed 21 March 2011), .

4.

See Fejo v Northern Territory (1998) 195 CLR 96 at 128–30; Yanner v Eaton (1999) 201 CLR 351 at [75]–[76] per Gummow J.

5.

Fejo v Northern Territory (1998) 195 CLR 96 at 128; Yanner v Eaton (1999) 201 CLR 351 at [75]– [76].

6.

S Dorsett, ‘“Since Time Immemorial”: A Story of the Common Law Jurisdiction, Native Title and the Case of Tanistry’ (2002) 26 MULR 32 at 33 notes that it is important to remember that ‘native title is not really a descriptor of Indigenous relationships to country, but a category of White law’. See B Edgeworth, ‘The Mabo “Vibe” and its Many Resonances on Property Law’ in S Brennan, M Davis, B Edgeworth and L Terrill (eds), Native Title From Mabo to Akiba: A Vehicle for Change and

Empowerment?, The Federation Press, Sydney, 2015. 7.

This is not to suggest that native title is the same as a tenured estate. As the material in Chapter 4 demonstrates, native title is, in some ways, an inferior title to that of a tenured estate. Yet it would be incorrect to see native title as simply as another form of land holding.

8.

For a discussion of the history of the common law, see T F T Plucknett, Concise History of the Common Law, 5th ed, Butterworths, London, 1956. For an abbreviated version, see also S Dorsett, ‘“Since Time Immemorial”: A Story of the Common Law Jurisdiction, Native Title and the Case of Tanistry’, note 6 above.

9.

W Blackstone, Commentaries on the Laws of England, 14th ed, T Caddell and W Davies, London, 1803, p 107. See also A C Castles, An Australian Legal History, Law Book Co, Sydney, 1982, pp 9– 13.

10.

The Privy Council’s memorandum from an anonymous case indicates the acceptance of these international constitutional principles justifying the application of English common law to new territories. See Anonymous (1722) 2 P Wms 75 at 75–6; 24 ER 646 at 646. See also M Walters, ‘British Imperial Constitutional Law and Aboriginal Rights: A Comment on Delgamuukw v British Columbia’ (1992) 17 Queens Law Journal 350 at 359–63. See also S Hepburn, ‘Disinterested Truth: Legitimation of the Doctrine of Tenure Post-Mabo’ (2005) 29 MULR 1.

11.

See U Secher, ‘The Reception of Land Law into the Australian Colonies Post-Mabo: The Continuity and Recognition Doctrines Revisited and the Emergence of the Doctrine of Continuity Pro Tempore’ (2004) 27(3) UNSWLJ 703; U Secher, ‘The Doctrine of Tenure in Australia PostMabo: Replacing the “Feudal Fiction” with the “Mere Radical Title Fiction” — Part 1’ (2006) 13(2) APLJ 107.

12.

Blackstone, Commentaries on the Laws of England, note 9 above; Attorney-General v Brown (1847) 1 Legge 312; Cooper v Stuart (1889) 14 App Cas 286.

13.

Cooper v Stuart (1889) 14 App Cas 286 at 291; Attorney-General v Brown (1847) 1 Legge 312 accepted that Australia was terra nullius and, hence, the principle of settlement was applied.

14.

Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 overturned the terra nullius doctrine in the Australian context.

15.

Brennan J noted in Mabo v Queensland (No 2) (1992) 175 CLR 1 at 31; 107 ALR 1 at 20 that the issue of sovereignty was not justiciable in a municipal court (and that issue is linked to the issue of acquisition). See also U Secher, ‘The Mabo Decision — Preserving the Distinction Between “Settled” and “Conquered or Ceded” Territories’ (2005) 24 UQLJ 36.

16.

See Mabo v Queensland (No 2) (1992) 175 CLR 1 at 81; 107 ALR 1 at 60, where Deane and Gaudron JJ commented that if the High Court were starting afresh ‘there would be something to be said for the view that the English system of land law was not, in 1788, appropriate for application to the circumstances of a British penal colony’.

17.

Eg, much English water law found its way into Australian water law despite the fact that English rivers are often wide with deep banks while Australian rivers commonly have shallow banks and dry up altogether on occasions throughout the year. See Gartner v Kidman (1961-62) 108 CLR 12 at 23 per Windeyer J. See also A Gardner, R Bartlett and J Gray, Water Resources Law, LexisNexis Butterworths, Sydney, 2009, p 151.

18.

9 Geo IV c 83.

19.

Of course, over time, the body of ‘received’ law did not remain static. It was altered and modified

by judge-made law, along with the local statutes of the colony (including Commonwealth statutes after Federation in 1901). For a discussion of the impact of imperial statutes, see H B Bignold, Imperial Statutes in Force in New South Wales, Law Book Co, Sydney, 1914, Vol 2, pp 10–17; A Castles, ‘The Paramount Force of Commonwealth Legislation since the Statute of Westminster’ (1962) 35 ALJ 402; P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, pp 3–4. 20.

Attorney-General v Brown (1847) 1 Legge 312; Cooper v Stuart (1889) 14 App Cas 286; Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1; Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129.

21.

F Pollock and F W Maitland, The History of English Law (Before the Time of Edward I), 2nd ed, Cambridge University Press, Cambridge, 1924, Vol 1, p 232.

22.

Pollock and Maitland, The History of English Law, note 21 above, p 232.

23.

‘Seisin’ was originally a term used to denote possession alone, but it later came to denote possession of a freehold estate. According to K Gray and S Gray, Elements of Land Law, 5th ed, Oxford University Press, Oxford, 2008, p 151: Seisin expressed an organic element in the relationship between tenant, land and lord, and came to provide presumptive evidence or entitlement within the medieval framework of rights in land. Moreover from the 15th century onwards, seisin was the technical term used to ‘denote the completion of that investiture, by which the tenant was admitted into the tenure; and without which, no freehold could be constituted or pass’ (Taylor d Atkyns v Horde (1757) 1 Burr 60 at 107, 97 ER 190 at 216 per Lord Mansfield). Note that the judgments of Cockburn CJ and Mellor J in Asher v Whitlock (1865) LR1QB 1 indirectly raise the issue of whether retaining the difference between seisin and possession, in the context of an action to recover land, is necessary.

24.

P Anderson, Passages from Antiquity to Feudalism, Verso Editions, London, 1978; Plucknett, Concise History of the Common Law, note 8 above, pp 509–15. For useful discussion of feudalism, see also R A Brown, Origins of English Feudalism, Barnes and Noble, New York, 1973.

25.

F Maitland, Domesday Book and Beyond, Cambridge University Press, Cambridge, 1897.

26.

G S W Barrow, Feudal Britain: The Completion of the Medieval Kingdoms 1066–1344, Edward Arnold Ltd, London, 1956, p 43. Before the Norman invasion, land in England was held as folkland, bookland, laenland (ie, leasehold) or allodial land. Only laenland appears to have involved holding ‘of’ the landlord in return for performing services. None of the other methods of landholding involved either (a) holding ‘of’ the king or (b) by way of the intercession of a lord as part of a tenurial system.

27.

Barrow, Feudal Britain: The Completion of the Medieval Kingdoms 1066–1344, note 26 above, pp 42– 3.

28.

For an interesting discussion of Crown grants, see K McNeil, Common Law Aboriginal Title, Oxford University Press, 1989, pp 84–5. McNeil explains that many of the titles did not, in practice, originate in a Crown grant. He suggests that the survival of the Anglo-Saxon system of stripholding, together with the fact that the Domesday survey’s purpose was to determine who held what lands of whom (an inquiry it probably would have been unnecessary to make if everyone had simply held of a Crown grant anyhow), demonstrates that it was untrue to say that all land originated in a Crown grant. See also W Holdsworth, A History of English Law, 1st–7th eds, Methuen, Sweet and Maxwell, London.

29.

R Lennard, Rural England 1086–1135, Clarendon Press, Oxford, 1959, pp 25–6; cited in P Butt, Land Law, 5th ed, Lawbook Co, Sydney, 2006, p 3.

30.

There is reason to believe that William did not take all land for himself (before he went on to grant land to his subjects). It is thought that some land remained outside the King’s hands. Indeed, it has been suggested that for some time there existed a dual system of land titles. On one hand, there was the land held by the Anglo-Saxons who had not resisted William and were, therefore, permitted to retain their pre-existing interests. Co-existing with this land was the land that had been confiscated by William and redistributed among his followers. It would seem that this dual system operated for some time but, by 1788, the English doctrine of tenure had chosen to disregard the duality and instead operated on the basis that all land had vested in the Crown. The Crown then proceeded to grant the land to subjects. See Barrow, Feudal Britain: The Completion of the Medieval Kingdoms 1066–1344, note 27 above, p 43. Barrow’s view would seem to conflict with Blackstone’s: Blackstone, Commentaries on the Laws of England, note 9 above, pp 50–1. Blackstone said that: … the King is the universal lord and original proprietor of all the lands in his kingdom; and that no man doth or can possess any part of it, but what has mediately or immediately, been derived “as a gift from him, to be held upon feodal services”. At any rate, it is clear that the ‘modern’ definition of tenure, which relies on a Crown grant, is a fiction. According to Gummow J in Wik Peoples v Queensland (1996) 187 CLR 1 at 172; 141 ALR 129 at 223, this modern definition of tenure seemed to provide justification of imperial expansion. These views are also affirmed in Holdsworth, A History of English Law, note 28 above.

31.

This was a process which invested a person with land by means of public delivery. It involved a ceremony called ‘livery of seisin’. See 3.64.

32.

C Harpum, S Bridge and M Dixon, Megarry and Wade: The Law of Real Property, 8th ed, Thomson Reuters, London, 2012, p 24.

33.

Later English law did accommodate an exception to the rule that no subject could acquire property unless it had previously been held of the Crown and alienated by the Crown. The Crown Suits Act 1769 (Imp) (the Nullum Tempus Act) permitted a subject to bar the Crown from recovering possession of land that the Crown had owned but never alienated, provided that the subject had enjoyed possession adversely to the Crown for a period of 60 years. This meant that the Crown could now be disseised of land and the adverse possessor’s seisin could result in him or her holding a fee simple estate in land which had not previously been the subject of a Crown grant.

34.

Allodialism is the direct ownership of land without holding through the Crown or one of the Crown’s lords. Having said that allodial title is not part of the common law approach to land holding, there are actually some small pockets of allodially held land still in existence today. See 3.31.

35.

For this and further interesting examples of feudal incidents, see R Megarry, Miscellany-at-Law: A Diversion for Lawyers and Others, Stevens and Sons Ltd, London, 1955, p 155. See also A W B Simpson, A History of the Land Law, 2nd ed, Clarendon Press, Oxford, 1986.

36.

See Plucknett, Concise History of the Common Law, note 8 above, pp 531–3.

37.

The services associated with socage tenure included ploughing the King’s or lord’s land on an allocated number of days per year or raising a flag annually.

38.

Chattels or personalty were not subject to such restrictions because they were held allodially, or absolutely.

39.

The solemn ceremony by which the tenant became bound to the lord. The ceremony involved the tenant placing his hands between the lord’s and swearing his (not usually her) allegiance.

40.

The oath taken by the tenant in homage. It effectively amounted to an oath of fidelity in which the tenant swore to perform feudal obligations.

41.

The obligation of the tenant to attend and participate in cases heard by the lord in his court.

42.

The rendering of financial assistance to the lord on occasions such as those delineated in this chapter.

43.

The right of the King on the death of a tenant holding directly of the King to take possession of the land until homage was performed and relief rendered. Relief was the lord’s right to money payable by the tenant when the heir succeeded. This generally amounted to one year’s value of the land. In the case of primer seisin, the lord in question was the King himself.

44.

The process by which a male heir (under 21 years of age) and female heir (under 14 years of age, if married, and 16 years, if unmarried) became wards of the lord of whom the land was held. This right permitted the lord to hold and use the land for his own purposes until the wardship came to an end on attainment of the ages specified above. Further, the lord also had control over when and whom the ward could marry. If the ward refused to marry the person designated as ‘suitable’, the lord could levy a payment amounting to the value of the marriage. If the ward married without the permission of the lord, the ward had to pay double the amount of the value of the marriage.

45.

The process by which the land reverted to the intermediate lord or the Crown when a tenancy came to an end. Property usually escheated because there was no heir to continue the tenancy or because the tenant committed a crime and was sentenced to death. These explanations are largely taken from Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, pp 31–32. Escheat is discussed at 3.17.

46.

See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 25.

47.

Barrow, Feudal Britain: The Completion of the Medieval Kingdoms 1066–1344, note 26 above, p 43.

48.

Historically, land was predominantly held by men and accounts of feudalism reflect this. Presumably, however, if land were held by women, the tenant would have sworn to become the lady’s man, devoting himself to the lady’s service.

49.

For detailed information on tenants in chief, see Barrow, Feudal Britain: The Completion of the Medieval Kingdoms 1066–1344, note 26 above, p 43.

50.

Villeins were villagers who usually owned strips of land in one or more of the village’s three fields. Cottars were the workers who actually tilled the soil. It is also interesting to note that ‘villain’ is a variant of the word ‘villein’, from the Old French ‘vilein’.

51.

See, eg, the Inclosure Act 1773 (UK). In common usage, the term is ‘enclosure’.

52.

For the effects of enclosure on the poor, see also Oliver Goldsmith’s poem ‘The Deserted Village’ (1770) and George Crabbe’s poem ‘The Village’ (1783).

53.

Later enclosure of the fields forced the rural poor to migrate to industrialised cities to seek work. As those cities became more heavily populated and the availability of work became scarce, crime rates rose. In turn, authorities sought a new place to incarcerate the rising criminal class and, ultimately, they settled on Australia as the site of an antipodean prison.

54.

Each lord of the manor could impose different services and rules in relation to the running of the village. Hence, variation was rife.

55.

For simplicity, seisin may be seen as possession of freehold title. See earlier discussion in note 23 above at 3.9.

56.

Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 26, comment that ‘At first, the villein tenant was literally a tenant “at will”’. A tenant at will’s interest is not assignable. The only way a villein could transfer his or her interest was to surrender that interest to the lord on trust and to admit to the alienee. The alienee was admitted at a session of the manorial court and the alienee’s name was copied onto the court rolls. Hence, this provides another explanation of why villeinage became known as ‘copyhold tenure’.

57.

The statute did not apply to life estates of fees tail, nor did it bind the Crown. Although it is widely thought that subinfeudation was never part of Australian law, Butt, Land Law, note 19 above, p 84, observes that a variant of subinfeudation may exist in relation to some land.

58.

The following example was taken from an earlier version of Halsbury’s Laws of Australia, looseleaf, LexisNexis, Australia, 28.1, ch 2, [10]: If Albert held the land from Lord Havelock, and Albert alienated all or part of the land to Brian, Brian stood in Albert’s shoes. Brian now held directly from Lord Havelock; no new subtenancy between Albert and Brian could be created. See also Halsbury’s Laws of Australia, looseleaf, LexisNexis, Australia, 355 — Real Property, I Introduction — Real Property, (1) Historical Foundation of Real Property in Australia, (E) Doctrine of Tenure — Real Property, [355-70].

59.

Eg, propter delictum tenentis applied where the tenant was convicted of a crime and sentenced to death. See T Cyprian Williams, ‘The Fundamental Principles of the Present Law of Ownership of Land’ (1931) 75 Sol Jo 843 at 844–6 for further examples.

60.

Further simplification of tenures occurred when knight service was commuted to a monetary equivalent known as ‘scutage’, ie, shield money.

61.

A D Hargreaves and B A Helmore, Introduction to the Principles of Land Law, Law Book Co, Sydney, 1963, p 35. Inflation was rife in the 16th and 17th centuries.

62.

Movement in this direction was assisted by the rule that, where there is no evidence to the contrary, a tenant will be deemed to hold land directly of the King. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, pp 29–30; Re Lowe’s Will Trusts [1973] 1 WLR 882.

63.

Described in note 44 above.

64.

12 Car 2 c 24.

65.

Frankalmoign and copyhold were not converted to socage tenure. The honorary services associated with grand serjeanty were specifically retained, as were the services incidental to socage (eg, those of petty serjeanty). See Hargreaves and Helmore, Introduction to the Principles of Land Law, note 61 above, p 36. In England today, some land is still held by virtue of serjeanty, eg, the Dukes of Marlborough and Wellington hold the land that was formerly granted to their ancestors by ‘the service of bringing a small flag to Windsor on the anniversaries of Blenheim and Waterloo respectively’. See C F Colbert and N A M Mackay, History of Scots and English Land Law, Geographical Publications Ltd, Hertfordshire, 1977.

66.

Forfeiture was a right of the Crown dependent upon the royal prerogative (compare tenure) to seize the lands of a person who had committed high treason.

67.

The Statute of Wills 1540 permitted testamentary disposition.

68.

J Williams, Principles of the Law of Real Property, 1st ed, Sweet & Maxwell, London, 1880.

69.

T Cyprian Williams, ‘The Fundamental Principles of the Present Law of Ownership of Land’ (1931) 75 Sol Jo 843 at 843.

70.

Williams, ‘The Fundamental Principles of the Present Law’, note 69 above, p 843.

71.

With the introduction of the Succession Act 2006 (NSW), the Wills, Probate and Administration Act was renamed the Probate and Administration Act 1898 (NSW). The Succession Act covers both testamentary dispositions and intestacy. Meanwhile, the renamed Probate and Administration Act has a more limited focus and, as the name suggests, is concerned with the mechanisms that facilitate or enable distribution of the estate (ie, probate and administration). For wills made prior to the commencement of the Succession Act, see ‘Transitional Provisions’ in Sch 1 Pt 2 of that Act.

72.

Bona vacantia is ownerless property. For a discussion of the general principles of bona vacantia, see N Ing, Bona Vacantia, Butterworths, London, 1971.

73.

See Re Middle Harbour Investments Ltd [1977] 2 NSWLR 652; Sandhurst Trustees Ltd v 72 Seventh Street Nominees Pty Ltd (in liq) (1998) 45 NSWLR 556; National Australia Bank Ltd v New South Wales (2009) 260 ALR 115.

74.

P Fry, ‘Land Tenures in Australian Law’ [1946–47] Res Judicatae 158 at 169, quoted by Kirby J in Wik Peoples v Queensland (1996) 187 CLR 1 at 243; 141 ALR 129 at 279.

75.

Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129.

76.

Wik Peoples v Queensland (1996) 187 CLR 1 at 90; 141 ALR 129 at 156.

77.

Instructions to Governor Macquarie, Historical Records of Australia, (hereafter HRA), Pt 1, Vol II, p 193. The instructions to Sir Thomas Brisbane were in similar terms: see HRA, Pt 1, Vol X, p 599.

78.

The best land was valued at 10 shillings an acre, the worst at five shillings: Lord Bathurst to Brisbane, 30 May 1823, HRA, note 77 above, Pt 1, Vol XI, p 87.

79.

See HRA, note 77 above, Pt 1, Vol XI, p 87. See also Stanley to Governor Bourke, 28 September 1833, HRA, Pt 1, Vol XVII, p 219; Governor Bourke to Rice, 8 February 1835, HRA, Pt 1, Vol XVII, p 650; Government Gazette, 9 October 1846; Grey to Fitzroy, 30 June 1847, HRA, Vol XXV, p 643.

80.

Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129.

81.

Wik Peoples v Queensland (1996) 187 CLR 1 at 174; 141 ALR 129 at 224 per Gummow J.

82.

The pastoral lease also represents a modification of the doctrine of estates, in that it deals with a modification to an interest in land; an interest which can be explained by virtue of a categorisation based on temporal fragmentation. It is, nevertheless, discussed at this point because of the references by both Fry (see note 74 above) and Gummow J (in Wik Peoples v Queensland (1996) 187 CLR 1 at 174; 141 ALR 129 at 224) to the development of new tenures.

83.

Wik Peoples v Queensland (1996) 187 CLR 1 at 109; 141 ALR 129 at 171 per Toohey J.

84.

The early governors could make grants by virtue of the powers under their commissions. See Randwick Municipal Corporation v Rutledge (1959) 102 CLR 54 at 71; 5 LGRA 127.

85.

It should be noted that the law of New South Wales became the law of Queensland (until repealed) when Queensland became a separate colony in 1859. Queensland also had the facility to cope with the movement of squatters.

86.

Wik Peoples v Queensland (1996) 187 CLR 1 at 109; 141 ALR 129 at 171 per Toohey J.

87.

Wik Peoples v Queensland (1996) 187 CLR 1 at 109; 141 ALR 129 at 171 per Toohey J.

88.

P Fry, ‘Land Tenures in Australian Law’ [1946–47] Res Judicatae 158 at 160, quoted by Toohey J in Wik Peoples v Queensland (1996) 187 CLR 1 at 109; 141 ALR 129 at 171.

89.

Wik Peoples v Queensland (1996) 187 CLR 1 at 109; 141 ALR 129 at 171–2.

90.

P Fry, ‘Land Tenures in Australian Law’ [1946–47] Res Judicatae 158 at 160–1, quoted in Wik Peoples v Queensland (1996) 187 CLR 1 at 110; 141 ALR 129 at 172.

91.

Stewart v Williams (1914) 18 CLR 381 at 390, quoted in Wik Peoples v Queensland (1996) 187 CLR 1 at 174; 141 ALR 129 at 224.

92.

Wik Peoples v Queensland (1996) 187 CLR 1 at 174; 141 ALR 129 at 224.

93.

This phrase is used by Griffith CJ: see Stewart v Williams (1914) 18 CLR 381 at 390. Griffith CJ also used the term ‘fancy tenures’ (at 390).

94.

A C Millard and G W Millard, The Law of Real Property in New South Wales, 3rd ed, Law Book Co, Sydney, 1923, p 5.

95.

See L Godden, ‘Wik, Feudalism, Capitalism and the State: A Revision of Land Law in Australia’ (1997) 5 APLJ 2.

96.

Wik Peoples v Queensland (1996) 187 CLR 1 at 108; 141 ALR 129 at 170 per Toohey J.

97.

For an account of this, see P McDermott, ‘Wik and Doctrine of Tenures: A Synopsis’ in G Hiley (ed), The Wik Case, Butterworths, Sydney, 1997, p 35.

98.

Wik Peoples v Queensland (1996) 187 CLR 1 at 112; 141 ALR 129 at 173 per Toohey J.

99.

R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327; 44 ALR 63.

100. R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 344; 44 ALR 63 at 76. 101. Wik Peoples v Queensland (1996) 187 CLR 1 at 112; 141 ALR 129 at 173–4. 102. Wik Peoples v Queensland (1996) 187 CLR 1 at 243–4; 141 ALR 129 at 279. 103. Formally known as the Real Estate of Intestates Distribution Act 1862 (NSW) (26 Vic No 20). The effects of the Act are described in A Buck, ‘Torrens Title, Intestates and the Origins of Australian Property Law’ (1996) 6(2) APLJ 93. 104. Eg, in New South Wales estates tail were abolished. See the discussion of entailed estates at 3.44. 105. Hargreaves and Helmore, Introduction to the Principles of Land Law, note 61 above, 1963, p 3. 106. Hargreaves and Helmore, Introduction to the Principles of Land Law, note 61 above, pp 3–4. See also Butt, Land Law, note 19 above, p 6. 107. When the Statute of Westminster 1931 (UK) came into effect and the Statute of Westminster Adoption Act 1942 (Cth) was passed, this was no longer possible. However, somewhat peculiarly, British Parliamentary supremacy still applied to state legislation. See also the Australia Act 1986 (UK). 108. This was followed up by the Australia Act 1986 (Cth). 109. Wik Peoples v Queensland (1996) 187 CLR 1 at 177; 141 ALR 129 at 226. 110. Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 24. 111. As quit rents were not an incident in the English sense, the only incident of note in Australia was escheat. Escheat for a felony was abolished by the Criminal Law Amendment Act 1883 (NSW). Escheat on intestacy or for lack of devisees was abolished by the Administration of Estates Act 1954

(NSW). Even escheat pertaining to bankruptcy was replaced by a statutory power to disclaim: see the Bankruptcy Act 1966 (Cth). See also Sandhurst Trustees Ltd v 72 Seventh Street Nominees Pty Ltd (in liq) (1998) 45 NSWLR 556. Sandhurst held that, where a landowner’s trustee in bankruptcy or liquidator disclaims land under the statutory power, the land escheats to the Crown. The High Court in National Australia Bank Ltd v New South Wales [2009] 260 ALR 115 cited Sandhurst but did not apply it. In obiter, the court held that title would not escheat absolutely to the Crown where the court was able to vest the title in someone else (in that case, National Australia Bank). 112. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 47; 107 ALR 1 at 33. 113. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. This case is discussed in detail in Chapter 4. See also B Edgeworth, ‘Tenure, Allodialism and Indigenous Rights at Common Law: English, United States and Australian Land Law compared after Mabo v Queensland’ (1994) 23 Anglo-American Law Review 397. 114. E Jenks, The History of the Australasian Colonies, Cambridge University Press, Cambridge, 1895, p 59, quoted in Wik Peoples v Queensland (1996) 187 CLR 1 at 187; 141 ALR 129 at 234 per Gummow J. 115. Hargreaves and Helmore, Introduction to the Principles of Land Law, note 61 above, p 18. See J Devereaux and S Dorsett, ‘Towards a Reconsideration of the Doctrines of Estates and Tenures’ (1996) 4 APLJ 1. 116. Attorney-General v Brown (1847) 1 Legge 312; 2 SCR (NSW) 30. 117. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 48; 107 ALR 1 at 34. 118. This issue is explored in Edgeworth, ‘Tenure, Allodialism and Indigenous Rights at Common Law’, note 113 above. 119. For example, in Hegarty v Ellis (1908) 6 CLR 264, Higgins J used the term ‘quasi-Crown lands’ to identify those areas where there had been conferred a tenure short of a fee simple. See Wik Peoples v Queensland (1996) 187 CLR 1 at 174; 141 ALR 129 at 224. 120. Wik Peoples v Queensland (1996) 187 CLR 1 at 175; 141 ALR 129 at 225. 121. Wik Peoples v Queensland (1996) 187 CLR 1 at 175; 141 ALR 129 at 225. 122. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 48; 107 ALR 1 at 34. 123. For a discussion of native title’s relationship to the common law, see S Dorsett, ‘Since Time Immemorial: A Story of Common Law Jurisdiction, Native Title and the Case of Tanistry’ (2002) 26 MULR 32. See also S Hepburn, ‘Feudal Tenure and Native Title: Revising an Enduring Fiction’ (2005) 27 Syd LR 49. 124. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 16; 107 ALR 1 at 8. See Chapter 4 for a discussion of what constitutes native title. 125. Attorney-General v Brown (1847) 1 Legge 312. 126. Milirrpum v Nabalco (1971) 17 FLR 1. Sovereignty is the overarching right to make laws for a country. 127. Radical title is ultimate or final title. 128. See K McNeil, Common Law Aboriginal Title, Oxford University Press, Oxford, 1989, p 85; Barrow, Feudal Britain: The Completion of the Medieval Kingdoms 1066–1344, note 26 above, p 43. See also Lennard, Rural England 1086–1135, note 29 above. 129. Some lands in the Shetland and Orkney Islands continued to be held after the Norman Conquest.

These are noted by Brennan J in Mabo v Queensland (No 2) (1992) 175 CLR 1 at 46; 107 ALR 1 at 32 where he cites, among other things, Bell, Lectures on Conveyancing, Edinburgh, 1867, Vol 1, pp 531–2. 130. Crown Suits Act 1769 (Imp). 131. Blankard v Galdy (1693) 2 Salk 411 at 412; 91 ER 356 at 357. 132. Hepburn, ‘Disinterested Truth: Legitimation of the Doctrine of Tenure Post-Mabo’, note 10 above. 133. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 134. Attorney-General v Brown (1847) 1 Legge 312; 2 SCR (NSW) 30. Eg, Butt claims that ‘[i]n Australia, the concept of one person holding of another under the hierarchical landholding structures developed in medieval times, was unknown’: P Butt, Land Law, note 19 above, p 83. Similarly, A R Buck says that ‘[b]y 1863 … feudal principles were eschewed from the land and from the idea of property in New South Wales’: ‘The Ghost of Feudalism: Law and the Idea of Property in NSW, 1788–1863’, Master of Arts (Economics) Thesis, University of Newcastle, February 1994. 135. For further consideration of these issues in the New Zealand context, see the New Zealand Law Reform Commission preliminary paper, Tenure and Estates in Land, No 20, June 1992. 136. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 80; 107 ALR 1 at 59. 137. For a brief introduction to estates, see B Edgeworth, C Rossiter, P O’Connor and A Godwin, Sackville and Neave Australian Property Law, 10th ed, LexisNexis Butterworths, Sydney, 2016, p 168. 138. See Stokes v Costain Property Investments Ltd [1983] 1 WLR 907 at 909 for comment on the nature of what a tenant ‘owns’. 139. See K Gray, ‘Property in Thin Air’ (1991) 50 Cam LJ 252. 140. F H Lawson, The Rational Strength of English Law, Stevens and Sons Ltd, London, 1951, p 87, quoted in A P Moore, S Grattan and L Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, 6th ed, Thomson Reuters/Lawbook Co, Sydney, 2016, p 57. 141. Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 37. 142. Butt, Land Law, note 19 above, p 104, suggests that, although the term ‘estate’ has been applied to leaseholds since the time of Littleton, this terminology is not strictly speaking correct because at common law a leasehold cannot be divided up into life estates or entailed estates. 143. A remainder is a future interest in that it vests in possession at some time in the future. It does, however, vest in interest immediately. 144. See R E Megarry and H W R Wade, The Law of Real Property, 5th ed, pp 540–42; cited in Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property note 32 above, p 38, for the 10 rules that were used to determine an heir; Simpson, A History of the Land Law, note 35 above, pp 57–63; Butt, Land Law, note 19 above, p 114. See also Clay v Karlson (1998) 19 WAR 287. 145. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 39. 146. The use is discussed in Chapter 6. 147. See explanation at note 70, above. 148. Amodu Tijani v Secretary, Southern Nigeria [1921] 2 AC 399 at 403 (Privy Council). 149. Determinable and conditional interests are discussed later in this chapter at 3.80. 150. Butt, Land Law, note 19 above, p 137, cites Plucknett and Simpson in support of the view that the

fee tail had its origins in the maritagium or marriage settlement. He suggests that the fee tail was designed to benefit the daughter of the donor, her husband and their issue. 151. See 3.68. 152. See discussion of determinable and conditional interests later in this chapter at 3.80. 153. De Donis Conditionalibus was received law on ‘settlement’ in Australia. See Allison v Petty (1899) 9 QLJ 125 at 129. 154. Remainders are discussed later in this chapter at 3.97. 155. For an account of how these actions worked, see Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, pp 72–74; Butt, Land Law, note 19 above, pp 140–2; M A Neave, C J Rossiter and M A Stone, Sackville and Neave Property Law: Cases and Materials, 5th ed, Butterworths, Sydney, 1994, p 171. (Note that this is not discussed in the 10th edition of Sackville and Neave Australian Property Law, published in 2016. See note 137 above.) 156. This is the same in Queensland, Victoria and Western Australia. 157. It was also repealed in Queensland and Victoria. The effect has been to give greater weight to the statutory provisions dealing with fees tail. 158. This term is explained at 3.47. 159. See 3.80–3.93 for definitions and discussion of these terms. 160. Old French for ‘he who lives’. 161. The person was prevented from entering as an heir because the estate was not one of inheritance. On special occupancy, see Re Underwood Estate Acts and Account (No 2) (1888) 9 LR (NSW) (Eq) 105 at 111. 162. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 50. 163. Historically equity did not follow the law in relation to dower. See Chaplin v Chaplin (1773) 3 P Wms 229, which involved a trust estate. 164. A Buck, ‘Women, Property and English Law in Colonial New South Wales’ in D Kirby (ed), Law and History in Australia, La Trobe University, Melbourne, 1987, Vol IV; M L Fellows, ‘Wills and Trusts: The Kingdom of the Fathers’ (1991) 10 Law and Inequality 137 at 146–50. Interestingly, there was no dower on copyhold tenures, but in many manors there was a custom for widows to have freebench, which was similar to dower. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 50. 165. Conveyancing Act 1919 (NSW) s 21. See also Probate and Administration Act 1898 (NSW) s 52. For a more detailed account of dower, see Butt, Land Law, note 19 above, pp 149–50. 166. See E Coke, Coke Upon Littleton, 19th ed, with notes by F Hargraves and C Butler, 1832 (Co Litt); cited in Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 78. Harpum, Bridge and Dixon observe (at p 29) that ‘Littleton’s Tenures was first printed in or about 1481; Sir Edward Coke’s commentary was first published in 1628)’. 167. Section 52 of the Probate and Administration Act denies a right of dower and curtesy, but Pt 3 of the Succession Act permits adjustments to wills on the basis of a range of circumstances. 168. The interest that the grantor retains is called the reversion, discussed at 3.96. 169. West Ham Central Charity Board v East London Waterworks Co [1900] 1 Ch 624 at 635. Waste means altering the nature of land so as either to improve or harm it. See Co Litt 53a, b, note 166 above.

170. Woodhouse v Walker (1880) 5 QBD 404 at 406. 171. The issue of permissive waste is not relevant to leasehold tenancies because statute imposes a covenant that requires the tenant to maintain the property in good repair. See Chapter 11. 172. Powys v Blagrave (1854) 4 de GM & G 448; 43 ER 582. 173. Re Cartwright; Avis v Newman (1889) 41 Ch D 532 at 536; Sclanders v Cole (1918) 18 SR (NSW) 216 at 217. 174. Sticklehorne v Hatchman (1586) Owen 43. 175. Meux v Cobley [1892] 2 Ch 253. 176. Marsden v Edward Heyes Ltd [1927] 2 KB 1 at 8. 177. Saunders’ Case (1599) 5 Co Rep 12A; 77 ER 66; Spotswood v Hand (1874) 5 AJR 85. Note that if the mine were already working, then continuing to work it would not be classified as permissive waste because the grantor would have intended the life tenant to carry on enjoying the profits of the mine. See Dashwood v Magniac [1891] 3 Ch 306 at 306–61 per Lindley, Bowen and Kay LJJ. 178. See Imperial Acts Application Act 1969 (NSW) s 32. 179. Doherty v Allman (1878) 3 App Cas 709; Meux v Cobley [1892] 2 Ch 253; Hockley v Rendell (1909) 11 WALR 170. 180. Jessel MR in Jones v Chappell (1875) LR 20 Eq 539 at 542 said that ‘in order to prove waste you must prove an injury to the inheritance’. 181. Doherty v Allman (1878) 3 App Cas 709. 182. Meux v Cobley [1892] 2 Ch 253. 183. Damages are a common law remedy which provide monetary recompense for harm suffered. Damages have made a foray into the equitable jurisdiction through the operation of what have become known as ‘Lord Cairns’ damages’. 184. An injunction is a remedy of the Court of Equity and either mandates or prevents certain acts. 185. Doherty v Allman (1878) 3 App Cas 709. 186. Butt, Land Law, note 19 above, p 156. 187. Vane v Lord Barnard (1716) 2 Vern 738; 23 ER 1082. 188. Gage v Bulkeley (Packington’s Case) (1744) 3 Atk 215; 26 ER 925; Marker v Marker (1851) 9 Hare 1 at 17; 68 ER 389 at 396; Turner v Jackson (1856) 1 VLT 127; Weld-Blundell v Wolseley [1903] 2 Ch 664. The exception to this rule lay where it was necessary to cut down trees to preserve the remaining trees. See Baker v Sebright (1879) 13 Ch D 179. 189. Primogeniture caused the eldest son to take to the exclusion of his siblings. 190. Real Estate of Intestates Distribution Act 1862 (NSW). 191. For a discussion of this, see Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 40. Chambers points to the re-emergence of the contractual aspects of the lease, particularly by reference to the Residential Tenancies Act 1987 (NSW) and the importance that commercial tenancies have assumed: R Chambers, An Introduction to Property Law in Australia, 3rd ed, Sydney, Lawbook Co, Sydney, 2013, p 111. Note that the Residential Tenancies Act 1987 (NSW) has now been repealed and replaced by the Residential Tenancies Act 2010 (NSW).

192. The development of the remedy of trespass as relevant to leaseholders is complex. See Plucknett, A Concise History of the Common Law, note 8 above, pp 369–73. 193. Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 40. The authors (by reference to Littleton) also note that when leases became fully protected by the law of property they became estates but that it was too late for them to be reclassified. Note also that leaseholds are categorised as ‘chattels real’. 194. Eg, Real Estate of Intestates Distribution Act 1862 (NSW) (Lang’s Act). 195. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 40. 196. In New South Wales, ss 68 and 69 of the Conveyancing and Law of Property Act 1898 (NSW) make an exception to the common law position and permit a life tenant to create a lease for a period of 10 years. 197. See Chapter 6. 198. See Chapter 11 for a fuller discussion of leases. 199. See Chapter 11. 200. Chambers makes this simple but nice point: Chambers, An Introduction to Property Law in Australia, note 191 above, p 111. 201. The categories of leases outlined here are explored in more detail in Chapter 11. 202. Agricultural leases are often for one year so that crops can be harvested. 203. See Dockrill v Cavanagh (1944) 45 SR (NSW) 78. 204. Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47. 205. Grundel v Registrar-General (1990) 5 BPR 11,217 at 11,222, where a six-month notice period was needed for termination of a tenancy at will involving an elderly tenant who had been in occupation for 12 years. 206. Conveyancing Act 1919 (NSW) s 47(1). 207. Eg, interpreting s 47 of the Conveyancing Act (discussed below at 3.66) requires an understanding of the material in 3.65. 208. See Chapter 8. 209. There is a divergence of views on whether before 1920, it was necessary to use words of limitation in relation to unregistered interests under the Torrens system. See P Butt, Land Law, 4th ed, Thomson Legal and Regulatory Ltd, Sydney, 2001, p 108. 210. The ceremonial handing over of possession was called ‘livery of seisin’. 211. Simpson, A History of the Land Law, note 35 above, p 52. 212. Re Davison’s Settlement [1913] 2 Ch 498. 213. See Butt, Land Law, note 19 above, p 130. 214. In 1840, New South Wales adopted ss 28 and 34 of the English Wills Act 1837 (Imp). These were later embodied in s 24 of the Wills, Probate and Administration Act 1898 (NSW). In turn, s 24 of the Wills, Probate and Administration Act is now embodied in s 38(1) of the Succession Act, which deletes mention of the specific kind of estate and simply states: A disposition of real property to a person without words of limitation is to be construed as passing the whole estate or interest of the testator in that property to that person.

215. The fee tail estate was a helpful tool of social engineering. Refer to Chapter 1 and the discussion of how property may be used to shape society. 216. As the Victorian Law Reform Commission, Review of the Property Law Act 1958 — Final Report, Melbourne, 2010, p 80 [6.3]–[6.4] noted, not all states took quite the same approach (accessed 6 June 2017), . 217. Conveyancing Act 1919 (NSW) s 47(2). 218. This was possible under s 24 of the Wills, Probate and Administration Act. Under s 38(1) of the Succession Act, a will without words of limitation is effective to pass the whole of the testator’s estate or interest unless there is a contrary intention. 219. Note that the rule in Shelley’s Case (emerging from Shelley’s Case (1851) 1 Co Rep 93b; 76 ER 206) was relevant to limitations made in New South Wales before 1920. The rule demonstrated the rigidity of the common law in regard to words of limitation. For details of how it operated, see J Gray, B Edgeworth, N Foster and S Grattan, Property Law in New South Wales, LexisNexis Butterworths, 2007, pp 109–110; Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 140 above, pp 519–20. Note that R Megarry and H Wade, The Law of Real Property, 5th ed, Stevens & Sons, London, 1984, p 1161 (referencing H W Challis, The Law of Real Property, 3rd ed, 1911, p 154), provide a detailed account of the rule in Shelley’s Case. They observe that a more detailed account still may be found in the 2nd edition of their book at p 60. See also D Smith, ‘Was there a Rule in Shelley’s Case?’ (2009) 30 J Legal History 53. 220. See Chapter 6 for a fuller discussion of the development of equity. 221. Prior to the Judicature Acts, common law and equity were administered in separate courts. These two courts are examples of common law courts. See J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 5th ed, LexisNexis Butterworths, Australia, 2015, pp 36–44. 222. There is a view that the more the Court of Chancery developed, the more hidebound it became, so that ultimately it emerged as much bound by precedent as the common law. 223. Note that the English Judicature Acts were replicated in the New South Wales jurisdiction. For a discussion of this process, see Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 221 above, pp 36–47. 224. See Chapter 6 for further discussion. 225. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 439, fn 257. 226. Re Bostock’s Settlement; Norrish v Bostock [1921] 2 Ch 469 at 480–1; Sexton v Horton (1926) 38 CLR 240 at 247–8. 227. See Sackville-West v Viscount Holmesdale (1870) LR 4 HL 543; Sexton v Horton (1926) 38 CLR 240 at 250. The settlor is the party who creates the trust. 228. Section 47 of the Conveyancing Act means that, since 1 July 1920, both legal and equitable interests created in a deed do not have to comply with strict words of limitation. 229. Eg, by way of a written declaration of trust but not in a deed. 230. Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 140 above, p 57. See also Butt, Land Law, note 19 above, p 133.

231. ‘The limitation marks the bounds or compass of the estate, and the time of its continuance’: Zapletal v Wright [1957] Tas SR 211 at 218, quoting Preston on Estates, Vol 1, p 49. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 64. 232. A possibility of reverter may be statute-barred under the Limitation Act 1969 (NSW) if, after the fee simple has determined (or put another way after it has terminated on the occurrence or nonoccurrence of an event), an adverse possessor takes possession of the land for 12 years or more. See Fraser v Canterbury Diocesan Board of Finance [2001] Ch 669. Cram Foundation v Corbett Jones (2006) NSWSC 495 at [31] treated the possibility of reverter on termination of a determinable fee as not being subject to the rule against perpetuities, although the court acknowledged contrary views. 233. Harpum, Bridge and Dixon, Megarry and Wade, The Law of Real Property, note 32 above, p 65. 234. E H Burn, Cheshire and Burn’s Modern Law of Real Property, 15th ed, Butterworths, London, 1988, p 341. 235. If the grantor is dead, this right passes to his or her successors. 236. Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 65. 237. By deed: Conveyancing Act 1919 (NSW) s 50(1). 238. See 3.105. 239. It is worth noting that native title as described in Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 does not permit the alienation of the interest (except perhaps in regard to a surrender to the Crown). 240. Re Dugdale (1888) LR 20 Eq 186. The relevant clause said: ‘if my son commits any act by reason of which he would be deprived of the personal beneficial enjoyment of the premises in his lifetime then the trust shall cease’. See also Re Macleay (1875) LR 20 Eq 186, where the court found a partial restraint on alienation valid; Re Rosher (1894) 26 Ch D 801, where the court found a partial restraint on alienation invalid; Saliba v Saliba [1976] Qd R 205 where, considering the circumstances, the court found a partial restraint void. 241. Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394. 242. Clayton v Ramsden [1943] AC 320. By comparison, a similar condition regarding the Jewish faith was found not to be void in Re Tuck’s Settlement Trusts [1978] Ch 49. 243. Blathwayt v Baron Cawley [1976] AC 397; [1975] 3 All ER 625. 244. Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 66. See also P Butt, ‘Testamentary Conditions in Restraint of Religion’ (1977) 8 Syd LR 400. 245. Ellaway v Lawson [2006] QSC 170. 246. Ramsay v Trustees Executors and Agency Co Ltd (1948) 77 CLR 321. 247. Most commonly, the grantor carves out the lesser interest from his or her fee simple estate. 248. For further practical examples of future interests, see P Tan, E Webb and D Wright, Butterworths Tutorial Series: Land Law, 3rd ed, LexisNexis Butterworths, Australia, 2002, pp 102–4. Note that Real Property Act 1900 (NSW) s 100(2) permits the Registrar to create and issue separate certificates of title for future interests (‘an estate in remainder’). Torrens Title is discussed in Chapter 8. 249. In the case of contingent gifts, however, a grant must not offend the rule against perpetuities. See the Perpetuities Act 1984 (NSW). See also Chapter 10.

250. Conveyancing Act 1919 (NSW) s 50(1). The Succession Act permits the assignment of an expectancy if it is characterised as property to which the testator is entitled under s 4. 251. This example is taken from Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 314. See also Cunningham v Moody (1748) 1 Ves Sen 174. 252. A particular estate amounts to only part (‘a particula’) of the fee simple, eg, the preceding life estate: Butt, Land Law, note 19 above, p 159. 253. Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 140 above, pp 520–21; Edgeworth, Rossiter, O’Connor and Godwin, Sackville and Neave Australian Property Law, note 137 above, pp 182-4; C Harpum, S Bridge and M Dixon, Megarry and Wade: The Law of Real Property, 7th ed, Thomson Reuters (Legal), London, 2008, p 370. 254. See discussion of equity at 3.73 and in Chapter 6. 255. Burn, Cheshire and Burn’s Modern Law of Real Property, note 234 above, p 38. 256. Originally, litigants petitioned the Chancellor directly. 257. This term comes from the French ‘cestui a que use le feoffment fuit fait’. 258. Legal executory interests were comprised of springing and shifting uses and executory devises. 259. Purefoy v Rogers (1671) 2 Wms Saund 380; 85 ER 1181. 260. Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 32 above, p 1219. 261. See Chapter 10. 262. For a discussion of how these two different interpretations of the section can yield different results, see Butt, Land Law, note 19 above, pp 156–7. See also P W Young, Annotated Conveyancing Act 1919 (NSW) and Real Property Act 1900 (NSW), 2010–2011 ed, LexisNexis Butterworths, Australia, 2011, pp 41–2. 263. Young, Annotated Conveyancing Act 1919 (NSW) and Real Property Act 1900 (NSW), note 262 above, p 81. Newcastle City Council v Kern Land Pty Ltd & Commonwealth Bank of Australia (1997) 42 NSWLR 273 and Bhana v Bhana [2002] NSWSC 117 discuss the operation of s 44(2) of the Conveyancing Act but the litigation does not turn on the section. 264. Zapletal v Wright [1957] Tas SR 211. 265. Andrews v Parker [1973] Qd R 93. 266. Zapletal v Wright [1957] Tas SR 211 at 217–18. 267. As noted, the consequences are different in cases where the limiting event occurs or is void. Further, the grantor’s possibility of reverter under a determinable interest probably is not subject to the rule against perpetuities. See Attorney-General v Pyle (1738) 1 Atk 435; 26 ER 278; The Cram Foundation v Corbett-Jones [2006] NSWSC 495. Butt points out that, although a contrary decision is to be found in Hopper v Liverpool Corporation (1944) 88 Sol Jo 213 (Bennett VC), that decision is criticised in ‘Notes’ (1946) 62 LQR 222. For discussion of the issue, see A Lyall in ‘Human Rights and Conditional and Determinable Interests’ (1987) 22 Irish Jurist 250 at 259; cited in Butt, Land Law, note 19 above, p 203. 268. Re King’s Trusts (1892) 29 LR Ir 401 at 410 per Porter MR. 269. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 270. Hepburn, ‘Disinterested Truth: Legitimation of the Doctrine of Tenure Post-Mabo’, note 10 above. 271. New Zealand Law Commission, Preliminary Paper No 20, 1992, pp 30–1.

272. See J C Gray, The Rule Against Perpetuities, 4th ed, Little, Brown & Co, Boston, 1942, pp 16–23. Note that Scotland has also done away with the doctrine of tenure. See Abolition of Feudal Tenure etc (Scotland) Act 2000 (UK). See also Scottish Law Commission, Report on Abolition of the Feudal System (SLC 168), 1999.

[page 135]

Chapter 4

Native Title Introduction 4.1 Rights in land in New South Wales are recognised through a number of different systems of land holding. For example, Chapter 7 deals with the recognition and operation of rights in land pursuant to old system title, while Chapter 8 discusses rights in land according to the Torrens title system. In this chapter, we turn to yet another system under which rights in relation to land may be recognised: that of native title. It is worth noting at the outset that there is debate about whether native title simply represents another aspect of property law or whether it is conceptually more diverse than that.1 As the focus of this book is property law, the issue of how native title is characterised will be deferred until later in this chapter, where it is discussed in some detail, particularly in the context of the Mabo v Queensland (No 2) (Mabo (No 2))2 decision and its aftermath. This chapter concentrates on the constitution, interpretation, recognition, characterisation, operation and extinguishment of native title rights. In order to appreciate these, however, it is necessary to trace briefly the evolution of native title, commencing with the Indigenous relationship to the land, moving on to ‘settlement’ of that land by Europeans, and to the mounting of the Milirrpum v Nabalco Pty Ltd3 (Gove Island Land Rights case or Gove case) and Mabo (No 2) cases. After this, we discuss a range of issues left unanswered by Mabo (No 2), some of which are dealt with in later case law or addressed in the

statutory regimes that were introduced following the Mabo (No 2) and Wik Peoples v Queensland (Wik)4 decisions. A purely doctrinal approach is not possible in this chapter because culture, religion and history are central to the validity and understanding of native title.5 As will be seen [page 136] below, the notion of continuity is embedded in the requirement for the establishment, maintenance and enforceability of native title.6

The Evolution of Native Title in Australia Relationship with the land 4.2 As noted in Chapter 3, Indigenous people lived in Australia for thousands of years prior to European contact. Their society is culturally diverse and complex.7 Land plays a key role in social organisation as well as economic and cultural life. It is not only the source of food and shelter, but also holds a great spiritual significance.8 Hence, it is central to Indigenous being and, consequently, the land imposes weighty responsibilities on all who claim native title.9 Land is treated with reverence and care.10 Not surprisingly, much Indigenous law relates to conduct that ensures the preservation of the land in good condition for those who come later. Indeed, Blackburn J in Milirrpum v Nabalco11 found that the Yolngu people had a ‘more cogent feeling of obligation to the land than of ownership of it’. He continued: It is dangerous to attempt to express a matter so subtle and difficult by a mere aphorism, but it seems easier, on the evidence, to say that the clan belongs to the land than that the land belongs to the clan.

Indigenous law also embraces some very subtle systems of inheritance, related to shifting kin definitions, which in turn establish overlapping degrees of responsibility for land.12 4.3 Some law is secret. Traditions, stories, songs of country and special knowledge are only passed on once members of the group demonstrate

sufficient maturity to be entrusted with them. Some special knowledge is never shared with the whole group but is held solely by traditional elders. The obligation to protect and nurture the land is even more [page 137] onerous for these people, but all users are seen as custodians. According to this paradigm, present users are part of a continuum, and one’s association with land is seen as cyclical rather than linear in nature. Protecting and caring for the land, or ‘growing up the land’ as it is sometimes called,13 involves making sure the land is passed on to the next generation in a state fit for physical and spiritual use.14 It has been said that: The fundamental truth about the Aboriginal’s relationship to the land is that whatever else it is, it is a religious relationship … There is an unquestioned scheme of things in which the spirit ancestors, the people of the clan, particular land and everything that exists on and in it, are organic parts of one indissoluble whole.15

As the interconnectedness between land, law, history and spirituality is central to Indigenous existence, any interference to one of these (such as land) reverberates throughout Indigenous society generally. The result is that the whole community is left somewhat exposed and vulnerable.16

‘Settlement’ and onwards 4.4 This strong connection with the land existed in Australia before European contact and continued until 1770, when Captain James Cook claimed Australia for Great Britain. From this point on, however, it became more difficult for Indigenous Australians to maintain their connection to the land.17 Of course, invasion of land itself is a common historical phenomenon. It usually involves force and subjugation. To that extent, the experience of Indigenous Australians is not unusual. However, their experience was peculiar in that the imperial government of Britain issued specific instructions concerning the taking of possession of land, which referred to the gaining of Indigenous permission; that is, it referred to the European immigrants’ need to gain consent. For example, the Admiralty’s instructions to Captain Cook, issued in 1768, were in the following terms:

You are also with the consent of the natives to take possession of convenient situations in the country in the name of the King of Great Britain, or if you find the country uninhabited take possession for His Majesty by setting up proper marks and inscriptions as first discoverers and possessors.18

[page 138] These instructions leave open whether a simple courtesy was afforded to the Indigenous population or, alternatively, whether the instructions incorporated a legal acknowledgment that pre-existing Indigenous rights and interests would be interfered with by European contact.19 Ultimately, however, the consent aspect of these instructions was not followed. Cook simply claimed possession of New South Wales on 22 August 1770, without either seeking or obtaining Indigenous permission.20 Nettheim, citing Reynolds, suggests that the reason for disregard of the imperial government’s instructions lay in Sir Joseph Banks’ testimony to the House of Commons committee on transportation in 1785.21 There, Banks surmised that ‘natives’ lived only on the coastal fringes of New South Wales and, hence, New South Wales could be taken to be uninhabited. Such reasoning very comfortably fed into acceptance of the terra nullius doctrine and acquisition of the colony by settlement rather than conquest.22 It would seem that the falsity of Banks’ surmise assisted in Indigenous people being led into a future of dispossession, disentitlement, and deprivation. Redress of this situation underpins the reconciliation movement,23 and influenced the negotiation and consultative processes that preceded the passing of the Native Title Act 1993 (Cth) and the Native Title Amendment Act 1998 (Cth).24 The effect of Banks’ conclusions could be seen more immediately when Governor Arthur Phillip took up his post. His instructions did not acknowledge any rights of the [page 139] pre-existing inhabitants.25 Phillip was merely encouraged to establish ‘friendly relations’ with Indigenous peoples; but, contradictorily, it was also recognised

that he might have to take steps to curb their ‘interference’. Significantly, he was authorised to grant land to people who would ‘improve’ it, yet there was no reference to his having to obtain the consent of the prior inhabitants before any grant was made.26 4.5 Hence, with the arrival of Captains Cook and Phillip, a bleak history began. In Deane and Gaudron JJ’s words in Mabo (No 2): As political power in relation to domestic matters was transferred from the Imperial Government in England to the European Colonists on the other side of the world, the Aborigines were increasingly treated as trespassers to be driven, by force if necessary, from their traditional homelands.27

Deane and Gaudron JJ stated: … the oppression and, in some areas of the continent, the obliteration or near obliteration of the Aborigines were the inevitable consequences of their being dispossessed of their traditional lands.28

Accordingly, Deane and Gaudron JJ concluded: The acts and events by which that dispossession in legal theory was carried into practical effect constitute the darkest aspect of the history of this nation.29

Dawson J, although in dissent, appeared to conclude similarly on this issue, when he stated: ‘There may not be a great deal to be proud of in this history of events’.30 Yet there were many incidents of Indigenous resistance to European invasion.31 These incidents attest to the facts, first, that ‘natives’ were present; and, second, that they were particularly attached to their land, having special entitlements to the use and occupation of defined tracts.32 [page 140] 4.6 Nevertheless, historical and legal records reveal judicial divergence on the issue of Indigenous legal rights. For example, on one hand, Burton J, a member of the New South Wales Supreme Court in 1836, rejected the idea that Indigenous people were governed by law, stating in his notes on R v Murrell,33 a criminal case, that: [Indigenous] practices are only such as are consistent with a state of the grossest darkness and irrational superstition and although in some cases being a show of justice — are founded entirely

upon principles, particularly in their mode of vindication for personal wrongs, upon the wildest most indiscriminatory notions of revenge.34

Hence, without a recognisable system of law, it was open to him to conclude that Indigenous people had no recognisable rights to be protected. On the other hand, contrasting positions can be seen in Willis J’s judgment in R v Bonjon and the judgments of Dowling J and Forbes CJ in R v Ballard or Barrett.35 Forbes CJ thought that intra-Aboriginal crimes should be settled according to Aboriginal people’s own customs, thus acknowledging a kind of self-governance based on pre-existing Indigenous law and traditions. Dowling J went a little further by introducing the concept of consent, stating that: Until the Aboriginal natives of this Country shall consent, either actually or by implication, to the interposition of our laws in the administration of justice for acts committed by themselves upon themselves, I know of no reason human, or divine, which ought to justify us in interfering with their institutions even if such an interference were practicable.36

He continued, ‘The Englishman has no right wantonly to deprive the savage of any property he possesses or assumes a dominion over’ (emphasis added). Among other things, the views of Dowling J and Forbes CJ serve to demonstrate the significance accorded by some to Indigenous customs and traditions; customs and traditions that have been found to lie at the heart of native title. Importantly, Dowling J’s view also recognised that Indigenous people owned property, although according to him ‘the notions of property may be very imperfect in the native’.37 4.7 The courts also handed down other cases less sympathetic to Indigenous rights. Attorney-General v Brown38 is one of them. It dealt with the issue of whether Indigenous [page 141] rights survived settlement. In that case, a coal miner sought to defend an action for trespass by rejecting the proposition of Crown ownership. The Full Court’s response was quite plain. It held that the lands of the colony: … are, and ever have been, from the time of its first settlement in 1788, in the Crown … as his or her property, they have been and may now be effectually granted to subjects of the Crown.39

The court also observed that recognition of any Indigenous rights in land would be inconsistent with the Crown holding title.40 4.8 Some years later, when reflecting on the issue of the recognition of preexisting local law and its relationship to property, Deane and Gaudron JJ commented that ignorance may have been an excuse in the very early days, but: Increasingly, the fact that particular tribes or clans enjoyed traditional entitlements to the occupation and use of particular lands for ritual, economic and social purposes was understood. Increasingly, that fact was even acknowledged by government authorities and in formal dispatches.41

Further, James Stephen, head of the Imperial Colonial Office, noted: It is an important and unexpected fact that these Tribes had proprietary rights in the Soil — that is, in particular sections of it which were clearly defined or well understood before the occupation of their country.42

The 19th-century legal luminary Dr Lushington also appeared to recognise both the radical title held by the Crown and ‘the rights in relation to the territory of the Aboriginal occupants’.43 4.9 Yet, despite this, as mentioned above, a legal fiction flourished that was based on the view that the land belonged to no one. The fiction was embodied in the doctrine of terra nullius and the interaction of that doctrine with the doctrine of tenure.44 The [page 142] doctrine of tenure permitted full legal and beneficial ownership of all lands to vest in the Crown, thereby serving to help dispossess Indigenous Australians.45 The logic went as follows. The land was either ‘desert uninhabited’ or inhabited by people so barbarous that there was no settled law. Hence, it was impossible to reconcile any customary rights ‘with the institutions or the legal ideas of civilised society’.46 As there was no sovereign Indigenous lawmaker in the colony, the British Crown became the sovereign lawmaker on acquisition of the colony. In short, the British Crown’s sovereignty filled a void. The Crown became owner because there was no other owner.47 Once the Crown held all land, then others, according to the doctrine of tenure, could only hold

‘of’ the Crown; all land being held mediately and intermediately of the Crown. There is no place for allodial holdings under the doctrine of tenure. Hence, if the proposition that the land were terra nullius is rejected, then ‘the notion that sovereignty carried ownership in its wake must be rejected too’.48 When this rejection finally occurred, it left open a window for the recognition of Indigenous customs and traditions. They could be recognised outside the doctrine of tenure.49 Yet, long before the landmark case of Mabo (No 2) was decided, the struggle for the recognition of Indigenous rights in land had begun. In its legal dimension it was binary, involving both a common law approach that sought recognition of native traditions and customs, as well as a land rights approach that sought the transfer of claimed land through specific land rights legislation.50 One of the key cases relevant to the first approach was Milirrpum v Nabalco, commonly known as the Gove case.51

The Gove case 4.10 In the 1960s there was a growing awareness of Indigenous identity and pride, in part fuelled by a worldwide Black Power movement.52 Indigenous people in Australia began to demonstrate resistance in various forms, much of which culminated in the Wave Hill strike. This involved the Gurindji people walking off a cattle station in the Northern [page 143] Territory in response to poor pay and conditions, and ultimately retaking their tribal lands.53 Further, in the 1960s and 1970s, reserves where Indigenous people lived, and which had remained untouched by outsiders for many years because they were remote and inhospitable, became the subject of non-Indigenous interest with the advent of the mining boom. The result was that Indigenous people living on reserves faced unprecedented pressure to accommodate mining interests. In 1971, the Yolngu people from Yirrkala, on the Gove peninsula, unsuccessfully resisted this pressure in Milirrpum v Nabalco.54 In that case,

Blackburn J found that Indigenous people did have a recognisable system of law, but that they did not have a proprietary interest (in land). He found that the usual indicia of property were not present: the right to use and enjoy, the right to alienate, and the right to exclude. He also held that, even if these indicia were present, some formal act by the Crown would have been needed to recognise the Indigenous relationship to the land before it could be protected.55 4.11 Milirrpum v Nabalco was not appealed. Instead, over the next decade or so the fight for rights in land became a statutory one. The Whitlam Government was elected in 1972, and there followed two reports on how Indigenous land rights could be best achieved.56 These reports formed the basis of a Whitlam Government Bill that was modified and eventually enacted by the Fraser Government as the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). The Act directly vested existing reserves in Aboriginal ownership,57 as well as providing a mechanism for claims to be lodged by Aboriginal groups. The latter process involves Aboriginal people convincing an Aboriginal Land Commissioner that they are the owners of the land in question under Aboriginal law. The commissioner then makes a recommendation to the relevant Commonwealth Minister about whether the land should pass to the Aboriginal people by the grant of a title under Australian law. While such a process does not recognise a title to land outside the common law, it does permit recognition of the significance of the Indigenous connection to the land, as well as recognition of custom and tradition.58 [page 144] 4.12 By contrast, direct vesting was not introduced by the Aboriginal Land Rights Act 1983 (NSW). That Act allows a claim to be made to land without requiring proof of anything other than that the land is claimable within the terms of the Act. It therefore moves away from proof of traditional ownership as a cornerstone. Unfortunately, this approach has set up some tension between traditional owners and other Indigenous people resident in the same

area. The Aboriginal Land Rights Act has been the subject of criticism, some of which takes the form that the Act fails to provide the opportunity to make a claim on the grounds of historical or traditional connection.59 Running counter to that view is one that sees the mechanism for claims under the Act as simple, unique and providing a fairly good model for other jurisdictions, should they choose to follow it.60

Mabo (No 2) Background 4.13 The failure of the Yolngu people’s claim in Milirrpum v Nabalco and the passing of land rights legislation seemed to deter Indigenous Australians from seeking recognition of their rights through the common law. Yet, internationally, common law recognition through ‘native’ or ‘Aboriginal’ title, as it was sometimes called, was a known phenomenon. For example, in the United States, Johnson v McIntosh61 had settled the question of competing claims between Aboriginal people and settlers on the basis of native title at common law, while Calder v Attorney-General of British Columbia62 in Canada and R v Symonds63 in New Zealand both relied on the continued existence of native title. Those seeking to test the native title doctrine in the Australian context were given hope by two cases in particular. They were Administration of Papua v Daera Guba64 and Coe v Commonwealth.65 In the first case, Barwick CJ intimated that native title might exist, while, in the second, the whole court agreed that the issue of native title amounted to an ‘arguable question if properly raised’.66 In Northern Land Council v Commonwealth (No 2),67 native title was referred to as a ‘question of fundamental importance’. Further, in Gerhardy [page 145] v Brown,68 Deane J seemed to reveal dissatisfaction with the decision in Milirrpum when he stated that if Milirrpum were correct, Australia had not yet

achieved the ‘retreat from injustice’ which had taken place in American jurisprudence at the beginning of the 19th century. 4.14 In this climate, five Meriam plaintiffs initiated proceedings in the High Court against the state of Queensland. Two dropped out, leaving Eddie Mabo, David Passi and James Rice to continue. These men sought a declaration that the Meriam people were entitled to their lands and the surrounding waters in the Murray Islands, on the basis that they held a traditional native title to them; or, in the alternative, that they held their land by virtue of possessory title or local custom. The plaintiffs also argued that any interference with or infringement of these rights constituted a breach of a fiduciary duty owed by the state of Queensland to the Meriam people. Such a breach would, they argued, cause compensation to flow. In February 1986, the matter was remitted to the Supreme Court of Queensland for hearing. The court was also to determine all matters of fact that the pleadings raised,69 but its task was interrupted when the status of the Queensland Coast Islands Declaratory Act 1985 (Qld) had to be clarified midstream. The defendant relied on this Act and, while its validity was tested, the case had to be adjourned. The effect of this Act was to declare retroactively that, on annexation, the islands off the Queensland coast (including the plaintiffs’ home island of Mer): … were vested in the Crown in the right of Queensland freed from all other rights, interests and claims of any kind whatsoever and became waste lands of the Crown in Queensland.70

The High Court held that the Queensland Act contravened s 10 of the Racial Discrimination Act 1975 (Cth) because it ‘abrogated the immunity of the Meriam people from arbitrary deprivation of their legal rights in and over the Murray Islands’.71 The finding allowed the litigation to proceed to the next stage, where the question of whether native title existed was decided.72

The finding in Mabo (No 2) General 4.15 The High Court in Mabo v Queensland (No 2)73 held that the common law of Australia recognised a form of native title that was grounded in the laws and customs of

[page 146] Indigenous people. The court concluded that the ‘rights and interests in land possessed by the Indigenous inhabitants of the territory’ existed long before the relevant laws of England were brought to Australian shores and that they ‘survived the change in sovereignty’.74 As this was the first time an Australian appellate court recognised native title, enforcement through the courts of the rights associated with native title became available only from 1992.

Sovereignty 4.16 The Crown’s acquisition of sovereignty was held not to be justiciable in a municipal court.75 Further, when the British Crown acquired sovereignty, native title was not automatically extinguished. Instead, sovereignty gave rise to radical or ultimate title, rather than absolute beneficial ownership. Therefore, it was only where native title was extinguished altogether that the Crown’s radical title blossomed into absolute beneficial ownership. This approach (best exemplified in the leading judgment of Brennan J) allowed the court to recognise native title rights while retaining the basic structure or ‘skeleton’ of the common law property system.76

Origin and nature of native title 4.17 According to the reasoning in Mabo (No 2), the origins and content of native title lie in the ‘traditional laws acknowledged by and the traditional customs observed by the Indigenous inhabitants of a territory’.77 The nature and incidents of native title are also determined by reference to the customs and laws of the Indigenous group, and their ascertainment is a ‘matter of fact’.78 While, on one hand, this is a respectful approach, on the other, it has placed a large burden on Indigenous people to prove by factual evidence what those customs and traditions involve. Clearly, where there is a clash of cultures (Indigenous versus non-Indigenous) this task becomes somewhat difficult, despite the practical efforts of some courts that have been willing to employ a variety of approaches aimed at bridging this gap.79 Ordinarily, native title will be a communal rather than an individual title, but that does not preclude Indigenous laws and customs creating entitlements

in individuals.80 Later cases have explored this issue further, and demonstrated that different Indigenous groups [page 147] are not precluded from coming onto the land and using it for hunting and ceremonies, for example, if that has been the traditional practice.81 Rights under native title generally belong to group members and membership is determined, according to Brennan J, by ‘biological descent’.82 Native title is also conceived of as an inalienable right, although it is possible to surrender it to the Crown.83 The lack of alienability raises an issue that is discussed in more detail later: how should native title be characterised? In Mabo (No 2) it was variously described as being ‘proprietary’,84 ‘personal’,85 ‘usufructuary’,86 ‘sui generis’,87 affording a ‘permissive occupancy’88 and perhaps ‘possessory’.89

Connection 4.18

According to Brennan J in Mabo (No 2):

Where a clan or group has continued to acknowledge the laws and (so far as is practicable) observe the customs based on the traditions of that clan or group, whereby their traditional connection with the land has been substantially maintained, the traditional community title of that clan or group can be said to remain in existence.90

Yet this connection is not to be ‘frozen as at the moment of establishment of a Colony’.91 Indeed, Deane and Gaudron JJ stated that: [page 148] Provided any changes do not diminish or extinguish the relationship between a particular tribe or other group and particular land, subsequent developments or variations do not extinguish the title in relation to that land.92

The type of connection that is required was another issue for consideration. Different views were expressed. Brennan J required only a ‘traditional connection’93 with the land, while Deane and Gaudron JJ referred to

‘occupation or use’.94 By comparison, Toohey J emphasised the need for a ‘physical presence’ on the land,95 but his approach did not preclude claimants living a nomadic existence from establishing the requisite connection. He stated that connection should be judged ‘in accordance with the way of life and habits, customs and usages’ of the claimants.96 Where there is a loss of connection with Indigenous traditions and customs, native title will be extinguished. Ceasing to acknowledge traditional law or failing to observe customs would amount to a loss of connection, as would the death of the last member of the group or clan.97

Native title over waters 4.19 Mabo (No 2) asserted that native title exists over land. The implication seems clear that it also exists over water, permitting Indigenous people the right to fish in rivers, for example.98 However, the specific issue of whether native title extended to coastal seas and other offshore areas went unanswered by that decision. The issue is explored below at 4.34.

Extinguishment 4.20 The concomitant of sovereignty, radical title, permits the Crown to extinguish native title where a clear and plain intention to extinguish is evident.99 The majority in Mabo (No 2), relying on the presumption set out in Adeyinka Oyekan v Musendiku Adele,100 found that no intention to extinguish native title existed at the point of the British acquisition of sovereignty.101 Native title was, however, extinguished on a more ad hoc basis by the Crown and the various legislatures. Acts of extinguishment can include: [page 149] the passing of legislation that manifests an intention to extinguish native title; valid laws or executive acts creating rights in land in third parties that are inconsistent with the survival of native title; and Crown acquisition of the absolute beneficial ownership of land.

4.21 Extinguishment by legislation When legislation extinguishes native title, it is common for it to vest an interest in the Crown itself or a third party. At other times, the extinguishing legislation may cause executive acts to be inconsistent with the continuation of native title. Although acts of extinguishment must be unambiguous,102 the legislation need not single out the particular interests to be extinguished. If the general intention of the legislation exhibits a clear and plain intention to extinguish, that will be adequate.103 In some cases, however, the legislation or acts will be compatible with the continued existence of native title — albeit, at times, continued existence with limitations. To explain, some legislation will permit the co-existence of native title along with the carrying out of a statutory purpose. For example, legislation that sets aside land for a national park could accommodate the continued existence of native title,104 as could the creation of reserves or the appointment of ‘trustees’ to control a reserve where no grant of title was made.105 In such circumstances, there would be no intention to extinguish native title. 4.22 Extinguishment by inconsistent grant Another method of extinguishing native title is through legislation that authorises the granting of an inconsistent interest over the very same land.106 Where the grant causes the two interests to be in conflict, native title will be extinguished to the extent of the inconsistency.107 Resolution of whether or not the grant is inconsistent has involved an analysis of the nature and incidents of native title and their fields of operation, compared with the competing rights under the later grant.108 According to Mabo (No 2), at common law the granting of estates or interests less than freehold or leasehold, such as an authority to prospect for minerals,109 would not necessarily extinguish native title. 4.23 Extinguishment by appropriation If the Crown acquires the absolute beneficial ownership of land as the result of a compulsory acquisition,110 or surrender,111 native title [page 150]

will be extinguished. Further, extinguishment will also occur if the Crown commences works on the relevant land totally preventing native title holders from exercising their rights. It is necessary to examine the terms under which the native title interest is acquired in order to gauge whether the requisite intention to extinguish exists. In the case of ‘works’, the examination is of the nature of the works. Extinguishment would, therefore, seem to extend to the compulsory acquisition of land for use as a school, for example. Extinguishment by appropriation raises the issue of whether the mere statutory dedication of land for a specific purpose is enough of itself to extinguish native title. According to Brennan J it is not.112 The use of the land extinguishes native title. However, the question is one that has been debated in subsequent cases. In Western Australia v Ward,113 the majority of the High Court rejected the notion of ‘operational inconsistency’ and affirmed that the relevant issue is not how the land is actually used, but whether there has been a disposition of the relevant rights and interests in a way that is inconsistent with continued recognition of native title. In other words, questions of extinguishment of native title must be addressed by considering the ‘rights’ granted rather than considering evidence of how the land was actually used.114 At one stage, the decision of the Full Court of the Federal Court in De Rose v South Australia (No 2),115 was thought to establish that native title in a specific area had been extinguished only once specific improvements authorised by the terms of a lease had been erected. However, it seems clear since the later decision of the High Court in Western Australia v Brown116 that this view is wrong, and the view expressed previously in Ward is the correct one. Further, it is worth noting that negotiated settlements may also be executed. These may extinguish native title through surrender, but will not necessarily do so.117 Hence, it can be seen that, while native title did survive the acquisition of sovereignty, its continued existence has been precarious. In fact, native title was highly precarious; more precarious than titles derived from the Crown, which cannot be extinguished by inconsistent grant. Fortunately, since 1975 this harshness has been tempered somewhat by the interaction of the Racial Discrimination Act 1975 (Cth) with native title.

[page 151] The difference this Act made is illustrated in Mabo v Queensland (No 1) (Mabo (No 1)) and Western Australia v Commonwealth, for example.118

Fiduciary relationship? 4.24 Toohey J in Mabo (No 2) introduced the concept that the Crown was in a fiduciary relationship with native title holders.119 He came to this conclusion on the basis that, first, native title could not be alienated to anyone outside the clan or group except to the Crown; and, second, the Crown was able to extinguish native title. According to Toohey J, the existence of a fiduciary relationship did not preclude the legislature from extinguishing native title but, if extinguishment were adverse to the native title holders’ interests or was brought about in a manner which ignored those interests, then a breach of the fiduciary obligation would result and damages would be payable.120 Brennan J in Mabo (No 2) concluded that, if Indigenous people surrendered native title to the Crown in expectation of the receipt of a Crown grant, a fiduciary obligation may arise.121 His reasoning focused on the expectation itself giving rise to a fiduciary obligation. Deane and Gaudron JJ’s approach was slightly different. They thought that native title could be protected by virtue of the imposition of a constructive trust under which the Crown was the trustee, and native title holders the beneficiaries.122 Notably, the relationship of trustee and beneficiary is one of those recognised as giving rise to a fiduciary obligation.

Compensation 4.25 By a narrow margin, the High Court in Mabo (No 2) did not support the payment of compensation for prior extinguishment of native title. Mason CJ and McHugh J stated that: … neither of us nor Brennan J agrees with the conclusion to be drawn from the judgments of Deane, Toohey and Gaudron JJ that, at least in the absence of a clear and unambiguous statutory provision to the contrary, extinguishment of native title by the Crown by inconsistent grant is wrongful and gives rise to a claim for compensatory damages.123

They also noted that Dawson J’s judgment supported the conclusion that compensation was not payable, because Dawson J characterised native title as a form of permissive occupancy at the will of the Crown.124 The Crown could simply withdraw its permission without facing the obligation to compensate. [page 152]

Some key continuing issues in the ‘common law’ of native title General 4.26 As the court in Mabo (No 2) was not in complete agreement on a number of aspects of native title, several issues were left without clarification. Debate has continued, a significant volume of litigation has ensued, generating much case law, and some legislation has been passed. According to Kirby J, in Commonwealth v Yarmirr (known as the Croker Island case): It was to be expected that [the] … significant change in legal doctrine [initiated by Mabo (No 2)] would give rise to many doubts and uncertainties, especially during the early stages of clarification and elucidation … The process of elucidation of the law is continuing.125

An account of the relevant legislation is provided later in this chapter; meanwhile, some of the key issues and problems emerging in the decisions of later courts in what may be called the ‘common law’ of native title following from Mabo (No 2)126 follow.

Connection to the land 4.27 As mentioned above, the issue of connection to the land proved to be an interesting point of divergence between Brennan, Deane, Gaudron and Toohey JJ in Mabo (No 2). One aspect of that divergence arose in relation to the need for a physical connection to the land. Decisions such as Pareroultja v Tickner127 and Mason v Tritton128 have not tended to emphasise a physical presence requirement, while the High Court in Western Australia v Ward129 found it unnecessary to decide whether continuing use or physical connection

were required. Notably, the Full Federal Court decision in Yorta Yorta Aboriginal Community v Victoria130 did not support a finding of native title as the result of simply carrying out activities on the land, unless the activities are connected or linked to the traditions and customs of the group. Kirby J, in Commonwealth v Yarmirr,131 also favoured an approach that downplayed the importance of physical occupation. He distanced himself from the primary judge and the majority of the Full Court in Yarmirr, believing that Mary Yarmirr’s references to ‘my country’ or ‘Mandilarri-Ildugij country’, and her culturally different explanations of how her people ‘owned’ the particular estate, were helpful in ascertaining the issues of possession and ownership. He stated: [page 153] … such concepts appear far more relevant than physical possession of the area which, of its nature [it consisted of an area of sea] was not capable of being “occupied”, as non-Indigenous perspectives understand that term.132

Further, he saw Yarmirr’s comments, accepted by traditional law and custom, as an ‘integral part of the “socially constituted fact”’ that the High Court had upheld in Yanner v Eaton.133 In De Rose v South Australia (No 2),134 the Full Court of the Federal Court made it clear that an absence of physical presence on the land alone did not preclude the establishment of a relevant ‘connection’, especially where at least one major reason for irregular or limited physical use of the land was a justified fear of harm from non-Indigenous occupants.135 4.28 One of the reasons that the issue of continuing connection has become vexed is because it necessarily raises the question of how far present practices can deviate from past ones without loss of connection.136 Despite statements in Mabo (No 2)137 that suggest a repugnancy towards a ‘frozen rights’ approach,138 some later cases have shown less tolerance for change to, and adaptation of, Indigenous customs and traditions. At first instance, Olney J in the Yorta Yorta decision found, by relying on the amateur anthropological observations of a pastoralist, Edward Curr, from the 1840s, rather than later Indigenous accounts, that the claimants had lost their traditional connection

with the land.139 He found a lack of evidence of ‘aspects of traditional lifestyle’140 and, in words echoing back to Brennan J in Mabo (No 2),141 that ‘the tide of history [had] indeed washed away any real acknowledgment of their traditional laws and any real observance of their traditional customs’.142 His views seemed to reflect the more conservative approach taken in some Canadian cases, such as [page 154] R v Van der Peet,143 R v NTC Smokehouse144 and R v Pamajewon.145 Those cases respectively found that the selling of 12 fresh salmon, the selling of processed fish, and high-stakes Bingo games were examples of activities that deviated too far from the original customs to be construed as modern manifestations of older traditions and customs.146 However, when it came to Hayes v Northern Territory, Olney J’s position seemed to have changed slightly. There he spoke of ‘some modification and adaptation of the old laws and customs’ as being acceptable.147 The acceptance of modification could also be seen in Yanner v Eaton,148 where Gummow J, in discussing whether the use of a motor-powered boat for fishing essentially altered a traditional activity, concluded that it was simply ‘an evolved, or altered, form of traditional behaviour’. While it was not a decision about the existence of native title, a similar result was reached in the decision of the Queensland Court of Appeal in Stevenson v Yasso.149 Mr Yasso was found to be not guilty of possessing a fishing net without a licence because his doing so was incidental to taking fish in accordance with ‘Aboriginal tradition’. The majority specifically held that the fact that he was using a modern net, which was not made of traditional fibres, did not stand in the way of him claiming that he was fishing under Aboriginal tradition.150 4.29 On appeal in (Branson and Katz JJ) instance decision had majority also said that

the Full Federal Court, the majority in Yorta Yorta rejected the appellants’ argument that Olney J’s first been prefaced on a frozen rights approach.151 The if a frozen rights approach had been taken, it would

have been wrong. Instead, they found that much hinged on what the word ‘traditional’ meant and how s 223 of the Native Title Act 1993 (Cth) operated.152 They emphasised that native title is able to survive changes to traditionally based practices, but it will be extinguished if those changes mean that practices cannot properly be ‘characterised as traditional’.153 Native title will also be extinguished where the practice ‘reflect[s] a breaking with the past rather than the maintenance of the ways of the past in changed circumstances’.154 Branson and Katz JJ also stated that the test for whether a custom or tradition retained its traditional character was objective rather than [page 155] subjective.155 This view may be compared, and perhaps contrasted, with Kirby J’s view in the High Court decision of Yarmirr, in which he says that: It is the traditional connection arising from the acknowledgement of laws and customs by the Indigenous community, and not recognition or acceptance by others of the connection, which is the source of native title.156

4.30 Quite notable was Black CJ’s dissenting judgment in the Federal Court Full Court Yorta Yorta decision. He found that the decision at first instance, although not exactly based on a ‘frozen rights’ approach, was nevertheless too restrictive in its understanding of the term ‘traditional’. His approach has been said to mark a subtle shift in the interpretation of the term ‘traditional laws and customs’, because it moves away from seeing the traditional laws and customs contemplated by s 223 of the Native Title Act as ‘traditions in themselves’, towards seeing them ‘as laws and customs drawn from a particular Indigenous tradition, a particular Indigenous socio-legal order’.157 On the analysis offered by Black CJ, these ‘traditions’, it was argued, operated as ‘fundamentally dynamic, normative frameworks, reaching across generations’. They are not ‘freestanding practices’, but instead need to be conceptualised as ‘interrelated elements within these normative frameworks’.158 4.31 On appeal to the High Court in Yorta Yorta, Gleeson CJ, Gummow and Hayne JJ, forming part of the majority, continued the discussion relating to normative systems.159 They found that Indigenous customs were not

freestanding, but instead were referenced to a normative framework. Even so, they did not allow the appeal. On the issue of normative systems, they stated: It is only if the rich complexity of Indigenous societies is denied that the reference to traditional laws and customs as a normative system jars the ear of the listener.160

The same judges also went on to discuss specifically the issue of how change affected ‘connection’. In particular, they asked critically important questions, such as: What is it that actually intersects with the common law? [page 156] Is it a body of law and custom as it exists today but which, in some way, is connected with a body of law and custom that existed at sovereignty? How, if at all, is account to be taken of the inescapable fact that since, and as a result of, European settlement, Indigenous societies have seen great change?161 In attempting to answer these questions, Gleeson CJ, Gummow and Hayne JJ found that it is imperative to address them by bearing in mind ‘all the elements of the definition of native title’.162 Native title that represents communal, group or individual rights in relation to land or water, in accordance with s 223 of the Native Title Act, must be: possessed under traditional laws acknowledged by traditional customs observed by the people concerned — put another way, the rights and interests ‘must find their source in traditional law and custom, not in the common law’;163 such that ‘… by the traditional laws acknowledged and traditional customs observed by the relevant peoples, those peoples have “a connection with” the land or waters … the connection to be identified is one whose source is traditional law and custom, not the common law’;164 ‘recognised’ by the common law of Australia.165 The last element for consideration necessarily raises the issue of timing. When is the relevant time to consider if the rights and interests are recognised by the common law of Australia? Is the law to be considered any aspect of the general law as it stood after the decision in Mabo (No 2) but before the enactment of the Native Title Act?166 Further, how does this element of the

definition speak to the significance that is to be attached to the identification of what traditional law or custom may have said, ‘at the time sovereignty was first asserted, about the rights and interests of peoples in the land or waters’?167 4.32 Although the answers to these complex questions may take some time to tease out in relation to any given set of facts, it is clear that the High Court has reaffirmed the importance of the position of customs and traditions at the time of the assertion of sovereignty.168 It has also re-emphasised the ‘forensic task’ of putting evidence of traditions and customs before the court as a means of establishing connection.169 Yet the court acknowledges that: It is not possible to offer any single bright line test for deciding what inferences may be drawn or when they may be drawn, any more than it is possible to offer such a test for deciding what changes or adaptations are significant.170

[page 157] Although it is heartening that Gleeson CJ, Gummow and Hayne JJ state that some interruption of the enjoyment or exercise of native title rights and interests between the assertion of the Crown’s sovereignty and the present will ‘not necessarily be fatal to a native title claim’171, it is disappointing that it remains so very difficult, in practical terms, to establish when the change or adaptation is of such a kind that the right or interest can no longer be considered a manifestation of the original tradition or custom.172 It is perhaps in response to these concerns that Graeme Neate, the then President of the National Native Title Tribunal, claimed in 2002 that many groups may turn to the use of mediated settlements rather than litigation.173 Since the High Court decision in Yorta Yorta, a number of decisions have hinged on the question of continuity of connection with the land.174 In Risk v Northern Territory of Australia,175 Mansfield J found that the Larrakia people in the Darwin area had not observed traditional laws and customs since before European settlement of the area, and hence their claim for recognition of native title failed. Similarly, in Jango v Northern Territory of Australia176 Sackville J was unable to be satisfied that the applicants in a native title claim covering tourist areas near Uluru were part of a group of Western Desert people exercising traditional laws and customs sufficiently related to those exercised at

the acquisition of sovereignty. On the other hand, in Rubibi Community v Western Australia (No 7)177 Merkel J found that the local Indigenous community near Broome had established native title over areas of that town where there had not been extinguishment. In Sampi v Western Australia,178 the Full Court held that a relevant connection to land in the Dampier Peninsula had been made out.179 [page 158] In Bennell v Western Australia,180 Wilcox J at first instance found that the Noongar people in south-western Western Australia constituted a community that was able to establish relevant continuity and, in a (politically, if not legally) controversial decision, ruled that native title might still exist over a large settled region that includes metropolitan Perth and a number of smaller towns. However, this decision was overturned in appeal in Bodney v Bennell,181 the Full Court holding that his Honour had not addressed the question whether there had been continuous acknowledgment and observance of the traditional laws and customs by the community from sovereignty until recent times.182 The Full Court indicated that continuity must be established ‘for each generation’.183 Following the Full Court decision in the Noongar claim, negotiations have been underway for a settlement of issues in the area outside the court system. A group called the South West Aboriginal Land and Sea Council (SWALSC) has been involved on behalf of native title holders.184 Part of the arrangements involved the enactment by the Western Australia Parliament of the Noongar (Koorah, Nitja, Boordahwan) (Past, Present, Future) Recognition Act 2016 (WA), which was assented to on 6 June 2016. However, the settlement also requires the registration under the Native Title Act 1993 (Cth) of a number of Indigenous Land Use Agreements (ILUAs) (see 4.67 for more detail about these agreements.) In McGlade v Native Title Registrar,185 the Full Court of the Federal Court held that not all the proposed ILUAs could be registered, as not all the relevant individuals who jointly comprised the relevant registered native title claimant or claimants had signed the ILUAs. At the time of writing, legislation has been introduced into the Federal Parliament to allow

an ILUA to be registered even if not all members of a registered native title claimant (RNTC) have agreed to it, but the legislation has not yet passed the Senate.186 [page 159] The decision in Bodney187 confirmed the view of many commentators that the ‘connection’ requirements for native title had become too strict and, in many cases, almost impossible to establish. The Australian Law Reform Commission (ALRC) was asked to consider this issue, among others, in its most recent review of the area. In its final report, the ALRC made a number of recommendations for change to the legislation to clarify issues around the connection requirements.188 It proposes, for example, in s 223 of the Native Title Act, specific recognition that laws and customs may adapt and evolve, and provision that it is not necessary for those laws or the community concerned to have been in continuous and uninterrupted existence since sovereignty for a connection to be established.

Compensation 4.33 As noted above,189 the position emerging from Mabo (No 2) was that compensation for loss of native title was not payable.190 Nevertheless, after the Racial Discrimination Act came into force, the rights of Indigenous people were to be treated ‘no less favourably’ than the rights of non-Indigenous people.191 Some of the implications that were thought to arise from this legislation were addressed in the Native Title Act. The Act authorises the compulsory acquisition of native title by states, and grants a consequent right to compensation in ‘just terms’ where that occurs.192 A right to compensation in just terms is also established by the Commonwealth Constitution, but only in so far as the loss of native title amounts to an ‘acquisition’.193 The impact of the native title legislation on the question of compensation is examined later in this chapter.194

Native title over waters 4.34 The argument for denying the existence of native title over coastal waters was as follows. Native title was claimable only over land that fell under the umbrella of the Crown’s sovereignty. When the Crown acquired sovereignty on ‘settlement’, that sovereignty extended only as far as the mean low-water mark and not beyond it. Hence, no native title could exist over areas that were not within the bounds of the area claimed by sovereignty.195 Coastal waters and offshore areas were beyond these bounds. [page 160] The majority of the High Court in Commonwealth v Yarmirr found that it is not necessary for the Crown to have radical title (a concomitant of sovereignty) for native title to exist in an area.196 The majority dismissed appeals from both the Commonwealth and the claimants, thereby affirming the first instance and Full Federal Court decisions. Those decisions were that native title did exist over the sea, but that it did not give rise to a right of exclusive possession. Instead, native title in this case constituted a right to fish, hunt and gather for personal, non-commercial needs, as well as the right to access the sea and seabed in order to exercise rights to travel, visit and protect places of cultural and spiritual significance.197 In Lardil Peoples v Queensland198 and Gumana v Northern Territory,199 the decision in Yarmirr has been applied to find that, while native title may exist over areas of either riverbed or seabed below the high water mark, such title will not be exclusive. In Akiba on behalf of the Torres Strait Islanders of the Regional Seas Claim Group v State of Queensland (No 2),200 it was found at first instance by Finn J that the Torres Strait Islander communities in question had long exercised fishing rights and were entitled to continue to do so, subject, however, to general state regulation of commercial fishing.201 While this decision was initially overturned by the Full Court of the Federal Court,202 on appeal the High Court upheld the trial judge’s decision, affirming that the mere regulation of an activity that would otherwise form a part of a native title right, does not of itself extinguish that right.203

A similar decision was then reached by the High Court in Karpany v Dietman,204 the court holding that South Australian legislation regulating fishing had not extinguished [page 161] native title rights to fish, which could be used under s 211 of the Native Title Act 1993 (Cth) as a defence to a criminal charge of unlawfully taking fish.205

Fiduciary relationship 4.35 There has been very little judicial consideration of the fiduciary issue in the post-Mabo (No 2) era. It was taken up by French J (as his Honour then was) in Re Wadi Wadi People’s Native Title Application,206 but in Coe v Commonwealth207 the issue was not decided, and in Thorpe v Commonwealth208 Kirby J also left the issue open. It has, however, been the subject of considerable academic discussion.209 One of the most attractive reasons for Indigenous people to mount a fiduciary argument in relation to native title concerns compensation. As claims for equitable compensation for breach of a fiduciary obligation are not statute-barred in New South Wales,210 the door to compensation for the pre-1975 extinguishment of native title would be left open if the fiduciary argument were to succeed.211 Perhaps one of the reasons for judicial reticence in finding the existence of a fiduciary relationship between the Crown and Indigenous people, concerning native title, is a more general coyness about spelling out ‘how [a fiduciary relationship] arises, what are its indicia, what are the particular obligations arising from the relationship and what remedies follow upon failure to observe them’.212 The fiduciary relationship has been said to be ‘a concept in search of a principle’.213 At the moment this doctrine, as it is currently interpreted, seems of little assistance in achieving justice for native title holders.214 [page 162]

Is native title a proprietary interest? 4.36 Judicial divergence on the nature of native title As noted earlier, there was judicial divergence in Mabo (No 2) on the question of the nature of native title.215 Although it is plain that the nature and incidents of native title are referable to Indigenous customs and traditions, there have been various attempts to equate native title with known common law rights, particularly proprietary rights.216 At other times, they have been equated with personal or usufructuary rights. This is not surprising, given that the task of recognition is made easier if the unknown is equated with the known.217 Yet there are difficulties in using all of these characterisations. Perhaps in recognition of these difficulties, Deane and Gaudron JJ in Mabo (No 2) observed that ‘the preferable approach … is to recognise the inappropriateness of forcing … native title to conform to traditional common law concepts’.218 However, Mabo (No 2) also provided support for characterising at least some native title interests as proprietary, when Brennan J stated that: Whether or not land is owned by individual members of a community, a community which asserts and asserts effectively that none but its members has any right to occupy or use the land has an interest in the land that must be proprietary in nature; there is no other proprietor.219

That his Honour specifically referred to ‘a proprietary native title’ at another point is also a clear indication that he intended at least some incidents of native title to be characterised as proprietary. Further, it is worth noting that international cases such as United States v Alcea Band of Tillamooks 1220 and Delgamuukw v British Columbia221 indicate that Aboriginal rights may be regarded as proprietary in nature.222 Clearly, such a characterisation affords the right important status in any hierarchy of rights, because proprietary rights receive a higher level of protection than personal rights and, as such, are enforceable against the whole world.223 4.37 Support for a proprietary analysis of native title can also be seen in Toohey J’s position in Mabo (No 2).224 He suggested that, in regard to extinguishment, native title should be treated in the same way as a proprietary interest, when he required that any extinguishment by inconsistent grants or appropriation be evidenced by clear and plain [page 163]

legislative authority.225 Further, his finding that ‘the Meriam people may have acquired a possessory title on annexation’226 also supports a proprietary analysis of the rights of Indigenous people. It is also arguable that common law Aboriginal title, being a form of possessory title, would result in Indigenous people being seised of a fee simple estate.227 Yet Toohey J’s reasoning also offered some support for the proposition that traditions and customs mediated through native title may not resemble any common law rights at all, proprietary or otherwise, when he stated: … it would defeat the purpose of recognition and protection if only those existing rights and duties which were the same as, or which approximated to, those under English law could comprise traditional title; such a criterion is irrelevant to the purpose of protection.228

4.38 That native title may have a different nature according to the different circumstances in which it arises is another interpretation available from Brennan J’s words in Mabo (No 2).229 There, he seemed to imply that native title is for some purposes proprietary, but is not necessarily so in all circumstances. In referring to the interests of the Meriam people, whose rights were being assessed, he stated that ‘as a community, they held a proprietary interest in the Islands’.230 Later, however, he suggested that there might be some flexibility regarding a more general interpretation of the nature of native title, when he said that native title may be: … protected by such legal or equitable remedies as are appropriate to the particular rights and interests established by the evidence; whether proprietary or personal or usufructuary in nature and whether possessed by a community, a group or individual.231

Pearson appeared to rely on Brennan J’s approach, at least partially, when he developed a distinction between the external and internal aspects of native title.232 According to Pearson, the external aspect refers to the relationship of the community as a whole to the non-Indigenous legal system (an aspect discussed in Mabo (No 2)),233 while the internal aspect relates to the rights of individuals and sub-groups within the overall community ownership. Some of the rights comprising the internal aspect may be proprietary in the Englishbased common law sense, and some may not; these are matters for Indigenous law. Pearson’s approach deals with the proprietary question summarily by simply characterising the external aspect as proprietary. This approach has its appeal, and it may well be the case

[page 164] that the High Court adopts this reasoning, but as yet the court does not appear to have reached this point. 4.39 The potential flexibility of the manner in which native title is characterised is evident in Brennan J’s discussion of remedies,234 where he seemed to suggest that legal and equitable remedies may support native title, whether that title is characterised as proprietary, personal or usufructuary. His approach permits appreciation of the fact that traditions and customs, when mediated through native title, may resemble a range of different common law rights. Of course, as noted above at 4.37, Indigenous customs and traditions sometimes may not resemble any common law rights at all. Where the latter is the case, an understanding of such difference may not yet be available. We will need to explore more creative means for giving expression to Indigenous customs and traditions if they are unfamiliar to the common law.235 The divergence of judicial opinion regarding characterisation was evident again when Toohey J suggested that native title’s nature was variable. He stated in the Wik Peoples v Queensland (Wik) decision that ‘at one end of the spectrum, native title rights may “approach the rights flowing from full ownership at common law”’.236 On the other hand, they may amount to an entitlement ‘to come onto land for ceremonial purposes, all other rights in the land belonging to another group’. Meanwhile, Gummow J stated in the same case that: The content of native title, its nature and incidents, will vary from one case to another. It may comprise what are classified as personal or communal usufructuary rights involving access to the area of land in question to hunt for or gather food, or to perform traditional ceremonies … At the opposite extreme, the degree of attachment to the land may be such as to approximate that which would flow from a legal or equitable estate therein.237

These extracts seem to point to the range of possibilities available in response to the question: what is the nature of native title? Yet the argument is open that decisions, such as the Wik decision, suggested that some resolution of the question has already been achieved, because in that case the majority agreed that an inconsistent grant could extinguish native title only if legislation manifested a clear and plain intention for extinguishment to result

from the grant. In coming to that view, the majority dealt with native title as though it were proprietary in nature. The position was, however, clouded by Brennan CJ maintaining his earlier position and concluding that native title could be extinguished by Crown grant with or without legislative authority. Yet his Honour’s view on this issue, in both Mabo (No 2) and Wik, did not square with another of his conclusions that native title was a right to be ‘fully respected’. According to Bartlett, ‘“Full respect” suggests that native title, representing an exclusive relationship to land, is a proprietary interest’.238 [page 165] 4.40 More recently, in Commonwealth v Yarmirr, the majority found the exercise of inquiring into the existence of native title should be conducted outside a proprietary framework. It stated that: Because native title has its origin in traditional laws and custom, and is neither an institution of the common law nor a form of common law tenure, it is necessary to curb the tendency (perhaps inevitable and natural) to conduct an inquiry about the existence of native title rights and interests in the language of the common law property lawyer.239

Perhaps the warning contained in these words should be extended to a discussion of the nature of native title once native title is established. In those circumstances, too, it may also be advisable to avoid the ‘language of the common law property lawyer’. 4.41 Indicia of property and their relationship to native title In order to discuss more fully whether some aspects of native title may be satisfactorily described as proprietary in nature, one approach is to revisit the question of what constitutes a proprietary interest.240 As noted in Chapter 1 and Chapter 3, the right to use and enjoy, the right to alienate, and the right to exclude are commonly seen as indicia of property.241 Clearly, no incidents of native title are capable of demonstrating strict compliance with all these indicia because, for example, native title cannot be alienated outside the group.242 On this analysis, one may be tempted to conclude that no native title rights could possibly be seen as proprietary in nature. Yet such a conclusion would be too simplistic in the light of post-Mabo (No 2) case law, both in Australia and

Canada. It would also be inappropriate in light of the fact that, even in regard to the common law, there does not appear to be a requirement that all these indicia are present at any one time for an interest to be characterised as proprietary. For example, a non-assignable lease is treated as property, even though it cannot be transferred to another.243 4.42 Returning to the first indicium of a proprietary right (the right to use and enjoy), it is quite clear that incidents of native title may involve using and enjoying the land — to live, hunt, fish and gather, for example.244 They may also involve use for ceremonies. The Canadian Supreme Court in Calder v Attorney-General of British Columbia245 spoke of ‘a right to occupy the lands and to enjoy the fruits of the soil, the forest and of the rivers and [page 166] streams’, while the Privy Council in St Catherine’s Milling and Lumber Co v R246 saw native title as extending to the fruits and produce of the land and to hunting and fishing. Both Ward v Western Australia247 and Hayes v Northern Territory248 at first instance determined that the content of native title included the right ‘to possess, occupy, use and enjoy’ the land, as well as the right to: control access; use and control the use of resources; maintain places that hold significance for the Indigenous community; and protect cultural knowledge.249 On appeal in the Ward case, the High Court stated that: [Where] native title rights and interests that are found to exist do not amount to a right, as against the whole world, to possession, occupation, use and enjoyment of land or waters, it will seldom be appropriate, or sufficient, to express the nature and extent of the relevant native title rights and interests by using those terms.250

Implicit in this statement is the view that at times, native title will be able to satisfy the ‘using and enjoying’ component. Further, in Commonwealth v Yarmirr,251 ‘using and enjoying’ was found to extend to the use of water for the purpose of passage from place to place and for the preservation of cultural and spiritual beliefs and practices. Most difficulties with ‘the right to use and enjoy’ tend to arise, not in

relation to its existence, but rather because the right to use and enjoy native title may be inconsistent with the exercise of common law rights.252 4.43 The second indicium of a proprietary right (the right to alienate), deserves consideration. It raises more immediate problems concerning the characterisation of native title as proprietary. As observed earlier, the right to alienate has traditionally been seen as an important aspect of property. However, some common law interests have been classified as proprietary despite the fact that there have been restrictions imposed on their alienability. Examples include entailed estates (such as fee tail male, fee tail female and fee tail special) as well as property, the alienation of which is affected (even if only in a small way) by the rule against perpetuities.253 This would suggest that restrictions affecting alienability do not necessarily result in an interest being regarded as non-proprietary. Therefore, although native title’s alienability is very restricted (it can only be alienated within the group or surrendered to the Crown), it does not automatically follow that it should be denied proprietary status on this basis. [page 167] By contrast, according to Deane and Gaudron JJ in Mabo (No 2), this very lack of alienability was one of the reasons to conclude that common law native title: … invites analogy with the kind of entitlement to use or occupy the land of another which confers no interest in the land and constitutes a “mere equity”.254

Even where these judges observed that ‘the rights under common law native title can … approach the rights flowing from full ownership’, they resisted a proprietary analysis and chose to see native title as sui generis.255 In the Canadian context, a lack of alienability has also led to an Aboriginal right being termed ‘personal’.256 However, the Supreme Court of Canada has sought to clarify the limited sense in which Aboriginal title should be seen as personal. Lamer CJ stated that: This Court has taken pains to clarify that Aboriginal title is only “personal” [in the sense that it is inalienable] … and does not mean that Aboriginal title is a non-proprietary interest which

amounts to no more than a license to use and occupy the land and cannot compete on an equal footing with other proprietary interests.257

In the Australian context, Brennan J, when considering whether native title was lost at the time the Crown acquired sovereignty, stated that: It would be wrong, in my opinion, to point to the alienability of land by that community and, by importing definitions of “property” which require alienability under the municipal laws of our society, to deny that the Indigenous people owned their land.258

He went on to suggest that a failure to classify native title as proprietary could lead to curious results. For example, if native title were not proprietary, and if native title were extinguished by the Crown, he thought it seemed rather odd that the new interests which the Crown created in place of native title would, in fact, be proprietary.259 In other words, he was uncomfortable with a proprietary interest blossoming out of soil that had previously been able to yield only a lesser interest. 4.44 On the question of the third indicium of a proprietary right (the right to exclude), Indigenous people have long been able to demonstrate that, as traditional communities, they excluded others from hunting, fishing and gathering, for example.260 The fact that they often invited other traditional groups to pass over their land or partake of its fruits for ceremonies or festivities may not necessarily deny the exclusivity element. It may be argued by way of analogy that exclusive possession of land demonstrates a proprietary interest, at least in regard to the question of what will survive a change in sovereignty.261 [page 168] The common law is quite familiar with the concept of possession that permits concurrent use by others; for example, by way of an easement. In Commonwealth v Yarmirr,262 the question of exclusive possession was revisited, with the finding at first instance that it was not possible for exclusive possession to co-exist with other, non-exclusive rights being overturned by the High Court. The issue of exclusive possession remained for some time a live one for

McHugh J, because in Western Australia v Ward263 he reasserted a position he took in Wik v Queensland,264 which was that: Possession that is not exclusive is a contradiction in terms, for the right of general control and exclusion is central to the concept of legal possession.265

It should be noted, however, that McHugh J was in dissent in Ward’s case. 4.45 In conclusion, many incidents of native title would look as if they were able to satisfy reasonably easily two of the three conventional indicia of a proprietary right. In regard to the third, alienability, as noted above, there appears to be evidence to suggest that lack of satisfaction of this element will not necessarily preclude a finding of a proprietary interest. To recapitulate, even in the common law, a lack of alienability or restricted alienability has not precluded a proprietary characterisation.266 Yet it may ultimately be the case that considering the indicia of property, on one hand, and assessing whether native title interests meet them, on the other, is an inappropriate or flawed approach in itself. Gleeson CJ, Gaudron, Gummow and Hayne JJ imply that this may be the case when they state that: … the expression “possession, occupation, use and enjoyment … to the exclusion of all others” is a composite expression directed to describing a particular measure of control over access to land. To break the expression into its constituent elements is apt to mislead.267

They continue, warning that it would be wrong to invite attention to: … the common law content of the concept of possession and whatever notions of control over access might be thought to be attached to it, rather than to the relevant task, which is to identify how rights and interests possessed under traditional law and custom can properly find expression in common law terms.268

Difficulties with the proprietary approach 4.46 While it is possible to make an argument for the proposition that native title, at least in some circumstances, may be seen as proprietary in nature, there are several difficulties in [page 169] employing a proprietary framework as the sole means of characterising native title. Some of these difficulties may be termed cases of ‘square pegs and round

holes’. Where native title does not easily fit the proprietary paradigm, it would seem inappropriate to force it to do so, irrespective of the benefits that might flow from such forcing.269 4.47 In Western Australia v Ward, Gleeson CJ, Gaudron, Gummow and Hayne JJ appeared concerned that native title should not be treated as a proprietary interest in the form of a fee simple estate if that were not the most appropriate way of dealing with it. They commented that: … it is a mistake to assume that what the NTA [the Native Title Act] refers to as “native title rights and interests” is necessarily a single set of rights relating to land that is analogous to a fee simple.270

It is possible to extrapolate from this statement that sometimes native title may equate with a single set of interests, such as a proprietary interest, but at other times that characterisation may be too limited.271 Indeed, the High Court clearly warned against over-simplifying the relationship of Indigenous people to the land by commenting: It is wrong to see Aboriginal connection with the land as reflected only in concepts of control to access to it. … [To do so is] to reduce a very complex relationship to a single dimension. It is to impose common law concepts of property on peoples and systems which saw the relationship between community and the land very differently from the common lawyer.272

These words highlight the need to ‘step outside the square’. They recognise that native title is perhaps not best understood simply in terms of a common law proprietary analysis, many of the difficulties of which are outlined in the sections on the indicia of property and compensation, above. The High Court’s approach is far from new in this regard. 4.48 The move away from a simple proprietary analysis of native title has been under discussion for some time. It has been evident both in case law and in academic scholarship.273 For example, the simple equation of native title with a proprietary right has drawn criticism from academics such as Webber, who states: … Indigenous title is frequently discussed as though it were simply another kind of interest affecting land, slipped into the structure of Australian property law.274 The implications are thoroughly captured by determining the content of Indigenous law according to the rules of Indigenous customary law, examining to what extent the title has been extinguished by prior

[page 170]

acts of the non-Indigenous sovereign, and then enforcing the remaining interests. That view of Indigenous title is, however, altogether too limited, not just because a more ambitious interpretation should be preferred as a matter of policy, but because it misunderstands what the recognition of Indigenous title necessarily involves. Indeed, it mischaracterises the very nature of Indigenous title as a legal doctrine.275

Webber argues that native title has significance ‘beyond the bounds of land law’ and that Mabo (No 2) ‘initiates a process of mutual adjustment that will continue long into the future’.276 Further, Sweeney observed that ‘caution needs to be exercised to avoid classifying the incidents of Aboriginal title in terms of English property law concepts’.277 Caution against this characterisation is suggested because such an approach is said to lead to a process of ‘rights reductionism’ and ‘involves the delegitimation of Indigenous rights’.278 4.49 Bearing this in mind, it is perhaps useful to interpret Indigenous traditions and customs through the medium of native title, concluding that native title is sui generis; although many of its incidents are synonymous with common law rights, some of which are personal and usufructuary, while others are proprietary. At other times, native title bears little or no synonymy with common law rights.279 Hence, it may be possible to see native title extending beyond proprietary understandings, but at the same time having the scope to incorporate these understandings within its ambit, where applicable. In reflecting on the richness and uniqueness of native title, it has been said that: Native title involves concepts that are not traditionally the domain of the Australian courts, such as collective rights, legal pluralism, and issues of competing sovereignty. It is an area where judges cannot always draw on familiar ways of understanding the issues before them.280

Presumably though, it is evidence of a synonymy with property rights that has led some authors to link traditional customs and traditions to property in discussions which analyse the nature of native title.281 Yet, as observed, there may be risks in relying too heavily on a proprietary framework. If we are too determined to cast Indigenous traditions and customs in the proprietary mould, we may run the risk of losing sight of their real meaning, that is, of their essence. The process of equation may result in customs and traditions being converted into something that they are not, when the aim is simply for

[page 171] them to find reflection in the common law. Therefore, it would seem important that the ‘recognition space’ of native title should preserve — not destroy, diminish or dilute — the uniqueness of Indigenous customs and traditions.282 The majority of the High Court indicated that it recognised these potential problems when it commented in Western Australia v Ward that:283 The difficulty of expressing a relationship between a community or group of Aboriginal people and the land in terms of rights and interests is evident. Yet that is required by the [Native Title Act]. The spiritual or religious is translated into the legal. This requires the fragmentation of an integrated view of the ordering of affairs into rights and interests which are considered apart from the duties and obligations which go with them. The difficulties are not reduced by the inevitable tendency to think of rights and interests in relation to land only in terms familiar to the common lawyer.284

Through these words, the High Court also appears to be acknowledging the ‘strait-jacket’ that the Native Title Act has imposed on the interpretation of Indigenous rights. A discussion of that Act follows later (at 4.63–4.74). 4.50 Compensation and a proprietary analysis Despite the difficulties of characterising native title as proprietary, and despite the importance of looking to more creative understandings of native title, there is still some pressure to characterise native title as proprietary for expedient reasons. The following two expediencies are relevant: 1.

Proprietary rights are known, familiar and convenient. Common understandings therefore follow.

2.

Proprietary interests rank very prominently in the hierarchy of rights.

In regard to point 2, it is relevant that extinguishment of a proprietary right triggers constitutionally enshrined compensation. Indeed, s 51(xxxi) of the Commonwealth Constitution speaks of ‘the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws’. That this provision is to be interpreted liberally can be seen in Clunies-Ross v Commonwealth.285 Case law also suggests that the term ‘property’ is to be interpreted free from ‘the artificial refinements of any particular legal system’.286 In fact, Dixon J pursued this point quite vigorously in Bank of New South Wales v Commonwealth, where he stated that:

I take Minister of State for the Army v Dalziel to mean that s 51(xxxi) is not to be confined pedantically to the taking of title by the Commonwealth to some specific estate or interest in land recognized in law or in equity and to some specific form of property in a chattel or chose in action similarly recognized, but that it extends to innominate and anomalous interests.287

[page 172] Dixon J’s words, therefore, suggest that native title may fall under the definition of property relevant to s 51(xxxi) of the Commonwealth Constitution.288 It would also appear that native title’s lack of alienability outside the group would not prevent it from being characterised as proprietary for the purposes of s 51(xxxi).289 Indeed, as Brennan has noted, it seems likely, given the breadth of the word ‘property’ as interpreted by the jurisprudence on s 51(xxxi), that extinguishment of native title might be characterised as an ‘acquisition’ of property attracting the requirement of compensation on ‘just terms’.290 4.51 No doubt, where native title is extinguished, constitutionally enshrined compensation on ‘just terms’ would reduce injustice resulting from its loss. That desire to compensate in order to ‘do justice’ is observable in the Native Title Act, where much of the logic for the validation of post-1975 grants was that they constituted property and, therefore, discrimination arose where no compensation was payable. Clearly, construing native title as a proprietary interest for the purposes of compensation results in very satisfactory moral and political outcomes, but there still remains a problem with characterising a right as proprietary if it does not sufficiently resemble a proprietary interest. It would be doctrinally unsatisfactory to characterise all rights comprising native title as proprietary if they did not all amount to proprietary interests. Where native title rights, which are referable to Indigenous customs and traditions, reflect a synonymy with proprietary rights, the characterisation may be appropriate. But where native customs and traditions are not synonymous with proprietary interests under the common law, it would be legally problematic to mould those customs into the shape of proprietary interests merely in order for them to be recognised by the common law as native title rights and, consequently, for compensation to flow

on their loss. Gleeson CJ, Gaudron, Gummow and Hayne JJ seemed to warn against this tendency in Commonwealth v Yarmirr.291 4.52 On one reading, merely characterising a right as proprietary so that desired political, social or moral outcomes are achieved could be said to taint the operation of the law and invest the judiciary with too much legislative influence. On this issue McHugh J, quoting Posner J, said that courts ‘have no authority to “provide a solvent” for every social, [page 173] political or economic problem or wrong’.292 He went on to quote himself and Gaudron J in Breen v Williams, where they stated that, in ‘a democratic society, changes in the law that cannot logically or analogically be related to existing common law rules and principles are the province of the legislature’.293 On another, and perhaps more compelling, reading of the situation, it may be that it is important to avoid characterising native title as proprietary in circumstances where it bears little or no resemblance to a proprietary interest, because the distortion that is done to it in the process of reshaping and reinventing may foreclose other, more imaginative understandings of the traditions and customs which underpin native title. Therefore, if at times native title is more personal or usufructuary — or indeed, something else altogether — rather than proprietary, perhaps that should be respected, even if it means that the consequences are harsh, particularly regarding compensation.294 Where there is a failure to trigger compensation, another solution will need to be worked out if the political will is to redress the loss of Indigenous rights. Such a solution may involve a legislative response which offers redress for the loss of rights that do not fit the proprietary framework, or it may involve revisiting the question of extinguishment, for example.295 Ultimately, a movement away from an approach that says ‘if there are serious questions of Indigenous rights, they should be squarely addressed and exhaustively defined, so that political and economic life can proceed in full certainty of what those rights entail’ could be embraced. Such a repositioning may well embody a commitment to a

process of ‘mutual adjustment’ that requires the redefinition of the relationship between Indigenous and non-Indigenous communities.296 4.53 Native title as sui generis If native title is not necessarily best described by reference to common law rights such as proprietary rights, perhaps brief consideration needs to be given to whether the sui generis classification is more apt. Pearson has argued for the characterisation of native title as sui generis because: (1) it is inalienable; (2) it is a communal right which has an internal dimension regulated by Indigenous law and custom and; (3) … it is subject to extinguishment by the valid exercise of Legislative and Executive powers in circumstances where other titles to land are not.297

Despite the fact that the appearance of some of these characteristics in other contexts (eg, entailed estates) has not forced the relevant rights and interests to be reclassified as sui generis, that might not be an argument for precluding such a classification in this context. Perhaps it is the unique combination of these characteristics that may permit the right to be best seen as sui generis. That native title is effectively a means or space for recognition [page 174] by the common law of Indigenous customs and traditions may be another good reason to characterise it as sui generis. Native title’s role of assisting Indigenous customs and traditions to find reflection in the common law is seemingly unique. Strelein has observed that a characterisation of native title as sui generis revealed ‘an explicit acknowledgement that native title should not be understood by reference to common law property rights’.298 Perhaps she is correct, but it is certainly arguable that native title may both be sui generis and, at times, embrace rights resembling proprietary and personal rights. Native title may also embrace rights that bear little or no similarity to proprietary or personal rights. Seen this way, the terms ‘sui generis’ and ‘proprietary’ are not necessarily mutually exclusive. 4.54

Native title as a ‘bundle of rights’ Finally, another possible

classification is that native title is a ‘bundle of rights’. Most commonly, the bundle of rights template extends only to the inclusion of a range of different personal rights. However, it would appear that it is at least possible to conceive of the bundle being constituted by personal, usufructuary or proprietary rights. The bundle of rights approach to native title gained greater currency following the majority decision of Beaumont and von Doussa JJ in the Full Federal Court appeal in Western Australia v Ward.299 There, those judges stated that, even where native title recognised an entitlement to exclusive possession, it remained a personal right rather than an interest in land.300 They claimed support for their position in the High Court decision of Fejo v Northern Territory, where Kirby J referred to ‘the bundle of rights which we now call native title’.301 While the bundle of rights approach may have gained favour with the High Court in Ward, that court, a year before in Commonwealth v Yarmirr, seemed concerned to leave open the possibility that, once established, native title may have ‘some or all of the features which a common lawyer might recognise as a species of property’.302 Nevertheless, the majority also warned against simply identifying native title as property, when it commented: Neither the use of the word “title” nor the fact that the rights and interests include some rights and interests in relation to land should, however, be seen as necessarily requiring identification of the rights and interests as what the common law traditionally recognized as items of “real property”.303

The appeal to the High Court in Western Australia v Ward has confirmed that court’s attraction to the bundle of rights approach.304 The majority explained it by stating that the metaphor drew attention to the fact that, first, ‘there may be more than one [native title] interest’ and, second, there ‘may be several kinds of rights and interests in relation to land [page 175] that exist under traditional law and custom’. Further, the court continued, ‘not all of those rights and interests may be capable of full or accurate expression as rights to control what others may do on or with the land’.305 However, as the focus of Ward’s case in the High Court was more on the

extinguishment of native title, rather than its nature, the latter issue was not definitively addressed there. 4.55 One argument against the bundle of rights approach is that it may place a greater onus on Indigenous people to prove their native title than would the alternatives. This is because it would seem easier to demonstrate that an Indigenous system of law, customs and traditions operated and continues to operate, albeit in a modernised way, than to establish the identity of each right making up the bundle, as well as having to establish the pedigree of each right in the bundle (by offering proof of continuity and its connection to traditions and customs). This calls for a high degree of specificity, particularly where the native title interest is something less than the right ‘to possess, occupy, use and enjoy’.306 Another criticism of the bundle of rights approach is that it treats native title as simply a composite of disparate rights, rather than being linked to a cohesive system of Indigenous law.307 In recent years, the ‘bundle of rights’ theory of property law has come under attack by theorists even outside the context of indigenous rights.308 4.56 The future Rather than seeing native title simply in terms of known common law rights and interests, it may be useful to conceive of it in a more creative fashion, seeing it as representing a point of interface between two different legal systems: the common law, on one hand, and Indigenous traditions and customs, on the other.309 Guidance on how we might approach this intersection was spelled out in Western Australia v Ward. There, the majority stated that the location of the intersection between these two legal systems should be determined as a result of careful attention being paid to the content of traditional law and custom and the way in which rights and interests existing ‘under that regime find reflection in the statutory and common law’.310 Perhaps, however, the most challenging and rewarding aspect of trying to develop more creative responses to native title issues relates to the process by which traditions and customs that, to date, seem foreign and unrecognisable may be interpreted. It is suggested that such an interpretation could possibly occur as a result of the process of ‘mutual adjustment’, [page 176]

referred to by Webber.311 It would also appear that Kirby J in Ward entered into the ongoing dialogue that nourishes and sustains the process of ‘mutual adjustment’ when he began to explore the way in which dreaming beings located at certain sites are narrated in song cycles, dance rituals and body designs. Stylistically, he approached the discussion through questions that he sought to answer himself. They included: ‘Would such a claim [to cultural knowledge] be one “in relation to” land or waters?’312 He concluded by stating: If this cultural knowledge, as exhibited in ceremony, performance, artistic creation and narrative, is inherently related to the land according to Aboriginal beliefs, it follows logically that the right to protect such knowledge is therefore related to the land for the purposes of the [Native Title Act].313

Further, he also engaged in a dialogue with other members of the bench who were unable to find that cultural knowledge amounted to a form of native title, since they feared that such a finding would acknowledge a right ‘akin to a new species of intellectual property’.314 He rejected their reasoning by commenting on the inadequacy of established intellectual property laws to deal with the kind of protection sought. Kirby J embraced the breadth that a classification of native title as sui generis may permit. Indeed, he stated that ‘there has been little need to elaborate the well-established principle that native title is sui generis and should not be restricted to rights with precise common law equivalents’.315 The prospect that the court might further explore this issue is encouraging. It opens our minds to the embracing of understandings different from those referenced to established, common law rights. Ultimately, it may be that such an approach will assist the development of a more successful interpretation and accommodation of native title. In this respect, it is interesting to note that, as noted below at 4.70, the first substantive decision on compensation for extinguishment of native title, Griffiths v Northern Territory of Australia (No 3),316 has recognised ‘loss of connection with land’ as a separate head of damages.

Extinguishment 4.57 The case law following Mabo (No 2)317 has both clarified and blurred a number of issues in relation to extinguishment. Some of these are discussed below.

One preliminary issue should be clarified. The Native Title Act does contain some provisions dealing with extinguishment of native title, which will be dealt with below. But it seems accepted that, even apart from the application of those provisions, native title may be extinguished under ‘common law’, based on the provisions about to be discussed.318 [page 177] In Wik Peoples v Queensland319 and Yanner v Eaton,320 the approach was to weigh up the nature and incidents of native title against the operation of the relevant inconsistent grant (that grant being born either of the common law or statute). On this approach, the characterisation of the two competing interests is relevant, and questions such as these arise: Does the interest of the grantee give rise to exclusive possession?321 Is native title of such a nature that it reflects a general connection to the land?322 Alternatively, can native title be treated as a ‘bundle’ of discrete rights permitting the extinguishment of some and not others?323 Yanner v Eaton involved an Indigenous man catching and killing a crocodile with the assistance of a harpoon-style implement. The man ate some of the crocodile and refrigerated the rest, at home, for later use. The question was whether any native title right the man may have had to take the crocodile was extinguished by the relevant fauna legislation, which vested ‘ownership’ in the Crown. In part, the case explored the question of the grantee’s right to exclusive possession and the need for legislation to require a clear and plain intention. The court read ‘ownership’ in this context as merely being a right to regulate; a sort of ‘radical title’, rather than beneficial ownership against those with native title. That is why the case found that legislation preserving a species of fauna may not necessarily extinguish native title but could reduce the sphere of operation of native title. Put another way, depending on how it is interpreted, legislation may sometimes only burden or regulate, and not necessarily extinguish, native title. (As noted above at 4.34, a similar approach

has been taken to legislation regulating fishing in the more recent High Court decisions in Akiba v Commonwealth and Karpany v Dietman.324) 4.58 In Wik Peoples v Queensland, Fejo v Northern Territory and Yanner v Eaton,325 the decisions of the High Court were not given in appeals brought in respect of determinations by the Federal Court of applications under the Native Title Act. By contrast, in Western Australia v Ward the determination provisions of the Native Title Act were ‘directly engaged’.326 Indeed, that Act lies at the heart of the extinguishment issue in Ward. The question of whether there could be partial extinguishment of native title rights and interests and what principles should be adopted in determining them had to be decided there, by reference to the Native Title Act, not by an examination of the general law. [page 178] In Ward, the issue of extinguishment was considered in several different contexts involving inconsistent grants (through pastoral leases and leases under the Land Act 1933 (WA)), appropriation (under the Public Works Act 1902 (WA)) and the creation of reserves for public purposes, to name but a few. The case involved a large native title claim by the Miriuwung Gajerrong people to 8000 square kilometres of land, including part of the East Kimberley region in Western Australia and land in the Northern Territory. The claim extended to land that was part of the Ord River Irrigation Area, Lake Argyle, Lake Kununurra, the Glen Hill pastoral lease, land subject to mining tenements, part of the Argyle diamond mine, part of the Keep River and Mirima National Parks, some Aboriginal-owned land in the Northern Territory, grazing land, areas of vacant Crown land that had formerly been pastoral lease land, various reserves, three islands in the Cambridge Gulf and parts of the inter-tidal zone of the gulf.327 In considering the issue of extinguishment, the High Court rejected Lee J’s finding at first instance that the ‘permanent adverse dominion’ test was the appropriate one to determine if extinguishment had taken place. That test, which had its genesis in the dissenting judgment of Lambert JA in the British

Columbia Court of Appeal decision in Delgamuukw v British Columbia,328 emphasised the need for an ‘act authorized by legislation which demonstrates the exercise of permanent adverse dominion as contemplated by legislation’.329 Instead, the High Court favoured the test employed by Beaumont and Von Doussa JJ in the Full Federal Court,330 which is known as the ‘inconsistency of incidents’ test. That test requires a comparison between the legal nature and incidents of the statutory right which has been granted and the native title rights which are claimed.331 Gleeson CJ and Gaudron, Gummow and Hayne JJ in the High Court also rejected North J’s dissenting view in the Full Federal Court, in which he stated that there could be inconsistency between native title and statutory rights, but that the degree of inconsistency would determine whether or not native title was wholly extinguished.332 The High Court expressed its counterview plainly, stating that: Two rights are inconsistent or they are not. If they are inconsistent, there will be extinguishment to the extent of the inconsistency; if they are not, there will not be extinguishment.333

This approach seems to be a fairly clear affirmation that extinguishment will be complete and not partial in this context. [page 179] Nevertheless, while some incidents of native title may be completely extinguished, it follows that if the ‘bundle of rights’ approach is employed as a means of characterising native title, there may be other rights in the bundle left unaffected by the extinguishment. Put another way, they will not be excised from the bundle. Such an approach requires the clear enunciation of the different incidents that constitute the bundle of rights known as native title. Examples of these incidents might include the right to burn country, the right to hunt or the right to gather traditional food on the land. Whereas the right to burn country may be inconsistent with rights under a pastoral lease, the rights to hunt and gather may not. It will be interesting to see how partial extinguishment in this context is played out.334

The firm view of the High Court that extinguishment is a matter of the relevant rights concerned, not the way that those rights are exercised, can be seen in its decision in Western Australia v Brown.335 At first instance in that litigation, Bennett J, in Brown (on behalf of the Ngarla People) v State of Western Australia (No 2),336 after an extensive review of previous authority, concluded that a mining lease had extinguished native title on those areas of the land concerned that had actually been developed, but had not extinguished native title rights on the undeveloped areas of the land. However, the High Court disagreed. They held that the question of extinguishment was one that had to be determined as of the moment the relevant rights were created, that the grant of mineral leases in this case had recognised the rights of third parties to also use the land, and, hence, that there had been no grant of ‘exclusive possession’. In these circumstances, native title, while it could not be exercised fully on any part of the land actually being used to extract minerals, was not completely extinguished, and could be exercised again once that task had been completed or abandoned.337 This decision meant that the earlier holding of the Full Federal Court in De Rose v South Australia (No 2),338 in so far as it seemed to envisage extinguishment by ‘later use’, was incorrect and should not be followed in future.339 However, while the general approach of ‘inconsistent rights’ is now well accepted, there can still be differences of opinion as to the content of rights created, especially by grants of land in unusual circumstances. In Queensland v Congoo,340 the High Court had to consider the question of extinguishment where the Commonwealth had temporarily taken control of land in World War 2 as a training area, and subsequently abandoned it. There had been a statement made in Parliament that the government intended as little interference with ‘individual rights’ as possible. But the relevant regulations empowered the government to treat such land as if it had an ‘unencumbered interest in fee simple’. The High Court divided evenly, in a 3:3 decision, on the question whether native title [page 180] had been extinguished. In consequence, the 2:1 decision of the Full Federal

Court341 was affirmed,342 resulting in the decision that native title had not been extinguished.343 4.59 On the issue of extinguishment by appropriation to the Crown, one of the questions that emerged in the post-Mabo (No 2) era was whether, on compulsory acquisition, native title was extinguished over every square centimetre of land acquired. In that regard, Hayes v Northern Territory344 held that extinguishment extended only to the land necessary or incidental to the use of the building or work. In Western Australia v Ward,345 the issue of compulsory acquisition also arose. Some of the claims involved possible extinguishment by appropriation through application of s 109 of the Land Acts (1898, 1933) (WA), the Public Works Act 1902 (WA) and the Rights in Water and Irrigation Act 1914 (WA). Whether or not the act of resuming caused extinguishment was found to be dependent on the effect of resumption as set out in the individual pieces of legislation. The court held that resumption under s 18 of the Public Works Act or s 3 of the Rights in Water and Irrigation Act resulted in the Crown being vested with a fee simple estate. Therefore, native title was extinguished. 4.60 When land has been reserved, the issue regarding extinguishment is whether ‘rights have been created in others that are inconsistent with native title rights and interests’.346 The High Court decided that the inquiry concerning extinguishment is ‘about inconsistency of rights, not inconsistency of use’.347 In the particular case of the Miriuwung Gajerrong peoples, the court found that designation as a reserve for certain purposes under Western Australian legislation does not, in itself, create any right in the public that extinguishes native title interests.348 If land is reserved for a public purpose, that will result in extinguishment of any native title right that pertains to how the land can be used. The use will already have been designated as part of the reservation. However, other native title rights may well not be inconsistent with the designated public use and they may continue to be exercised by the Indigenous people who hold them. 4.61 In regard to the question of extinguishment by grant of a fee simple estate, Mabo (No 2) established that such a grant extinguishes native title. Later cases, such as Fejo v Northern Territory,349 have confirmed this finding. Indeed,

even where a grant in fee simple has been made but the Indigenous owners continue their connection with the land, [page 181] extinguishment will still take place.350 That is because the court has chosen to focus, not on the factual, continuing connection, but rather on the extensive nature of the interest granted. A fee simple estate is the closest thing to absolute ownership that the common law recognises. It permits the greatest range of activities on and dealings with the land known to the common law. Its potential to be utilised accordingly is what extinguishes native title. 4.62 Mabo (No 2) clarified that ordinary common law leases extinguished native title.351 The issue of whether a pastoral lease extinguished native title was decided in Wik Peoples v Queensland.352 There, it was found that a pastoral lease did not necessarily extinguish native title. The particular claim of native title and the terms of the pastoral lease would need to be considered.353 Western Australia v Ward discussed whether a lease of a reserve under s 32 of the Land Act 1933 would extinguish native title.354 Although the features of the interest granted were not prescribed by the Act, the court was able to find that the rights granted were rights as a lessee and that they gave rise to exclusive possession. As such, they were totally inconsistent with the continued existence of native title.355 In Wilson v Anderson,356 the High Court held that a ‘perpetual lease’ granted under the Western Lands Act 1901 (NSW) extinguished native title. In Western Australia v Brown,357 however, as noted above at 4.58, a ‘mineral lease’ was held not to do so, especially because it explicitly recognised a right in third parties to use the land so long as that use did not interfere with mining operations. The High Court stressed on a number of occasions that the lease did not grant ‘the right to exclude any and everyone from that land for any reason or no reason at all’,358 which it would have needed to do, to extinguish native title.

Legislation Native Title Act 1993 (Cth) Introduction 4.63 After Mabo v Queensland (No 2) (Mabo (No 2))359 was handed down in 1992, discussion took place as to whether individuals should have to litigate their claims as Eddie Mabo had done, or whether legislation should set up a process or scheme for dealing [page 182] with claims.360 Ultimately, it was decided to set up a scheme, and the Commonwealth Government passed the Native Title Act 1993 (Cth) in order to facilitate this. The Act did not attempt to codify native title. Instead, it was designed to operate in conjunction with the common law. As well as providing a mechanism for dealing with claims, another purpose of the Native Title Act was to validate land titles that came into existence after the passing of the Racial Discrimination Act 1975 (Cth) and which were issued over native title land. There was an argument that the post-1975 titles might not be valid because, if their issuance had the effect of extinguishing native title and no compensation had been paid to Indigenous owners, that act of issuance was discriminatory and in breach of the Racial Discrimination Act. Native title holders had not been afforded the same procedural and compensation rights as ‘ordinary’ title holders.361 The Native Title Act was a compromise that failed to satisfy many of the competing interest groups. It offended those who thought the aim of such legislation should be land management, and it simultaneously offended those who thought the legislation’s aim should be the recognition of Indigenous human rights.362 As a result, the legislation, like the discussion leading up to it and the Mabo (No 2) decision itself, provoked different responses. Two years after its inception, the Native Title Act was described as a

legislative attempt to deal with the ‘novel legal problems’ raised by the recognition of native title.363 A detailed understanding of the operation of the Native Title Act is best gleaned elsewhere.364 However, key aspects of the Act are outlined below. 4.64 The Native Title Act’s Preamble noted the dispossession of Indigenous people and stated that the legislature intended the Act to constitute a ‘special measure’ within the meaning of the Racial Discrimination Act.365 This suggested a desire to redress some of the concerns about the perpetuation of injustice towards Indigenous people expressed by the High Court in Mabo (No 2). It is, therefore, ironic that the validation of grants made after the coming into effect of the Racial Discrimination Act ‘completed the legitimation [page 183] of the dispossession of Aboriginal people up until 1 January 1994’.366 That is, the passing of the Native Title Act assisted and reinforced the dispossession that its Preamble suggested it was seeking to redress.

Validation of existing grants 4.65 The validation of all existing grants meant that ‘full force and effect’ was given to all Crown grants made before 1 January 1994 or legislation made prior to 1 July 1993 where there was invalidity caused by the existence of native title. Hence, in a competition between native title and ordinary title, ordinary title prevailed.367 Such was the extent of the validation of ordinary title, that the Racial Discrimination Act did little to protect Indigenous interests in land.368 Put simply, native title could still be extinguished after the passing of the Racial Discrimination Act. To redress the loss ‘and provide for those Aboriginal people who have been dispossessed and lost all kind of contact with the land that could begin to justify … [native] title status’, s 201 of the Native Title Act as enacted in 1993 made provision for a National Aboriginal and Torres Strait Islander land fund.369 It was designed to meet the social and economic needs of dispossessed Indigenous people by assisting in

the acquisition of land and its management. The fund was later re-established under more specific legislation.

Definition of ‘native title’ 4.66 The Native Title Act defines native title and native title rights in s 223 of the Act, which states: (1) The expression native title or native title rights and interests means the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where: (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; and (c) the rights and interests are recognised by the common law of Australia.

This definition reflects the High Court’s definition of ‘native title’ in Mabo (No 2); a definition that was referable to Indigenous customs and traditions.370 Under this definition, native title has either been seen as exclusive or nonexclusive. Exclusive native title rights have been found to include: rights to live on land; rights to use and enjoy plant, animal, fish and bird life for customary and traditional purposes; and [page 184] the right to maintain the land by stewarding it, protecting important sites, and holding spiritual, cultural and social activities on it.371 Non-exclusive rights permit similar kinds of activities, but their use and enjoyment are tempered by the rights of non-native title holders to exercise their rights as well. For example, in Commonwealth v Yarmirr,372 Gleeson CJ, Gaudron, Gummow and Hayne JJ found that the Yuwurrumu members did not have an exclusive right to use and enjoy the seabed and the water above it, because ‘common law public rights to navigate and to fish’, as well as ‘the international right of innocent passage which is recognised by Australia’, could not be interfered with. A right to exclusive possession by native title holders

could not have co-existed with these rights. Therefore, it was found that the relevant native title rights gave rise to ‘non-exclusive’ possession. Notably, s 223 of the Native Title Act sets out a requirement that the rights and interests claimed as native title must be recognised by Australian common law. This may pose problems for those Indigenous rights that do not resemble common law rights, as has been discussed earlier in this chapter. While the reference to the common law may have been seen initially as a means to allow the courts to continue to develop the rules of common law concerning the recognition of native title in accordance with the process begun in Mabo (No 2), in fact s 223(1)(c) has received a very narrow interpretation by the High Court. In Yorta Yorta Aboriginal Community v Victoria,373 the majority held that the effect of s 223(1)(c) is essentially to limit the type of recognition that may be extended to native title rights where those rights might be ‘antithetical to fundamental tenets of the common law’, and to direct attention to the need to limit native title rights to those where there is continuity with laws and customs exercised prior to European settlement.374

Native title determinations 4.67 The Native Title Act also provides for mechanisms to determine native title. Accordingly, native title is determined either by the National Native Title Tribunal (which the Act established) or by the Federal Court. The tribunal’s role in this regard is restricted to determining native title in circumstances where the parties in question agree, or seek to come to agreement, by virtue of mediation. Where the parties cannot agree as to the existence of native title, the Act redirects them into the litigious process and the Federal Court is left to decide the matter. [page 185] From the outset, the Commonwealth legislation was designed to have compatible state legislation exist alongside it. After a faltering start, this has been achieved. Now, all states and territories have passed legislation complementary to the Native Title Act.375

An important part of the legislation, however, provides for a non-litigious resolution of issues. Subdivisions B, C, D and E of Div 3 of Pt 2 of the Act provide for three different types of ‘Indigenous Land Use Agreement’ (ILUA) and for their effect.376 The ILUAs are designed to be a mechanism whereby native title parties and others can reach a binding agreement on resolution of issues without an adversarial battle in the courts.377 They have been very popular; the latest information is that there are now 1165 registered ILUAs.378 Proper negotiation of such agreements, of course, requires an understanding of the legal basis of native title and how it is dealt with under the Act.

Past acts 4.68 The Native Title Act instituted a ‘past acts’ regime. This regime is relevant to more fully understanding the validation of native title and its interaction with other forms of title, as well as the issue of compensation. The Commonwealth legislation authorises states and territories to validate past acts.379 In so doing, the legislation also provides for the extinguishment of native title according to the category of past act that took place.380 Many, but not all, past acts extinguish native title; for example, category A past acts include grants of freehold title and grants of commercial, agricultural, pastoral or residential leases.381 Under the Native Title Act, these grants extinguish native title permanently, whereas category B ‘past acts’ extinguish native title only to the extent of the inconsistency.382 Category C acts (currently, only mining leases)383 and category D acts (which include any past acts not included in categories A, B and C, such as an easement, licence or permit) apply the ‘non-extinguishment principle’.384 [page 186] This scheme does not validate every grant made in the past, nor every piece of legislation which may have had the effect of impairing or extinguishing native title.385 For example, native title may be extinguished by the valid operation of legislation apart from the Native Title Act. Hence, whether a particular statute has extinguished native title must be determined according to

the common law as set out in Mabo (No 2)386 and other relevant cases. Whether a pastoral lease that was granted prior to the operation of the Act, and that was outside the ‘past act’ categories under the Act, was valid was, therefore, left after Wik for the courts to decide.387 4.69 The validation aspect of the Native Title Act was left largely intact by amendments made in 1998.388 The 1998 amendments also introduced the concepts of a ‘previous exclusive possession act’ and a ‘previous non-exclusive possession act’. The result is that now there is no doubt that both a freehold title and a residential lease extinguish native title as a result of being incorporated into the ‘previous exclusive possession act’ category. The common law is left to decide if nonexclusive pastoral leases extinguish or suppress native title.389

Compensation for past acts 4.70 Section 17 of the Native Title Act spells out two main grounds for the payment of compensation when native title is extinguished by virtue of a past act. They are where: 1.

native title is extinguished by a category A or category B past act; or

2.

native title has been affected by a category C past act (a mining lease) or a category D past act (any past act not included in categories A, B or C).

In regard to the first ground, compensation is payable on the same basis as that spelled out in the Commonwealth Constitution; that is, on ‘just terms’.390 The compensation is for the ‘loss, diminution, impairment or other effect … on their native title rights’.391 In regard to the second ground, two regimes operate: 1.

If compensation would have been available had the native title holder held ‘ordinary title’ rather than native title, the measure and extent of compensation available is determined by the compensation regime that would have applied to an ordinary title holder.392 [page 187]

This type of regime works by making native title the same as ordinary title. In New South Wales, in these circumstances, the term ‘ordinary title’ can be equated with freehold title. It has been suggested that problems may occur with this approach when a native title holder suffers loss but there is no equivalent position for an ordinary title holder; for example, if the loss is spiritual. It is important to acknowledge what Pearson, an Indigenous leader and lawyer, called ‘a loss of culture’ rather than simply a ‘loss of real estate’.393 Denying this harm does not seem to do justice to Deane and Gaudron JJ’s view that native title is a strong right.394 However, as noted below, the recent compensation decision in Griffiths v Northern Territory of Australia (No 3)395 does, to some extent, take these matters into account. 2.

Where extinguishment would have been impossible had the native title holder been the holder of an ‘ordinary title’, compensation will be available on just terms.396 This situation was altered slightly by changes embodied in the Native Title Amendment Act, discussed later in this chapter.397

Where compensation is payable, it is payable only by the relevant government and not by any third parties.398 Under the Commonwealth regime, compensation is usually monetary, but a claimant may request payment in kind, in the form of land, goods or services.399 Experience has demonstrated that because compensation is payable only after the existence of native title has been determined, the wait for compensation could be very long. Only a few cases so far have considered the compensation regime under the Native Title Act in any detail. One was the decision of Sackville J in Jango v Northern Territory of Australia.400 An argument was put in that case that, if native title were held to have existed, then it was not completely extinguished until some time after a number of significant improvements had been made on the land, including the building of an airport. His Honour, after a detailed consideration of the legislative history of the ‘extraordinarily complex’ compensation provisions in the Native Title Act,401 concluded that extinguishment of native title by the construction of public works took place when the construction of the

[page 188] works commenced, and hence that no compensation would be payable to native title holders based on the value of the public works themselves.402 The issue of compensation was then considered in De Rose v South Australia,403 where compensation was ordered in a consent order; as a result, the case did not provide any guidance on how the amount in question had been calculated. However, clearer guidance has now been provided on these issues in the decision of Mansfield J in Griffiths v Northern Territory of Australia (No 3).404 In brief, compensation of over $3.3 million was ordered for the effect on native title rights and interests of various land grants and other works, which had occurred after 1975. This was made up of: an award for economic loss of about $500,000, which valued the relevant land at 80% of its ‘freehold value’ under the European title system (given that the rights involved were not all those of ‘exclusive possession’); an order for non-economic loss, representing an overall amount for ‘loss of traditional attachment to land’ of $1.3 million; and an award of simple interest of some $1.4 million, dating back to the original time that rights were extinguished some 30 years prior. It seems likely that this decision may be appealed, but it seems to represent a good basis at the moment for dealing with some of these complex issues of compensation.405

Future acts 4.71 The Native Title Act, as well as dealing with the consequences of the previous extinguishment of native title, makes detailed provision for the future (ie, for actions done after the commencement of the legislation).406 The Preamble to the Act deals with this element of the legislation when setting out the principle that: In future, acts that affect native title should only be able to be validly done if, typically, they can also be done to freehold land and if, whenever appropriate, every reasonable effort has been made to secure the agreement of the native title holders through a special right to negotiate.

The regime governing ‘future acts’ was changed dramatically with the passage of the Native Title Amendment Act 1998 (Cth).407 The previous regime will not be discussed [page 189] here.408 The current rules are set out in Pt 2 Div 3 of the Native Title Act. They are very complex, and it is not possible to explore them in detail here.409 Broadly speaking, the logical starting point (as signalled by the words of the Preamble noted above) is that, under s 24OA of the Native Title Act,410 unless otherwise provided, a ‘future act’ is invalid ‘to the extent that it affects native title’. The Act is intended to be the only means by which native title in the future may be impaired or extinguished. Within earlier provisions of Pt 2 Div 3, however, there are a number of specific situations that amount to exceptions to the general rule under s 24OA. They are set out in Subdivs E– N of Pt 2 Div 3, and include, for example, acts done pursuant to ‘Indigenous land use agreements’, acts done to manage water supplies, and certain acts done to provide facilities for services to the general public.411 The Native Title Act requires a sequential approach to be followed to the various categories of future acts, which are listed in order in s 24AA(4). With the exception of future acts dealt with by an ILUA, if a future act falls within one of the earlier provisions of s 24AA(4)(a)–(k), then it cannot be dealt with under one of the later provisions.412 In some of these cases the ‘non-extinguishment principle’ in s 238 of the Native Title Act applies, so that native title will only be suspended, rather than completely extinguished, and hence may revive after the relevant ‘future act’ has ceased to operate.413 In other cases the ‘future act’ will completely extinguish native title.414

Right to negotiate 4.72 Certain types of future act are said to be subject to a specific ‘right to negotiate’ dealt with in Subdiv P of Pt 2 Div 3 of the Native Title Act. The

right to negotiate procedures must be followed for the relevant ‘future act’ to be valid. Future acts subject to the right to negotiate are defined in s 26, and mostly include mining rights and the compulsory acquisition of land by a government. Where state law makes its own provision for negotiation procedures, and that law is determined by the relevant Commonwealth Minister to contain adequate safeguards, then compliance with the state procedures will be deemed to be sufficient compliance with the Act.415 [page 190]

The Wik decision and its sequel 4.73 As noted, neither the Mabo (No 2) decision nor the Native Title Act explicitly spelled out whether pastoral leases extinguished native title.416 Certainly, Brennan J in Mabo (No 2) seemed to imply that pastoral leases, like all Crown leases, extinguished native title,417 while the Preamble to the Act, as well as the past acts regime contained within it, also seemed to imply the same. However, when the issue was put to the test, the High Court found in Wik Peoples v Queensland (Wik) that a pastoral lease did not ‘necessarily extinguish all incidents of Aboriginal title’.418 The majority noted that a ‘clear and plain intention’ was needed to extinguish native title.419 According to the majority of Toohey, Gaudron, Gummow and Kirby JJ, that intention is only evident where the inconsistency between native title and the rights of the grantee is so great as to prevent native title and the rights of the grantee from co-existing.420 The majority found that pastoral leases were unlike common law leases in that they did not automatically confer a right to exclusive possession. The pastoral lease was sui generis in nature, giving rise to a new form of tenure.421 It was a statutory response to the peculiar historical, domestic conditions of Australia. In coming to its conclusion, the court took account of the imperial dispatches on the matter, which suggested that it was unlikely that the legislature intended to exclude Aboriginal people altogether. The majority also based its decision on the fact that a grant of this nature was for a pastoral purpose only, and that the lease could be affected by exceptions relating to

minerals, timber and other materials, as well as access by, and the depasturing of, stock upon a stock route. Further, the remoteness and size of the vast land tracts which were the subject of the leases also suggested to the majority that the land was not intended to be for the exclusive possession of the grantee of the lease.422 4.74 Ultimately, the Wik decision affirmed the paramountcy of a pastoral lease over native title, but, by finding that a pastoral lease per se was not necessarily inconsistent [page 191] with native title, the court left open the possibility of co-existence.423 This led to calls by the Pastoralists and Graziers Association and others for legislation to delineate in what circumstances native title would be extinguished by the grant of a pastoral lease. The call for certainty became loud and — together with other long-brewing concerns, many evident since the inception of the Native Title Act — was taken up by the Liberal–National Coalition Government elected in March 1996. The Wik decision, which was handed down on 23 December 1996, provided a timely opportunity for legislative intervention, but it is clear that the government’s planned overhaul of native title was in train before the Wik case was decided.424 The ‘10 Point Plan’ set out the government’s proposed changes. It sought the diminution of native title rights then existing in relation to pastoral leases, and also sought to reduce native title rights in reserves, towns and cities, as well as over water. It placed restrictions on how and when native title claims could be made and what compensation could flow from the loss of native title. Consequently, it became very difficult to see how these proposals were at one with any notions of equality between native title and other forms of land holding commonly used in Australia, such as old system, Torrens, strata and community title.425 Like Mabo (No 2) several years before, the plan served to divide the community. Ultimately, it provided the basis for the Native Title Amendment Act 1998 (Cth), a piece of legislation that had a difficult passage through

parliament, but which was eventually passed subject to many amendments, when the government struck a deal with an independent senator.426 The key features of the Act are set out below.427

Native Title Amendment Act 1998 (Cth) Intermediate period acts 4.75 The intermediate period referred to here is between 1 January 1994 and 23 December 1996 when the Wik decision was handed down. Part 2 Div 2A of the Native Title Act (ss 21–22H), inserted by the Native Title Amendment Act 1998 (Cth), permits grants made in this period over land that was formerly the subject of a freehold estate or a lease, including a pastoral lease, to be validated. Mining leases are not included in this [page 192] category. The effect of the validation is to override native title in all cases. In most cases, it will also mean the extinguishment of native title.

Extinguishment 4.76 At common law, a clear and plain intention, such as a grant of freehold,428 is needed to extinguish native title. Initially, the common law was not so clear on the issue of whether a short-term lease, for example, would have the same effect. It left open the possibility that a short-term lease would only suspend native title for the duration of the lease, after which native title could be revived. The Native Title Act, however, is categorical. Part 2 Div 2B of the Act (ss 23A–23JA) deems that a short-term lease automatically extinguishes native title. This is so because a short-term lease is seen as giving rise to a right of exclusive possession.429 Under the Act, native title will also be extinguished by a ‘scheduled interest’.430 The effect of this deeming procedure is to broaden and increase the range of areas where other title can triumph over native title. 4.77

At common law, native title is extinguished only in relation to

reserved land by virtue of a clear and plain statutory authority. The Native Title Act, as originally enacted, treated a future act ‘done in good faith and in accordance with the reservation’ as a past act. The effect of this was to extinguish or diminish native title. Part 2 Div 3 Subdiv J of the Act (ss 24JA– 24JB), inserted by the Native Title Amendment Act, does away with the requirement that the act be done ‘in good faith and in accordance with the reservation’, and instead demands only that the impact of the future act on native title is ‘no greater than the impact that any act that could have been done under’ the reservation would have been. By treating native title in this way, the Act is deviating quite strongly from the common law principle that had the extinguishment of past acts being confined to just that, acts in the past.431 The capacity for native title to be extinguished is also greatly affected by the operation of Pt 2 Div 3 Subdiv G of the Native Title Act (ss 24GA–24GE), which declares that if the grantee of a non-exclusive agricultural or pastoral lease expands his or her rights to engage in or carry on any primary production activity, or any associated or incidental activity, native title will be extinguished. One of the harshest aspects of these provisions is that extinguishment is to occur irrespective of the rights originally granted. Hence, if the original grant did not pertain to primary production, for example, but the present activity does involve primary production, native title will be extinguished. The only restrictive proviso is that the expansion or activity could have been authorised at any time before 31 March 1998. It should be noted that primary production in this context includes fishing, forestry, horticultural, pastoral and cultivation activities, and that expansion can even include tourism. [page 193] 4.78 In circumstances where a non-claimant application is made, there is the very real possibility of extinguishment of native title.432 For example, any future act undertaken pursuant to a non-claimant application which has not been withdrawn by the applicant or dismissed by the National Native Title Tribunal433 will be valid and will have the effect of extinguishing — or at least

overriding — a native title claim, unless the claimant of native title (ie, the relevant Indigenous group or individual) registers its claim within three months. The task of registration by claimants has also become onerous under the amendments. By contrast, the task of registration by non-claimants is not as onerous, there being no requirement that they demonstrate how native title has been extinguished. Further, future legislation concerning the management and regulation of water and ‘living aquatic resources’, as well as airspace and future grants of any lease, licence, permit or authority with respect to those resources, overrides native title pursuant to s 24HA of the Act. This section suggests a wide range of non-Indigenous interests which take precedence over native title, again confirming that the operation of the Act has entrenched the inequality as between various forms of title. The Act, therefore, represents a whittling away of the status of native title — a title which the Native Title Act originally proclaimed to be, for the purpose of the future acts regime, equal in status to freehold.

Compensation 4.79 In an attempt to cut back the amount of compensation available for ‘past acts’, the Native Title Amendment Act 1998 (Cth) introduced s 51A into the Native Title Act. This section restricts the quantum of damages to the amount available had there been a compulsory acquisition. Such a formula would probably not be able to take account adequately of the loss of anything above a freehold equivalent, such as spiritual loss. Yet, as s 51A(2) makes s 51A subject to the ‘just terms’ standard contained in s 53 of the Act, the ‘just terms’ standard may still provide the scope to compensate over and above freehold value.434 Note that in the compensation decision in Griffiths v Northern Territory of Australia (No 3)435 discussed previously at 4.70, while the ‘economic loss’ component of compensation was capped at the freehold value, Mansfield J still was able to award a substantial ‘loss of connection to land’ component of damages. [page 194]

The right to negotiate 4.80 In regard to mining tenements and the compulsory acquisition of land for grants to private individuals or parties, the Native Title Act created a right to negotiate. The legislation recognised the right of native title holders to negotiate and also created a duty for governments and the grantees of mining tenements and others to negotiate.436 The 1998 amendments cut back the right to negotiate very considerably. While they maintained the right to negotiate regarding mining interests and the compulsory acquisition of native title rights, as well as interests for the benefit of third parties, they denied the right to negotiate for compulsory acquisitions for privately built infrastructure437 and the creation or variation of certain mining rights, permitting some kind of low-impact or small-scale mining if the approval of the Commonwealth Minister were granted, for example.438 Section 43A has also been incorporated into the Native Title Act by the amendments. It provides an alternative state and territory regime which operates over ‘alternative provision areas’. The right to negotiate is consequently lost where the Commonwealth Minister has given his or her approval to the scheme. The section applies to future acts over land which have been the subject of pastoral leases or many types of freehold.

Conclusion concerning the 1998 amendments 4.81 Reaction to the Native Title Amendment Act 1998 (Cth) was diverse. For example, many mining and pastoral interests were placated by the changes, but the amendments certainly did not gain universal approval. Human rights organisations and some political parties were outspoken in their dissatisfaction with the amendments. The amendments also spawned two controversial court cases whose object was to prove that the amendments gave rise to inequality and that inequality, in turn, amounted to genocide. Neither of these cases was successful.439 The Native Title Amendment Act contained other amendments relevant to land law, but space does not permit a discussion of these here. Into this category would fall issues concerning the six-year sunset clause and land use agreements.440

[page 195]

More recent legislative amendments 4.82 More recent amendments to the Native Title Act have mainly introduced refinements to the legislation rather than generating the political controversy of the 1998 changes.441 One controversial amendment, however, was the addition in 2010 of a new category of ‘future act’ under Subdiv JA of Pt 2 Div 3, allowing certain public housing projects to proceed as part of the ‘intervention’ process in the Northern Territory without necessarily taking account of underlying native title rights.442 4.83 A substantial package of amendments to the legislation was put forward as a Private Member’s Bill by the Australian Greens during 2011, in the form of the Native Title Amendment (Reform) Bill 2011 (Cth). The Senate Legal and Constitutional Affairs Legislation Committee recommended that the Bill not proceed, but there may be further debate on the issues in the future.443 Many of the amendments deal with issues that have been identified as needing clarification in this chapter, such as the clarification of the definition of ‘traditional’ in s 223 of the Native Title Act, and a proposal to introduce a ‘presumption of continuity’ of connection. These are matters on which recommendations have now been made by the Australian Law Reform Commission (ALRC).

Reform Definition of ‘native title’ 4.84 One of the very positive features of s 223 of the Native Title Act 1993 (Cth) is that it largely retains the common law definition of native title gleaned from Mabo v Queensland (No 2) (Mabo (No 2)).444 In turn, that common law definition was made referable to Indigenous customs and traditions. Yet, s 223 requires that the rights and interests claimed as native title must be recognised by the common law. At first blush, that requirement seems acceptable and suggests that native title may provide what Pearson has called a ‘recognition space’ for Indigenous customs and traditions in the

common law world.445 Yet, if the Act does not create new forms of title,446 but demands that Indigenous customs ‘fit’ the common law model in order to be recognised, difficulties could arise. For example, it may mean that s 223 potentially acts as a filter, keeping out any customs or traditions that [page 196] are too foreign or different. If that were the case, opportunities for interpreting aspects of native title that are different from the cultural and legal understandings non-Indigenous people bring to the matter may be denied. This would seem to be unfortunate and at odds with the messages being sent by the High Court to respect the sui generis nature of native title and to leave ‘the language of the common law property lawyer’ behind.447 This suggests an amendment to s 223 may be necessary, but any amendment would need to be preceded by extensive research and consultation.448 The recent ALRC Report449 represents a good start to this process, which ought to be carefully considered by the government for enactment. 4.85 An important part of the concept of native title is the question of the ‘connection’ that a tribal group has to have with a pre-1788 community. In this respect, it is commendable that the Commonwealth Government’s Australian Institute of Aboriginal and Torres Strait Islander Studies has produced a report as to how issues of ‘connection’ should be dealt with when dealing with consent determinations of native title.450 The articulation of a clear policy would have the potential to avoid needless litigation and may have an impact on the way that the courts regard the issue.

Cultural knowledge 4.86 The issue of the recognition of cultural knowledge through native title rights has not yet been satisfactorily resolved, and the present position needs reform. Where artwork is located on rocks, or where ceremonies are performed on land, the ‘connection’ aspect of those practices to the land is fairly self-evident, but at other times cultural knowledge is not so physically related to the land.451 For example, it could concern restricting access to

‘representations, images or oral accounts relating to such land or waters’. An example would be restricting the ‘reproduction of a Dreaming story relating to a particular site, where the reproduction could be proved to contravene Aboriginal law’.452 In the latter circumstances, some members of the High Court have shied away from finding the existence of native title rights, stating that they are unprepared to recognise ‘something approaching an incorporeal right akin to a new species of intellectual property’.453 They have commented that ‘The recognition of this [incorporeal] right would extend beyond [page 197] denial or control of access to land held under native title’.454 It is suggested that the law needs to be reformed to take account of the ‘land-relatedness’ of the spiritual beliefs and cultural narratives of Indigenous people.455 Where song cycles, dances, body art and ceremony are wedded to the land, the law needs to acknowledge these as aspects of native title. As Kirby J, in dissent on this point, has stated: If this cultural knowledge, as exhibited in ceremony, performance, artistic creation and narrative, is inherently related to the land according to Aboriginal beliefs, it follows logically that the right to protect such knowledge is therefore related to the land for the purposes of the NTA. Indeed, as stated in Yanner v Eaton: … an important aspect of the socially constituted fact of native title rights and interests that is recognised by the common law is the spiritual, cultural and social connection with the land.456

Perhaps the most appropriate manner to go about reforming this area of law is to take up Kirby J’s suggestion, which is to see these practices as human rights — human rights that are protected under international instruments.457 Another alternative could be to mount a constitutional argument that conceives of cultural knowledge as based on the spirituality of Indigenous people. Such spirituality, it could be argued, is protected by s 116 of the Commonwealth Constitution.458

Compensation 4.87

Some of the key questions relevant to compensation are:

What should be compensated? How should the quantum of that compensation be determined? In what form should it be paid? The common law, together with the Native Title Act and the Native Title Amendment Act 1998 (Cth), has sought to address some of these issues, but there is still scope to improve on the present position. For example, in deciding what should be compensated, we need to have some understanding of what has been lost. Once again, this involves inquiring into the nature of the interest extinguished or impaired. As the material in this chapter demonstrates, there is no unity of understanding regarding this concept. Further, where traditions and customs exist but are not recognised through native title, because they do not find reflection in the common law, compensation is precluded. Perhaps [page 198] revisiting our understanding of how native title is to be interpreted and amending the relevant legislation so that new interpretations are available would be a good starting point in assisting with the development of a more equitable compensation scheme. To highlight the problem of simply treating Indigenous customs and traditions (mediated through native title) as something that they are not, we need only look as far as the issue of the ‘freehold cap’. The freehold cap means that the quantum of compensation payable is capped at the value of the same property had it been held by virtue of a freehold title. There has been strong support for a freehold cap to the quantum of compensation payable.459 However, such an approach does not necessarily permit consideration of ‘any special or unique aspects of the links’ that native title holders may have with the land.460 For example, a freehold cap would probably prevent property that had a low freehold value but a strong ceremonial or spiritual value being adequately compensated.461 Native title and freehold are simply not the same.462 In recognition of this, it is suggested that s 51A (capping native title compensation at the level of a compulsory acquisition of freehold title), which

was introduced into the Native Title Act as part of the 1998 amendment package, be repealed.463

1.

See J Webber, ‘Beyond Regret: Mabo’s Implications for Australian Constitutionalism’ in D Ivison, P Patton and W Sanders, Political Theory and the Rights of Indigenous Peoples, Cambridge University Press, Cambridge, 2000, p 61.

2.

Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 (Mabo (No 2)).

3.

Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 (Gove Island Land Rights case) (Gove case).

4.

Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129.

5.

The relevance of religion, eg, is shown in the decision of the Full Court of the Federal Court in Cheedy on behalf of the Yindjibarndi People v Western Australia [2011] FCAFC 100 that allowing mining over a particular area, which would cut off a source of ceremonial ochre, did not amount to a breach of s 116 of the Commonwealth of Australia Constitution (the Constitution), which prohibits Commonwealth interference with freedom of religion.

6.

See D Ritter’s opening paper presented to ‘Turning Back the Tide — The Use of History in the Native Title Process’, a conference sponsored by the Native Title Research Unit of the Australian Institute of Aboriginal and Torres Strait Islander Studies, 10–11 May 1999, Canberra.

7.

The term ‘Indigenous people’ is very broad and covers different groupings such as Yuin, Pitjantjatjara, Eora and Torres Strait Islanders. Not all bands or tribal groups, nor all members of a band or tribal group, would necessarily share exactly the same views; any generalisations about Indigenous people are flawed, at least to that extent.

8.

See M Dodson, ‘Aborigines and the Criminal Justice System’ (1987) 28 Abor LB 4; B Butcher and D Turnbull, A People’s History of Australia Since 1788, McPhee Gribble, Melbourne, 1988, Vol 1, p 19; C F Black, The Land is the Source of the Law: A Dialogic Encounter with Indigenous Jurisprudence, Routledge, 2011.

9.

See also P Sutton, ‘The Robustness of Aboriginal Land Tenure Systems: Underlying and Proximate Customary Titles’ (1996) 67(1) Oceania 7.

10.

B Chatwin, The Songlines, Vintage, Sydney, 1988, picks up many of these themes. The novel is somewhat controversial in that it is written by an ‘outsider’, an Englishman, yet deals with Indigenous culture and the creation songs pertaining to the land.

11.

Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 at 268–73.

12.

M Langton, ‘Grandmothers’ Law, Company Business and Succession in Changing Aboriginal Land Tenure Systems’ in Our Land is Our Life, G Yunupingu (ed), University of Queensland Press, St Lucia, 1997.

13.

This is a term commonly used by Indigenous people. See P Toyne and D Vachon, Growing Up the Country: the Pitjantjatjara Struggle for Their Land, McPhee Gribble, Melbourne, 1984, pp 5–8.

14.

Indigenous middens are evidence of an organised system of recording how the resources of the land and sea were used. By placing the shells and bones of seafood and animals eaten at ceremonial gatherings in layers, Aborigines ensured that those who next came to the site would know not to deplete resources by eating the same types of food as those which were last eaten. This explanation was given during a visit to the middens at Wallaga Lake on the far south coast of New South Wales by members of the Yuin nation: Personal communication, 16 January 1998.

15.

Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 at 167.

16.

Indigenous people today would argue that the same notions of interconnectedness and intermingling still underpin their cultural identity, beliefs and customs.

17.

See Deane and Gaudron JJ’s discussion of ‘white expropriation’ of land in Mabo v Queensland (No 2) (1992) 175 CLR 1 at 105; 107 ALR 1 at 79. They state that land was ‘granted by the Crown or dedicated or reserved for inconsistent public purposes without regard to Aboriginal claims’.

18.

J M Bennet and A C Castles, A Source Book of Australian Legal History, Law Book Co, Sydney, 1979, pp 253–4 (emphasis added).

19.

For further information on the impact of Cook’s conduct and social memory, see C Healy, From Ruins of Colonialism, Cambridge University Press, Cambridge, 1997, particularly Ch 2.

20.

H McRae, G Nettheim, L Beacroft and L McNamara, Indigenous Legal Issues: Commentary and Materials, 4th ed, Thomson Reuters/Lawbook Co, Sydney, 2009, p 18. Note that New South Wales comprised about half of the Australian continent in 1770: H Reynolds, ‘Racial Thought in Early Colonial Australia’ (1974) 20(1) Australian Journal of Politics and History 45. Flannery notes that the explorer Mitchell ‘was also virtually alone in his time in recognising and wishing to perpetuate a sense of prior Aboriginal ownership of Australia’: T Flannery, The Explorers, Text Publishing, Melbourne, 1998, p 13.

21.

G Nettheim, ‘Native Title: Facts, Fallacies and the Future’, University Symposium Papers, University of New South Wales, Sydney, 1998, p 15. Nettheim cites H Reynolds, The Law of the Land, Penguin, Ringwood, 1992.

22.

According to Blackstone, land could be acquired by virtue of settlement, conquest or cession: W Blackstone, Commentaries on the Laws of England, 9th ed, Vol 1, W Strahan and T Caddell, London, 1783. Depending on the method of acquisition, different consequences flowed. On one analysis, a new category was created after Mabo (No 2): the category of settled land with continuing native title. Such a category involves a rejection of Blackstone’s scheme. Terra nullius means ‘land of noone’; in the Australian context, the doctrine is now recognised as a legal fiction. For recent comment on the concept in response to claims that it was illegitimately referred to in the Mabo decision, see K Williams, ‘Critique: A Historian Said Terra Nullius Was an Invention …’ (2006– 2008) 10 Newcastle Law Review 37–48; U Secher, ‘The High Court and Recognition of Native Title: Distinguishing Between the Doctrines of Terra Nullius and “Desert and Uncultivated”’ (2007) 11 University of Western Sydney Law Review 1–39.

23.

A policy initiated by the government of former Prime Minister Keating, when he gave his Redfern address. See the website of Reconciliation Australia: . One focus of current debate is whether there ought to be formal Constitutional recognition of the pre-existing rights of Indigenous Australians — see a discussion paper on the topic issued by an expert panel in May 2011 (accessed 5 August 2011), . See also Recognise, Why Recognition (accessed 1 April 2017), , for continuing arguments in favour of Constitutional recognition.

24.

These statutes are discussed later in this chapter. See 4.63–4.81.

25.

McRae et al, Indigenous Legal Issues: Commentary and Materials, note 20 above, p 18.

26.

McRae et al, Indigenous Legal Issues: Commentary and Materials, note 20 above, p 18.

27.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 105; 107 ALR 1 at 79.

28.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 106; 107 ALR 1 at 80.

29.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 109; 107 ALR 1 at 82.

30.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 145; 107 ALR 1 at 111.

31.

See ‘Gipps to Glenelg, 19 December 1838’ in Historical Records of Australia, Series 1, Library Committee of the Commonwealth Parliament, Sydney, 1914–1925, Vol 19. See also H Goodall, Invasion to Embassy, Allen & Unwin, Sydney, 1996, p 27, for a discussion of resistance by the Dharuk and Gandangara landowners to the penetration of white farmers. For a more journalistic account of resistance, see B Elder, Blood on the Wattle, New Holland Publishers, Sydney, 2000.

32.

McRae et al, Indigenous Legal Issues: Commentary and Materials, note 20 above. See also H Goodall, Invasion to Embassy, Allen & Unwin, Sydney, 1996, p 1, where, in discussing the significance of land to Indigenous people, Goodall points out that while the spiritual and religious dimensions are important, the role ‘land plays in social relations, political relations, and in the cultural construction and transmission of knowledge’ should not be overlooked. See Goodall, p 23, for a discussion of the difference between Indigenous and European concepts of land. Note that outrage at dispossession was expressed by many Indigenous people. On occasions the issue of dispossession also claimed the attention of white officials, such as the New South Wales Crown Land Commissioner in the Murrumbidgee area, C C L Bingham (Goodall, p 35).

33.

R v Murrell and Bummaree [1836] NSWSupC 35.

34.

Miscellaneous correspondence relating to Aborigines, in the possession of the Archives Office of New South Wales, 5/1161, pp 239–40; cited in B Kercher, Decisions of the Superior Courts of New South Wales, 1788–1899, Division of Law, Macquarie University at: . For the full decision, see R v Murrell and Bummaree [1836] NSWSupC 35, available on the AustLII database (). See also J Hookey, ‘Settlement and Sovereignty’ in P Hanks and B Keon-Cohen (eds), Aborigines and the Law: Essays in Memory of Elizabeth Eggleston, Allen & Unwin, Sydney, 1984.

35.

See R v Ballard [1829] NSWSupC 26; R v Bonjon [1841] NSWSC 92. Dowling and Forbes JJ were the first two holders of the office of Chief Justice of New South Wales.

36.

R v Ballard [1829] NSWSupC 26 at 107–8 (emphasis added).

37.

R v Ballard or Barrett, reported in Kercher, Decisions of the Superior Courts of New South Wales, 1788– 1899, note 34 above. See also B Kercher, ‘The Recognition of Aboriginal Status and Laws in the Supreme Court of New South Wales under Forbes CJ, 1824–1836’ in A Buck, J McLaren and N E Wright (eds), Land and Freedom: Law, Property Rights and the British Diaspora, Ashgate, Aldershot, 2001, pp 83–102.

38.

Attorney-General v Brown (1847) 1 Legge 312.

39.

Attorney-General v Brown (1847) 1 Legge 312 at 316.

40.

Attorney-General v Brown (1847) 1 Legge 312 at 324. See also A R Buck, ‘Attorney-General v Brown and the Development of Property Law in Australia’ (1994) 2 APLJ 128; A R Buck, The Making of Australian Property Law, The Federation Press, 2006; R Bartlett, Native Title in Australia, 3rd ed, LexisNexis Butterworths, Australia, 2015, p 5. The authors acknowledge the assistance of the latter work in writing this chapter.

41.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 106–8; 107 ALR 1 at 80–2 per Deane and Gaudron JJ.

42.

Quoted in Mabo v Queensland (No 2) 175 CLR 1 at 106–8; 107 ALR 1 at 80–2 per Deane and Gaudron JJ.

43.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 106–8; 107 ALR 1 at 80–2 per Deane and Gaudron JJ. Dr Stephen Lushington was a leader of the English Bar and a judge of the London consistory court. Subsequently, he was an eminent Admiralty judge and a member of the Judicial Committee of the Privy Council. For the concept of ‘radical title’, see 4.16 below.

44.

Some doubt has recently been cast on the view that terra nullius as a doctrine was actually invoked by early courts considering these matters: see D Ritter, ‘The “Rejection of Terra Nullius” in Mabo: A Critical Analysis’ (1996) 18 Syd LR 5; U Secher, ‘The Mabo Decision — Preserving the Distinction between “Settled” and “Conquered or Ceded” Territories’ (2005) 24 UQLJ 35. But something like this view lay behind the decisions, and calling it ‘terra nullius’ in an extended sense does not seem to cause any real misunderstanding. Secher, ‘The High Court and Recognition of Native Title: Distinguishing Between the Doctrines of Terra Nullius and “desert and uncultivated”’, note 22 above, p 6, suggests that the doctrine may be seen to have a ‘common law’ sense now as well as its traditional international law meaning.

45.

This doctrine is explained in Chapter 3.

46.

Re Southern Rhodesia [1919] AC 211 at 233.

47.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 45; 107 ALR 1 at 31 per Brennan J.

48.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 45; 107 ALR 1 at 31 per Brennan J. Murphy J in Coe v Commonwealth (1979) 53 ALJR 403 at 412 described the doctrine of terra nullius as a ‘convenient falsehood to justify the taking of Aboriginal land’ when he was discussing the doctrine as set out in Cooper v Stuart (1889) 14 App Cas 286. Cooper v Stuart enlarged the notion of a ‘settled colony’ to include those ‘practically unoccupied, without settled inhabitants or settled law’.

49.

Indeed, Hepburn has argued that the logical implication of the doctrine of native title as spelled out in Mabo (No 2) is that the doctrine of tenure should be abolished: see S Hepburn, ‘Disinterested Truth: Legitimation of the Doctrine of Tenure Post-Mabo’ (2005) 29 MULR 1; ‘Feudal Tenure and Native Title: Revising an Enduring Fiction’ (2005) 27 Syd LR 49. But so far, the courts have not taken this step. For further discussion of these issues, see 3.33–3.38.

50.

This legislation is distinct from the native title legislation (the Native Title Act 1993 (Cth) and the Native Title Amendment Act 1998 (Cth)) that was spawned largely in response to Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 and Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129.

51.

Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141.

52.

Eg, the Black Panther movement in the United States of America.

53.

For a more detailed account of this, see J Gray, ‘The Mabo Case: A Radical Decision?’ (1997) 17(1) Canadian Journal of Native Studies 33 at 43. See also Sir William Deane, Some Signposts from Dagaragu, inaugural Vincent Lingiari Memorial Lecture, AGPS, Canberra, 1996.

54.

Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141. The land in question became part of Arnhem Land in the 1930s, but mining on it was nevertheless approved in following decades.

55.

This proposition was rejected in Mabo (No 2).

56.

The Whitlam Government commissioned Woodward J to write the two reports, known as the Aboriginal and Land Rights Commission First Report (1973) and Second Report (1974). When still at the bar, Woodward J had been senior counsel for the Yirrkala people in Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141.

57.

The word ‘Aboriginal’ rather than ‘Indigenous’ is preserved in this context because it is the

language of the legislation. 58.

Nettheim, ‘Native Title: Facts, Fallacies and the Future’, note 21 above, p 18. Nettheim claims that the court in Mabo (No 2) found the so-called jurisprudence of these claims very influential. See also comments to this effect by French CJ writing extra-judicially in ‘The Role of the High Court in the Recognition of Native Title’ in L Strelein (ed), Dialogue about Land Justice — Papers from the National Native Title Conference, Aboriginal Studies Press, 2010, pp 86–7.

59.

M Wilkie, Aboriginal Land Rights in New South Wales, Alternative Publishing Co-Operative, Sydney, 1985.

60.

To some, however, the legislation remains primarily a compensation-style Act rather than a land rights Act. It is worth noting that the Queensland legislation relies on a different approach, where the claim process provides a hierarchy of bases for entitlement to claimable land: first traditional affiliation, then historical association and, lastly, needs.

61.

Johnson v McIntosh 8 Wheat 543 (1823). Although the Indians lost this case, the court clearly acknowledged that they were the rightful occupants of the land and that they had a valid legal claim to retain possession of it. However, the court found that their rights to complete sovereignty had been diminished and burdened.

62.

Calder v Attorney-General of British Columbia (1973) 34 DLR (3rd) 145 at 218–19 (SC Canada).

63.

R v Symonds [1847] NZPCC 387 at 390.

64.

Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 397.

65.

Coe v Commonwealth (1979) 53 ALJR 403.

66.

Coe v Commonwealth (1979) 53 ALJR 403 at 408 per Gibbs J; at 411 per Jacobs J; at 412 per Murphy J.

67.

Northern Land Council v Commonwealth (No 2) (1987) 61 ALJR 616 at 620.

68.

Gerhardy v Brown (1985) 159 CLR 70 at 149. See Nettheim, ‘Native Title: Facts, Fallacies and the Future’, note 21 above, p 18.

69.

This litigation led to the decision reported as Mabo v Queensland (No 1) (1988) 166 CLR 186; 83 ALR 14.

70.

Queensland Coast Islands Declaratory Act 1985 (Qld) s 3.

71.

Mabo v Queensland (No 1) (1988) 166 CLR 186; 83 ALR 14 at 96.

72.

Moynihan J of the Supreme Court of Queensland (to whom the matter had been remitted for a finding of fact) delivered his determination on 16 November 1990: Mabo v Queensland [1992] 1 Qd R 78. The law (as opposed to the facts of the matter) was decided by the High Court in the next stage of the litigation, reported as Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1.

73.

Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1 (Mabo (No 2)).

74.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 57; 107 ALR 1 at 41 per Brennan J. Similar expressions are to be found at CLR 81–2; ALR 60–1 per Deane and Gaudron JJ; at CLR 182–4; ALR 142–3 per Toohey J.

75.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 69; 107 ALR 1 at 51 per Brennan J.

76.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 29 per Brennan J, referring to ‘the skeleton of principle which gives the body of our law its shape and internal consistency’.

77.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 58; 107 ALR 1 at 42.

78.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 58; 107 ALR 1 at 42 per Brennan J. This view was supported in Wik Peoples v Queensland (1996) 187 CLR 1 at 169 per Gummow J.

79.

In an effort to bridge the cultural gap, some courts have been willing to hold hearings in situ — in the bush or the desert, for example — rather than in the courtroom. In Members of the Yorta Yorta Aboriginal Community v Victoria [1998] FCA 1606 (Yorta Yorta Aboriginal Community v Victoria), Olney J began taking oral evidence at a temporary shelter at Rumbalara Community near Mooroopna, Victoria. He later took evidence at another 65 locations.

80.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 109–11; 107 ALR 1 at 83 per Deane and Gaudron JJ.

81.

Ward v Western Australia (1998) 159 ALR 483 at 550–2.

82.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 70; 107 ALR 1 at 51 per Brennan J. Note that the issue of who is Indigenous and who is not is very contentious. While in the 1970s there was a movement away from the ‘bloodline definitions’ embodied in terms such as ‘half caste’ and ‘quadroon’, there has been a call by Michael Mansell, Indigenous lawyer and activist, as well as others, including members of the former Aboriginal and Torres Strait Islander Commission (ATSIC), to return to a biological descent test. They hope that a stricter test will lead Indigenous resources to be less taxed by an increasing number of people who identify as Indigenous. See ‘Land is Not Enough — Mabo Ten Years On’ and ‘It’s Still Disputed Territory — Mabo: Land is Not Enough’, The Weekend Australian, Features, 1 June 2002, pp 19 and 24. Disputes over the appropriate criteria for identification of persons as Indigenous or not still cause controversy, as can be seen in litigation involving remarks by the commentator Andrew Bolt on the issue in the Federal Court: see Eatock v Bolt (2011) 197 FCR 261.

83.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 70; 107 ALR 1 at 51 per Brennan J; at CLR 110; ALR 83 per Deane and Gaudron JJ. The possibility that native title might be transferred from one traditional group to another was discussed, though held not to be applicable on the facts of that case, in Dale v Moses [2007] FCAFC 82 at [120]. See also D Yarrow, ‘The Inalienability of Native Title in Australia: A Conclusion in Search of a Rationale’ in S Brennan et al (eds), Native Title from Mabo to Akiba: A Vehicle for Change and Empowerment?, The Federation Press, 2015, pp 60–74, for the view that the doctrine needs more substantial justification than has so far been provided.

84.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 61; 107 ALR 1 at 44 per Brennan J.

85.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 61; 107 ALR 1 at 44 per Brennan J; at CLR 110; ALR 83 per Deane and Gaudron JJ.

86.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 61; 107 ALR 1 at 44 per Brennan J.

87.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 88–9; 107 ALR 1 at 66–7 per Deane and Gaudron JJ; at CLR 132–3; ALR 101–2 per Dawson J.

88.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 132–3; 107 ALR 1 at 101–2 per Dawson J.

89.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 214; 107 ALR 1 at 167 per Toohey J.

90.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 59–60; 107 ALR 1 at 43.

91.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 110; 107 ALR 1 at 83 per Deane and Gaudron JJ.

92.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 110; 107 ALR 1 at 83.

93.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 59; 107 ALR 1 at 43.

94.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 110; 107 ALR 1 at 83.

95.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 188; 107 ALR 1 at 147.

96.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 188; 107 ALR 1 at 147. For a comprehensive discussion of the requirements for connection and ultimately proof of native title, see Bartlett, Native Title in Australia, note 40 above, Ch 7, discussing the position in light of the decision of the High Court in Members of the Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 (Yorta Yorta Aboriginal Community v Victoria).

97.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 69; 107 ALR 1 at 51.

98.

See Water Management Act 2000 (NSW) s 55, which recognises the right of native title holders in many circumstances to ‘take and use water in the exercise of native title rights’ without complying with licensing requirements.

99.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 64; 107 ALR 1 at 46 per Brennan J; at CLR 111; ALR 84 per Deane and Gaudron JJ; at CLR 196; ALR 153 per Toohey J.

100. Adeyinka Oyekan v Musendiku Adele [1957] 1 WLR 876 at 880. 101. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 57; 107 ALR 1 at 41 per Brennan J; at CLR 82; ALR 60 per Deane and Gaudron JJ; at CLR 184; ALR 144 per Toohey J. 102. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 64; 107 ALR 1 at 46 per Brennan J; at CLR 111; ALR 84 per Deane and Gaudron JJ. 103. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 196; 107 ALR 1 at 152–3 per Toohey J. 104. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 70; 107 ALR 1 at 51 per Brennan J; see also CLR 111; ALR 84 per Deane and Gaudron JJ; CLR 196; ALR 153 per Toohey J. Note that the circumstances outlined above may be subject to the operation of s 211 of the Native Title Act 1993 (Cth). 105. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 65–6; 107 ALR 1 at 48 per Brennan J. 106. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 46; 107 ALR 1 at 32 per Brennan J. This was explored further in Wik Peoples v Queensland (1996) 187 CLR 1 at 85 per Brennan CJ; Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 at 180–1. 107. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 69; 107 ALR 1 at 51. 108. See 4.57–4.62. 109. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 69; 107 ALR 1 at 51. 110. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 70; 107 ALR 1 at 52. 111. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 70; 107 ALR 1 at 51–2. 112. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 68; 107 ALR 1 at 50. 113. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1. 114. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [215]–[216], [234]. 115. De Rose v South Australia (No 2) [2005] FCAFC 110 at [157]. See the comment by R Bartlett, ‘Outstanding Matters of Proof and Extinguishment Left Over from Ward and Yorta Yorta: De Rose in the Full Federal Court’ (2005) 24 AMPLJ 219. Special leave to appeal the decision to the High Court was refused: see Fuller v De Rose [2006] HCA Trans 49. 116. Western Australia v Brown (2014) 253 CLR 507. See further discussion below at 4.58. 117. The negotiated agreement made at Crescent Head between the New South Wales Government

and the Dunghutti people involved recognition of native title and payment for impairment of it, because a subdivision of the land had taken place. The payment was reportedly 150% of the freehold value of the land. The agreement did not result in extinguishment of native title. See B Horrigan and S Young (eds), Commercial Implications of Native Title, The Federation Press, Sydney, 1997, pp 19–20. See also the agreement between Boral and the Nyungah claimants of the Swan River and Swan Coastal Plains, signed on 16 January 2003. 118. Mabo v Queensland (No 1) (1988) 166 CLR 186; 83 ALR 14; Western Australia v Commonwealth (1995) 183 CLR 373. 119. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 199–205; 107 ALR 1 at 156–60. 120. The Canadian jurisdiction (where a fiduciary duty is known to exist regarding Aboriginal rights) offers guidance on the payment of damages. See Guerin v R (1984) 13 DLR (4th) 321. 121. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 60; 107 ALR 1 at 43. 122. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 113; 107 ALR 1 at 85–6. 123. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 15; 107 ALR 1 at 7. 124. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 15; 107 ALR 1 at 7. 125. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [242]. 126. See Mabo v Queensland (No 2) (1992) 175 CLR 1 at 70; 107 ALR 1 at 51–2. 127. Pareroultja v Tickner (1993) 42 FCR 32 at 39. 128. Mason v Tritton (1994) 34 NSWLR 572. 129. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [64]. 130. Members of the Yorta Yorta Aboriginal Community v Victoria (2001) 110 FCR 244; 180 ALR 655 at [122]–[129]. 131. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [304]. Note that Gleeson CJ, Gaudron, Gummow and Hayne JJ delivered a joint judgment. McHugh, Kirby and Callinan JJ were in dissent on some issues. 132. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [304]. 133. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [304]; Yanner v Eaton (1999) 201 CLR 351 at 372–3. 134. De Rose v South Australia (No 2) [2005] FCAFC 110 at [101]. 135. See also the decision of the Full Court of the Federal Court in Worimi (aka Gary Dates) v Worimi Local Aboriginal Land Council (2010) 181 FCR 320 at [87] confirming that ‘connection may be mainly spiritual rather than physical; it may have evolved over time to a less specific use of all or many parts of that land; it may not involve physical access to each and every part of the land’. 136. J Gray, ‘O Canada! Van Der Peet as Guidance on the Construction of Native Title Rights: The Gladstone Decision’ (1997) 2(1) AILR 18; [1997] AUIndigLawRpr 10. 137. Brennan J in Mabo v Queensland (No 2) (1992) 175 CLR 1 at 61; 107 ALR 1 at 44 pointed out that ‘in time the laws and customs of any people will change’, but as long as the people remained an identifiable community ‘living under its laws and customs’ ‘the communal native title survives’. 138. The strongest manifestation of a ‘frozen rights’ approach requires an adherence to customs and traditions in the same state as before European contact.

139. Yorta Yorta Aboriginal Community v Victoria [1998] FCA 1606 at [109]–[121], [129]. See J Cockayne, ‘Members of Yorta Yorta Aboriginal Community v Victoria; Indigenous and Colonial Traditions in Native Title’ (2001) 25 MULR 786. 140. Yorta Yorta Aboriginal Community v Victoria [1998] FCA 1606 at [118]–[119]. 141. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 60; 107 ALR 1 at 43. 142. Yorta Yorta Aboriginal Community v Victoria [1998] FCA 1606 at [129]. 143. R v Van der Peet (1996) 137 DLR (4th) 289; Van der Peet v R [1996] 2 SCR 507. 144. R v NTC Smokehouse Ltd [1996] 2 SCR 672; (1996) 137 DLR (4th) 528. 145. R v Pamajewon [1996] 2 SCR 821. 146. J Gray, ‘O Canada! Van der Peet as Guidance’, note 132 above. See also Hamlet of Baker Lake v Minister of Indian Affairs and Northern Development (1979) 107 DLR (3rd) 513 at 526–9. 147. Hayes v Northern Territory (1999) 97 FCR 32 at [30]. 148. Yanner v Eaton (1999) 201 CLR 351 at [68]. 149. Stevenson v Yasso [2006] 2 Qd R 150; by a 2:1 majority, McMurdo P and Fryberg J (McPherson JA dissenting). The case involved a specific provision of s 14 of the Fisheries Act 1994 (Qld), but reference was made to native title cases in coming to the decision. 150. Stevenson v Yasso [2006] 2 Qd R 150 at [49]. 151. At first instance, per Olney J, Yorta Yorta Aboriginal Community v Victoria [1998] FCA 1606. On appeal to the Full Federal Court, Yorta Yorta Aboriginal Community v Victoria (2001) 110 FCR 244; 180 ALR 655. 152. The Act is discussed below at 4.63–4.74. 153. Yorta Yorta Aboriginal Community v Victoria (2001) 110 FCR 244; 180 ALR 655 at [122]. 154. Yorta Yorta Aboriginal Community v Victoria (2001) 110 FCR 244; 180 ALR 655 at [122]. 155. Yorta Yorta Aboriginal Community v Victoria (2001) 110 FCR 244; 180 ALR 655 at [127]. 156. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [307] (emphasis in original). Note that Kirby J was in dissent from the majority in regard to several aspects of the decision. 157. Cockayne, ‘Members of Yorta Yorta Aboriginal Community v Victoria; Indigenous and Colonial Traditions in Native Title’, note 139 above. 158. Cockayne makes this argument: Cockayne, ‘Members of Yorta Yorta Aboriginal Community v Victoria; Indigenous and Colonial Traditions in Native Title’, note 139 above. See also A Reilly, ‘Land Rights — From Past to Present to Absent’ (2001) 26(3) Alt LJ 143. 159. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538. For discussion and critique, see J Gray, ‘The Lost Promise of Mabo: An Update on the Legal Struggle for Land Rights in Australia with Particular Reference to the Ward and Yorta Yorta decisions’ (2003) 23 Canadian Journal of Native Studies 305–48; R Bartlett, ‘An Obsession with Traditional Laws and Customs Creates Difficulty Establishing Native Title Claims in the South: Yorta Yorta’ (2003) 31 WALR 35– 46; R Bartlett, ‘Humpies not Houses, or The Denial of Native Title: A Comparative Assessment of Australia’s Museum Mentality’ (2003) 10 APLJ 83. Gray and Bartlett both refer to the devastating critique of the High Court decisions in Yorta Yorta and Ward by Noel Pearson: see N Pearson, ‘The High Court’s Abandonment of “The Time-Honoured Methodology of the Common Law” in its Interpretation of Native Title in Mirriuwung Gajerrong and Yorta Yorta’ (2003) 7 Newcastle Law

Review 1. 160. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [40]. 161. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [31]. 162. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [36]. 163. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [33]. 164. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [34]. 165. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [35]. 166. See Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [33]. 167. See Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [35] (emphasis in original). 168. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [79]. 169. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [80]. 170. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [82]. 171. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [83] (emphasis in original). 172. S Young, The Trouble with Tradition: Native Title and Cultural Change, The Federation Press, 2008 provides a detailed critique of what he calls the ‘over-particularity’ of the High Court’s view of tradition in Yorta Yorta. 173. ‘High Court Dismisses Yorta Yorta Appeal’, National Native Title Tribunal media release, 12 December 2002, available at: (enter title of media release in search box to locate). 174. For a general overview of matters to be considered in establishing ‘connection’ with land, see V Hughston SC, ‘Native Title Connection: An Overview’ (2013) 118 Precedent 8–12. 175. Risk v Northern Territory of Australia [2006] FCA 404; see the conclusion expressed after a lengthy review of the evidence (at [834]). The trial decision was upheld on appeal in Risk v Northern Territory of Australia (2007) 240 ALR 74, and special leave to appeal was refused by the High Court: Risk v Northern Territory of Australia [2007] HCATrans 472. 176. Jango v Northern Territory of Australia (2006) 152 FCR 150, summarised in [499]–[507]. This case and the Risk decision, note 175 above, are discussed in R Webb and G Kennedy, ‘The Application of Yorta Yorta to Native Title Claims in the Northern Territory — The City and the Outback’ (2006) 25 AMPLJ 201–13. The trial decision was upheld on appeal in Jango v Northern Territory of Australia (2007) 159 FCR 531. 177. Rubibi Community v Western Australia (No 7) [2006] FCA 459. The decision was upheld on appeal in Western Australia v Sebastian (2008) 173 FCR 1. 178. Sampi v Western Australia (2010) 266 ALR 537. 179. For comment, see M Burns, ‘Challenging the Assumptions of Positivism: An Analysis of the Concept of Society in Sampi on Behalf of the Bardi and Jawi People v Western Australia [2010] and Bodney v Bennell [2008]’ (2011) 4(7) Land, Rights, Laws: Issues of Native Title 1–15. 180. Bennell v Western Australia (2006) 153 FCR 120. His Honour was careful to point out that native title claims could not be made against freehold land in the region, and that people’s ‘back yards’ would not be affected (see the summary of the judgment accompanying the formal report, at p 10).

181. Bodney v Bennell (2008) 167 FCR 84. 182. For comment on the Full Court judgment, see S Young, ‘One Step Forward and One Step Back: The Noongar South-West Native Title Claim’ (2008) 23 Aust Prop Law Bull 14–17; L Strelein, ‘Continuity and Change’ in Compromised Jurisprudence: Native Title Cases Since Mabo, 2nd ed, AIATSIS, 2009, Ch 10; Burns, ‘Challenging the Assumptions of Positivism: An Analysis of the Concept of Society in Sampi on behalf of the Bardi and Jawi People v Western Australia [2010] and Bodney v Bennell [2008]’, note 179 above. 183. Bodney v Bennell (2008) 167 FCR 84 at [72]–[73]. For discussion of ‘connection’ issues arising in Canada, see the decision in Tsilhqot’in Nation v British Columbia 2014 SCC 44, holding that connection can be established over a large area used for hunting and fishing even if close settlement had only taken place in a smaller area. 184. For background, see M Mccagh, ‘Native Title in the Southwest: the Noongar Recognition Bill’ (2015) 8(18) Indigenous Law Bulletin 26–9; G Kelly and S Bradfield, ‘Negotiating a Noongar Native Title Settlement’ in Brennan et al (eds), Native Title from Mabo to Akiba: A Vehicle for Change and Empowerment?, note 83 above, pp 249–56. 185. McGlade v Native Title Registrar [2017] FCAFC 10. 186. See the Native Title Amendment (Indigenous Land Use Agreements) Bill 2017 (Cth), approved by the House of Representatives on 16 February 2017, and introduced into the Senate on that day. 187. Bodney v Bennell (2008) 167 FCR 84. 188. See Australian Law Reform Commission, Connection to Country: Review of the Native Title Act 1993 (Cth), ALRC Report 126, Commonwealth of Australia, April 2015. 189. See above at 4.25. 190. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 191. Western Australia v Commonwealth (1995) 183 CLR 373 at 453. 192. Native Title Act 1993 (Cth) s 24MD. 193. Commonwealth Constitution s 51(xxxi). 194. See 4.70. 195. The Australian Government did not assert sovereignty beyond this point until 1990, when it asserted sovereignty as far as the 12-nautical mile limit. 196. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [49]. See comment by D J Cremean, ‘The Common Law of the Realm (Commonwealth of Australia v Yarmirr)’ (2002) 2 OUCLJ 257. 197. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [87]. 198. Lardil Peoples v Queensland [2004] FCA 298. See comment by S Huber, ‘The Wellesley Island Decision: Offshore Native Title Post Yarmirr and Ward’ (2004) 23 UQLJ 242; J Behrendt, ‘Lardil Peoples v State of Queensland [2004] FCA 298’ (2004) 6 ILB 14. 199. Gumana v Northern Territory (2005) 141 FCR 457. See comment by G Hiley, ‘Native Title for Blue Mud Bay and the Inter-tidal Zone’ (2005) 7 Native Title News 2. On appeal in Gumana v Northern Territory of Australia [2007] FCAFC 23, the Full Court upheld the finding that native title rights over the seabed did not give exclusive possession, while finding that a grant under specific Land Rights legislation of fee simple over certain parts of the ‘intertidal waters’ did give the right to exclude others from those areas.

200. Akiba on behalf of the Torres Strait Islanders of the Regional Seas Claim Group v State of Queensland (No 2) [2010] FCA 643. For comment, see S Hepburn, ‘Native Title Rights in the Territorial Sea and Beyond: Exclusivity and Commerce in the Akiba Decision’ (2011) 34 UNSWLJ 159–81. 201. The question of the extent of a native title claim over waters was also considered recently in the Canadian decision of Lax Kw’alaams Indian Band v Canada (Attorney General), 2011 SCC 56 (10 November 2011). The Supreme Court of Canada held that an indigenous custom of trading in the grease produced by one species of fish, did not entitle the indigenous group to claim the right to control all commercial fishing within the area covered by the tribal claim. 202. Commonwealth v Akiba (2012) 204 FCR 260. 203. Akiba v Commonwealth (2013) 250 CLR 209. For comment see G Lauder and L Strelein, ‘Native Title and Commonwealth Fisheries: the Torres Strait sea claim’ (2013) 118 Precedent 13–19. 204. Karpany v Dietman (2013) 252 CLR 507. See L Butterly, ‘“For the reasons given in Akiba”: Karpany v Dietman [2013] HCA 47’ (2014) 8(10) Indigenous Law Bulletin 23–6. 205. For detailed comment on ‘interpretative choices’ available to courts in determining whether native title has been extinguished where activity is regulated, including discussion of Akiba and Karpany, see S Hepburn, ‘Statutory Interpretation and Native Title Extinguishment: Expanding Constructional Choices’ (2015) 38 UNSWLJ 587–617. 206. Re Wadi Wadi People’s Native Title Application (1995) 129 ALR 167 at 178–87. 207. Coe v Commonwealth (1993) 68 ALJR 110. 208. Thorpe v Commonwealth (1997) 71 ALJR 767 at 776. Argument for a broad fiduciary duty owed by the Commonwealth to Indigenous peoples was defeated in Kruger v Commonwealth (1997) 190 CLR 1. 209. C Hughes, ‘The Fiduciary Obligations of the Crown to Aborigines: Lessons from the United States and Canada’ (1993) 16(1) UNSWLJ 70; L Behrendt, ‘Bargaining on More than Good Will: Recognising a Fiduciary Obligation in Native Title’ in Land, Rights, Laws: Issues of Native Title, Vol 2, Australian Institute of Aboriginal and Torres Strait Islander Studies, Canberra, 1994; L Behrendt, ‘Responsibility in Governance: Implied Rights, Fiduciary Obligations and Indigenous Peoples’ (2002) 61(2) Aust J Pub Admin 106; Bartlett, Native Title in Australia, note 40 above, Ch 29. 210. Limitation Act 1969 (NSW); Williams v Minister, Aboriginal Land Rights Act (1994) 35 NSWLR 497. 211. 1975 marks the commencement of the Racial Discrimination Act 1975 (Cth). 212. D Heydon and P Loughlin, Cases and Materials on Equity and Trusts, 6th ed, LexisNexis Butterworths, Australia, 2002, p 211. 213. Sir Anthony Mason, ‘Themes and Prospects’ in P D Finn (ed), Essays in Equity, Law Book Co, Sydney, 1985, p 246. 214. In the Canadian decision of Lax Kw’alaams Indian Band v Canada (Attorney-General) 2011 SCC 56, a claim for recognition of a fiduciary duty by the Crown was rejected on the basis that no treaty or promise made by the Crown existed that would create such a duty. 215. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. See above 4.17. 216. S Motha, ‘Mabo, Encountering the Epistemic Limit of the Recognition of “Difference”’ (1998) 7(1) Griffith Law Review 79 at 83. 217. Section 223(1) of the Native Title Act recognises individual and group rights in relation to land or waters that are recognised by the common law.

218. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 89; 107 ALR 1 at 67. 219. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 51; 107 ALR 1 at 36. 220. United States v Alcea Band of Tillamooks 329 US 40 (1946). 221. Delgamuukw v British Columbia [1998] 1 CNLR 14 at 113. 222. See the discussion in R Bartlett, Native Title in Australia, note 40 above, pp 353–5. 223. Contrast this with the general principle of contract law, which upholds privity of contract, so that a right is enforceable only against the parties to the contract. 224. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 187; 107 ALR 1 at 6. 225. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 196; 107 ALR 1 at 153. According to Toohey J, if extinguishment took place, compensation would flow. Wrongful extinguishment could not occur. However, in Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129, Toohey J concluded that native title could be extinguished without compensation if there is a clear and plain intention for that to occur. See the discussion in Bartlett, Native Title in Australia, note 40 above, pp 346–50. 226. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 213; 107 ALR 1 at 167. 227. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 206; 107 ALR 1 at 161. See also Chapter 3. 228. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 187; 107 ALR 1 at 146. 229. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 51; 107 ALR 1 at 36. 230. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 60; 107 ALR 1 at 43 231. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 61; 107 ALR 1 at 44. 232. N Pearson, ‘Principles of Communal Native Title’ (2000) 5(3) Indigenous Law Bulletin 4. 233. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 60; 107 ALR 1 at 43. 234. See above at 4.38. 235. See the discussion of the need to think creatively at 4.47. See also Webber, ‘Beyond Regret: Mabo’s Implications for Australian Constitutionalism’, note 1 above, p 61. 236. Wik Peoples v Queensland (1996) 187 CLR 1 at 126–7; 141 ALR 129 at 185. 237. Wik Peoples v Queensland (1996) 187 CLR 1 at 169; 141 ALR 129 at 220. 238. Bartlett, Native Title in Australia, note 40 above, p 347. This point was taken up in a slightly different fashion in Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [122], where the court rejected the ‘argument that native title can be treated differently from other forms of title because native title has different characteristics from those other forms of title and derives from a different source’. 239. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [11]. 240. See Chapter 1 for a more detailed discussion. 241. Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141. 242. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 59; 107 ALR 1 at 42 per Brennan J; at CLR 88, 110; ALR 66 and 83 per Deane and Gaudron JJ. See also, on this issue, the discussion by Yarrow, ‘The Inalienability of Native Title in Australia: A Conclusion in Search of a Rationale’, note 83 above. 243. It is acknowledged that, technically, a lease has historically been classified as personalty, but today it

is treated as proprietary in nature. 244. This view is supported by R Bartlett, The Mabo Decision — Commentary and Full Text of the Decision in Mabo and Others v State of Queensland, Butterworths, Sydney, 1993, p xv. Further, cases such as Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 have spelled out the various ways in which native title rights may be used and enjoyed: see Yarmirr at [70]. 245. Calder v Attorney-General of British Columbia (1973) 34 DLR (3rd) 145 (SC Canada). 246. St Catherine’s Milling and Lumber Co v R (1888) 14 App Cas 46. 247. Ward v Western Australia (1998) 159 ALR 483 (Lee J), known as the Miriuwung Gajerrong determination. 248. Hayes v Northern Territory (1999) 97 FCR 32, known as the Arrernte determination. 249. See L Strelein, ‘Conceptualising Native Title’ (2001) 23(1) Syd LR 95 at 99. See also Lee J’s Minute of Order in the Miriuwung Gajgerrong determination; Olney J’s Draft Minute of Proposed Determination of Native Title in the Arrernte determination. 250. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [51]. 251. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [87]. 252. The question of inconsistency is discussed later in this chapter in regard to Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129. See 4.73. 253. See Chapter 10. 254. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 89; 107 ALR 1 at 66. 255. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 89; 107 ALR 1 at 66–7. 256. Attorney-General (Quebec) v Attorney-General (Canada) [1921] 1 AC 401 at 408. 257. Delgamuukw v British Columbia [1998] 1 CNLR 14 at 113. 258. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 51; 107 ALR 1 at 36. 259. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 51; 107 ALR 1 at 36 per Brennan J. 260. Palmer, ‘Aboriginal Land Ownership Among the Southern Pitjantjatjara of the Great Victorian Desert’ in McRae et al, Indigenous Legal Issues: Commentary and Materials, note 20 above, p 90. 261. Mabo v Queensland (No 2) (1992) 175 CLR 51; 107 ALR 1 at 36 per Brennan J. 262. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [301]. 263. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1. 264. Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129. 265. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [477]. 266. Another example of an interest that can be alienated in limited circumstances only (eg, pur autre vie), but still remains a property interest, is a life estate. See B Edgeworth, C Rossiter, P O’Connor and A Goodwin, Sackville and Neave Australian Property Law, 10th ed, LexisNexis Butterworths, Australia, 2016, p 171. 267. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [89]. 268. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [89]. 269. One of these benefits is that compensation would flow on its loss. This issue is discussed later: see 4.50.

270. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [82]. 271. Bartlett seems to favour a proprietary analysis of native title: Bartlett, Native Title in Australia, note 40 above, Ch 17. Note also the view of Brennan J in Mabo v Queensland (No 2) (1992) 175 CLR 1 at 58–62; 107 ALR 1 at 42–5. 272. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [90]. 273. See Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113. 274. This is the approach adopted in Brennan J’s judgment in Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1, and implicitly followed by the great majority of subsequent commentators and judgments. See, especially, his discussion of the recognition and enforcement of native title by the ordinary courts at CLR 58–62; ALR 42–5 of that decision. 275. Webber, ‘Beyond Regret: Mabo’s Implications for Australian Constitutionalism’, note 1 above, p 61. 276. Webber, ‘Beyond Regret: Mabo’s Implications for Australian Constitutionalism’, note 1 above, p 61. 277. D Sweeney, ‘Fishing, Hunting and Gathering Rights of Aboriginal Peoples in Australia’ (1993) 16(1) UNSWLJ 97 at 104. 278. M Harris, Native Title in Australia — the Frustration of Indigenous Aspirations, paper presented to the Law and Society Conference, Central European University, Budapest, Hungary, 4–7 July 2001. 279. For a discussion of incommensurability, a concept related to the process of interpretation of Indigenous traditions and customs, see P Fitzpatrick, ‘Passions Out of Place, Incommensurability and Resistance’ (1995) 1(1) Law and Critique 96. 280. Strelein, ‘Conceptualising Native Title’, note 249, at 97. 281. Bartlett, Native Title in Australia, note 40 above, Ch 17; R Bartlett, ‘The Proprietary Nature of Native Title’ (1993) 6 APLJ 1; K McNeil, Common Law Aboriginal Title, Oxford University Press, Oxford, 1989; D Rose, ‘The 10 Point Plan — Its Constitutional Validity’ (1998) 17 AMPLJ 216 at 225; K Gray and S Gray, ‘The Idea of Property in Land’ in S Bright and J Dewar (eds), Land Law: Themes and Perspectives, Oxford University Press, Oxford, 1998. 282. N Pearson, ‘Concept of Native Title at Common Law’, Land Rights Past Present and Future, Proceedings of the Conference on 20 Years of Land Rights, Northern and Central Land Councils, Canberra, 1991, p 118. 283. With the exception of Kirby J. 284. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [14]. 285. Clunies-Ross v Commonwealth (1984) 155 CLR 193 at 202; 55 ALR 609 at 612. 286. Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 285. 287. Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 349. 288. For a more detailed analysis of this and other points concerning compensation, see Bartlett, Native Title in Australia, note 40 above, Ch 28. 289. See Georgiadis v Australia and Overseas Telecommunications Corp (1994) 179 CLR 297 at 314 and 319– 20; 119 ALR 629 at 633–5 and 639; Bartlett, Native Title in Australia, note 40 above, p 351. 290. S Brennan, ‘Native Title and the “Acquisition of Property” under the Australian Constitution’ (2004) 28 MULR 28. See also C Winnett, ‘“Just Terms” or “Just Money”: Section 51(xxxi),

Native Title and Non-Monetary Terms of Acquisition’ (2010) 33 UNSWLJ 776–807. It should be noted that this view is not affected by the decision in Wurridjal v The Commonwealth of Australia (2009) 237 CLR 309, dealing with the question as to whether leasehold interests had been compulsorily acquired under legislation implementing the 2007 ‘Northern Territory intervention’. The interests that were held by the majority to have been acquired under the legislation (and which another majority held had been compensated for on just terms) were explicitly said not to be ‘native title’ interests, but interests held under other specific land rights legislation. For comment on this decision, see M T Stubbs, ‘The Acquisition of Indigenous Property on Just Terms: Wurridjal v Commonwealth’ (2011) 33 Syd LR 119. 291. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [11]. 292. Quoting Tucker v US Department of Commerce 958 F 2d 1411 at 1413 (7th Cir 1992) per Posner J. 293. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [236] per McHugh J, quoting himself and Gaudron J in Breen v Williams (1996) 186 CLR 71 at 115. 294. Perhaps the respect should arise from a desire to preserve doctrinal purity. 295. If the instances where native title was extinguished were reduced, the need for compensation for its loss would be reduced. 296. Webber, ‘Beyond Regret: Mabo’s Implications for Australian Constitutionalism’, note 1 above, p 82. 297. Pearson, ‘Principles of Communal Native Title’, note 232 above. 298. Strelein, ‘Conceptualising Native Title’, note 249 above, p 98. 299. Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 at 178. 300. Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 at 178. See the discussion in Strelein, ‘Conceptualising Native Title’, note 249 above, p 102. 301. Fejo v Northern Territory (1998) 195 CLR 96 at 151. 302. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [12]. 303. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [12]. 304. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [95]. 305. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [95]. Note that Kirby J was in the majority but he expressed his views in a separate judgment. 306. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [95]. 307. Strelein, ‘Conceptualising Native Title’, note 249 above, p 103. 308. See the influential article by J E Penner, ‘The Bundle of Rights Picture of Property’ (1996) 43 UCLA L Rev 711; T W Merrill and H E Smith, ‘What Happened to Property in Law and Economics?’ (2001) 111 Yale LJ 357; the detailed symposium on the issue in (2011) 8(3) Econ Journal Watch: Scholarly Comments on Academic Economics, available online at . 309. Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ referred to the existence of the intersection in Fejo v Northern Territory (1998) CLR 96 at 128, and in Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [31], [39]–[42]. 310. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [85]. 311. Webber, ‘Beyond Regret: Mabo’s Implications for Australian Constitutionalism’, note 1 above, p

61. 312. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [580]. 313. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [580]. 314. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [582]. 315. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [578]. 316. Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900. 317. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 318. See Brown (on behalf of the Ngarla People) v State of Western Australia (No 2) [2010] FCA 498 at [66] per Bennett J: ‘There is no dispute that extinguishment can occur at common law and that common law extinguishment is not contrary to the [Native Title Act]’. 319. Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129. 320. Yanner v Eaton (1999) 201 CLR 351; 166 ALR 258. 321. Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129. 322. Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159. 323. Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 at 189. 324. Akiba v Commonwealth (2013) 250 CLR 209; Karpany v Dietman (2013) 252 CLR 507. 325. Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129; Fejo v Northern Territory (1998) 195 CLR 96; Yanner v Eaton (1999) 201 CLR 351; 166 ALR 258. 326. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [2]. For comment, see K Stoeckel, ‘Western Australia v Ward & Ors’ (2003) 25 Syd LR 255. 327. For more information about the claim, see the National Native Title Tribunal website at , and search for Ward. 328. Delgamuukw v British Columbia (1993) 104 DLR (4th) 470 at 670–2. 329. Ward v Western Australia (1998) 159 ALR 483 at 508. 330. Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 at [71]. 331. See also comments in Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 at [81]. 332. Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 at [684] point (7). 333. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [82]. 334. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [194]. 335. Western Australia v Brown (2014) 253 CLR 507. 336. Brown (on behalf of the Ngarla People) v State of Western Australia (No 2) [2010] FCA 498. See the conclusion that native title had not been extinguished on ‘non-developed’ areas: at [208]. 337. Western Australia v Brown (2014) 253 CLR 507 at [64]. 338. De Rose v South Australia (No 2) (2005) 145 FCR 290. 339. Western Australia v Brown (2014) 253 CLR 507 at [37] and [60]–[62]. 340. Queensland v Congoo (2015) 256 CLR 239. 341. Congoo (on behalf of Bar-Barrum People) (No 4) v Queensland (2014) 218 FCR 358.

342. This is the effect of s 23 of the Judiciary Act 1903 (Cth) in an appeal from a superior court of record. 343. For comment on the decision, see M Stephenson, ‘The Doctrine of Extinguishment: And Then There was Congoo’ (2016) 6 Property Law Review 3–26; Z Bush, ‘Queensland v Congoo: The confused reemergence of a rationale of equality?’ (2015) 39 UWALR 451–68. 344. Hayes v Northern Territory (1999) 97 FCR 32. 345. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1. 346. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [215]. 347. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [215]. 348. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [221]. 349. Fejo v Northern Territory (1998) 195 CLR 96. 350. Yanner v Eaton (1999) 201 CLR 351; 166 ALR 258 at 288; Fejo v Northern Territory (1998) 195 CLR 96 at 151 per Kirby J. 351. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 69–70; 107 ALR 1 at 51 per Brennan J; at CLR 110; ALR 83 per Deane and Gaudron JJ; at CLR 158; ALR 123 per Dawson J. 352. Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129. 353. For a detailed discussion of the Wik case, see 4.73–4.74. 354. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [366]. 355. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [368], [369]. 356. Wilson v Anderson (2002) 213 CLR 401; 190 ALR 313. 357. Western Australia v Brown (2014) 253 CLR 507. 358. Western Australia v Brown (2014) 253 CLR 507 at [45]; see also [52], [53], [55], [57] and [63]. 359. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 360. Following the decision, the Commonwealth Government announced that a consultative process would take place between the Commonwealth, the states and territories, Aboriginal and Torres Strait Islander organisations, and industry. The group would be chaired by the then Prime Minister and would work with an interdepartmental committee of officials. The committee came to be known as the IDC (Inter-Departmental Committee). One of the options for discussion was a statutory framework. 361. Western Australia v Commonwealth (1995) 183 CLR 373 at 470 found that it was only post-1975 titles that were at risk. 362. N Pearson, ‘The Law Must Dig Deeper to Find Land Rights’, The Australian, 8 June 1993, p 11, explored these competing approaches. 363. North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595 at 613. 364. Bartlett, Native Title in Australia, note 40 above, Ch 14; P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, pp 986–1028; M Perry and S Lloyd, Australian Native Title Law, Lawbook Co, Sydney, 2003. 365. Special measures are defined under s 8 of the Racial Discrimination Act in terms of Art 1, para 4 of the International Convention on the Elimination of All Forms of Racial Discrimination. 366. Bartlett, Native Title in Australia, note 40 above, p 47.

367. See Native Title Act 1993 (Cth) s 228, which defines ‘past act’ for the purposes of validation. 368. Native Title Act 1993 (Cth) s 7(2). 369. Commonwealth of Australia, Hansard, Senate, 16 December 1993, p 5455 (Senator Gareth Evans); quoted in Bartlett, Native Title in Australia, note 40 above, p 811. 370. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 58; 107 ALR 1 at 42. 371. Saibai People v Queensland [1999] FCA 158; Mualgal People v Queensland [1999] FCA 157; Hayes v Northern Territory (1999) 97 FCR 32. 372. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [94]. 373. Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [76]–[77] per Gleeson CJ, Gummow and Hayne JJ. 374. McHugh J expressed some personal doubt that this was in fact what Parliament had intended, but felt bound by the court’s previous decisions to accept this limited view of s 223(1)(c): see Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 422; 194 ALR 538 at [133]–[134]. For a detailed critique, see Pearson, ‘The High Court’s Abandonment of “The Time-Honoured Methodology of the Common Law” in its Interpretation of Native Title in Mirriuwung Gajerrong and Yorta Yorta’, note 159 above. 375. This did not occur seamlessly. For example, the Western Australian Land (Titles and Traditional Usage) Act 1993 (WA), which purported to extinguish any surviving native title in that state and replace it with statutory rights for the traditional use of land, was found to be unconstitutional in Western Australia v Commonwealth (1995) 183 CLR 373. Eventually, the Titles Validation Act 1995 (WA) was enacted, which validated past dealings inconsistent with native title. 376. See also Pt 8A of the Native Title Act, which sets up the Register of ILUAs. 377. For an overview of ILUAs and their operation, see Butt, Land Law, note 364 above, [25164]– [25168]; K Mackie, E Histed and J Page, Australian Land Law in Context, Oxford University Press, Melbourne 2011, pp 119–20. 378. See NNTT, Statistics: Current Applications (accessed 5 May 2017), . 379. Native Title Act 1993 (Cth) s 19ff. 380. Section 19 of the Native Title Act applies the provisions of ss 15–16 of the Act, dealing with Commonwealth Acts, to analogous state Acts. 381. Native Title Act 1993 (Cth) s 229. 382. Native Title Act 1993 (Cth) s 230. 383. Native Title Act 1993 (Cth) s 231. 384. Native Title Act 1993 (Cth) ss 15(1)(d), 232. For the ‘non-extinguishment’ principle, see s 238 of the Act. 385. For an overview of the validation provisions, see G J Neate (ed), Native Title Service, LexisNexis Butterworths, Australia, looseleaf, [1680.30]ff. 386. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 387. Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129. 388. See the Native Title Amendment Act 1998 (Cth).

389. See G Griffith, The Native Title Debate: Background and Current Issues, New South Wales Parliamentary Library Research Service, Briefing Paper No 15/98, p 12. 390. Native Title Act 1993 (Cth) s 18(1). 391. Native Title Act 1993 (Cth) s 51(1). 392. Native Title Act 1993 (Cth) ss 17(2), 20 and 51(3). See also the ‘similar compensable interest test’ in s 240 of the Act. 393. Pearson, ‘The Law Must Dig Deeper to Find Land Rights’, note 362 above, p 11, explored these competing approaches. 394. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 101; 107 ALR 1 at 76. Arguments have been raised that the solatium aspect of compensation (by which, in some cases, a payment may be made for wounded feelings) may be relevant. 395. Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900. 396. Native Title Act 1993 (Cth) ss 17(2)(a), 17(3), 20 and 51(1). 397. See 4.75–4.81. 398. This serves as a contrast to compensation in the context of future acts, where it is envisaged that compensation may be paid by third parties. 399. Native Title Act 1993 (Cth) s 51(6). See Butt, Land Law, note 364 above, p 1007, [2599]. 400. Jango v Northern Territory of Australia (2006) 152 FCR 150; upheld on appeal in Jango v Northern Territory of Australia (2007) 159 FCR 531 with no real discussion of the compensation issues. Compensation is discussed in a paper by T Jowett and K Williams, ‘Jango: Payment of Compensation for the Extinguishment of Native Title’, presented to the AIATSIS Conference, Darwin, 23 May 2006; and in T Nau, ‘Looking Abroad: Models of Just Compensation Under the Native Title Act’ (2009) 93 Reform 18. 401. Jango v Northern Territory of Australia (2006) 152 FCR 150 at [39]. 402. Jango v Northern Territory of Australia (2006) 152 FCR 150 at [774]. 403. De Rose v South Australia [2013] FCA 988. For comment, see W Song, ‘What’s Next for Native Title Compensation: the De Rose decision and the assessment of native title rights and interests’ (2014) 8(10) Indigenous Law Bulletin 11–14. 404. Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900. 405. For commentary, see F Martin, ‘Native Title Compensation Awarded to Timber Creek Claimants in First Judgement of its Kind’ (Dec 2016) Native Title Newsletter 16–18; F Martin, ‘Compensation for Extinguishment of Native Title: Griffiths v Northern Territory Represents a Major Step Forward for Native Title Holders’ (2016) 8/27 Indigenous Law Bulletin 8–11. 406. Confusingly, of course, many of these ‘future’ acts are now in the past from the perspective of those who are dealing with the Act after the relevant provisions have commenced. 407. Discussed in more detail below at 4.75ff. 408. For a summary, see Perry and Lloyd, Australian Native Title Law, note 364 above, pp 32–3. 409. For more information see Perry and Lloyd, Australian Native Title Law, note 364 above, pp 169– 379; Butt, Land Law, note 364 above, pp 1014–26. 410. Note that this is s 24 ‘OA’, where O is the letter ‘O’, not the number ‘0’. It is to be found in Subdiv ‘O’ of Div 3 of Pt 2.

411. For a more detailed summary see Perry and Lloyd, Australian Native Title Law, note 364 above, p 34; and pp 172–5, Table 2.1, which contains a full list of the Subdivisions and their effects. 412. See Native Title Act 1993 (Cth) s 24AB. 413. Eg, future acts under Subdiv E, dealing with ILUAs (see s 24EB(3)), and future acts under s 24GB dealing with primary production activities (see s 24GB(6)). 414. Eg, where public works are erected under Native Title Act 1993 (Cth) s 24JB(2). 415. See Native Title Act 1993 (Cth) ss 43, 43A. 416. A counter-view claims that, after the introduction of the Native Title Act, there were many contested opinions, and the cases Re Waanyi People’s Native Title Application (1994) 129 ALR 100 (brought in the National Native Title Tribunal) and Wik Peoples v Queensland (1996) 63 FCR 450; 134 ALR 637 (in the Federal Court) contested the issue of exclusivity and pastoral leases. Hence, the Wik outcome, while contested, was not unexpected, and all parties should have been on notice of this possibility. 417. Mabo v Queensland (No 2) (1992) 175 CLR 1 at 69; 107 ALR 1 at 51. 418. Wik Peoples v Queensland (1996) 187 CLR 1 at 2 (headnote). This was a 4:3 split decision. 419. Wik Peoples v Queensland (1996) 187 CLR 1 at 155, 166; 141 ALR 129 at 208, 218 per Gaudron J; at CLR 123–4, 130; ALR 182–3, 188 per Toohey J; at CLR 168–9, 185–6; ALR 220, 233 per Gummow J; at CLR 243, 241 and 249; ALR 279, 283 and 284 per Kirby J. 420. Wik Peoples v Queensland (1996) 187 CLR 1 at 125–7; 141 ALR 129 at 184–5 per Toohey J; at CLR 185–6; ALR 233 per Gummow J; at CLR 249; ALR 284 per Kirby J. 421. Wik Peoples v Queensland (1996) 187 CLR 1 at 110; 141 ALR 129 at 172 per Toohey J; at CLR 149; ALR 204 per Gaudron J; at CLR 173–4; ALR 224 per Gummow J; at CLR 226; ALR 266 per Kirby J. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [78] confirms the position taken in the Wik case by stating that ‘the question is whether rights are inconsistent with the alleged native title rights and interests’. 422. For a more detailed account, see Bartlett, Native Title in Australia, note 40 above, Ch 4; and especially p 57, for a summary of the holding in the case. 423. Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129. In Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [474], McHugh J offers a strong criticism of the majority judgment in the Wik case, as does G Del Villar, ‘Pastoral Leases and Native Title: A Critique of Ward and Wik’ (2004) 16 Bond LR 29. 424. G Nettheim, ‘The Search for Certainty and the Native Title Amendment Act 1998 (Cth)’ (1999) 22(2) UNSWLJ 564 at 566. Nettheim discusses how concerns about the operation of the Native Title Act 1993 (Cth), from both sides of the political fence, had been aired before the Wik decision was handed down; however, the post-Wik era provided an ideal time for these to be dealt with legislatively. The government had also released an outline paper entitled ‘Towards a More Workable Native Title Act’ in May 1996, and followed up with an outline of proposed amendments to the Native Title Act in October 1996. 425. Bartlett makes this point in Native Title in Australia, note 40 above, p 65. 426. Senator Harradine held the balance of power in the Senate. The Act came into effect on 30 September 1998. 427. For a more detailed analysis of the Native Title Amendment Act specifically, see Bartlett, Native

Title in Australia, note 40 above, Ch 5. 428. Fejo v Northern Territory (1998) 195 CLR 96; 156 ALR 721. 429. Bartlett, Native Title in Australia, note 40 above, pp 65–6. 430. See s 249C of the Native Title Act for the definition of this term. 431. According to the common law, past acts were those that involved rights that were already in existence. 432. A non-claimant is usually a government or a mining or pastoral company that has an interest in knowing whether native title exists over certain land. There is a certain irony, however, in the fact that some recent non-claimant applications have been made by groups acting on behalf of Aboriginal people who need to establish a firmer title under state law by ruling out the existence of native title: see, eg, Hillig v NSW Native Title Services Ltd [2006] FCA 1184. 433. Or a state native title tribunal, or the Federal Court. 434. See J Litchfield, ‘Compensation for Loss or Impairment of Native Title Rights and Interests: An Analysis of Suggested Approaches’ (1999) 18(3) AMPLJ 253 (Pt 1), (2000) 19(1) AMPLJ 44 (Pt 2); J Sheehan, ‘Indigenous Property Rights: Towards a Valuation Methodology’ in Compensation for Native Title: Issues and Challenges, National Native Title Tribunal, 1999. 435. Griffiths v Northern Territory of Australia (No 3) [2016] FCA 900. 436. Negotiation was also a duty in respect of the compulsory acquisition of land for the purpose of grants to third parties. 437. Native Title Act 1993 (Cth) s 26(1)(c)(iii). Section 24MD(6B) sets out the negotiation rights of native title holders. 438. Native Title Act 1993 (Cth) ss 26A–26C. Low-impact exploration, prospecting, fossicking, smallscale opal and gem mining in existing opal and gem mining areas, as well as alluvial mining for gold and tin, are included. 439. Nulyarimma v Thompson; Buzzacott v Minister for the Environment (1999) 96 FCR 153; 165 ALR 621 (two cases, ‘different in nature and derivation’, were heard together) included argument that the Prime Minister, John Howard; Pauline Hanson, leader of the One Nation Party; and independent Senator, Brian Harradine, were responsible for Indigenous genocide through their support of the native title amendment. Buzzacott v Minister for the Environment argued that, in not declaring greater areas of Australia as world-heritage listed sites, the Minister for the Environment was responsible for Indigenous genocide. 440. See Bartlett, Native Title in Australia, note 40 above, Ch 5, for a more comprehensive treatment. The process of making a claim now entails the adducing of evidence concerning the pre-contact relationship of Indigenous people to the land, as well as consideration of the history of post-contact development and disposition of the land. 441. For an overview of recent legislative changes, see Mackie, Histed and Page, Australian Land Law in Context, note 377 above, pp 120–7. See also Bartlett, Native Title in Australia, note 40 above, Ch 10, where the author describes the theme of legislative amendments enacted between 2007 and 2014 as directed to ‘efficiency not equality’, attempting to make the current scheme more workable but not necessarily making it more equitable. 442. See Native Title Act 1993 (Cth) s 24JAA, introduced by the Native Title Amendment Act (No 1) 2010 (Cth) with effect from 16 December 2010. See comment on the views of various stakeholders in Mackie, Histed and Page, Australian Land Law in Context, note 377 above, pp 124–7.

443. The Report of the Committee was handed down on 9 November 2011. 444. Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1. 445. Pearson, ‘Concept of Native Title at Common Law’, note 282 above, p 118. 446. Djaigween v Douglas (1994) 48 FCR 535 at 541. 447. Commonwealth v Yarmirr (2001) 208 CLR 1; 184 ALR 113 at [11]. 448. For comment on the need to allow a broader role for the common law in development of native title, see L Strelein, ‘A Captive of Statute’ (2009) 93 Reform 16. 449. Australian Law Reform Commission, ALRC Report 126, note 188 above. 450. See L Strelein, N Duff and T Bauman, Commonwealth Native Title Connection Policy: Final Report, Native Title Research Unit, AIATSIS, Canberra, 2014 (accessed 30 May 2017), . 451. Western Australia v Ward (2000) 99 FCR 316; 170 ALR 159 found that the common law could only recognise native title rights and interests that involve physical use of the land. On appeal to the High Court, artworks on rock, for example, were said, to some degree, to answer the connection with land requirement. See Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [59]. 452. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [579] per Kirby J. 453. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [59] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 454. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [59] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 455. This is the view of Kirby J in Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [580]. 456. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [580]. 457. Such as the International Covenant on Civil and Political Rights, New York, 19 December 1966, ATS 1980, No 23; International Covenant on Economic, Social and Cultural Rights, New York, 19 December 1966, ATS 1976, No 5. See also K Howden, ‘Indigenous Traditional Knowledge and Native Title’ (2001) 24 UNSWLJ 60; Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [586] per Kirby J. 458. Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [586]. The impact of s 116 was discussed in the decision in Cheedy on behalf of the Yindjibarndi People v Western Australia [2011] FCAFC 100, although a very narrow view of the provision was articulated by the court there. 459. See Western Australia v Thomas (1996) 133 FLR 124 at 195. 460. M Lavarch, ‘Compensation for Ancient Rights’ in L Strelein, Working with the Native Title Act, Native Title Research Unit, AIATSIS, Canberra, 1998, p 96. 461. Note that there is a view that a solatium component in any valuation could deal with the issue of spiritual loss: see J Sheehan, Towards Compensation for the Compulsory Acquisition on Native Title Rights and Interests in Australia, paper presented to the Foundation South Pacific Land Tenure Conflict Symposium, University of the South Pacific, Suva, Fiji, 10–12 April 2002. 462. See Bartlett, Native Title in Australia, note 40 above, p 794. 463. Although s 51A is to be read subject to the ‘just terms’ standard, as noted above, it is suggested that it should still be repealed. It is an unnecessary inclusion.

[page 199]

Chapter 5

Possession and Adverse Possession Introduction 5.1 As discussed in Chapter 2, trespass to land is a legal wrong and, in some cases, will amount to dispossession of the owner. Nonetheless, although wrongful, the law recognises such dispossession as a title to land and calls it ‘possessory title’. As this title may be in conflict with that of the documentary title holder, it is also sometimes called ‘adverse possession’. Possessory title is not simply a parallel alternative to either old system title or Torrens title, which are dealt with in Chapter 7 and Chapter 8 respectively. Indeed, in the correct circumstances, a party may claim possessory title over either old system or Torrens title land. Possessory title is an alternative to documentary title and, as such, bears some similarity to native title, which also arises independently of documentation. Both possessory title and native title are forms of title characteristic of pre-literate societies that rely on custom and oral tradition. 5.2

As outlined in Chapter 3, land in Australia may be held by:

virtue of native title;1 the Crown; or private persons, who have received grants directly from the Crown, or who

can trace title to a Crown grant. Privately held land is held under either old system or Torrens title.2 If land is held under old system title, the true owner is ascertained by reference to a chain of title with a good root of title ultimately traceable, at least in theory, to the original Crown grant. [page 200] Where the land in question is held under Torrens title, ownership is established by virtue of a recording in the Torrens Register.3 By contrast, as noted above, possessory title arises without documentation and by virtue of possession. It is a type of title that, after satisfaction of the limitation period, may bar the documentary owner’s title.4 5.3 The significance of the concept of ‘possession’ was captured in stirring language by William Pitt the Elder (Lord Chatham) as recorded in Brougham’s Statesmen in the Time of George III in 1839, and quoted in Harrow London Borough Council v Qazi.5 Lord Chatham commented: The poorest man may in his cottage bid defiance to all the forces of the Crown. It may be frail — its roof may shake — the wind may blow through it — the storm may enter — the rain may enter — but the King of England cannot enter! — all his force dares not cross the threshold of the ruined tenement!6

5.4

As Lord Millett went on to observe in this case:

Although not unrelated to his rights of property, the poor man’s defiance of the King was not based on his title. The common law protects possession as well as title. A person who is in actual possession of land is entitled to remain in peaceful enjoyment of the property without disturbance by anyone except a person with a better right to possession. It does not matter that he has no title. A squatter can maintain a claim of trespass. His want of title does not justify the authorities in searching his premises without a search warrant. He cannot be evicted save at the suit of someone with a better right to possession, and even then that person must rely on the strength of his own title and not the weakness of the squatter’s.7

5.5 Accordingly, rights in land may be based on (a) ownership or (b) possession. In many cases, a party may be in possession and simultaneously enjoy rights by way of his or her ownership. Where this occurs, the law of possession and the law of ownership will effectively merge.8 In other cases, however, a person may be in possession without also being the owner. His or

her rights will be solely possessory in nature. Alternatively still, a person may own property but not be in possession of it, as is the case when an owner leases property to a tenant who goes into possession.

Historical Development of the Concept of Possession 5.6 In order to understand more fully why the law has been, and is still, willing to acknowledge (and at times favour) a title based on possession rather than documentation, it is necessary to examine the significance and historical development of the concept [page 201] of possession more generally.9 It is also helpful to acknowledge the interrelationship between the co-existing but often competing concepts of possession, ownership, property, estate and title.10 It has been observed that ‘[t]he subtlety of these linkages reflects a deep historic ambivalence as to whether “property” in land is constituted by the empirical reality of behavioural fact or by the official recognition of abstract rights’.11 The situation is probably best explained as a case of shifting sands in that the preeminence of possession (behavioural fact) over ownership (recognition of abstract rights) and vice versa, is constantly being played out and positions are susceptible to change and readjustment over time. Some of the contestation and disputation as to dominance may be linked to the historic availability of proprietary and possessory actions. Harpum et al conclude that the ‘essentially possessory character of land is a product of historical evolution and in particular the old forms of action’, and go on to comment that ‘[f]or some time after the middle of the twelfth century there were (at least in name) both proprietary and possessory actions, the former asserting title and the latter asserting possessory rights’; yet despite the competition between the two concepts (proprietary and possessory), those authors also observe that ‘[e]ven the proprietary (“droitural”) actions had a strong possessory flavour’.12

5.7 More recently, it has been observed that, in England at least, there has been a move away from reliance on interests which are based on the fact of possession, in favour of a ‘more modern view of property’ that creates entitlements of ownership under a state-administered computerised land registration system.13 To date, Australian law has largely resisted the recent English trend (although it does rely on a state-administered land registration scheme in the form of Torrens title).14 However, the modern Australian law on prescriptive easements perhaps suggests a judicial willingness to diminish the significance of possession as the basis of a right capable of over-riding a right based on registration.15 [page 202] At this stage, it is difficult to predict the future course of Australian law in relation to the pre-eminence of one concept over the other. However, for the present, possession remains a significant property law concept albeit that possession that is adverse to the documentary title holder, on one reading at least, undermines a key tenet of the Torrens system — that is, the sanctity of the Torrens Register. It is also worth noting that, beyond the possessory title context, the concept of possession continues to remain fundamental to many spheres of property law. For example, in the sphere of leases, it remains particularly relevant.16 It is for these reasons, among others, that it is helpful to explore the concept of possession in more detail.

Concept of possession 5.8 Although possession is a fundamental tenet of Anglo-Australian property law, it is not a term that has been neatly and succinctly judicially defined. Toohey J in Mabo v Queensland (No 2)17 described it as ‘a conclusion of law defining the nature and status of a particular relationship of control by a person over land’. Kevin Gray and Susan Gray put it similarly when they stated that ‘possession is simply a state of overall territorial control’.18 The High Court in Western Australia v Ward19 noted that the commonly

used term ‘exclusive possession’ involved an element of redundancy, stating: … possession that is not exclusive is a contradiction in terms, for the right of general control and exclusion is central to the concept of legal possession. … It is a pity that the term “exclusive possession” was ever used …20

5.9 The term ‘possession’ is sometimes confused with the term ‘occupation’. Although often related in practice, they are not synonymous. Occupation describes a physical presence and accordingly it is a question of fact. Possession, on the other hand, goes beyond mere physical occupation and emphasises the control a person has over land [page 203] (or a chattel).21 The relevant control is not accidental. It arises by virtue of application of a mental element (sometimes known as ‘animus’). Possession, therefore, involves a serious and deliberate attempt to bring the land or object under control, and that is why a friend who stays at one’s house overnight may be said to be in occupation but will not usually be in possession. Possession, then, is a conclusion of law, not fact. By parity of reasoning, a person may be in possession without actually occupying (ie, setting foot on) the relevant land. It has been observed: … [t]he fact that a lessee continues to pay the rent to the landlord is a fact which suggests that the lessee has not parted with possession. The fact that an occupant other than the lessee holds the keys to the premises, ie exercises physical control over the premises, is an indication to the contrary.22

Property, possession, ownership, title and seisin 5.10 The distinction between (a) property; (b) possession; (c) ownership; (d) title; and (e) seisin is complex. For example, an estate in land (an estate, as explained in Chapter 3, refers to the duration of a landowner’s right) indicates a type of property right.23 It has also been found historically to be derivative of one’s possession of land24 but, as Gray and Gray explain, a person who is in possession of land is not (except in one highly technical sense) in possession of a proprietary right. Possession and property are distinct

concepts.25 Those authors suggest that the difference between possession and property may be observed by recognising that: The animus which underlies “possession” of land is subjective to the occupier, whereas “property” in land is ultimately validated by some social or collective judgement about the legitimacy of the claim involved.26

[page 204] 5.11 Perhaps another way of considering the issue is to inquire whether title to land arises from the physical or behavioural reality of actually going into possession and exercising the requisite level of control over land; or, alternatively, by way of a set of socially accepted conventions and relations that become recognised as law and which include the concept of ownership. The debate has been said to be about whether ‘the character of property [is] ultimately physical or cerebral.’27 5.12 Seen in this light, possession is a ‘behavioural reality’,28 while ownership is a concept that only has meaning if it is supported by law.29 Hence, Elizabeth will be said to be in possession of a bicycle if we see her riding it, but we would have to know more about how she came to be riding it to know whether she also owns it. She may have borrowed the bicycle (bailment). She may have hired it (lease) or may have stolen it (theft). Hence, ownership is determined by the conditions and acts leading to possession and depends on whether the law sanctions those conditions and acts as giving rise to ownership. Clearly, what will constitute ownership is dependent on what the law specifies at any given time. Clearly the law relating to ownership (and possession), therefore, is subject to change. That is why, at least to some extent, there was so much public outcry after the Mabo v Queensland (No 2) decision was handed down in 1992.30 As a result of that decision, many ‘owners’ of Torrens title land, for example, feared (wrongly) that the law granting them ‘ownership’ had changed, with the result that ownership vested in Indigenous claimants rather than in themselves. 5.13

The term ‘title’ is commonly used alongside the terms ‘possession’ and

‘ownership’. Title refers to the entitlement of an owner to assert his or her estate in land against all the world. Title to an estate such as a fee simple or life estate therefore affords the title holder the opportunity to exercise the range of rights associated with owning property. In relation to a fee simple or life estate, those rights include the right to: control; exploit, use or enjoy; and alienate. (As native title does not afford the title holder the opportunity to assert the incidents of ownership per se, ‘title’ is arguably not the correct term to describe the common law’s recognition of the relationship between Indigenous Australians and land/water.)31 5.14 Meanwhile, ownership in its ‘fullest sense’ has been said to ‘mean that the owner holds the land in tenure for an estate in fee absolute’.32 As explained in Chapter 3, tenure means the conditions and terms on, or ‘services’ by which, land is held; such as having to supply grain, holding the King’s head while he was seasick or paying money.) [page 205] Linking the concept of possession to title, Lord Millett noted that ‘possession’ may be upheld by a person who does not have (documentary) ‘title’.33 Further, protection of possession in more recent times has been enshrined in Art 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (European Convention on Human Rights) (while protection of property is enshrined in the First Protocol to the European Convention on Human Rights, not by Art 8).34 5.15 Another related concept is that of ‘seisin’, which is discussed in more detail below.35 In its simplest form, seisin means ‘possession’ and in early law the terms ‘possession’ and ‘seisin’ were applicable to both chattels and realty, such that it was acceptable to use them interchangeably and speak of the seisin of chattels and the possession of freehold land.36 5.16 Over time, the term ‘seisin’ became reserved for realty only and, in particular, for freehold land.37 Seisin, therefore, came to mean possession of freehold title. Pollock and Maitland noted that a man was ‘in seisin’ of land when he was ‘enjoying it or in a position to enjoy it’.38 Seisin existed

independently of ‘right’ and, hence, even a thief could have seisin.39 Seisin, therefore, reflected fact but the existence of seisin was presumptive evidence of entitlement (title) to land. From the 15th century onwards, seisin was necessary to pass freehold land and a conveyance of freehold (a feoffment) required livery of seisin.40 It has been noted that ‘[s]eisin was … the root of all titles’.41 Against this background, it is perhaps not surprising that Salmond observed that ‘[i]n the whole range of legal theory … [there is] no conception more difficult than that of possession’.42 [page 206]

Possessory actions Development of the writ system 5.17 In English law, the roots of possessory title lie in circumstances, where proprietary and possessory actions for the recovery of land have historically existed alongside each other.43 ‘Real actions’, as they were known, were proprietary in nature and available only to freeholders. Pursuing them was a very time-consuming process. The drawbacks associated with real actions included: the plaintiff needed to establish ownership by virtue of inheritance; tenants in chief were the only class of people able to use the actions; and adjudication was most commonly determined by ‘trial by battle’.44 5.18 The real actions available in the feudal or seigneurial (local) courts were usually commenced by way of verbal complaint. That system worked effectively enough in small local communities, but, to support the operation of the King’s national courts, a new system for commencing an action needed to be developed.45 The writ system served this purpose. It involved the sheriff acting as the local agent of the King, by informing the defendant that his or her presence was required in order for the matter to be heard in the King’s court. The instructions that the sheriff received were in the form of a writ;

hence, the writ came to mark the commencement of an action. Writs had to be purchased and there was not one general writ for all complaints but, instead, a series of individual writs, which had their own procedures and remedies. As newer, more efficient writs were developed, litigants sought to bring their claims under those writs, but this was not always easy to do, because each writ required the facts of the plaintiff’s case to comply exactly with the rigid requirements of the writ itself.46 Without complete compliance, the writ simply could not be used. 5.19 For example, the main writ used in regard to recovery of land was the praecipe in capite writ.47 This writ fell into the broad category of ‘writs of right’ and was used to commence litigation in the royal court. Initially, it could be used only by a tenant in chief who had been disseised of his or her land.48 It operated by requiring the disseised party to claim ownership of the land as his or her ‘right and inheritance’. Trial was by battle so, naturally, this form of resolution had its drawbacks for the faint-hearted. However, later the dispossessed could seek to have the dispute with the defendant resolved through either [page 207] the traditional means of trial by battle or, alternatively, by a group of 12 local knights who were summoned by the sheriff to decide the matter.49 5.20 The alternative method (known as the Grand Assize), took place in the King’s court and represented an important aspect of the King’s attempts to establish the supremacy of the royal courts.50 The King’s determination to establish the supremacy of his courts rather than that of the seigneurial courts was also seen in his attempt to expand, beyond tenants in chief, the class of people eligible to use the praecipe in capite writ. The wider the net of people who could use the King’s courts, the more central to justice those courts would become. Although, initially, attempts at extension of the writ were thwarted,51 it became established that proceedings relating to land had to be commenced by the issuance of a royal writ. This, in turn, had the effect of

sending a firm message to all subjects that justice began with the King even though the seigneurial courts retained their decision-making powers.

Assizes 5.21 Over time, the focus of the questions associated with actions relating to the recovery of land began to change and, in the process, the emphasis shifted from a concern about who was the owner, and therefore had a better right, to whether a person in possession had been dispossessed.52 5.22 This shift away from ownership was reflected in the introduction of the remedy known as the ‘possessory’ assize;53 a remedy that was notable in a doctrinal sense for the emphasis it placed on possession.54 The possessory assize was commenced in the King’s courts but its use was not limited to tenants in chief. The key question was whether the defendant unjustly disseised55 the plaintiff. The answer to the question was decided by a group of witnesses and, without the need to establish ownership, the remedy could operate efficiently and provide results quickly. Accordingly, it assumed great popularity. 5.23 The assize of mort d’ancestor is an example of the possessory assize.56 Pursuant to that action, the relevant question was whether the defendant had taken possession before [page 208] the heir of the freeholder, who had died in possession of the land. The procedure necessary to answer this question did not require any inquiry of whether the ancestor was the owner. Instead, what was at issue was whether the defendant had dispossessed the plaintiff of a freehold estate unjustly and without judgment from a court.57

Better possession 5.24 From the above discussion, it can be seen that what lay at the core of resolution of these disputes was which party had the better possession or, put another way, whose possessory title was superior. As a result, both the importance of possession and the relativity of titles became embedded in land

law. Initially, the concepts were woven into the law in the language of seisin.58 Where the plaintiff lost seisin, he or she gained a right of entry, which in turn permitted the plaintiff to recover possession if the plaintiff could demonstrate that he or she did, in fact, have a better right to seisin. Broadly speaking, a better right to seisin was established by earlier seisin.59 5.25 The attack on the seigneurial court’s jurisdiction in regard to dispossession of land (an attack which was assisted greatly by the possessory assizes) continued with the introduction of the writs of entry.60 These writs married aspects of the writs of right to the concept of possession, alleging that the tenant had a flawed title on which his or her entry was based.61

Seisin 5.26 Another important development in the history of possessory actions was the introduction of the writ de ejectione firmae or ejectment, which was really a personal action based on the writ of trespass. It was an action available for the recovery of possession, as opposed to seisin. The possession/seisin concept mentioned earlier (at 5.16) may be elaborated on thus. Possession can be enjoyed by someone using the land and exercising control over it, as, for example, a leaseholder. Seisin, although originally synonymous with possession,62 came [page 209] to represent a more complex concept than mere possession63 and eventually amounted to the possession of a freeholder.64 The distinction between seisin and possession, which emerged by the late 15th century,65 is grounded in the different incidents that attached to seisin, on one hand, and possession, on the other. The incidents of seisin (and especially the conditions under which seisin could be recovered) were protected by the real actions, whereas the incidents of possession were protected by personal actions.66 Seisin could be acquired by: taking possession of land by virtue of a Crown grant;

taking possession through inheritance from a person who was seised of the land at the time of his or her death; disseising another; or later by receiving a conveyance according to the requirements of livery of seisin.67 5.27 A leaseholder in possession did not have seisin and, if dispossessed of land, he or she was unable to access the real actions, the possessory assizes and the writs of entry. His or her interest was regarded as personalty (compare with realty) and, consequently, he or she could not recover possession.68 However, in the 15th century, the common law attempted to redress the unfairness suffered by dispossessed leaseholders through the development of [page 210] the action of ejectment.69 As a result, a lessee (who had no seisin) became able to recover possession. 5.28 Freeholders also came to see the benefits of this action and, eventually, by a complicated system of pleading involving the fictitious characters John Doe and Richard Roe, the action of ejectment, with its emphasis on possession, came to be the preserve of freeholders as well.70 (Although the pleadings were complicated, the action itself operated to provide a fairly simple means of recovering land.) Ejectment did not, however, develop into a complete replacement for the real actions before their abolition in 1833, because ejectment was dependent on a right of entry and some freeholders had only a right of action.71 Later still, the Common Law Procedure Act 1852 (UK) replaced the action of ejectment with the ‘action to recover possession of land’, which permitted a pleading in ordinary English. Nowadays, in New South Wales, actions for the possession of land may be brought by way of s 20 of the Civil Procedure Act 2005 (NSW) in conjunction with the Uniform Civil Procedure Rules 2005 (NSW).72 Despite statutory modifications, a form of right and remedy, which had possession at its core, became embedded in our legal system.

5.29 This was acknowledged by Toohey J many years later in Mabo v Queensland (No 2) (Mabo (No 2)), when he said: So long as it is enjoyed, possession gives rise to rights, including the right to defend possession or to sell or to devise the interest. A defendant in possession acquires seisin even if possession

[page 211] is tortiously acquired. That is, a person in possession has an estate in fee simple in the land; it is this interest on which a defendant in an action for ejectment could rely. The disseisee loses seisin and acquires a right of entry in its stead. A possessor acquires a fee simple estate because the fullest estate known to the law is presumed until a lesser estate is proved.73

Mabo (No 2) also arguably assisted in broadening what might amount to possession74 because since that case, entry onto land in order to perform an Indigenous ceremony, or to hunt or fish, may potentially be interpreted as amounting to possession. These acts go beyond what were traditionally thought to be evidence of possession.75 5.30 Seisin may still technically form the basis of old system title in Australia but it does not form the basis of Torrens title, where registration (pursuant to statute) lies behind the formation of title.76 Under old system title, vendors of land do not have to demonstrate that they are the absolute owners of land.77 Instead, purchasers take a title on the basis that there have been no challenges to the title which is offered by the vendor, within a reasonable period of time. In New South Wales, that period of time is now set by statute at 30 years.78 Hence, both under old system title and Torrens title, the relativity of titles is important, rather than any notion of absolute title.

Ejectment and Possession 5.31 Having discussed the background to the action of ejectment above, it is helpful to return to that action in order to understand better the concept of possession. This is so even though the action of ejectment is no longer in use.

Need to establish ownership? 5.32

Historically, controversy has surrounded the basis on which an action

of ejectment could be brought. Although the action was developed to assist the dispossessed leaseholder, one influential view was that a plaintiff wishing to bring an action to recover land had to establish the probability that he or she was the owner.79 This view was favoured by [page 212] Professor Holdsworth, and Doe d Carter v Barnard is authority for the proposition.80 In that case, Robert Carter’s son, John, entered into adverse possession of his father’s land in 1816.81 By 1836, John had statute-barred his father, and hence Robert had no title to pass to Barnard. When John died, his widow, Mary, took an action for recovery of the land against Barnard, who evicted her. Her action was lost because, to sue in ejectment, Mary had to prove that she had the best right to possession in all the world. As she was merely a widow, her right to possession (of what had been John’s land) was defeated by John’s (male) heir. Accordingly, this case is relied on by supporters of the jus tertii plea. See 5.47.

Need to establish a better right to possession? 5.33 An alternative, and more convincing, view suggests that the plaintiff in an action for ejectment need only establish that he or she had a right to immediate possession that was better than that of the defendant.82 Accordingly, this superior right to immediate possession could be established by demonstrating that at some earlier point the plaintiff, or someone through whom the plaintiff claimed, had been in possession, and that the rights which arose by virtue of previous possession had not been voluntarily surrendered on terms that would result in the plaintiff having lost his or her right to immediate possession. 5.34 Asher v Whitlock83 is authority for the latter view; that is, that to sue in ejectment a plaintiff does not have to establish ownership (through a documentary title) but rather need only establish a better right to possession than the defendant. The decision, therefore, reinforces the concept of the relativity of title.

5.35 The effect of that judgment was to uphold the principle of hereditary squatters. As a result, Williamson, who was in possession adverse to the lord of the manor (the documentary title holder), was able to pass his interest, via his will, first to his widow, Lucy, and later to his daughter, Mary Ann. Mary Ann, in turn, was able to pass her interest to her own heir, Mrs Asher.84 The dispute was between Lucy’s second husband, Whitlock, who had come into possession of the land after Williamson’s death, and Asher, both of whom sought possession of the land. The plaintiff, Asher, was successful. [page 213] 5.36 The main ground for Cockburn CJ’s decision was that Williamson’s possession for any period would have been protected against all but someone who could prove a better right stemming from earlier possession or documentary title. According to Cockburn CJ, Williamson’s possession entitled him to bring an action in ejectment. As observed, the court also held that the rights generated by Williamson’s possession were transferable by will or inter vivos. Inherent in Cockburn CJ’s judgment is his view that, by 1865, possession had become equivalent to seisin. Mellor J’s view is almost the same as that of Cockburn CJ, except that he believed that in 1865 the plaintiff still needed to establish earlier unabandoned seisin (rather than possession) to bring an action in ejectment. Mellor J thought that earlier possession was prima facie evidence of earlier seisin. It is noteworthy that he did not say that earlier possession was prima facie evidence of ownership. 5.37 Despite the fact that Asher v Whitlock85 did not actually raise the jus tertii,86 the case is commonly referred to as support for the proposition that the jus tertii is not applicable to land. The reasoning behind this view is that, although the lord of the manor (the documentary title holder) had the best title to the land in 1865 when the action was brought,87 (because he was not statute-barred until 1870) the court still found in favour of the plaintiff, Mrs Asher, and did not find against her although a third party (the lord of the manor) had the best title. 5.38

Allen v Roughley88 is another significant case on the issue of possession

and ejectment although, technically, the court’s words on this issue remain obiter because the case was ultimately decided on the trust point.89 In this case, Plunketts’ land, as it was known, was granted by the Crown to Turner in 1823, but there was a break in the chain of title until another dealing, a mortgage between the Plunketts and Hyland, was recorded in 1877. In 1880, the land was jointly conveyed by the Plunketts and Hyland to Cusbert. Although Cusbert could not demonstrate that he had good title to the land because of the breaks in the chain, he nevertheless sought to pass his interest by way of testamentary disposition. In 1950, Roughley, a co-trustee under the will, sought a declaration that the land in question was part of the land held on trust under Cusbert’s estate. If it were, it should pass according to that will. [page 214] 5.39 Cusbert’s will devised Plunketts’ land and the homestead block to the use of his son, William, for life, and then to his issue; but, in the words of the court, ‘William died a bachelor’, which the court interpreted as also meaning that he died childless.90 In this event, the will required that the land be sold and the proceeds divided among all the testator’s children. The original trustees appointed under the will died and two new ones were appointed. One was Allen (who was married to Cusbert’s daughter, a beneficiary under the will). The other was Roughley. 5.40 Allen had gone into possession of the land in 1898; that is, well prior to Cusbert’s death in 1942. William had also lived with Allen (and Allen’s wife, his sister) from about 1898 to 1900 on the homestead block. Indeed, William lived on and off at the homestead for some years before he moved more permanently to a hut on Plunketts’ land, and finally back to the homestead in 1923. William died in 1942 and Allen stayed on in possession of Plunketts’ land, despite the fact that this was contrary to the will. 5.41 A dispute emerged between Allen and the beneficiaries in remainder under Cusbert’s will (who for ease of explanation may be regarded as William’s siblings). The matter was ultimately litigated as far as the High Court. Basically, the beneficiaries argued that they had a prior possessory

interest emanating from the will and that it defeated any later interest claimed by Allen. They claimed that, even if Allen were in adverse possession of the land, they were able to bring an action against him for recovery of possession because they had a period of 20 years from the date of William’s death in 1942, in which to do this and that period had not yet elapsed. Meanwhile, Allen argued that, as Cusbert’s interest had not arisen by virtue of either a documentary title or a period of adverse possession long enough in duration to statute-bar the true owner, it could not prevail against his own possessory interest.91 5.42 In the High Court, Allen’s own adverse possession claim was not pursued. Instead, Allen focused on the duration of Cusbert’s possession. He argued that, although Cusbert’s possession was sufficient for him to recover personally should a trespasser oust him, his possession was not sufficient to give him a proprietary interest that could be passed on by will. Possession would be sufficient to achieve this only if the possession had been for longer than the relevant statutory limitation period. This argument was largely based on the Holdsworthian proposition that mere possession for less than the statutory period would not permit the possessor to bring ejectment, subject to two exceptions.92 The first exception was that the immediate victim of a trespassory ouster could bring an action against the immediate perpetrator still in possession; the second was that a party permitted to take possession by another’s consent is estopped from denying that other’s title to recover the land, when the permission ceases.93 [page 215] The court found that even if Cusbert had a mere possessory title (ie, neither a documentary title nor a title gained by a period of adverse possession that was sufficient to bar the true owner), he was able to pass his possessory title to his trustees. It was more equivocal on what was required to establish a possessory title. 5.43 The judgments differed on the issue of the significance of possession. For example, Dixon CJ, Taylor and Williams JJ all saw possession as being

prima facie evidence of title, an approach that seemingly left it open to the defendant to demonstrate that best title lay in a third person (who was neither the plaintiff nor the defendant).94 Yet, Perry v Clissold had held that: It cannot be disputed that a person in possession of land in the assumed character of owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner. And if the rightful owner does not come forward and assert his title by process of law within the limitation period prescribed by the provisions of the Statute of Limitations applicable to the case, his right is forever extinguished, and the possessory owner acquires an absolute title.95

Applying this logic, the court found in favour of the possessor despite the fact that a tertius existed. 5.44 By comparison, Fullagar J’s judgment in Allen v Roughley is based on the view that possession is prima facie evidence of seisin.96 With this in mind, he went on to reject the Holdsworthian view (and uphold the Hargreavian view)97 by finding that the plaintiff need only prove that he or she has a right to possession that is superior to that of the defendant in order to bring an action in ejectment. In Fullagar J’s view, it is not necessary for the plaintiff to establish that he or she has a title that is good against all the world. Hence, his judgment is consistent with the position taken by Mellor J in Asher v Whitlock.98 It follows, then, that the plaintiff could succeed in ejectment by establishing that he or she, or someone whose rights he or she acquired, enjoyed unabandoned possession of any duration prior to that of the defendant or the person through whom the defendant claims. Such an approach permits an adherence to the concept of relativity of title and avoids [page 216] leaning too heavily towards absolute title.99 It also sits comfortably with the proposition put forward in Perry v Clissold, and referred to at 5.43, that: … a person in possession of land in the assumed character of owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner.100

5.45 Following Allen v Roughley, cases such as Spark v Whale Three Minute Car Wash (Cremorne Junction) Pty Ltd101 and Mulcahy v Curramore102 proceeded on the basis that the jus tertii plea was not a good defence. In so doing, they

(wisely) ignored the possibility left open by some of the judgments in Allen v Roughley that the defence may still operate in similar sorts of cases.103 5.46 Although, as noted above, the action of ejectment was abolished in New South Wales by virtue of the Supreme Court Act, cases dealing with the action have been discussed in order to explain and reinforce the importance of the concept of possession.104

Jus Tertii 5.47 The jus tertii (referred to above) is a defence that permits the defendant to argue that although the plaintiff’s right to possession may be better than that of the defendant, a better right still exists in a third party, the tertius. The existence of this better right will be fatal to the plaintiff’s case.105 The defence may arise in relation to actions concerning the recovery of chattels or interference with their possession, but it did not apply to an action concerning the recovery of land in New South Wales in Perry v Clissold.106 In that case, Clissold was in possession of land for 10 years. When the land was compulsorily acquired by the Minister of Public Instruction in New South Wales, Clissold’s executors sought a writ of mandamus compelling a valuation of the land so that compensation could be calculated. Perry, the defendant and the Minister, argued that Clissold’s executors could not succeed because [page 217] superior title to the land existed in a third party, the documentary title holder. The court rejected this argument and held that possession is title. It found that it could not have been the intention of the compulsory acquisition legislation to shake titles. The fact that a documentary title holder did exist (albeit an unknown one) and that the defendant had acquired ‘not merely the title of the person in possession as owner, but also the title, whatever it may have been of the rightful owner out of possession’ did not preclude the plaintiff from seeking compensation.107 5.48

Lord MacNaghten (in Perry’s case) went out of his way to distinguish

Doe d Carter v Barnard,108 commenting that the conclusion in Carter’s case was: … hardly consistent with the views of such eminent authorities on real property law as Mr Preston and Mr Joshua Williams. It is opposed to the opinions of modern text writers of such weight as Professor Maitland and Holmes J of the Supreme Court of the United States.109

Adverse Possession Definition 5.49 The possession-based title, which we have observed above, operates on the basis that earlier possession is afforded priority over later possession.110 Such an approach helps reduce the likelihood of ‘free-for-alls’ or mêlées whereby one party dispossesses another and is rewarded for that act by being privileged. The authorities that we have considered above also reveal how possession came to be treated as something that, of itself, was worthy of protection against all the world except for the true (documentary) owner. The doctrine of ‘adverse possession’ deals with the protection of possession even against the true (documentary) owner.111 5.50 Adverse possession is the principle that permits the documentary title holder’s interest to be statute-barred, in favour of the possessory interest, after the effluxion of a specified period of time.112 The doctrine of adverse possession, therefore, operates to block the title of the documentary owner. Hence, the effect of a successful adverse possession claim is to liberate the adverse possessor from the superior title of the documentary [page 218] owner.113 In this way the concept of relativity of titles, which is at the heart of common law property, remains intact because the extinguishment of the documentary owner’s cause of action has the effect of enhancing the adverse possessor’s title relative to that of the documentary title holder. It is worth reinforcing at this point that the dispossessed documentary title holder does not lose his or her interest immediately another person goes into adverse possession. The documentary title holder has a relatively long period

of time in which to bring a claim to recover possession. As discussed in the section on limitations, he or she has the relevant statutory period in which to bring a claim. 5.51 It is also worth noting that, in many of the older cases, the term ‘adverse possession’ had a more technical meaning than it bears today.114 Today, the term simply means that a person is in actual possession, without the consent of the documentary owner, and that the relevant statutory limitation period has begun to run against the documentary owner.115 It is used that way throughout this chapter.

Rationale 5.52 Why extinguishment of the documentary title holder’s interest should occur at all, and simply as a result of the duration and style of possession, is a contentious issue.116 To some commentators, allowing documentary title to be lost by way of the application of limitations statutes represents a form of legalised theft.117 To others, it raises human rights concerns in relation to the loss of property.118 To others still, it is a useful doctrine that: (a) represents an efficient mechanism for identifying who can deal with land; (b) encourages alienability; and (c) supports an alternative set of human rights concerns embedded in [page 219] land-use sharing.119 A range of policy considerations have lain behind the upholding of the doctrine.120 Some of these are examined in more detail below.

Sleeping on rights 5.53 It has been suggested that one reason to permit adverse possession claims is to discourage documentary owners from ‘sleeping on their rights’.121 An active use of rights is seen as encouraging the land’s potential through exploitation of it. However, as the documentary owner is able to sleep on his or her rights while the limitation period of 12 years is satisfied, it is arguable

that the doctrine of adverse possession does not actually serve to encourage greatly the owner’s use of his or her rights. Admittedly, beyond the 12-year period the consequences for the documentary owner are dire, but up until that point there is little active encouragement to avoid sleeping on rights.122 5.54 Furthermore, it is arguable that the view in favour of exploiting land is losing some of its potency in a political and social climate that is increasingly sympathetic towards sustainability principles. As society recognises the value of ‘living lightly on the land’, development is more likely to be closely scrutinised and less exploitation, rather than more, may increasingly be regarded as a favourable outcome.

The law’s acknowledgment of the actual situation 5.55 Another reason in support of the adverse possession doctrine is that the law has greater credibility when it reflects the truth. If an adverse possessor is in possession, rather than the documentary owner, there is a strong argument that the law should acknowledge this fact. If the reality of adverse possession is acknowledged, it also allows purchasers to be informed as to the quality of the title they take. The effect is to encourage stability.123 [page 220] This may be a powerful argument in regard to old system title where documents are often lost, yet it is arguable that the opposite is true in relation to Torrens land.124 Interests that exist outside the Register, such as adverse possession interests, could be said to undermine stability.125 5.56 However, in New South Wales this proposition may perhaps carry less force than in some jurisdictions. In New South Wales, an adverse possessor who accrues the requisite period of time necessary to satisfy the limitation period and bar the true owner’s title will not be held to have barred that owner’s title until the Register has been altered pursuant to s 45C of the Real Property Act 1900 (NSW). On this basis, it is perhaps arguable that in New South Wales, in relation to Torrens land, the law operates in a manner

that permits the Register to maintain its integrity while simultaneously allowing the adverse possessor to have his or her possession recognised.

Hardship 5.57 The hardship argument suggests that if an adverse possessor has been in possession for many years, paying the rates and taxes and improving the land, it would be unfair to deny him or her remedies for interference with that property indefinitely. Indeed, to deny rights and benefits would be to discourage exploitation of the land. However, the converse of this argument is that the documentary title holder suffers hardship on the eventual barring of his or her rights, and the very possibility of being statute-barred encourages the ‘acquisition’ of property by a means which involves going outside the market.126 For this reason, it has been suggested by some that separate rules should apply to inadvertent squatting and deliberate squatting; that is, ‘good faith’ squatting and ‘bad faith’ squatting.127 However, such dichotomisation represents a very blunt approach to the issue and, as the Indigenous experience demonstrates, the issue is quite challenging. To explain, on one analysis at least, European ‘settlement’ and the development of Australia could be said to have been founded on ‘bad faith’ squatting on Indigenous land. 5.58 These diverse policy considerations demonstrate that the rationale for adverse possession is complex, disparate and inconsistent. It is based on divergent policy [page 221] considerations that presently seem to favour ease of conveyancing and the reduction of hardship.128 McHugh J summarised many of the relevant considerations, in relation to a statutory limitation, when he stated: The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them …

The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.129

5.59 Nevertheless, judges such as Neuberger J in JA Pye (Oxford) Ltd v Graham130 have colourfully expressed distaste for the concept of adverse possession (a concept that is dependent on the operation of a limitation period), describing it as ‘draconian to the owner, and a windfall to the squatter’.131 Yet, the appellate court in Pye’s case upheld the doctrine and went on to find in favour of the adverse possessor.132 More recently in New South Wales, Tamberlin JA in Bridges v Bridges reminded us that doctrine is based on an attempt to serve the welfare of society. His Honour stated: A limitation period should not be seen … as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated.133

Adverse possession and human rights 5.60 As observed above in recent years, human rights law has been found to intersect with the doctrine of adverse possession.134 Such an intersection has permitted the preservation of human rights to be used as a rationale for the dismantling, or at least cutting back, of the doctrine of adverse possession in relation to registered land. When [page 222] J A Pye (Oxford) Ltd took its claim to the European Court of Human Rights, the intersection of human rights and adverse possession was raised directly.135 5.61 The European case followed JA Pye (Oxford) Ltd v Graham136 (discussed in more detail at 5.94), an English case that applied the English domestic law of adverse possession to a situation where a licensee for a term stayed on in possession after the expiration of his licence. The relevant domestic law (which has since changed)137 did not require the person continuing in possession after the expiration of the licence to inform the documentary owner that time was accumulating towards satisfaction of the

relevant limitation period; time that would consequently cause the documentary title holder’s interest to be barred. 5.62 Domestically, JA Pye (Oxford) Ltd v Graham went on appeal to the House of Lords.138 That court found in favour of the adverse possessor;139 a decision that caused the documentary owner (Pye) to lose its land without compensation. In response to the House of Lords’ decision, the documentary owner mounted a case against the United Kingdom Government, in the European Court of Human Rights (ECtHR), claiming that the result in the House of Lords’ decision was in contravention of Art 1 of Protocol 1 to the European Convention on Human Rights (1950), because the decision deprived the company of its property. It sought compensation from the government for its loss. The ECtHR case, which was also appealed (in this case, to the Grand Chamber), is known as JA Pye (Oxford) Ltd v United Kingdom.140 5.63 In the 2005 decision of JA Pye (Oxford) Ltd v United Kingdom,141 the majority of the ECtHR found that the ‘domestic rules on adverse possession … [were] incompatible with Article 1 of Protocol No 1’ of the Convention for the Protection of Human Rights and Fundamental Freedoms (the European Convention on Human Rights) and that the loss of Pye’s land was not in the public interest because it was registered land.142 Had that position not been overturned by the Grand Chamber of the ECtHR, any future English adverse possession claims that related to registered land would need to have been limited to: [page 223] claims that were ‘in the public interest and subject to the conditions provided for by law and by the general principles of international law’;143 and claims that demonstrated a legitimate ‘control [of] the use of property in accordance with the general interest’, if they were to comply with the European Convention on Human Rights.144 The 2005 ECtHR decision left the United Kingdom Government in a

vulnerable position, potentially being liable for future adverse possession claims brought under the Law of Property Act 1925 (UK). Decisions of the ECtHR do not have a direct effect on English courts but ss 2 and 3 of the Human Rights Act 1998 (UK) require courts to take into account decisions from the ECtHR when determining a case in which a Convention right145 has been raised. There is also an obligation to interpret domestic legislation consistently with the European Convention on Human Rights (ECHR). A common approach is for the ECtHR to hold that there has been a violation of a Convention right, and then create an obligation on the state to make just satisfaction for that violation: satisfaction that is usually made in terms of compensation under Art 41 of the ECHR. The ECtHR does not operate by requiring that the state change its legislation, although in practical terms, legislative change is commonly the result of its decisions because states wish to avoid future claims for satisfaction. (In JA Pye (Oxford) Ltd v United Kingdom,146 the ECtHR reserved a decision on just satisfaction.) However, there was actually no need for the state (United Kingdom) to amend its domestic law on the basis that it would continue to accrue liability for violations under the ECHR in this instance, because the state had already amended its legislation and introduced the Land Registration Act 2002 (UK) (LRA (UK)). That Act introduced a new scheme in respect of registered land and adverse possession claims that substantially curtailed the ability of the adverse possessor to make a claim and so, on one analysis at least, better balanced competing interests. 5.64 In Pye’s case, the amendments outlined above in the form of the LRA (UK) proved technically unnecessary because, in 2007, the Grand Chamber of the ECtHR overturned the lower court’s 2005 decision and, hence, no just satisfaction was necessary. In a narrow majority of ten to seven, the Grand Chamber found that, although the documentary owner’s title was barred under the English domestic law, that law did not operate by way of a ‘depriv[ation of] possessions’ but instead by a ‘control of use’ of property in accordance with the public interest. If it did not operate by way of a ‘depriv[ation of] possessions’, then it did not come under Art 1 of Protocol No 1 to the ECHR, which states: Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one

shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding

[page 224] provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interests or to secure the payment of taxes or other contributions or penalties.147

5.65 The above discussion raises the question of how relevant the Grand Chamber decision in the ECtHR is to Australia. Australia is not a party to the European Convention on Human Rights148 but human rights law may still impact on Australian domestic law. Although international treaties, including those on human rights, are not part of Australian law, unless and except to the extent that their provisions are given effect in Australian law by legislation, Australian courts have been willing, for a number of purposes, to consider the provisions of such treaties and the case law applying to them.149 In other words, the provisions and the case law have had some persuasive value. It may also be the case that treaty-monitoring bodies will seek to raise issues about the applicability of ECtHR decisions in respect of treaties to which Australia is a signatory.150 It may also be the case that human rights charters, such as those in Victoria and the Australian Capital Territory,151 serve to stimulate interest in the further development of charters that go further to protect property. 5.66 However, JA Pye (Oxford) Ltd v United Kingdom is not only useful because it serves to raise the connection between the law of adverse possession and human rights at a doctrinal level, but the case is also useful because it serves to highlight how human rights, which are imbued with policy considerations, may be deployed to undermine the very [page 225] basis or rationale for certain laws in the first place; in this case, to deny the basis for the law of adverse possession.152 5.67

Yet, reliance on human rights as a basis to deny the validity of adverse

possession law may be somewhat double-edged. As we know, ultimately in Pye’s case the United Kingdom was not in contravention of Art 1 of Protocol No 1 of the ECHR under its old, domestic (English) legislation, and nor would it have been in contravention under its new, reformed domestic law, but reliance on human rights to undermine the doctrine of adverse possession may be problematic for other reasons, too. This is because there is a broad spectrum of human rights and while some human rights may be used to attack the rationale for adverse possession law, others may perhaps be used to support or uphold it. Accordingly, it may be possible that, in some circumstances at least, a human right to family and private life under Art 8 of the ECHR could be relied on as the basis for the continuation (as opposed to the denial or diminution) of adverse possession law. 5.68 Alternatively, perhaps Art 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), to which Australia is a party, could be relied on to uphold the continuation of the doctrine of adverse possession rather than wind it back. That article affirms that all people have a right to adequate housing. It recognises ‘the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing’ and states that ‘States Parties will take appropriate steps to ensure the realisation’ of that right. 5.69 Irrespective of which position we hold in relation to the rationale for, and reasonableness of, the doctrine of adverse possession, what the foregoing discussion demonstrates is that rights to property are not absolute rights and that their protection is limited by other concerns; a point which was made clearly in JA Pye (Oxford) Ltd v United Kingdom where the interests of society were considered. Whether or not adverse possession will be inconsistent with human rights will depend on the circumstances of the legislation and the policy arguments supporting the deprivation.153

Source of adverse possession rights 5.70 The source of adverse possession rights is established by the conjunction of common law and statute. The common law establishes the principle of possessory title itself and what amounts to adverse possession,

while statute determines the limitation period154 after which the title of the documentary owner is barred.155 The common law, [page 226] through Asher v Whitlock,156 demonstrated that more than one party may have a legal fee simple interest in the same property and that a legal fee simple interest may be created as a result of possession.157 Another line of authority has established what amounts to factual possession.158 5.71 Meanwhile, s 27(2) of the Limitation Act 1969 (NSW), which came into effect in 1971,159 sets the limitation period at 12 years in New South Wales, while s 27(1) states that the title of the Crown cannot be barred until 30 years of adverse possession have elapsed.

Adverse possession and the Crown 5.72 Although s 27(1) of the Limitation Act sets a 30-year limitation period in relation to the Crown, s 170 of the Crown Lands Act 1989 (NSW) provides that title to Crown land cannot be asserted on the basis of an adverse possession claim in a number of specified circumstances.160 The same section also prohibits the acquisition of title, by adverse possession, of certain ‘land of the Crown’. The legislation does not define this term and reference to the general concepts of ownership needs to be made to give it meaning, but ‘land of the Crown’ includes Crown land dedicated or reserved for a public purpose.161 5.73 The potency of s 170 of the Crown Lands Act can be seen in Townsend v Waverley Council.162 In that case, a man with the requisite animus possidendi (intention to possess) went into possession of land that formed part of Bronte Park (in Sydney). The land was adjacent to the house over which the man held documentary title. No certificate of title had been issued for the relevant park land after the land had been resumed to form part of the park.163 This meant that the land reverted to the Crown and, in so doing, was held ‘on behalf of Her Majesty’. Those words in turn brought the land within the expression ‘land of the Crown’, a term used in s 170(1) and (2) of the Crown

Lands Act. More particularly, it was land of the Crown that had been dedicated for a public purpose, pursuant to s 170(1)(c) of that Act. So, while the court recognised that there was possession ‘back to about 1920 — and certainly since October 1933’, and that it was ‘open, notorious, [page 227] exclusive and without acquiescence of the true owner, the defendant’, the plaintiff was unsuccessful in his claim because the relevant land, being ‘land of the Crown’ that had been dedicated for a public purpose, could not be the subject of an adverse possession claim.164 5.74 Claiming adverse possession against the Crown is generally regarded as being different from claiming adverse possession against a private citizen or company. One rationale for the difference lies in the fact that Crown land holdings are vast and an undue burden would be placed on the Crown if it had to be constantly vigilant about checking its holdings for evidence of adverse possession. This may be particularly so, where land has never been alienated or used by the Crown. However, as much Crown land is actually in use by government departments, for example, it may be the case that the task of checking is not as onerous as first anticipated. If so, that would suggest that a blanket rule against adverse possession claims against the Crown on the basis of overly burdensome checking responsibilities may not be well grounded. However, it cannot be denied that there are also powerful policy reasons against ever permitting Crown land to be the subject of adverse possession. These policies are based on the view that enough of the state’s land is already held privately and that no more should be permitted to pass out of the public domain, and so constitute a diminution of a valuable public asset.165 Weber v Ankin166 raised some of these concerns in relation to an adverse possession claim over a public lane. 5.75 But what of the reverse situation, that is, where the Crown possesses adversely against one of its citizens? Should the law uphold such possession and allow the true owner’s title to be extinguished by the Crown? Roberts v Swangrove Estates Ltd167 considered that issue in relation to a documentary title

holder who held land on the Welsh side of the Severn River. In that case, the court rejected the appellant’s argument that the Crown cannot commit a wrong against one of its subjects: a wrong that formed the basis of an adverse possession claim. Instead, the court found that there was no principle preventing the Crown from disseising a subject of his or her land. [page 228] Accordingly, if the statutory period had fully run against the documentary owner, the Crown may bar the documentary owner from asserting his or her title. It has been noted that there does not appear to be any Australian case dealing with this issue and nor do any of the Australian limitations statutes directly address the possibility of it.168

When does the limitation period start? 5.76 It is useful to conceive of the limitation period as rather like a clock ticking. In the case of adverse possession, the clock starts to tick from the time the documentary owner’s cause of action begins to accrue;169 that is, from when another person takes possession of the land adversely to the documentary owner. As noted above, in New South Wales, time runs for 12 years, after which the documentary owner is statute-barred and cannot bring an action for the recovery of his or her land.

What needs to occur for the cause of action to accrue? 5.77

The cause of action will accrue:170

when there is: –

dispossession, which involves the adverse possessor driving another off the land,171 and therefore involves ouster; or

–

discontinuance, which refers to the person in possession going out of possession and another coming into possession,172 and effectively means

abandonment by the documentary owner; and when some other person takes adverse possession.173 Hence, the land must be vacated and another person must enter into possession. In practical terms, many cases of barring by statute arise as a result of discontinuance because, where there is dispossession of the documentary title holder, the documentary title holder will usually institute proceedings within the limitation period to avoid being statute-barred.174 5.78 If a documentary owner who has been dispossessed, or who has discontinued possession, assigns his or her interest before the statutory period has expired, the assignee will take subject to the adverse possessor’s interest, because the assignee cannot be propelled [page 229] into a better position than that which the assignor was in.175 In the case of land subject to an interest in remainder, the cause of action will not accrue until the remainder falls into possession.176 So, although a possessor may hold adversely against a life tenant for 12 years and defeat the interest of the life tenant, the adverse possessor will not be able to defeat the tenant in remainder until the expiration of another 12 years of adverse possession (ie, until the full statutory period has run again) against the tenant in remainder. When the statute is running against the tenant in remainder, the tenant may bring an action for recovery of possession at any time. This scenario demonstrates how it is possible for an adverse possessor to be in possession for well in excess of 12 years without statute-barring the ultimate documentary title holder. 5.79 To take an example: If, by 2012, A had adversely possessed as against B (a life tenant under T’s will) for 12 years or more, then B’s life estate would have been extinguished. If, however, B died in 2017, C, who was entitled to a fee simple estate in remainder under T’s will, would have been entitled to possession in 2017. This is because C’s cause of action to recover the land from the adverse possessor, A, only began to accrue in 2017 when C became entitled to his or her interest under the will, on the death of B. A cannot

defeat C until 2029 (ie, 12 years after 2017). To reiterate: although an adverse possessor may hold adversely against a life tenant for as long as 12 years, the adverse possessor will not be able to defeat the tenant in remainder until the expiry of another 12 years of adverse possession against that tenant in remainder. Periods of adverse possession against the tenant in remainder cannot simply be added to prior periods of adverse possession against the life tenant so as to statute-bar the tenant in remainder. The clock must re-start against the tenant in remainder on the death of the life tenant. At any point during the statutory period, the tenant in remainder may bring an action for recovery of possession. 5.80 The situation is similar in regard to leases. A tenant under a lease may bring a claim for recovery of land against an adverse possessor in the 12-year period after the cause of action has accrued. The clock does not begin ticking against the lessor until the lease has expired and the lessor is able to go into possession again.177 Further, if an adverse possessor goes into possession against a tenant, but before the 12-year period has elapsed, and the landlord grants a new lease, the tenant under the new lease has another 12 years from the commencement of that new lease to assert his or her rights against the adverse possessor.178 [page 230]

What are the criteria for adverse possession? Introduction 5.81 In this section, we return to the concept of possession discussed at the beginning of this chapter. An adverse possessor must be able to demonstrate that he or she is in possession. Here, possession is comprised of: factual possession (demonstrating the requisite level of physical control); and the requisite animus possidendi. Further, a person cannot be in adverse possession if he or she has the permission or consent of the documentary owner to be in possession.179

The meaning of these requirements has proved rather difficult to pin down. There is no simple tick-list of behaviours or actions that will automatically lead to satisfaction of the requirements. Instead, courts have dealt with these elements on a case-by-case basis and been very influenced by context.

Factual possession 5.82 Factual possession requires ‘possession in the ordinary sense of the word’.180 Hence, a squatter181 must simply go ‘into ordinary possession of the land for the requisite period without the consent of the owner’.182 An adverse possessor must be able to demonstrate that he or she has taken factual possession and has not merely engaged in conduct which constitutes something less than or different from possession.183 [page 231] 5.83 There is no requirement that the possession be confrontational. As Lord Hope of Craighead observed: [The term, “adverse”] suggests that an element of aggression, hostility or subterfuge is required … But … this is not so. It is used as a convenient label only, in recognition simply of the fact that the possession is adverse to the interests of the paper owner or, in the case of registered land, of the registered proprietor.184

5.84 Meanwhile, Bowen CJ in Mulcahy v Curramore Pty Ltd185 stated that possession must be ‘open, not secret; peaceful, not by force; and adverse, not by the consent of the true owner’.186 Hence, possession should occur in such a manner whereby a documentary owner who ‘was reasonably careful about his or interest’ would notice it.187 5.85 Open Yet, despite these statements, factual possession has been established where the documentary title holder did not know of the adverse possession. In Rains v Buxton,188 for example, A occupied a cellar under the ground of B for 60 years. B had no knowledge of the occupation, but Fry J found that the requisite possession existed and that the relevant limitation period had been satisfied. Consequently, adverse possession was effective to block the title of the documentary owner. Similarly, in the United States, a party exploited the tourism potential of a cave under the ground of another’s

land for a period of 12 years. Although the documentary owner of the land where the cave existed continued to use the surface land, the court found that there had been sufficient possession of the underground space and satisfaction of other criteria to amount to adverse possession.189 Nevertheless, as has been observed ‘openness may strengthen a claim of adverse possession’.190 5.86 Peaceful Further, despite the requirement in Mulcahy v Curramore Pty Ltd that possession be ‘peaceful’,191 some cases have also found factual possession established where force has been used.192 According to some scholars, s 28 of the Limitation Act implicitly recognises that force may be part of factual possession because that section recognises that the clock will start ticking against the documentary owner when the owner ‘discontinues’ or is ‘dispossessed’. ‘Dispossession’, in turn, is based on the documentary owner being driven out; an act that includes some degree of force.193 If time starts on the basis of [page 232] forceful acts, surely force may also be used to maintain the ticking of the adverse possession clock. However, if, for example, a documentary owner is so intimidated by the force used that he or she is unable to enforce his or her rights through the courts, it may be the case that the possession will not be regarded as peaceable.194 5.87 Permission If the documentary title holder grants permission for the possession, the possession cannot be adverse. At times it may be difficult to establish whether the possession is inconsistent with the documentary owner’s title or whether it is possession by way of a lease or a licence, for example, and therefore is possession with permission.195 This is particularly the case in family situations where arrangements that are oral and unclear often emerge over time.196 In Richardson v Greentree,197 the court specifically examined how an agreement or arrangement between family members can negative the ‘adverse’ aspect of possession, because permission is taken to have been granted.198 In that case, Einstein J found that the defendant did not hold adversely but as the result of:

… an agreement or arrangement … which broadly provided that [the defendant] was given a licence to reside in the property until his death, on condition that he pay the rates in lieu of the rent and maintain the property in a reasonable condition.199

Einstein J went on to say that ‘the allegation of adverse possession is clearly negatived by the family relationship in the course of which the agreement or arrangement was entered into’ and the defendants failed to establish an intention ‘to exclude the whole world from the land or an intention to take possession from the documentary title holder’.200 5.88 In considering Richardson’s case, the court referred to Hughes v 201 Griffin, a case in which a plaintiff went to live with her husband in a house which the husband held under freehold title. Although the husband told his wife (the plaintiff), that the property was to be hers on his death, he executed a conveyance inter vivos in favour of his nephew. The wife knew nothing of the conveyance and, initially, nor did the nephew. Later, the husband went as far as offering to vacate the house in favour of the nephew. This offer was not accepted but, on the husband’s death, the nephew sought possession and the widow refused to vacate the premises. One of her arguments was that she took the property pursuant to her late husband’s will and that he was able to pass an interest to her via the will because he held adversely to his nephew. As we observed earlier in Asher v Whitlock,202 [page 233] possessory interests are devisable, but here the question hinged on whether the husband held adversely to the nephew. (He needed to do so in order to have an interest to devise.) The Court of Appeal held that the continued occupation by the husband was by virtue of a licence and not as a result of adverse possession. Einstein J, paraphrasing Hannan LJ in Hughes v Griffin, stated that: … the facts negatived an intention on the part of the husband to obtain a statutory title before his death and that it would be contrary to common sense to suppose that a man can become the owner under the Limitation Act 1939, when his whole intention was not to become such an owner.203

5.89

Although a contrary view was taken in Roy v Lagona,204 where a

foster daughter was found not to be in possession under any legal right, nor any right in equity, the more commonly held position is that possession by a person in a family relationship with the documentary owner will be regarded as in possession ‘with permission’. However, each case will turn on its facts. 5.90 In some cases, permission to possess might be given at the outset, but the permission may be revoked during the course of possession.205 This scenario has been known to arise when a party is in possession pursuant to a contract for sale but stays on in possession after the contract ceases to bind the parties.206 In such circumstances, Lakshmijit v Faiz Sherani207 found that the possession could only be adverse after the parties’ rights were no longer affected by the contract. 5.91 Sandhu v Farooqui208 dealt with a similar issue. There, the court demonstrated that a potential purchaser may acquire a possessory title even when permission is initially granted to take possession. This case involved a potential purchaser going into possession with the vendor’s permission but staying on in possession after it was clear that the sale of the property was never going to proceed. Key to the Court of Appeal’s decision was the issue of when the licence, under which the purchaser went into possession, ended. The court noted that if a purchaser goes into possession with permission, the purchaser must prove withdrawal of that permission before the adverse possession clock can begin to tick. Communication of an intention not to proceed to completion must be communicated between the parties although that communication may be implied from conduct and need not be express. 5.92 BP Properties v Buckler209 also considered the issue of permission. It found that it is possible for the documentary owner to grant permission of adversely possessed land at any [page 234] time before the expiration of the statutory period. This is the case even where the grant of permission is unilateral and unsolicited. The effect is not only to stop time accruing against the documentary owner, but also to bring about the loss of all benefit from previously accrued time. Concern has been expressed as

to whether this case represents good law.210 Given that the prevention of time running is often achieved by quite formal mechanisms, such as by way of institution of an action, the mere granting of permission may seem a somewhat lax method to achieve the same effect.211 Yet scholars such as Butt argue that halting the adverse possession clock from ticking merely by granting permission for possession is both logical and consistent with the law that prevents rights being acquired by way of prescription, once permission is granted.212 Nevertheless, a more conclusive method of stopping time would seem to be where the adverse possessor makes a written offer to lease, licence or buy the land, for example. Such an offer would act as a clearer affirmation by the adverse possessor of the documentary owner’s title.213 However, there may be cases where not even an offer to purchase will act as an acknowledgment of the documentary owner’s title, with the effect that time stops running. The English case of Ofulue v Bossert214 considered the question of whether a ‘without prejudice’ offer to purchase the relevant property, made by an adverse possessor to the documentary owner, amounted to confirmation of title. The court did not doubt that ordinarily an offer to purchase would affirm the title of the documentary owner and so stop the accrual of time against that owner. However, given that the offer to purchase in this case was made ‘without prejudice’, in the course of earlier legal proceedings, and could not, therefore, be admitted into evidence, the court held that the offer had no operative effect in affirming the documentary owner’s title. Hence, the adverse possessor had accumulated the requisite amount of time to bar the title of the documentary owner. 5.93 Range of variables, particular circumstances and physical control In commenting on what amounted to possession, the court referred to a range of variables, stating that it was necessary to take into account: … the character and value of the property, the suitable and natural mode of using it [and] the course of conduct, which a proprietor might be expected reasonably to follow with regard to his [or her] own interests …215

In a similar vein, Slade J in Powell v McFarlane216 commented that, in considering what amounts to physical control — an appropriate degree of physical control being an indication of factual possession — the court needed to have regard to a range of factors. It needed to consider ‘the nature and manner of the land and the manner in which land

[page 235] of that nature is commonly used and enjoyed’.217 In Powell’s case, neighbouring animals strayed on to land and grazed on it. To establish the requisite level of possession, the court found that the number of straying animals must be great enough to displace the original animals and it noted that the same degree of possession that is required to sue in trespass is needed to establish adverse possession.218 Slade J stated: Everything must depend on the particular circumstances, but broadly speaking … what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that noone else has done so.219

Hence, carrying out improvements or erecting buildings on the land would be strong evidence that the Slade J test had been satisfied.220 5.94 According to Lord Browne-Wilkinson, in JA Pye (Oxford) Pty Ltd v Graham, the factual possession aspect of adverse possession is established by ‘a sufficient degree of physical custody and control’.221 In that case, the Grahams held a grazing licence over Pye’s land. When the licence expired, the Grahams sought to extend it but Pye refused the request and the Grahams remained in possession. The Grahams used the land, not paying rent for it and not receiving a request from Pye to vacate. Had they been requested to pay rent, they said that they would have obliged. The Grahams requested another grazing licence but received no reply to their letter or any subsequent letter. They remained in possession for the statutory period and physically excluded Pye from the land by hedges and a lack of key to the road gate. They spread dung on the land, harrowed it and rolled it. They also overwintered dry cattle and yearlings in a shed on the land, which went beyond what they were permitted to do under the initial grazing agreement. These acts constituted factual possession for the purposes of establishing adverse possession. 5.95 Examples of adverse possession It is well established that what will amount to possession may vary from one situation to the next. Indeed, the court in Guggenheimer v Registrar of Titles observed that: The courts have not formulated specific rules or definitions that can be applied to any given fact

situation such that it is possible to say that the presence or absence of particular factors demonstrate the existence or absence of possession.222

5.96 As what amounts to adverse possession is so heavily dependent on the circumstances, the case law at times can seem somewhat disparate and unpredictable. In order to elucidate what may amount to adverse possession, some further examples of decisions are discussed below. [page 236] 5.97 In relation to some unoccupied marshy land, which was too overgrown to be easily used for agriculture and which, in fact, was a vacant building block, the court found that entering the land and engaging in recreational shooting evidenced factual possession.223 By contrast, it was held in Harnett v Green224 that walking over unfenced bushland near Sydney once a week and warning off anyone who tried to enter the land, as well as sporadically collecting payment from those who removed timber, did not amount to evidence of factual possession. 5.98 In Tecbild Ltd v Chamberlain,225 children playing on land and tethering ponies on the land amounted to acts insufficient to establish adverse possession. Similarly, in Riley v Penttila,226 enclosing land and using it first as a tennis court and later as a garden were not considered acts that amounted to adverse possession. 5.99 Further, if the land in question is a large area, adverse possession of some sections might well be enough for the whole parcel of land to be adversely possessed.227 This is more particularly so if the land in question is farming land and different paddocks are used each year.228 Possession of one or some paddocks could be sufficient to claim adverse possession over all the land. 5.100 However, on other occasions the reverse has been held. Some and not all the land has been the subject of a successful adverse possession claim. In Quach v Marrickville Municipal Council,229 the plaintiffs owned land, a small section of which was acquired by the local council for use as a drainage reserve (pursuant to s 398 of the Local Government Act 1919 (NSW)). The

plaintiffs continued to use the land for 34 years without the council claiming it. Young J ultimately found that the drainage reserve land had been adversely possessed by the plaintiffs and that, where there is a retained use of a specifically defined part of the premises, the adverse possessor need not prove that his or her acts are directly inconsistent with the acts of the true owner. He also found that the council retained a right similar to an easement that allowed it to keep its pipes in the ground. The facts of this case also demonstrate how an adverse possessor and a documentary owner cannot both be in possession of the land at the same time.230 Possession must be single and exclusive231 and, where neither the adverse possessor nor the documentary title holder can prove this, the documentary title holder will be assumed to be the single and exclusive possessor.232 [page 237] 5.101 The issue of how much land must be adversely possessed was discussed again by Tamberlin JA in South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd.233 His Honour stated that: … [it] is not necessary for an owner to show that physical use has been made of every section of the land and acts of possession done on parts of a parcel of land may be evidence of possession of the whole: see Higgs v Nassauvian Ltd [1975] AC 464 at 474. It is sometimes difficult to arrive at a single description adequate to cover all aspects of the use of land. Often there may exist a dominant use with other subsidiary uses which are less intensive or equivocal.234

5.102 Bearing in mind the contextual variables discussed in Lord Advocate v Lord Lovat,235 and other cases, the following situations and acts may (but will not necessarily) amount to evidence of possession: building on the property;236 occupying the property by residing on it;237 paying rates and taxes;238 fencing the property;239 maintaining trees and gardens;240 blocking access so others cannot use the land;241 and allowing cattle to agist (graze for a fee) on the land.242

5.103 In all the cases where the possessor is seeking to establish that his or her possession is adverse, the onus lies on the possessor, and the standard of proof is the civil onus;243 that is, the possessor must demonstrate that on the balance of probabilities his or her possession was adverse.244 5.104 Use inconsistent with the documentary owner’s use of land On the basis of older cases such as Leigh v Jack,245 the law (at least for a time) required that, in order to establish an [page 238] adverse possession claim, the possession had to be inconsistent with the purpose for which the documentary title holder intended to use the land. Where no inconsistency could be established, the documentary title holder was deemed to have granted an implied licence to the squatter whereby possession was permitted. The effect of permission or consent was to prevent the possession being characterised as adverse to the documentary title holder. 5.105 In cases where the documentary title holder had no present use for the property, but was merely keeping it for later use, it was difficult to establish an ‘adverse’ or inconsistent element.246 In response, a trend developed whereby the courts found that no adverse possession could be established in those cases, on the ground that, as there was no present use for the land, there was no use to which the possession could be judged as being adverse. Hence, conduct that in other circumstances may have been evidence of possession capable of establishing an adverse possession claim, such as cutting down timber and removing it or grazing cattle on a fenced-off, unused section of a golf course, was not found to establish adverse possession.247 Those acts were not regarded as being inconsistent with the present non-use of the land. 5.106 Rejection of implied licence doctrine English courts have now rejected application of the implied licence doctrine in the context of adverse possession.248 Evidence that the implied licence doctrine is no longer favoured may be observed in Buckinghamshire County Council v Moran,249 where one of

the main issues to be decided was whether the fencing of property, planting of bulbs and the installation of a locked gate (for the statutory period) [page 239] amounted to adverse possession even though there was no present use for the land but a future use (as a road) had been planned. The court found that the relevant acts were sufficient to amount to the dispossession of the documentary title holder. Moran’s case followed Stamp LJ in dissent in the Wallis’ Cayton Bay Holiday Camp Ltd v Shell Mex and BP Ltd250 case and, accordingly, rejected the implied licence doctrine, demanding instead that the issue of intention be determined by reference to the facts.251 If the facts demonstrated an intention to possess, that intention would not be negatived simply because the true owner was undecided about the future or present use of the property. 5.107 In the more recent case of JA Pye (Oxford) Ltd v Graham,252 the House of Lords discussed whether the possession of the squatter needed to be inconsistent with the documentary owner’s intended use for the land. Lord Browne-Wilkinson stated that to claim that ‘the sufficiency of possession can depend on the intention not of the squatter but of the true owner’ was ‘heretical and wrong’, and to do so reflected an attempt to recast the law in its pre-1833 position where ‘inconsistent user’ was a partial requirement of adverse possession.253 He observed that the Wallis’ Cayton Bay Holiday Camp Ltd v Shell Mex and BP Ltd254 line of cases was wrong. 5.108 On the facts of Pye’s case, the House of Lords found for the Grahams, the adverse possessors, even though Pye had no present use for the land. The court went on to acknowledge that, in some remote circumstances, it may be possible for the documentary title holder to establish that the squatter did not have the requisite level of intention to possess. Such a case would be where the stranger is aware of a special purpose for which the documentary holder uses or intends to use the land and the stranger’s use of the land is not in conflict with that use. The court stated that at best it ‘may provide some support for a finding as a question of fact that the squatter had

no intention to possess the land in the ordinary sense but only an intention to occupy it until needed by the paper owner’.255 Lord Browne-Wilkinson added that he thought there would be ‘very few occasions’ where this was the case but observed it was a possibility, albeit quite an improbable one.256 [page 240] 5.109 In England, the rejection of a blanket implied licence doctrine was ultimately enshrined in statute.257 Although in New South Wales there is no provision comparable to the English one, the blanket implied licence approach seems to be judicially unpopular. Australian courts largely seem to have rejected the inconsistent use doctrine and, presumably, the related implied licence doctrine. Cases such as Monash City Council v Melville258 and Whittlesea City Council v Abbatangelo259 demonstrate this. Indeed, Underwood J in Woodward v Wesley Hazell Pty Ltd260 noted, at an earlier point, that ‘even if the Shell-Mex case and Gray v Wykeham-Martin [cases that applied the implied licence doctrine] were binding upon me, they should no longer be regarded as good law’. However, South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd261 offers a contrary position.

Animus possidendi or intention to possess 5.110 The party seeking to establish adverse possession must also demonstrate an intention to possess as well as factual possession.262 This is more difficult where the acts of possession are equivocal.263 In those circumstances, consideration of the subjective intention of the adverse possessor may become relevant.264 If the intention remains equivocal by being open to more than one interpretation, it generally will not be sufficient to satisfy the requisite animus possidendi.265 5.111 Although statements by the adverse possessor, as to intention, have been regarded as problematic particularly because they could be self-serving, the case of Whittlesea City Council v Abbatangelo affirmed that the adverse possessor’s statements of intention may, in concert with other considerations,

be used to help establish the requisite level of intention. In that case, the court stated: [page 241] … while a statement by a person that he or she intended to possess will not be enough in itself to establish such an intention, it may be relevant when taken in combination with other evidence suggesting an intention to possess.266

Courts relying on statements by the adverse possessor about his or her intention would need to exercise caution, evaluating the adverse possessor’s statements carefully and bearing in mind the possibility of their self-serving nature. If, after a contextual evaluation of the statements, the court still found them to be helpful, it would not be precluded from relying on them. 5.112 The intention that is relevant is always the intention of the squatter, not the documentary owner.267 According to Powell v McFarlane,268 what must be demonstrated is an intention to use the land as though it were the possessor’s own.269 Slade J in Powell v McFarlane put it thus: … the animus possidendi involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.270

5.113 At trial, in Moran’s case the requirement was framed as ‘not an intention to own or even an intention to acquire ownership but an intention to possess’.271 This position was affirmed on appeal, where the court held that ‘an intention for the time being to possess’ was sufficient.272 Intention was also considered, in the Victorian context, in Kierford Ridge Pty Ltd v Ward.273 There, the court affirmed Slade J’s requirement in Powell v McFarlane that the squatter needs to demonstrate an intention to possess and that the intention needs to be conveyed to the world. The Victorian Court elaborated on this requirement by quoting Bayport v Watson274 in the following terms: When the law speaks of an intention to exclude the world at large, including the true owner, it does not mean that there must be a conscious intention to exclude the true owner. What is required is an intention to exercise exclusive control: see Ocean Estates v Pinder [1969] 2 AC 19. And on that basis an intention to control the land, the adverse possessor actually believing himself or herself to be the true owner, is quite sufficient: see Bligh v Martin [1968] 1 WLR 804. As a number of authorities indicate, enclosure by itself, prima facie indicates the requisite animus possidendi. As Cockburn CJ said in Seddon v Smith (1877) 36 LT 168, 169:

[page 242] “Enclosure is the strongest possible evidence of adverse possession.” Russell LJ in George Wimpey & Co Ltd v Sohn [1967] Ch 487, 511A, similarly observed: “Ordinarily, of course, enclosure is the most cogent evidence of adverse possession and of dispossession of the true owner”.275

Generally speaking, Australian cases have tended to follow the test set out by Slade J in Powell v McFarlane,276 but they have not explored further the proposition that the intention to possess must be conveyed to all the world. Some commentators suggest that such a manifestation of intention is, nevertheless, required.277 5.114 The ‘intention to possess’ (rather than own) test was affirmed again in the later case of JA Pye (Oxford) Ltd v Graham. In that case Lord BrowneWilkinson endorsed it, commenting that it was ‘manifestly correct’,278 and Lord Hope of Craighead explained that it was not necessary ‘to show that there was a deliberate intention to exclude the paper owner or the registered proprietor’ but rather what needed to be demonstrated was ‘an intention to occupy and use the land as one’s own’.279 5.115 In Whittlesea City Council v Abbatangelo, the court affirmed yet again that an adverse possessor must prove an intention to possess exclusively which is different from proving an intention to own.280 The court also highlighted the difference between an intention to possess exclusively and the mere deprivation of special benefits from land. The latter will be insufficient to meet the test for establishment of the requisite animus possidendi. However, if deprivation of special benefits accompanies an intention to possess, the requisite level of intention may still be established.281 Abbatangelo’s case is also significant because it affirmed that actions or words that acknowledge the existence of ownership in another party will not, of themselves, preclude the establishment of the requisite level of intention to possession by the adverse possessor.282 Hence, Mrs Abbatangelo’s statements that she did not own the land were not inconsistent with her intention to possess the land exclusively. Applying the same logic, the payment of rates by a party who is not the adverse possessor will not of itself be regarded as evidencing a failed intention to possess. Put another way, the payment of rates will not necessarily destroy the adverse possessor’s claim.283

[page 243] 5.116 Cervi v Letcher284 applied Abbatangelo’s case285 in relation to the question of the animus possidendi. The court in Cervi’s case summarised what is required to prove an intention to possess in the following terms: The animus possidendi, which is also necessary to constitute possession, … involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow … the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the [requisite] animus possidendi and consequently as not having dispossessed the owner.286

5.117 What will amount to the requisite animus possidendi or intention will, like factual possession, vary according to circumstance. Further, the intention may be, and frequently is, deduced from the physical acts of possession themselves.287 Hence, at times, the acts which go towards demonstrating factual possession will be the same acts as those which go towards demonstrating an intention to possess. Nevertheless, the two requirements have been regarded as distinct, albeit that in England a ‘downgrading of the requisite animus’ has been observed while, somewhat paradoxically, the operation of the Land Registration Act may well reduce the number of successful adverse possession claims.288 5.118 To recapitulate, thus far, the following observations may be made. First, enclosure is an important act in helping to establish adverse possession and has, by itself, on a number of occasions been said to demonstrate the requisite intention to possess.289 Yet this will not always be the case.290 Significantly, Buckinghamshire County Council v Moran291 affirmed the importance of examining the issue of intention with reference to the particular circumstances at hand, thereby reinforcing the need for the contextualisation of enclosure or other acts. [page 244]

5.119 Second, the intention to possess may also be demonstrated by the payment of rates and taxes,292 yet such payment is not necessarily evidence of the requisite animus possidendi.293 It would seem that the payment of rates and taxes needs to be supported by other acts evincing an intention to possess. Other acts may include enclosing/fencing, cultivating or living on the land.294 In cases where there has been no payment of rates, the court has, on some occasions, found in favour of the adverse possession claimant.295 Hence, the payment of rates and taxes is not necessary to the success of an adverse possession claim. Nevertheless, refusing to pay rates has been found to run counter to a claim of the requisite animus possidendi.296 5.120 Possession may also be adverse to predecessors in title of the registered proprietor, not just the present registered proprietor. Barrett v McGuiness297 answered the following related question: Against whom exactly does the intention to possess for the statutory period need to be demonstrated? That case concerned two parties, McGuiness and the Barretts, who were each in possession of land to which the other party was the registered proprietor. The predecessors of each party had been in possession of the other’s land long enough to satisfy the statutory period. The Barretts wished the Torrens Register to be rectified and the correct lot numbers recorded, but McGuiness did not wish such an action to proceed, because the lot for which he was registered was more valuable than the lot for which he should have been registered. One of the arguments for McGuiness in resisting the transposition of the lot numbers on the Torrens Register was that, in order for s 45D(1)(b) of the Real Property Act to be satisfied, the relevant period of adverse possession must be demonstrated to be against the actual registered proprietor whose cause of action the possessor sought to extinguish (ie, against McGuiness himself, and not his predecessors in title). Hodgson CJ rejected this reasoning, finding that the period of adverse possession could include periods as against the successors in title of the present registered proprietor against whom the claim was being made. He said, with reference to s 45D(1)(b): In my opinion, the reference there to “the registered proprietor of an estate or interest” does not mean that the extinguishment must first have occurred as against the particular person who is the registered proprietor at the time of the application, much less that the whole period of adverse possession must have run against that person. In my opinion those words have to be given an ambulatory application, and the paragraph applies wherever the title of any registered proprietor

of an estate or interest in the particular land would, at or before the time of the application, have been extinguished.

[page 245] In my opinion, the interpretation contended for by [counsel] is inconsistent with s 45D(4), which protects registered proprietors who have become so registered without fraud and for valuable consideration.298

Summary of requirements for factual possession and the animus possidendi 5.121 A crisp judicial summary of the law on both factual possession and the animus possidendi was offered by Tamberlin AJ in Bridges v Bridges.299 He summarised the law as follows (emphasis added): (i)

For a person to acquire possessory title he or she must be shown to have had both factual possession and a requisite intention to possess the land.

(ii) Factual possession signifies an appropriate degree of physical control and it must be single and exclusive possession and this is a question of fact dependent on particular circumstances such as the nature of the land and the manner in which such land is commonly used or enjoyed. There is no universally applicable principle to resolve this question. (iii) The intent to possess is that of the claimant to title by possession and involves an intention in relation to the whole world, including the owner with the paper title. (iv) There must be clear and affirmative evidence that the claimant has acquired possession. Equivocal acts will normally not suffice. (v) The acts must be indicative of the requisite intention to possess. (vi) The concept of adverse possession in the Act is to possession by a person in whose favour time can run and not to the nature of the possession. The question is whether the claimant adverse possessor has dispossessed the paper owner by having possession without the consent of the owner. (vii) The intention required by the law is not an intention to own or even an intention to acquire ownership of the land, but an intention to possess it. The claimant, although in adverse possession, need not subjectively believe that he or she is the owner of the land. (viii) A statement of intention by a claimant adverse possessor must be treated cautiously as it may be self-serving, but it may be relevant with other evidence to support the inference of an intention to possess. (ix) Use falling short of possession will not suffice. For example, a use of land may amount to enjoyment of a special benefit of the land by casual, cursory or occasional acts of trespass and this may not suffice to establish factual possession nor demonstrate the requisite intention.

(x) There is no requirement that the use to which the land is put by the claimant adverse possessor must be inconsistent with the paper owner’s present or future use of the land.

[page 246]

Adverse possession and mortgages 5.122 If a mortgagee remains in possession of land, the mortgagor will lose his or her right to redeem300 after the expiration of the limitation period if the mortgagee does not give written acknowledgment of the mortgagee’s title or equity of redemption and does not receive any payment from the mortgagor in respect of interest or principal.301 5.123 Meanwhile, a mortgagee has a right to foreclose, claim possession or sue for the principal when the mortgagor makes the repayment due.302 That right is lost if it is not exercised within the limitation period. 5.124 Hence, if a mortgagee does not bring a claim for possession within the statutory period, an adverse possessor may succeed in barring that claim, thereby effectively extinguishing the mortgage. The English case of Ashe v Westminster plc303 demonstrated how this may occur. In that case, the parties entered into an ‘all monies’ legal charge, one effect of which was to give the mortgagee bank an immediate right to possession of the mortgagor’s house on execution of the instrument. The mortgagee did not go into possession at that time. The mortgagor defaulted on the loan and ultimately went bankrupt, but still the mortgagee did not take possession of the house. Accordingly, the mortgagor successfully argued that as the bank’s right of action had accrued more than 12 years before the action was brought, the right was extinguished under the Limitation Act. (Execution took place 17 years before the action was brought.) Importantly, by application of the principles as to what constitutes adverse possession set out in JA Pye (Oxford) Ltd v Graham,304 the mortgagor was also able to demonstrate that he was in adverse possession of his own land and not there with the permission of the mortgagee.305 Young J has commented ex-judicially that this case should serve as a warning ‘to mortgagees who allow the mortgagor to keep in possession while waiting for a more propitious time to sell’.306

Co-ownership and adverse possession 5.125 Where a property is co-owned, the question may arise as to whether one co-owner may succeed in an adverse possession claim against another coowner or owners. Given that, at common law, all co-owners have the right to use and possess the whole of the [page 247] property, the starting point is that it is not possible to bring a successful adverse possession claim against other co-owners. 5.126 However, s 38(5) of the Limitation Act overturns that presumption, deeming the possession of a co-owner who takes possession of more than his or her own share (not for the benefit of the other co-owners) as possession that is adverse to the other co-owner(s). In such circumstances, the co-owners who are out of possession must bring their action for recovery of possession within the limitation period if they are not to have their rights extinguished. Much turns on whether possession by a tenant of ‘more than his or her share’ is regarded as being for the benefit of the co-owners or not.307 5.127 Re Franklin, a Victorian case, considered the issue of adverse possession in the context of co-ownership.308 In that case, a man transferred property to himself and his sister as joint tenants. Although the two were registered as joint tenants, the man dealt with the property as though he were the only registered proprietor. He paid the outgoings and mortgaged the property for the purposes of his business. His sister did not ever enter possession either as a resident or a visitor. After the man died, his son brought an application for a declaration that he, the son, as administrator of the estate, had acquired title to the joint tenancy by way of adverse possession. Hence, the court was charged with deciding whether a donor of a co-ownership interest in land could regain title to the donated land, by way of an adverse possession claim against his or her co-owner. Kaye J found that the sister’s interest had been extinguished by her brother, exercising sole rights of possession for the relevant period. This decision was largely based on the application of s 14(1) of the Limitations of Actions Act 1958 (Vic), which,

although considerably lengthier than the equivalent New South Wales provision, consistently deems a co-owner who is in possession or receipt of more than his or her share to be an adverse possessor. Although some commentators have questioned whether there was sufficient evidence of the animus possidendi to accompany factual possession in this case, the court did not exhibit any concerns in this regard.309

Property held on trust 5.128 Section 36 of the Limitation Act states that that Act applies to both legal and equitable interests, and s 11 of the same Act defines ‘land’ as including an equitable interest in land. Hence, property that is held on trust is subject to the Act. A beneficiary under a trust may be affected by adverse possession in circumstances where the trustee is the adverse possessor. At other times, the adverse possessor could be a stranger to the trust, giving rise to a right of action by the beneficiary or trustee. These different situations are examined below. [page 248]

Trustee as adverse possessor 5.129 In New South Wales, s 47(1) of the Limitation Act provides that a trustee who is in breach of a trust and in adverse possession is able to bar the beneficiary if he or she continues to hold adversely beyond the limitation period. Put another way, the beneficiary has 12 years from the time when he or she discovered, or could with reasonable diligence have discovered, that he or she had a cause of action in which to bring a claim against the adversely possessing trustee. After that, the beneficiary is statute-barred. This legislation reflects the view of the New South Wales Law Reform Commission.310

Stranger as adverse possessor of trust property 5.130

If a stranger goes into adverse possession of land held on trust, he or

she will need to be in adverse possession for 12 years in New South Wales in order to satisfy the statutory period and bar the documentary title holder (the trustee).311 However, this period can be extended by application of s 37 of the Limitation Act, with the result that the trustee’s title will not be barred until all the interests of the beneficiaries have been extinguished. For example, where there is a life estate followed by an estate in remainder, both of which are held on trust, the adverse possessor will statute-bar the lifeestate holder after 12 years, but the trustee’s legal estate will not be extinguished until the tenant in remainder is also statute-barred. The tenant in remainder does not acquire a right of action against the adversely possessing stranger until the life estate has expired. If the adverse possessor possesses as against the life-estate holder for a period in excess of 12 years, it is as though the adverse possessor holds an estate pur autre vie.312 This is so, because the adverse possessor’s interest is still constrained by the duration of the life-estate holder’s life. On the death of the life-estate holder, the tenant in remainder has an interest vested in possession and, from that time onwards, the tenant in remainder accrues a cause of action. That right to bring an action reasserting title will be exhausted after 12 years of adverse possession against the tenant in remainder. Only after the expiration of that period will the trustee’s legal title to the property be barred.313

Beneficiary as adverse possessor of trust property 5.131 Where the property is held on trust for a beneficiary, it is possible that, in limited circumstances, the beneficiary may seek to bar the title of the trustee by virtue of an adverse possession claim.314 In practical terms, this situation may arise where a purchaser has paid purchase moneys for a property but the contract for sale has not been completed.315 If the purchaser goes into possession and is not under licence, it can be argued that he or she is in [page 249] possession as a beneficiary under a constructive trust and is possessing adversely as against a vendor who holds the property as trustee.316

Suspending the statutory period 5.132 If the documentary owner is under a disability, the statutory period will be suspended.317 In New South Wales, a person who is under 18 years of age is regarded as being under a disability.318 A person may also be under a disability if, ‘for a continuous period of 28 days’, he or she ‘is incapable of’, or ‘impeded in’, the ‘management of his or her affairs’ by reason of: ‘any disease’ or ‘impairment’ of ‘his or her physical or mental condition’;319 ‘war or warlike operations’;320 or imprisonment.321 By providing a suspension, the legislature has, in part, sought to ensure that a party who has a valid cause of action, but who has not known about it or is unable to respond adequately to it, is not unfairly denied the opportunity to rely on that cause of action. New South Wales’ provisions are more liberal than those of some other states in this regard. For example, in New South Wales, the disability may either have existed at the time the adverse possessor went into possession, or may have developed during the limitation period. In either case, the limitation period will be suspended during the period of the disability. There is, however, an upper limit. No claim may be brought more than 30 years from the date the cause of action accrued.322 5.133 Finally, should the statutory period be destined to expire within three years of the documentary title holder ceasing to be under the disability, the statutory period will be prolonged so that the documentary title holder has three full years after the disability ceases in which to reassert his or her title.323 In this same three-year period, if the adverse possessor acknowledges or confirms the documentary owner’s title, it will bring the period of adverse possession to an end. 5.134 A circumstance where the commencement of the limitation period may be delayed is where there has been fraud or fraudulent concealment of either the cause of action or the adverse possessor’s identity. In such cases, the limitation period will not begin to run until the documentary title holder has discovered the fraud or should have discovered it, had reasonable diligence been applied.324 Seymour v Seymour325 found that, [page 250]

although the relevant fraud in these circumstances was not as narrow as common law fraud, ‘a consciousness’ of the wrongfulness was still required.326

Adding consecutive periods of adverse possession together 5.135 Separate consecutive periods of adverse possession that are independently less than the statutory period may be added together in order to satisfy the statutory period.327 If each adverse possessor takes through the previous adverse possessor in the chain, then the party in adverse possession at the date that the limitation period is satisfied will be able to bar the title of the documentary owner. This is because the initial adverse possessor acquired a title through his or her possession, and that title, which is good against all the world,328 may be devised or conveyed.329 In these circumstances, there is no need for each adverse possessor to effect a conveyance to the next possessor.330 5.136 If the successive adverse possessors do not hold through each other, but rather against each other, the situation is a little different. Clearly, the first adverse possessor is in possession wrongfully as against the documentary titleholder but, in addition, all the other adverse possessors are in possession wrongfully as against each other. Pursuant to Shaw v Garbutt and Mulcahy v Curramore,331 the general position is if the total of the several periods of adverse possession exceeds the statutory period, the documentary title holder’s title will be barred.332 However, it will not be the last in the chain of adverse possessors who bars the fee simple title, but the first. For example, if A, B, C, D and E comprise the chain of adverse possessors, each taking his or her interest independently of one another, then it is A who bars the title of the documentary owner at the expiration of the statutory period. E, who is in possession at the time the statutory period expires, will have a title by virtue of his or her possession, and that title will be good against all the world — except someone with better title. In these circumstances, D, C, B and A all have better title. 5.137 Of course, it is essential for the adverse possessors to maintain the chain of adverse possession continuously. There must be no breaks between

the periods of adverse possession whether by abandonment or reassertion of title, for example. If the land is at any time no longer held adversely, the clock will stop ticking and the benefit of all [page 251] accumulated time will be lost.333 Time will begin to accrue again from the point where the land is once again possessed, without the documentary owner’s consent, by someone in whose favour the limitation statute can run.334 The situation regarding abandonment may alter in the context of a series of successive independent adverse possessors holding against each other. For example, if a prior adverse possessor abandoned his or her rights and possession were immediately taken by a successive adverse possessor, the clock would not stop ticking as against the documentary owner because the land would continue to be held adversely to the documentary owner. There would be abandonment but not in the regular sense. This type of abandonment is known as qualified or modified abandonment. It permits periods of continuous, independent adverse possession to be accumulated so as to satisfy the limitation period. Qualified or modified abandonment by one or more adverse possessors in a chain may also have an effect on who will be entitled to possession when the limitation period is satisfied. Taking the example above, if A, the original adverse possessor, abandoned and B moved into (adverse) possession, at the expiration of the statutory period A’s claim for recovery of possession from E would be subject to defeat by E. E may also be able to defeat claims by B, C and D if they too had taken land abandoned by a preceding adverse possessor. Accordingly, it is important to ascertain the circumstances under which each adverse possessor took possession. To summarise, if the succeeding adverse possessor took wrongfully against the preceding adverse possessor, the preceding adverse possessor would have a better right but if the succeeding adverse possessor took immediately after a

qualified or modified abandonment by the preceding adverse possessor, the succeeding adverse possessor’s right would be better.

Stopping time running 5.138 As noted above, the true owner’s title cannot be barred unless an uninterrupted period of adverse possession equal to the statutory period has been established.335 Some acts will cause adverse possession to cease altogether and, consequently, the statutory requirement to bar the title will not be met by a continuous period of adverse possession.336 As we have observed (at 5.135–5.137), there is, however, no need for the limitation period to be satisfied by one adverse possessor alone. Successive periods of adverse possession that are accumulated so as to give rise to a continuous block of adverse possession equalling the statutory period may be relied on. What will matter in terms of accumulating time is whether or not there is an uninterrupted, continuous period of adverse possession. 5.139 Broadly speaking, acts by which the true owner asserts his or her own title, or where the adverse possessor acknowledges the superior title of the true owner, will cause time to stop running. These issues are considered below. [page 252] 5.140 Time will cease to accrue if the true owner asserts his or her right to possession. This may be achieved in several ways. It may be achieved if the true owner of the land brings an action to recover the land. Alternatively, the true owner may make a peaceable but effective physical entry onto the land. This is often achieved by turning out the possessor,337 but acts such as removing fences have been held to be sufficient in some circumstances.338 A mere formal entry will not be treated as the assertion of a better right.339 The aim of any assertion of rights is to demonstrate a retaking of possession,340 and this cannot be achieved by mere paper dealings such as the granting of a lease341 or a mortgage over the land.342 Nor can it be achieved by mere oral protests.343 Practitioners often resort to the aphorism ‘litigate first, negotiate

later’ when speaking of effective means to assert title.344 As the commencement of proceedings is unequivocal evidence of an assertion of rights, such advice helps overcome the problem that what amounts to a reassertion of rights varies from case to case.345 In Australia, the issue and service of a summons for possession, along with an intention to obtain an order for possession, would appear to be sufficient to amount to the retaking of possession by court proceedings.346 It will not matter how little time the assertion of rights is maintained. As long as it took place at all, it will be sufficient to prevent time accumulating in satisfaction of the limitation period.347 5.141 If the adverse possessor acknowledges348 the title (or the right of possession) of the true owner, time will also stop running against the documentary owner.349 Such an acknowledgment of title must be made in writing and signed by the maker.350 In these [page 253] circumstances, an email is regarded as writing.351 At times the acknowledgment may be given inadvertently; for example, in the form of a letter about a related subject.352 5.142 Merely realising that someone else owns the land, and consequently cancelling a licence, has not amounted to an acknowledgment of the rights of the owner.353 Yet the seeking of an exemption to pay rent has been held to confirm or acknowledge the true owner’s title.354 Admitting the documentary owner’s title in proceedings for possession of land also has been found to be an acknowledgment of title that stops time running;355 as has requesting a contribution towards the payment of rates.356 However, offering to purchase the relevant land is more problematic. It may,357 but will not necessarily,358 be treated as an acknowledgment of title.359 If title is acknowledged, that acknowledgment is binding on any successor in title to the adverse possessor or any person who might dispossess the adverse possessor and time will run from the date of acknowledgment.

Abandonment 5.143 Modified or qualified abandonment in relation to a series of adverse possessors was discussed above. This section focuses on ‘ordinary’ abandonment. If an adverse possessor abandons the land, time ceases to run against the documentary owner.360 Vacation of the land must be complete. Simply not using the land does not automatically equate to abandonment. Instead, each case must be considered on its facts. In regard to farmland, for example, lack of use will not amount to abandonment if the land was rendered unusable because of seasonal change, such as drought.361 Where land is not occupied because some tenants of the adverse possessor have left and others have not yet entered, there will be no abandonment.362 5.144 In cases of abandonment, the true owner is free to recover the land as though there had never been any adverse possession. In Mulcahy v Curramore, the court stated that abandonment leaves ‘no cloud on the true owner’s title’.363 If there is an intervening period of abandonment between two periods of adverse possession, the two periods of adverse possession cannot be added together, because the first period has ceased to count for all adverse possession purposes.364 If another party takes adverse possession after the [page 254] first adverse possessor’s abandonment, the earlier adverse possessor has no right of action (against the second) based on his or her earlier possessory title, because he or she forfeited his or her inchoate possessory title.365 5.145 If the adverse possessor abandons after the statutory period has been satisfied, it would seem the adverse possessor does not simply lose his or her rights according to the law of abandonment.366 Indeed, pursuant to the reasoning in Allen v Roughley and Asher v Whitlock,367 the adverse possessor by then has best title to the land and that title is enforceable against all the world whether or not his or her possession continues. The adverse possessor does not

acquire the rights of the documentary title holder; rather he or she merely bars the latter’s title. Such a view, discussed earlier,368 is expressed in Fairweather v St Marylebone Property Co Ltd,369 where it is said that the adverse possessor: … comes in and remains in always by right of possession, which in due course becomes incapable of disturbance as time exhausts the one or more periods allowed by statute for successful intervention. His title, therefore, is never derived through but arises always in spite of the dispossessed owner.

This seeming anomaly can occur because the principle of relativity of titles is based on the idea that there can be more than one fee simple estate in the same land.370

To what rights does adverse possession give rise? 5.146 While the land is adversely possessed, but before the statutory period has elapsed, the adverse possessor does not hold best title. The adverse possessor’s interest is, at this point, a possessory one and as such is enforceable against all the world except the true owner. After the statutory period has expired and the true owner is unable to assert his or her title, the adverse possessor still retains a possessory title, but it takes on the characteristics of a proprietary title, being enforceable against the whole world including the true owner. On the expiration of the statutory period, the adverse possessor acquires a fee simple estate or a life estate, for example, of his or her own. Further, on satisfaction of the statutory period, the documentary owner’s title may be extinguished by way of s 65(1) of the Limitation Act. 5.147 By characterising adverse possession as an act that extinguishes rather than creates rights, it becomes easier to understand the enforceability of the rights of third parties over the land.371 For example, if a third party holds an easement over land, and that land [page 255] is subject to a successful adverse possession claim, the easement will remain unaffected by the success of the adverse possession claim.372 This is so because

only the right of the true owner to bring an action in regard to land has been barred, and the definition of ‘land’ in the Limitation Act does not extend to incorporeal hereditaments.373

Possessory title and Torrens land 5.148 The Torrens system of land titles has at its heart the paramountcy of the Register. Hence, the recognition of rights in land that are not recorded in the Register runs counter to the objectives of the scheme. It is, of course, the case, as discussed in Chapter 8, that some unregistered interests are recognised by the Torrens system, but it was perhaps the desire to maintain the Register as an accurate account of interests held that precluded the holding of Torrens land by virtue of adverse possession until 1979 when the Real Property Act was amended.374 After those amendments were passed, it became possible to make a possessory application of Torrens land under Pt 6A of the Real Property Act. 5.149 The statutory amendments allow a party who has held Torrens land by virtue of possession for a period of time equal to or greater than the statutory period contained in the Limitation Act to lodge a possessory application.375 A possessory application pursuant to s 45D(1) of the Real Property Act is a request for the Registrar-General to record the adverse possessor, as the proprietor, in the Register. Although the provisions under Pt 6A of the Act are designed to provide an administrative mechanism for recognising title by adverse possession, it would seem that the court could still play a role where there was a real dispute between the adverse possessor and the documentary owner.376 5.150 Unlike land under old system title, the general position in relation to Torrens land is that it can only be the subject of an adverse possession claim (through a possessory application under Pt 6A of the Real Property Act) if the claim relates to a ‘whole parcel of land’.377 This position was confirmed in Seyffer v Adamson.378 Hence, small areas that do not amount to whole parcels of land cannot be the subject of such applications. However, there are exceptions. Section 45D(6) of the Real Property Act permits applications where

[page 256] the adverse possessor has occupied up to an ‘occupational boundary’,379 but that boundary is still within the true boundary. In those cases, the adverse possessor is able to claim the area of land up to the true boundary, even though he or she has not actually occupied it.380 Where the adverse possessor occupies land to an occupational boundary that is beyond the true boundary, his or her claim will be limited to the true boundary. Section 14(2) of the Real Property Act also provides an exception. It enables a primary application to be made by a person claiming an estate in possession in the land to which the application relates. Whereas applications under Pt 6A require applications be made in respect of whole parcels of land, s 14(2) permits applications in respect of either a whole or part of a parcel. 5.151 Another exception to ‘whole parcels’ of land being necessary for an adverse possession claim under the Torrens system relates to ‘residue lots’ and, in particular, to ‘night soil’ or ‘service’ lanes — lanes originally designed for the collection of human bodily waste.381 The amendments to s 45D of the Real Property Act that cover service lanes were designed to make claims of adverse possession over land comprising these lanes easier.382 The rationale for the amendments was that they permitted the better exploitation of the land, by assisting the land to be used for more socially beneficial purposes.383 In reality, many of the lanes were too narrow for vehicular access and, if they had not been possessed by adjoining owners, they had reportedly ‘fallen into disrepair’ or had ‘become a haven for illegal drug use’.384 Nevertheless, the amendments raise several policy issues, including whether adjoining owners should be the beneficiaries of windfalls, particularly in areas where land is very valuable.385 5.152 That parties choose to litigate adverse possession claims over small areas of land when sensible negotiations could resolve matters more successfully ‘at a great saving of [the parties’] money, time and attention, and with a better contribution to peace and order than [the court] can make’, led Bryson J to comment, ‘[a]s in Shakespeare’s Hamlet Act IV Scene 4, “We go to gain a little patch of ground That hath in it no profit but the name”’.386

Yet His Honour concluded that as the courts, like the Ritz Hotel, are open to all, he had to both hear and decide such matters. [page 257] 5.153 A possessory application cannot, pursuant to s 45D(3) of the Real Property Act, be made in regard to land registered in the name of: (a) Her Majesty or a Minister of the Crown; (b) a statutory body representing the Crown; (c) certain corporations or; (d) a council or county council within the meaning of the Local Government Act 1993 (NSW). Whereas under old system title, a Crown grant or lease has the effect of stopping time from running, s 45D(8) and (9) of the Real Property Act operate to keep time running against the documentary owner. Hence, if, under the Torrens system, the Crown grants a folio over land that is the subject of adverse possession, time continues to run against the documentary owner, despite the granting of that folio. However, if land subject to adverse possession is sold, the limitation period starts running anew against the purchaser, unless the purchaser has been guilty of fraud.387 5.154 Further adverse possession claims cannot be made against the Crown in cases where the Crown is not the registered proprietor but is the owner of the residue lot because ownership has vested in it as the result of the operation of local government or other legislation.388 5.155 If a party claims a legal or equitable interest in Torrens land that is subject, or could be subject, to a possessory application, a caveat should be lodged pursuant to s 74F(3) of the Real Property Act. Finally, if the possessory application is granted by the Registrar-General, the Register is altered and the adverse possessor’s name will appear on the Register as the proprietor, but, as we know, his or her title will not have been derived through the documentary owner — it will have been derived by virtue of possession only.389 Nevertheless, it will be possession significant enough to extinguish the title of the documentary owner.390 Recording of the adverse possessor’s title will occur only after all the steps pursuant to ss 45C–45E of the Real Property Act

have been followed. By altering the Register, in response to the possessory application, the Register retains its status as a conclusive record.391 As is the case with old system title land, successive periods of adverse possession may be added together to total the limitation period under Torrens title land.392 Similarly, there can no gaps or breaks in those periods of possession if they are to count cumulatively against the true owner. [page 258] 5.156 As noted above, the Real Property Act aims to preserve the sanctity of the Register in relation to adverse possession claims over Torrens title land. It does this by requiring that a possessory application is lodged — an application that, in turn, must be approved before the Register can be altered to reflect the fact that the adverse possessor has barred the title of the documentary owner. As a result, in New South Wales it is not possible to bar the documentary owner simply by being in possession for the relevant statutory period, with the relevant intention, and without the owner’s consent. Until the application is granted and the Register altered, the Register reflects the title of the documentary owner. In that sense, the Register remains conclusive until such time as it is altered. Although there may be other kinds of rights that are not recorded on the Register, such as in personam rights or equitable interests under a trust, for example, a person dealing with the Register can be comfortable in the knowledge that there are not unrecorded possessory rights in existence that have extinguished the registered proprietor’s interest. Therefore, because of the way the New South Wales legislation operates (and the New South Wales position is different from some other states), the conclusiveness of the Register is preserved and the reality of the actual possession is simultaneously acknowledged.

Reform

Paper dealings 5.157 In regard to the issue of the documentary title holder retaking possession and asserting title, it might be worthwhile revisiting the view that paper dealings are insufficient. If paper dealings are not relied on, the retaking of possession must be in the form of the commencement of litigation or the physical (but peaceful and effective) retaking of the land. The former is expensive and the latter could often involve physical danger. Hence, permitting paper dealings as evidence of the retaking of possession might well result in a less costly and cumbersome solution. Furthermore, if one of the objectives is to demonstrate that the documentary title owner is asserting his or her own title to the extent that it overrides the possessory title in question, surely correspondence between the two is capable of proving this intention. It is suggested that the degree of intention that must be exhibited by the documentary holder and that is likely to be contained in the correspondence itself would become highly significant in determining whether title had been confirmed or acknowledged.

Nature of the adverse possessor’s rights before a successful claim over Torrens title land 5.158 It would be useful also if the courts or the legislature provided further clarity on what type of interest the adverse possessor of Torrens land holds before a possessory grant is made. Opinions on this vary: to some, the adverse possessor is, until the Register is altered to reflect his or her interest, in no better a position in relation to the registered proprietor [page 259] than a trespasser;393 while to others his or her interest is to be regarded as synonymous with the many other unregistered interests that are recognised by the Torrens system; to others still, his or her interest amounts to an inchoate title echoing the inchoate title held by an adverse possessor under old system title.394 It is suggested that clarification would be beneficial for many reasons,

not the least of which would be to determine whether the adverse possessor had an interest over which a caveat could be lodged.395

Abolition of adverse possession doctrine 5.159 Following the decisions in JA Pye (Oxford) Ltd v Graham and JA Pye (Oxford) Ltd v United Kingdom,396 the issue of whether Australia (and, in particular, New South Wales) should abolish the doctrine of adverse possession altogether became topical once more. Although, as is discussed above, the European Court of Human Rights (ECtHR) ultimately did not find the then relevant English legislation on adverse possession to be in conflict with Art 1 of Protocol No 1 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (European Convention on Human Rights), concerns have been raised as to whether the doctrine of adverse possession remains justifiable in legal systems where title to land is registered. If interests in land are registered but adverse possession claims may still be made against the title of the registered proprietor, the integrity of the Register may, arguably, be impugned. The veracity of this claim, at least in relation to New South Wales, is considered in 5.156. Another argument against upholding the adverse possession doctrine relates to proportionality. That argument suggests that although the documentary title holder has a reasonably long period (12 years) in which to regularise the adverse possessor’s occupation, either by asserting his or her own documentary title or by commencing proceedings to recover the land, the deprivation suffered by the documentary owner that follows from a successful adverse possession claim does not strike a fair balance with any legitimate public interest being served. In other words, it is disproportionate. This is made all the more so, according to the first instance decision of the ECtHR, when loss of title is not accompanied by compensation.397 These arguments militate in favour of either abolishing [page 260] the doctrine of adverse possession in relation to registered land or perhaps

alternatively reframing it so as to bring it under the provisions of ss 88K and 89 of the Conveyancing Act 1919 (NSW), which are sections giving the court the power to create, modify and extinguish easements.398 When Lord Bingham stated that the finding (in favour of the adverse possessor, by the House of Lords) in Pye’s case was ‘arrive[d] at with no enthusiasm’ he seemed to reflect a growing disquiet about whether the law of adverse possession still served society well.399 Such disquiet has, in part, stemmed from the view that adverse possession is simply a form of legalised theft.400 Further, it has been noted that ‘if property is indeed a relationship of socially approved control over a valued resource, it is quite clear that, in the Britain of the 21st century, the adverse possession of land has become a form of control that is no longer socially approved’.401 5.160 Whether dissatisfaction with the law of adverse possession is also at the same level in Australia is not clear, although there is some literature on the issue.402 Perhaps one argument against the view that the doctrine of adverse possession is inappropriate or outmoded in the Australian context (where registration of land title is the norm) lies in the doctrine’s history of deliberate incorporation. To explain, far from seeking to deny adverse possession a role in the Torrens system, amendments to the Real Property Act 1900 (NSW) were passed in 1979 that consciously incorporated the doctrine of adverse possession into the Torrens system, albeit initially only in relation to whole parcels of land. Expansion of the doctrine within the Torrens system followed with the amendments now contained in s 45D(2A) and (2B) (colloquially known as the ‘Dunny Lane’ amendments) of the Real Property Act. Presumably these amendments were passed because lawmakers believed that recognition of some adverse possession claims, within a system of title by registration, was beneficial. Rather than harm the registration system and its integrity, it is arguable that these amendments were thought to enhance the aims and operation of land law. That being the case, it does not so easily follow that adverse possession has no place in the New South Wales Torrens system. Nor does it follow that the Register’s [page 261]

integrity is undermined in relation to Torrens title land in New South Wales if, as discussed above, the Register remains conclusive in relation to the registered proprietor’s interest, until such time as a possessory application is granted. The mere accrual of sufficient time to statute bar the documentary owner will not, in New South Wales, alone be sufficient to extinguish the title of the documentary owner. Until such time as the possessory title is granted, the Register remains valid as a reflection of the registered proprietor’s interest — an interest that is not extinguished by the mere accumulation of time and the satisfaction of the relevant common law requirements. 5.161 Another (and perhaps less convincing in the Australian context) argument against abolishing adverse possession is the role that the doctrine plays in supporting the housing needs of the homeless. Where public housing is insufficient or unavailable, and private housing out of the reach of the poor, the doctrine may be seen as a measure to reduce homelessness. Possessory title, which ultimately can be used to bar the documentary title holder, consequently provides some security of tenure for those who otherwise would have no home.403 While the level of poverty and homelessness in Australia is not comparable with that in South America, Africa, South-East Asia and many other parts of the world, the favelas of Brazil, the townships of Africa and kampongs of Asia, where the doctrine of adverse possession is vividly played out, serve to highlight the underpinning moral issues about whether it is better to have land used (and interests upheld), particularly by those who are homeless, than not used at all. 5.162 On balance, and in the New South Wales context, it would seem that there is much to recommend the preservation of the doctrine of adverse possession in relation to unregistered (old system title) land on the basis that it encourages use of the land. However, in relation to Torrens land, where the paramountcy of the Register needs to be preserved, the doctrine is perhaps less justifiable but, arguably at least, is still consistent with much policy underpinning Torrens.404 Given that (a) such competing and strongly held views exist, and (b) that New South Wales has, unlike some other jurisdictions, not undertaken a comprehensive review of

[page 262] adverse possession law, it may be useful to subject the different positions to considered and comprehensive scrutiny by way of a New South Wales Law Reform Commission reference on the subject. This would allow New South Wales’ legislators and policy makers, as well as the wider community, to consider carefully over-arching issues such as the integrity of the Register, the role of human rights and adverse possession, and compensation, as well as more specific technical issues, including paper dealings and the nature of any pre-possessory application rights.

1.

Native title is communally held title recognised by the common law but not ‘of’ the common law. See Chapter 4.

2.

Strata title and community title are two other popular forms of title used in New South Wales. Note that strata and community schemes operate only in relation to Torrens title land. See Chapter 9.

3.

A certificate of title is generated from the Torrens Register.

4.

The limitation period is set by the Limitation Act 1969 (NSW). See s 27(2) of that Act. Other criteria also need to be satisfied. They are discussed in the course of this chapter.

5.

Harrow London Borough Council v Qazi [2004] 1 AC 983.

6.

Henry Lord Brougham, Statesmen in the Time of George III (First Series), 2nd ed, Charles Knight & Co, London, 1839, pp 41–42. Quoted in Harrow London Borough Council v Qazi [2004] 1 AC 983 at [86].

7.

Harrow London Borough Council v Qazi [2004] 1 AC 983 at [87].

8.

W Holdsworth, An Historical Introduction to the Land Law, The Law Book Exchange Ltd, Clark, New Jersey, 2004, p 123.

9.

For a discussion of the concepts of possession (and ownership) in the context of a theoretical framework, property law and literature, see ‘Terra Nullius, Cannibalism, and the Law of Appropriation in Robinson Crusoe’ in W Schmidgen, Eighteenth Century Fiction and the Law of Property, Ch 2, Cambridge University Press, Cambridge, 2002.

10.

K Gray and S Gray, Elements of Land Law, 5th ed, Oxford University Press, Oxford, 2009, p 150.

11.

Gray and Gray, Elements of Land Law, note 10 above, p 150; K Gray and S Gray, ‘The Idea of Property in Land’ in S Bright and J K Dewar (eds), Land Law: Themes and Perspectives, Oxford University Press, Oxford, 1998, p 18.

12.

C Harpum, S Bridge and M Dixon, Megarry and Wade: The Law of Real Property, 9th ed, Sweet & Maxwell, London, 2012, pp 87–8. The possessory actions and the development of the action of ejectment (based on possession) are discussed later in this chapter.

13.

Gray and Gray, Elements of Land Law, note 10 above, pp 150 and 180.

14.

Moore et al suggest that the adverse possession doctrine may not have a strong future when they conclude that ‘the advent of electronic titles and eventually electronic conveyancing will inevitably ensure that in the future more reliance is placed on documented title than on the fact of possession’: A Moore, S Grattan and L Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, 6th ed, Thomson Reuters/Lawbook Co, Australia, 2016, p 125.

15.

Easements are discussed in Chapter 12. Note that the Torrens system grants indefeasibility to interests that are registered. One exception to indefeasibility is ‘the omission or misdescription of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act’: Real Property Act 1900 (NSW) s 42(a1). An easement by prescription or long user is arguably based on the doctrine of possession because it exists, not by way of documentation, but rather by way of a party going into possession and using the alleged easement for at least 20 years. Yet, in Williams v State Transit Authority (NSW) (2004) 60 NSWLR 286 the court found against the holder of an

alleged easement and in favour of the competing registered title holder. It rejected the proposition that an easement by prescription could be founded on a lost Crown grant. The effect of this decision was to cut back severely the doctrine of prescriptive easements, arguably demonstrating a curtailment of the doctrine of possession, in favour of ‘ownership’ at least in relation to Torrens title land. See B Edgeworth, ‘Adverse Possession, Prescription and their Reform in Australian Law’ (2007) 15 ALPJ 1. F Burns, ‘Adverse Possession and the Title-by-Registration Systems in Australia and England’ (2012) 35(3) MULR 773–820, argues for Australian reform of what Burns describes as ‘this “rough and ready” doctrine’: at 773. 16.

Conveyancing Act 1919 (NSW) s 23D(2).

17.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 207; 107 ALR 1 at 162 (Mabo (No 2)).

18.

Gray and Gray, Elements of Land Law, note 10 above, p 153.

19.

Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1.

20.

Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [477] and [502] per McHugh J.

21.

Holdsworth, An Historical Introduction to the Land Law, note 8 above, p 123, calls possession the ‘physical relation of control exercised by a person over a thing’. See also JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 445, where Lord Hope of Craighead suggests that mere physical occupancy will not at common law constitute possession; Moncrieff v Jamieson [2007] 1 WLR 2620 at [55], where per Lord Scott of Foscote also suggests that occupation is ‘fundamentally inferior to, exclusive possession’.

22.

Ace Property Holdings Pty Ltd v Australian Postal Corp [2010] QCA 55 (19 March 2010) at [80] referring to Akici v LR Butlin [2005] EWCA Civ 1296; [2006] 1 WLR 201 at 209 [36]; Chaplin v Smith [1926] 1 KB 198. For further discussion of the concept of possession in the context of a lease, see Lam Kee Ying v Lam Shes Tong [1975] AC 247. For discussion of lower court decision in the Ace Property Holdings case, see S Jones, ‘Double Illusion: Parting with Possession or Occupation by Proxy’ (2010) 7 APLB 102.

23.

See Chapter 3 where reference is made to fee simple estates, life estates and fee tail estates, for example.

24.

This point is made by Gray and Gray, Elements of Land Law, note 10 above, pp 165, 167. See also earlier edition Gray and Gray, Elements of Land Law, 4th ed, Oxford University Press, Oxford, 2005, p 200. Note that the court in Metropolitan Railway Co v Fowler [1892] 1 QB 165 at 175 stated that the origin of title was never ‘a set of words on a parchment’. It was rather the on-going possession of the land. See also Clos Farming Estates Pty Ltd v Easton (2001) 10 BPR 18,845 at [44], per Bryson J.

25.

Gray and Gray, Elements of Land Law, note 10 above, pp 153–4.

26.

Gray and Gray, Elements of Land Law, note 10 above, p 200; Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 276 per Latham CJ, cited in Gray and Gray; A W B Simpson, A History of the Land Law, 2nd ed, Clarendon Press, Oxford, 1986, p 38. Note that property involves the relationship people have with each other about a ‘thing’ and therefore that relationship, being based on varying degrees of power, is capable of many calibrations.

27.

K Gray and S Gray, Elements of Land Law, 4th ed, Oxford University Press, Oxford, 2005, p 151.

28.

Gray and Gray, Elements of Land Law, note 10 above, p 166.

29.

That is, ‘ownership’ only has meaning if the law attaches rights to the owner.

30.

Mabo v Queensland (No 2) (1992) 175 CLR 1; 107 ALR 1; J Gray, ‘The Mabo Case: A Radical

Decision?’ (1997) 17(1) Canadian Native Studies Journal at 33–74. 31.

Native Title is discussed in Chapter 4.

32.

Harpum, Bridge and Dixon, Megarry and Wade, The Law of Real Property, note 12 above, p 85.

33.

Harrow London Borough Council v Qazi [2004] 1 AC 983 at [88].

34.

Note that the adverse possession issue in the case of JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419; [2002] UKHL 30, discussed later, eventually went to the European Court of Human Rights for consideration under Art 1 of the European Convention on Human Rights as JA Pye (Oxford) Ltd v United Kingdom (2006) 43 EHRR 3; [2005] ECHR 921 (Application no 44302/02, Strasbourg, 15 November 2005) (ECtHR).

35.

F W Maitland, ‘The Mystery of Seisin’ (1886) 2 LQR 481; ‘The Beatitude of Seisin’ (1888) 4 LQR 24 at 28. See 5.16 and 5.26 explaining seisin further.

36.

Holdsworth, An Historical Introduction to the Land Law, note 8 above, p 121, notes that ‘the term seisin is derived from the same root as the Roman possessio and the German besitz’.

37.

Holdsworth, An Historical Introduction to the Land Law, note 8 above, p 121, notes that from the 15th century on, when Littleton was writing on tenures the term seisin was appropriated to describe possession of freehold land.

38.

F Pollock and F W Maitland, The History of English Law, 2nd ed, London, 1968; cited and referred to in Gray and Gray, Elements of Land Law, note 10 above, p 153.

39.

See F W Maitland, ‘The Mystery of Seisin’ (1886) 2 LQR 481; ‘The Beatitude of Seisin’ (1888) 4 LQR 24 at 28; Asher v Whitlock (1865) LR1QB 1.

40.

Note that livery of seisin was the ceremonial handing over of feudal possession. It involved the physical act of placing a clod of earth or twig from the transferor’s land into the hands of the transferee. (The act was imperative to admit the transferee into the tenure and was absolutely necessary to pass the freehold.) Although livery of seisin is no longer necessary to pass freehold, in 1975 the then Prime Minister of Australia, Gough Whitlam, poured sand from the Daguragu land into the hands of Vincent Lingiari, an Indigenous elder, in an act symbolising the handing back of ancestral land from non-Indigenous Australians to the Gurindji people.

41.

Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 12 above, p 88.

42.

J Salmond, Jurisprudence (or The Theory of Law), London, 1902, p 288.

43.

From at least the reign of Henry II (1154–89). For an historical discussion of land law remedies, see Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 12 above, pp 87–9, 93.

44.

See W J V Windeyer, Lectures on Legal History, 2nd ed, Law Book Co, Sydney, 1957, pp 44–6. See also R Bartlett, Trial by Fire and Water: The Medieval Judicial Ordeal, Oxford University Press, Oxford, 1986.

45.

Henry II, who acceded to the throne in 1154, embraced wholeheartedly the notion of the King’s court. He made a number of changes to the rights, remedies and procedures of the legal system. These changes were made in an effort to divert power and influence away from the feudal lords and towards himself.

46.

The writ was a blueprint from which deviation was not tolerated.

47.

See W Holdsworth, A History of English Law, 4th ed, Methuen, Sweet & Maxwell, London, 1936, Vol 2. Praecipe means ‘order’ and was the word used after the introductory greeting.

48.

‘Disseised’ means to have lost seisin.

49.

The Grand Assize was a tool of the King designed to wrest power and influence away from the barons by offering new forms of actions and better remedies for old actions in the royal courts, thus influencing litigants to have their matters heard in the royal courts. The term ‘Grand Assize’ relates both to the procedure itself and the panel of 12 men.

50.

Henry II also attempted to secure the supremacy of the royal courts by extending the writ of praecipe in capite to those other than tenants in chief and by introducing the possessory assizes.

51.

Magna Carta 1215, ch 34, demonstrates how the earlier more rigid position was retained.

52.

See 5.7, where it is noted that others have observed that this trend appears presently to be in retreat, in England, at least.

53.

Assize means a sitting or session. The term comes from the Latin sedere, meaning ‘to sit’.

54.

See P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, pp 90–93, for a discussion of the writ system and real actions.

55.

At this time, the term ‘disseised’ meant ‘dispossessed’.

56.

The assize of mort d’ancestor, the assize of novel disseisin, darrein presentment, and utrum comprise the four possessory assizes. They were commenced by way of writ. Possessory or petty assizes, as they were known, dealt with less significant issues than grand assizes. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 12 above, pp 94, 102; J Oxley-Oxland and R T Stein, Understanding Land Law, Law Book Co, Sydney, 1985, pp 24–35; S F C Milsom, Historical Foundations of the Common Law, 2nd ed, Oxford University Press, London, 1981, p 140; J H Baker, An Introduction to English Legal History, 4th ed, Oxford University Press, 2005, p 545.

57.

In this context, ‘disseised’ meant ‘dispossessed’. Although the word ‘disseised’ had its origins in seisin, it was not until some time later that ‘seisin’ came to mean anything more than possession.

58.

By the time the action of ejectment had been developed in the 16th and 17th centuries, ‘seisin’ no longer simply meant possession, but had come to mean something akin to the possession of a freeholder.

59.

T F T Plucknett, A Concise History of the Common Law, 5th ed, Butterworths, London, 1956, pp 357–60.

60.

Writs of entry date back to the reign of King Richard I (1189–1199) and King John (1199–1216).

61.

Note that writs of right replaced the possessory assizes. These writs provided owners with a simpler and easier method of protecting their rights than had the real actions. See Butt, Land Law, note 54 above, pp 92–3, for an insightful discussion of this point.

62.

Trust Company Ltd v Chief Commissioner of State Revenue (2007) 13 BPR 25,019 at 25,027 (per Giles JA). Note that Holdsworth, An Historical Introduction to Land Law, note 8 above, p 121 states: ‘Seisin means possession. It is derived from the Roman “possessio” and the German “besitz”. The man who is seised is the man sitting on the land; when he was put in seisin, he was set there and made to sit there. During the mediaeval period the terms were used convertibly … but in the latter part of the Fifteenth century when Littleton was writing in his book on Tenures, the term seisin came to be appropriated to describe the possession of freehold estates in the land while the term possession was appropriated to chattels real and personal’.

63.

Maitland claimed that seisin represented a fusion of concepts, a ‘primeval fusion between possession and ownership’: F W Maitland, ‘The Mystery of Seisin’ (1886) 8 LQR 481. See also F W Maitland, ‘The Beatitude of Seisin’ (1888) 4 LQR 24 at 28.

64.

A ‘freehold estate’ is the name given to one of the interests in land. Freehold tenure, also called socage tenure, historically had an uncertain, though limited, duration. Under freehold tenure tenants were free, unlike under villeinage (also known as copyhold tenure) where tenants were unfree. See 3.42. Under the doctrine of estates there are freehold estates and estates less than freehold, such as leasehold estates. See Chapter 3 for a discussion of estates.

65.

Certainly by the time Littleton was writing on tenures. See Holdsworth, An Historical Introduction to Land Law, note 8 above, p 121.

66.

Holdsworth, An Historical Introduction to Land Law, note 8 above, p 121.

67.

This area of the law was later echoed in s 79 (now repealed) of the Supreme Court Act 1970 (NSW), which stated: Where if this Act had not been passed, any person might have brought an action of ejectment, the person may commence proceedings and claim judgment for possession of land and, subject to the rules, claim such other relief as the nature of the case requires. In turn, s 70 of the Supreme Court Act was replaced by s 20 of the Civil Procedure Act 2005 (NSW). On livery of seisin, see R Kipling, Puck of Pook’s Hill, London, 1906, p 12 (cited in Gray and Gray, Elements of Land Law, note 10 above, p 152, fn 2): “What’s taking seizin?” said Dan, cautiously. “It’s an old custom the people had when they bought and sold land. They used to cut a clod and hand it over to the buyer, and you weren’t lawfully seized of your land — it didn’t really belong to you — till the other fellow had given you a piece of it — like this”. He held out the turves.

68.

The best a dispossessed leaseholder could hope for was damages.

69.

Until approximately 1475, eviction of a lessee did not give him or her a right to bring any kind of legal action to recover land. If a lessee were evicted, it was the lessor who could mount a real action for recovery, and that action was based on his or her own disseisin. The lessee would get the land back only if the lessor decided to hand over possession for the remaining portion of the unused lease. The only remedy available to the lessee was damages, a remedy that did not become possible until the 13th century.

70.

The appropriation of ejectment by freeholders involved the dispossessed freeholder making an actual lease to a friend who would bring the action in his or her name. If successful, the friend would then hand over possession to the dispossessed freeholder. A later stage in the appropriation of the action involved the dispossessed freeholder alleging the existence of the fictitious lease to a fictitious character called John Doe, who suffered a fictitious eviction at the hands of another fictitious character, Richard Roe. Success in such an action would result in an order that the land be vacated by Roe or anyone else on it. Hence, the real defendant had to be given a chance to defend his or her possession of the land. Richard Roe would then attach a note to the writ explaining that he, Roe, did not intend to defend and the real defendant ought to do so in order to avoid eviction. Ultimately, the only issue for trial became whether or not the plaintiff’s lessor had a right of entry against the defendant. Such a right of entry would be grounded in his or her earlier seisin, or that of an earlier ancestor. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 12 above, pp 96–8; B Edgeworth, C Rossiter, M Stone and P O’Connor, Sackville and Neave Property Law: Cases and Materials, 8th ed, LexisNexis Butterworths, Australia, 2008, p 141. (Note that later editions of Sackville and Neave do not discuss this historical material.)

71.

F Pollock and F W Maitland, The History of English Law, 2nd ed, Cambridge University Press, Cambridge, 1898, Vol 2. Note that 3 and 4 Will IV c 27 (Real Property Limitation Act 1833

(UK)), which became effective on 31 December 1834, abolished the real actions. It was adopted and became effective in New South Wales in 1834. 72.

Section 20 of the Civil Procedure Act now permits ‘a claim for judgment for possession of land’ to take the place of a claim in an action for ejectment that could have been brought under the practice of the Supreme Court as it was immediately before 1 July 1972.

73.

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 209; 107 ALR 1 at 163–4.

74.

See Mabo v Queensland (No 2) (1992) 175 CLR 1 at 209; 107 ALR 1 at 16.

75.

See B Pohle, ‘Possessory Title in the Context of Aboriginal Claimants’ (1998) 11 QUTLJ 200–6. See also the joint judgment in Western Australia v Ward (2002) 213 CLR 1; 191 ALR 1 at [48]–[52] and [89]–[94] for further elaboration. In Ward, the court warns against splitting up a portmanteau concept such as ‘possession’ into its component parts. Note that in some other jurisdictions, such as Greenland and the Galápagos Islands, whale fishery by way of striking did historically demonstrate possession. See, eg, Fennings v Lord Grenville (1808) 1 Taunt 245; 127 ER 825; Hogarth v Jackson (1827) Mood & M 58; ER 1080; cited in O Wendell Holmes, The Common Law (1881), pp 206– 13.

76.

Torrens title is discussed in Chapter 8. See Real Property Act 1900 (NSW). Note that it is possible to claim adverse possession of Torrens title land in limited circumstances in New South Wales.

77.

Indeed, even under the Torrens system, title is not absolute.

78.

See Conveyancing Act 1919 (NSW) s 53 (as amended). See Chapter 7. Note, however that s 170 of the Crown Lands Act 1989 (NSW) effectively means that an adverse possession claim cannot be brought against the Crown.

79.

See discussion in Edgeworth, Rossiter, Stone and Connor, Sackville and Neave Property Law: Cases and Materials, note 70 above, p 141.

80.

Holdsworth, A History of English Law, note 47 above; Doe d Carter v Barnard (1849) 13 QB 945. See also Allen v Roughley (1955) 94 CLR 98 per Kitto and Taylor JJ. For a discussion of ejectment, see A W B Simpson, A History of the Land Law, 2nd ed, Oxford University Press, Oxford, 1986, pp 71–7.

81.

‘Adverse possession’ means that he took possession without the consent of the documentary title holder or an earlier adverse possessor. The concept is explained more fully at 5.50.

82.

Asher v Whitlock (1865) LR1QB 1; Perry v Clissold [1907] AC 73; Allen v Roughley (1955) 94 CLR 98; Oxford Meat Co Pty Ltd v McDonald [1963] SR (NSW) 423 at 427; Spark v Whale Three Minute Car Wash (Cremorne Junction) Pty Ltd (1970) 92 WN (NSW) 1087; Newington v Windeyer (1985) 3 NSWLR 55; Mabo v Queensland (No 2) (1992) 175 CLR 1 at 209; 107 ALR 1 at 163 per Toohey J.

83.

Asher v Whitlock (1865) LR1QB 1.

84.

For a more modern application of hereditary squatting, see Beever v Spaceline Engineering Pty Ltd (1993) NSW ConvR ¶55-678 where a squatter devised his possessory title of land at Coledale, New South Wales, to his neighbour.

85.

Asher v Whitlock (1865) LR1QB 1.

86.

See 5.47.

87.

The lord of the manor retained best title until 1870 because he had 20 years from the date the adverse possessor took possession (ie, from 1850) to bring an action for recovery.

88.

Allen v Roughley (1955) 94 CLR 98.

89.

As Allen had accepted the office of trustee of Cusbert’s estate, he was bound by the usual duties of a trustee, and would have to deal with the land comprising the estate accordingly. Allen’s status as trustee meant that he could not take the normal stance of a defendant in possession of land from which a plaintiff sought to eject him. Naturally, if Allen were not a trustee, he could have relied simply on his existing possession at the time the action was brought and insisted that a plaintiff must affirmatively establish whatever the law requires to be proven to sue in ejectment. However, as the land in question was prima facie part of the estate for which he was trustee, he found himself in a position where he could defeat the ejectment action of the plaintiffs only by affirmatively proving that Plunkett’s land was not part of the estate over which he had become trustee in 1937.

90.

Allen v Roughley (1955) 94 CLR 98 at 106 per Dixon CJ. Note the law on extra-marital children meant that such children did not automatically inherit.

91.

By the time the case went on appeal, Allen had died and his executors acted in his place.

92.

Holdsworth, A History of English Law, note 47 above, Vol 2, pp 57–81; W Holdsworth, ‘Terminology and Title in Ejectment — A Reply’ (1940) 56 LQR 479.

93.

‘Trespassory ouster’ involves a trespasser ousting the possessor of the land.

94.

Allen v Roughley (1955) 94 CLR 98 at 108 per Dixon CJ; at 114 per Williams J; at 144 per Taylor J. The use of a defence based on better title resting in a third person is known as the jus tertii plea.

95.

Perry v Clissold [1907] AC 73. Despite the waters having been muddied by the words of Dixon CJ, Taylor and Williams JJ in Allen v Roughley, it would seem that the position is probably that the jus tertii cannot be raised in relation to land. For further discussion of the jus tertii, see 5.47.

96.

Per Fullagar J in Allen v Roughley (1955) 94 CLR 98 at 130, quoting Jordan CJ in NRMA Insurance Ltd v B & B Shipping and Maritime Salvage Co Pty Ltd (1947) 47 SR (NSW).

97.

A D Hargreaves, ‘Terminology and Title in Ejectment’ (1940) 56 LQR 376.

98.

Asher v Whitlock (1865) LR1QB 1. Mellor J used the word ‘seisin’ in its technically correct sense; that is, denoting the possession of a freeholder rather than a leaseholder, such as a tenant at will. Hence Mellor J’s point is simply that Williamson’s earlier possession might not have given him a title to sue in ejectment against a dispossessor if Williamson had entered in 1850 with the consent of the lord of the manor, and hence become a tenant at will, rather than someone who had seisin in the proper sense of the word.

99.

We are indebted to Denis Harley, Visiting Fellow and sometime Senior Lecturer in the Faculty of Law, at the University of New South Wales, Sydney, Australia, for his discussion and analysis of this case. See also the discussion of, and questions about, Allen v Roughley in Edgeworth, Rossiter, Stone and O’Connor, Sackville and Neave: Property Law — Cases and Materials, note 70 above, p 154; Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property, note 14 above, p 167. Note, too, that Kitto J thought that possession was prima facie evidence of a fee simple estate. Hence, had circumstances existed whereby a third party held better title than either the plaintiff or the defendant, Kitto J may well have seen that title as defeating the plaintiff’s claim for possession.

100. Perry v Clissold [1907] AC 73 at 79. 101. Spark v Whale Three Minute Care Wash (Cremorne Junction) Pty Ltd (1970) 92 WN (NSW) 1087. 102. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464. 103. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 12 above, p 90,

for examples of when the jus tertii defence may properly be applied. 104. See s 20 of the Real Property Act in conjunction with Uniform Civil Procedure Rules 2005 (NSW), including rr 6.8, 10.15, 14.5, 16.4 and 36.8 in relation to claims for possession of land. Note that in McPhail v Persons, Names Unknown [1973] Ch 447, Lord Denning MR acknowledged the remedy of self-help but discouraged its use in favour of court-ordered remedies. 105. Supporters of the jus tertii as it relates to land rely on Doe d Carter v Barnard (1849) 13 QB 945. 106. Perry v Clissold [1907] AC 73 at 80. 107. Perry v Clissold [1907] AC 73 at 80. 108. Doe d Carter v Barnard (1849) 13 QB; 116 ER 1524. 109. Perry v Clissold [1907] AC 73 at 377. He observed that Doe d Carter was ‘difficult, if not impossible to reconcile with Asher v Whitlock (1865) LR1QB 1’. 110. It is also possible for a party to go into possession of Torrens title land in New South Wales. That possession will be defeated by the title of the registered proprietor unless the party in possession can bring himself or herself under ss 45B–45G of the Real Property Act 1900 (NSW). See 5.148 on possessory title and Torrens land. 111. Adverse possession is sometimes known as possessory title. 112. See 5.70–5.71. Clearly, adverse possession has been part of Australian law (and, more specifically, New South Wales law) since ‘settlement’. For an early case on the issue, see Blower v Larkin [1833] NSWSupC 94 in Dowling, Proceedings of the Supreme Court, Vol 83, State Records of New South Wales, 2/3266, cited in Decisions of the Superior Courts of New South Wales: 1788–1899, published by the Macquarie Law School, Macquarie University (accessed 11 July 2017), , click on ‘Finding cases’ then ‘Case Index’ and ‘1833’. Butt, Land Law, note 54 above, p 895, observes that while the law seeks to uphold the paramountcy of prior possession, it takes the view that ‘there comes a time when, as a matter of policy, claims to land must be barred by lapse of time’. 113. It follows that the documentary title holder will be unable to bring an action to eject an adverse possessor after his or her own title is barred. The principle tends to operate in a passive rather than active sense and, hence, its application does not simply invest title in the adverse possessor. The process is an extinctive one, which contrasts it with the process by which an easement or profit à prendre is created; the latter being an acquisitive one known as prescription. 114. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 12 above, p 1463. 115. JA Pye (Oxford) Pty Ltd v Graham [2003] 1 AC 419 at 432–8 per Lord Browne-Wilkinson; Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at 60 and 61. 116. D Irving, ‘Should the Law Recognise the Acquisition of Title by Adverse Possession?’ (1994) 2(2) APLJ 112–19; K Green, ‘Citizens and Squatters: Under the Surfaces of Land Law’ in S Bright and J K Dewar (eds), Land Law: Themes and Perspectives, Oxford University Press, New York, 1998, p 229. Note that the concept of squatting is well embedded in Australian culture and history. Observe the role of the squattocracy in Australian history. See J Merritt, That Voluminous Squatter: W E Abbott, Turalla Press, Bungendore, 1999; G Farwell, Squatter’s Castle, the Story of a Pastoral Dynasty; the Life and Times of Edward David Stewart Ogilvie 1814–96, Lansdowne Press, Melbourne, 1973; Manning Clark’s History of Australia, abridged by M Cathcart, Penguin, Australia, 1995. 117. Issue discussed in M J Goodman, ‘Adverse Possession of Land — Morality and Motive’ (1970) 33

Mod LR 281–282; B Edgeworth, ‘Adverse Possession, Prescription and their Reform in Australian Law’ (2007) 15 APLJ 1 at 11. 118. B Edgeworth, ‘Adverse Possession and Human Rights: The Last Act in JA Pye (Oxford) v United Kingdom’ (2007) 15 APLJ 107–14. Whether the doctrine of adverse possession should apply to registered land has been raised by scholars including L McCrimmon, ‘Whose Land is it Anyway? Adverse Possession and Torrens Title’ in D Grinlinton, Torrens in the Twenty First Century, LexisNexis, Wellington, NZ, 2003, and Gray and Gray, Elements of Land Law, note 10 above, pp 120, 1167 and 1170. 119. Eg, as reflected in Art 5(xxiii) of the Brazilian Constitution. See also M Dockray, ‘Why Do We Need Adverse Possession?’ [1985] Conv 272. 120. See T J Miceli and C F Sirmans, ‘An Economic Theory of Adverse Possession’ (1995) 15(2) Int Rev Law & Econ 161. See also J Wallace, ‘Principles of the Law of Possession’, Leo Cussen Institute Seminar Paper, Melbourne, February 1994. For a discussion of adverse possession in the context of the move towards a scheme of land registration, see L Chen and S B C Gordon, ‘Whither Adverse Possession in Hong Kong: A Comparative and Statistical Study’ (2014) 5 Conveyancer and Property Lawyer 413–29. 121. Marquis of Cholmondeley v Lord Clinton (1820) 2 Jac & W 1 at 139–40; 37 ER 527 at 577 per Sir Thomas Plumer MR. 122. M Dockray, ‘Why Do We Need Adverse Possession?’ [1985] Conv 272 at 274. In other jurisdictions, such as Brazil, for example, where there is an acute housing shortage among the poor, the objective of not sleeping on rights is perhaps more seriously encouraged. However, there is still a limitation period for adverse possession claims in Brazil before which documentary owners may indeed sleep on their rights. Yet, in Brazil the objective of not sleeping on rights has found some voice in Art 5(xxiii) of the Brazilian Constitution, which states that ‘property shall observe its social function’. For a discussion of some of the housing issues in Rio de Janeiro, see J Gray, ‘Stories from a Favela: The Limits of Property Law’ (2005) 30(4) Alt LJ 184. Note also that in Bolivia, President Morales gave more than 30,000 square kilometres of land to Indigenous peasants as part of agrarian reform. That land was state owned but the President vowed to redistribute private land that was not being used productively. See J Read, Bolivia head starts land handout, BBC News, 4 June 2006 (accessed 11 July 2017), . 123. J Netter, ‘An Economic Analysis of Adverse Possession Statutes’ (1986) 6 Int Rev Law & Econ 217; M Goodman, ‘The Morality of Adverse Possession of Land’ (1968) 31 Mod LR 82. 124. Eg, Allen v Roughley (1955) 94 CLR 98. For a general discussion, see L Griggs, ‘Possessory Title in A System of Title by Registration’ (1999) 21 Adel LR 157. Note that some scholars suggest that a successful adverse possession claim should also involve the payment of compensation to the documentary owner, a point raised in L Griggs, ‘Possession, Indefeasibility and Human Rights’ (2008) 8(2) QUTLJ 286. 125. See Chapter 8. For an interdisciplinary perspective on the issue see M Park, ‘The Effect of Adverse Possession on Part of a Registered Title Land Parcel’, PhD thesis, Department of Geomatics, University of Melbourne, January 2003 (accessed 11 July 2017), . 126. Miceli and Sirmans, ‘An Economic Theory of Adverse Possession’, note 120 above. 127. Miceli and Sirmans, ‘An Economic Theory of Adverse Possession’, note 120 above. The authors do, however, admit that good faith errors are difficult to distinguish from intentional boundary

encroachments. In McPhail v Persons, Names Unknown [1973] Ch 447 at 460; [1973] 3 All ER 393 at 399, Lord Denning raised the notion of squatting with justification, when he stated that, although he was compelled to give the owner of the house the order sought, he trusted that ‘the owners [would] act with consideration and kindness in the enforcing of it — remembering the plight which the homeless are in’. 128. For consideration of adverse possession in the context of another country, see D Fitzpatrick, Land Claims in East Timor, Asia-Pacific Press, Canberra, 2002. In East Timor, like so many countries throughout the world, there is a vast set of competing land claims. Those with claims derived from the period of Portuguese colonialism are in competition with those whose land claims date back to Indonesian occupation, and those who currently occupy land but do not necessarily have any documentation to support their claims. 129. Brisbane South Regional Health Authority v Taylor [1996] HCA 25 at [15]. 130. JA Pye (Oxford) Ltd v Graham (2000) 3 WLR 242. 131. JA Pye (Oxford) Ltd v Graham (2000) 3 WLR 242 at 271. See 5.94. 132. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419. See 5.94. 133. Bridges v Bridges [2010] NSWSC 1287 at [12]. 134. See JA Pye (Oxford) Pty Ltd v United Kingdom (2006) 43 EHRR 3; [2005] ECHR 921 (Application no 44302/02, Strasbourg, 15 November 2005) (ECtHR); JA Pye (Oxford) Ltd v United Kingdom (2008) 46 EHRR 45 (ECtHR Grand Chamber, 30 August 2007); L Griggs, ‘Possession, Indefeasibility and Human Rights’ (2008) 8(2) Law and Justice Journal 286. 135. JA Pye (Oxford) Pty Ltd v United Kingdom (2005) 43 EHRR 3; JA Pye (Oxford) Ltd v United Kingdom (2008) 46 EHRR45 (ECtHR Grand Chamber, 30 August 2007). 136. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419. 137. The English law of adverse possession is governed by the Land Registration Act 2002 (UK), which significantly amends the approach taken to adverse possession in England and Wales, one effect of which is to require that notice be given to the registered owner. For a discussion of the rationale for the Land Registration Act, see Law Commission and HM Land Registry, Land Registration for the 21st Century: A Conveyancing Revolution, Land Registration Bill and Commentary, report, Law Com No 271, 2001, p 5 (accessed 1 July 2017), . See also Law Commission, Updating the Land Registration Act 2002: A Consultation Paper, Consultation Paper No 227, 2016, particularly p 360 onwards, which relates to adverse possession (accessed 1 July 2017), . Note that, at the time of going to press, consultations are ongoing. 138. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419. 139. Note that Mr Graham, the adverse possessor, died in a shooting accident before the trial and his wife continued the litigation. 140. JA Pye (Oxford) Pty Ltd v United Kingdom (2005) 43 EHRR 3; JA Pye (Oxford) Ltd v United Kingdom (2008) 46 EHRR 45 (ECtHR Grand Chamber, 30 August 2007). 141. JA Pye (Oxford) Pty Ltd v United Kingdom (2005) 43 EHRR 3. 142. JA Pye (Oxford) Pty Ltd v United Kingdom (2005) 43 EHRR 3. 143. Article 1 of the Convention for the Protection of Human Rights and Fundamental Freedoms (European Convention on Human Rights).

144. Article 1 of Protocol No 1 to the European Convention on Human Rights. 145. That is a European Convention on Human Rights right. 146. JA Pye (Oxford) Pty Ltd v United Kingdom (2005) 43 EHRR 3. 147. Article 1 of Protocol No 1 to the European Convention on Human Rights. 148. Australia has ratified the Universal Declaration on Human Rights. Although Art 17(1) upholds a right for everyone to own property by themselves and with others, the Declaration is not part of Australian Law. However, Australia is also party to the International Covenant on Civil and Political Rights (ICCPR) and the Second Optional Protocol to the ICCPR under which individuals may directly petition the Human Rights Committee in Geneva, alleging a violation of the ICCPR by Australia. For a discussion of human rights and property in Australia, see D Hughes and M Davis, ‘Human Rights and the Triumph of Property: The Marginalisation of the European Convention on Human Rights in Housing Law’ (2006) 70 Conv 526. 149. Eg, if legislation is ambiguous, Australian courts may prefer an interpretation that is more consistent with Australia’s international human rights obligations. As many of the rights contained in the ECHR are similar to those contained in the ICCPR, Australian courts have referred to the ECtHR, even though Australia is not, in fact, a party to the Convention. The authors acknowledge the benefit of discussions with Dr Chris Staker, Barrister and then Acting Prosecutor, Special Court of Sierra Leone, and (then) Dr Sarah Williams, Faculty of Law, University of New South Wales, Sydney, Australia, in regard to these issues. 150. Eg, the ICCPR and Human Rights Committee. 151. Human Rights Act 2004 (ACT); Charter of Human Rights and Responsibilities Act 2006 (Vic). It is worth noting that at the Universal Periodic Review (UPR) by the Human Rights Law Centre in 2015, the NGO report raised concerns about Australia’s native title law, asserting that the requirement of continuous connection to land and/or water is incompatible with the UN Declaration on the Rights of Indigenous Peoples: Human Rights Law Centre, Australia’s 2nd Universal Periodic Review: Joint Submission on behalf of the Australian NGO Coalition, March 2016, [37], [38] (accessed 11 July 2017), and click on the link to NGO Joint Report. Accordingly, the UPR process may be another way Australia could theoretically be held responsible for its protection (or non-protection) of the right to property — although the process is not legally binding. 152. Abbatangelo v Whittlesea City Council [2008] V Conv R 54-750 explores this issue a little further in relation to the respect for property by way of the Charter of Human Rights and Responsibilities Act 2006 (Vic). 153. This idea may be pursued through consideration of Pt 9 and Sch 6 of the Land Registration Act 2002 (UK), which demonstrate how the United Kingdom acted in anticipation of a negative result in Pye’s case at the ECtHR. 154. Limitation Act 1969 (NSW) s 27 (the limitation periods); s 28 (cause of action accrues on dispossession and discontinuation); s 38(1) (adverse possession taken by another). 155. Possessory title is acknowledged by both s 23E(c) of the Conveyancing Act and Pt 6A of the Real Property Act. 156. Asher v Whitlock (1865) LR1QB 1. 157. In Asher v Whitlock, Asher took her interest through a line of inheritance, while Williamson, Lucy and Mary Ann took their interests through possession. Note that this case is also often cited to

demonstrate that the jus tertii does not apply to land. However, this view is a little contentious because the jus tertii defence was not specifically argued in this case. Perry v Clissold [1907] AC 73 is, however, authority that the jus tertii is inapplicable in Australia in regard to land. 158. See, eg, Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464. 159. This Act commenced on 1 January 1971. Before it, the adverse possession periods were set by an Act known as the Real Estate (Limitation of Actions) Act 1837 (NSW) (8 Will IV No 3). 160. See Re North Sydney Council (1998) NSW ConvR ¶55-828. Note that there are exceptions in relation to the operation of s 170 of the Crown Lands Act. See Butt, Land Law, note 54 above, p 897, fn 16, for a discussion of these exceptions. 161. Townsend v Waverley Council (2001) 120 LGERA 224; [2001] NSWSC 384 at [23]. For an English case involving intervention of the Crown’s ownership and the defeat of a claim, see Hill v Transport for London [2005] 3 WLR 471 (Ch D). 162. Townsend v Waverley Council (2001) 120 LGERA 224; [2001] NSWSC 384. 163. Bronte Park was dedicated as a park on 19 January 1887, pursuant to s 4 of the Public Parks Act 1884 (NSW). 164. Townsend v Waverley Council (2001) 120 LGERA 224; [2001] NSWSC 384 at [65]. 165. P Latovick, ‘Adverse Possession of Municipal Land: It’s Time to Protect this Valuable Asset’ (1998) 31(2) University of Michigan Journal of Law Reform 475. See also P Latovick, ‘Adverse Possession Against the States: The Hornbrooks Have it Wrong’ (1996) 29(4) University of Michigan Journal of Law Reform 939, which demonstrates how, despite the fact that in some of the states of the United States adverse possession statutes do not run against the state, state land can still be held adversely. Note, as discussed later, that it is not possible to bring a successful adverse possession claim against the Crown in relation to Torrens title land, and s 170 of the Crown Lands Act prevents the adverse possession claims in relation to ‘Crown lands’ a term defined in that statute. 166. Weber v Ankin (2008) 13 BPR 25,231. There the defendants claimed adverse possession over a lane in Marrickville, Sydney, which the court found to be a public lane. The claim failed under s 45D of the Real Property Act and would have also failed at common law pursuant to Dawes v Hawkins [1860] EngR 968; (1860) 8 CB NS 848; 141 ER 1399, a case where the court found: [O]nce a highway always a highway … for the public cannot release their rights, and there is no extinctive presumption or prescription. The only methods of legally stopping a highway are, either by the old writ of ad quod damnum, or by proceedings before magistrates under the statute. 167. Roberts v Swangrove Estates Ltd [2008] 2 WLR 1111. 168. Mr Justice P Young, ‘Recent Cases: Can the Crown Claim Adverse Possession Against a Subject?’ (2008) 82 ALJ 693. 169. See Limitation Act 1969 (NSW) s 28. 170. See Limitation Act 1969 (NSW) s 28. 171. For a recent discussion of what constitutes possession, see Roy v Lagona [2010] VSC 250, relying on Whittlesea City Council v Abbatangelo (2009) 259 ALR 56. 172. See Limitation Act 1969 (NSW) s 38. 173. Limitation Act 1969 (NSW) s 38(1).

See Asher v Whitlock (1865) LR1QB 1 and Allen v Roughley (1955) 94 CLR 98 for examples of 174. what needs to occur for the cause of action to accrue. See also Appendix A of the 2nd edition of this book for earlier details of possessory claims. 175. See Limitation Act 1969 (NSW) ss 27(2), 11(2)(a). The position is otherwise in relation to Torrens land. See 5.153. 176. See Limitation Act 1969 (NSW) s 31. 177. See Ace Property Pty Ltd v Australian Postal Corp [2010] QCA 55; P Butt (ed), ‘When Does a Tenant “Part with Possession” in Breach of the Lease’ (2010) 84 ALJ 522; S E Jones, ‘Double Illusion: Parting with Possession, or Occupation by Proxy?’ (2010) 24(7) APLB 101. See Bridges v Bridges [2010] NSWSC 1827 at [14]. 178. Chung Ping Kwan v Lam Island Co Ltd [1997] AC 38 (PC). Note the situation is different if the new lease is simply the result of an exercise of an option in the original lease. In such a case, the tenant’s title in the new lease is extinguished in the same way as it would be under the old lease. 179. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419, quoting Slade J in Powell v McFarlane (1979) 38 P & CR 452 at 470: ‘In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prima facie right to possession’. Where the paper owner or someone claiming through him or her is not in possession, the law will attribute ‘possession of land to a person who can establish no paper title to possession [if that person can] be shown to have both factual possession and the requisite intention to possess (“animus possidendi”)’. See also Bridges v Bridges [2010] NSWSC 1287. Note that in Payne v Dwyer [2013] WASC 271, one of the reasons the claim to adverse possession of minerals failed was because permission had been granted. See E Webb, ‘Adverse Possession of Minerals in Land’, (2013) Australian Property Law Bulletin 208 (August) at 209. 180. JA Pye (Oxford) Pty Ltd v Graham [2003] 1 AC 419 at 433–4 per Lord Browne-Wilkinson. 181. This term is used interchangeably with the term ‘adverse possessor’. 182. JA Pye (Oxford) Pty Ltd v Graham [2003] 1 AC 419 at 434–5. For a discussion of possession, see A E S Tay, ‘Possession in the Common Law: Foundations for a New Approach’ (1964) 4 MULR 476 at 490, where it is described as ‘the present control of a thing, on one’s own behalf and to the exclusion of others’. Elsewhere it has been referred to as the objective realisation of ownership. See R von Ihering, ‘Über den Grund Besitzschützes’, translated in Salmond, Jurisprudence, 10th ed, Sweet & Maxwell, 1947, pp 311–12, and cited in Tay, ‘Possession in the Common Law’, above in this note, p 481. See also the earlier discussion of possession at 5.8. 183. See Kierford Ridge Pty Ltd v Ward [2005] VSC 215 where it was argued (unsuccessfully) that the possession did not amount to legal possession because it was accidental. See also Roy v Lagona [2010] VSC 250, which relied on Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 in deciding what test for possession was applicable. 184. JA Pye (Oxford) Pty Ltd v Graham [2003] 1 AC 419 at 445. 185. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464. 186. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475. The question of whether there was continuing factual possession in the context of building a fence was raised in Patsios v Glavinic [2006] VSC 92. 187. Re Riley and the Real Property Act (1965) 82 WN (NSW) 373. 188. Rains v Buxton (1880) 14 Ch D 537.

189. Marengo Cave Co v Ross 7 NE (2nd) 59 (1937). See also Cox v Colossal Cavern Co, 276 SW 540 (1925). 190. Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 14 above, p 135, referencing Ellis v Lambeth LBC (2000) 32 HLR 596. 191. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475. See also Shaw v Garbutt (1996) 7 BPR 14,816, where peaceable possession was equated with uninterrupted, exclusive and continuous possession. 192. Harnett v Green (No 2) (1883) LR 4 LR (NSW) 292, where the squatter maintained possession by way of a shotgun and warnings. See also Beever v Spaceline Engineering Pty Ltd (1993) NSW ConvR ¶55-678; Shaw v Garbutt (1996) 7 BPR 14,816 at 14,831–2. 193. Butt, Land Law, note 54 above, p 903, argues that if force can be used to commence a period of adverse possession, it would be anomalous that it could not be used to maintain it. 194. Bartlett v Ryan (2000) 10 BPR 18,077. 195. In Hughes v Griffin [1969] 1 WLR 23 at 30, the court stated that time cannot begin to run in favour of a possessor if a licence has been granted. 196. Smith v Lawson (1997) 75 P & CR 466. 197. Richardson v Greentree (NSWSC, Einstein J, 1 December 1997, unreported, BC9706375). 198. Bartha v O’Riordan [2004] QSC 205 provides another example of an adverse possession claim in a domestic context. Note the manner in which it deals with the effect of a joint tenancy on a claim for adverse possession. 199. Richardson v Greentree (NSWSC, Einstein J, 1 December 1997, unreported, BC9706375) at 35. In this case, the court also sets out 22 principles regarding adverse possession generally. 200. Richardson v Greentree (NSWSC, Einstein J, 1 December 1997, unreported, BC9706375) at 36. 201. Hughes v Griffin [1969] 1 WLR 23. 202. Asher v Whitlock (1865) LR1QB 1. See 5.34. 203. Richardson v Greentree (NSWSC, Einstein J, 1 December 1997, unreported, BC9706375) at 24. Morris v Tarrant [1971] 2 QB 143 supports the view that persons in possession as the result of close family relationships will not be held to be trespassers. 204. Roy v Lagona [2010] VSC 250. 205. See the discussion in Bridges v Bridges [2010] NSWSC 1287 at [16], quoting Butt, Land Law, note 54 above, p 904. 206. Eg, where the contract is rescinded or terminated. 207. Lakshmijit v Faiz Sherani [1974] AC 605. See also Hyde v Pearce [1982] 1 WLR 560. 208. Sandhu v Farooqui [2004] 1 P & CR 3. The purchaser’s claim failed on the facts in this instance. 209. BP Properties Ltd v Buckler (1988) 55 P & CR 337. 210. J Wallace, ‘Limitation, Prescription and Unsolicited Permission’ [1994] Conv 196 considers whether this is good law; referred to in Butt, Land Law, note 54 above, p 904. 211. See views of Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 14 above, p 136. 212. Butt, Land Law, note 54 above, p 904.

213. See Garbutt v Shaw (1996) 7 BPR 14, 816 at 14,826. 214. Ofulue v Bossert [2009] 2 WLR 749. 215. Lord Advocate v Lord Lovat (1880) 5 App Cas 273 at 288. 216. Powell v McFarlane (1979) 38 P & CR 452. 217. Powell v McFarlane (1979) 38 P & CR 452 at 471. 218. Powell v McFarlane (1979) 38 P & CR 452 at 469 per Slade J. 219. Powell v McFarlane (1979) 38 P & CR 452 at 471. 220. See Cooke v Dunn (1998) 9 BPR 16,489. 221. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 435, mentioned at 5.61. 222. Guggenheimer v Registrar of Titles [2002] VSC 124 at [4]. 223. Red House Farms (Thorndon) Ltd v Catchpole [1977] 244 EG 295; 121 Sol J 136. 224. Harnett v Green (No 2) (1883) 4 LR (NSW) 292 at 300. 225. Tecbild Ltd v Chamberlain (1969) 20 P & CR 633. 226. Riley v Penttila [1974] VR 547. 227. Staughton v Brown (1875) 1 VLR (L) 150 at 163. 228. Higgs v Nassauvian Ltd [1975] AC 464. 229. Quach v Marrickville Municipal Council (No 2) (1990) 22 NSWLR 55. 230. In Re Riley and the Real Property Act (1964) 82 WN (Pt 1) (NSW) 373 at 380, McLelland CJ stated that ‘the possession relied upon to establish adverse possession must be actual open, manifest and exclusive and must be continuous for a full period of 20 years’ (20 years was then the relevant period). See again Mulcahy v Curramore Ltd [1974] 2 NSWLR 464 at 475. 231. This requirement is affirmed in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419. 232. M Dockray, ‘Adverse Possession and Intention II’ [1982] Conv 345 at 346. See also Quach v Marrickville Municipal Council (No 2) (1990) 22 NSWLR 55 at 66–9 for a discussion of factual possession. 233. South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716. 234. South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716 at [20]. 235. Lord Advocate v Lord Lovat (1880) 5 App Cas 273 at 273. 236. Mulcahy v Curramore Ltd [1974] 2 NSWLR 464 at 475. 237. Mulcahy v Curramore Ltd [1974] 2 NSWLR 464 at 475. 238. Newington v Windeyer (1985) 3 NSWLR 555 at 564; Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475; Kirby v Cowderoy [1912] AC 599 at 603. 239. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475; Harnett v Green (No 2) (1883) 4 LR (NSW) 292; 5 ALT 61. 240. Newington v Windeyer (1985) 3 NSWLR 555 at 564. 241. Newington v Windeyer (1985) 3 NSWLR 555 at 564. 242. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475. Further examples are available in D Elvin and J Karas, Unlawful Interference with Land, Sweet & Maxwell, 2nd ed, London, 2002.

243. Wogama Pty Ltd v Harris [1969] 1 NSWR 245; (1968) 89 WN (Pt 2) (NSW) 62. 244. Cawthorne v Thomas (1993) 6 BPR 13,840. 245. Leigh v Jack (1879) 5 Ex D 264 at 271. See also South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716 where Tamberlin JA held that to defeat a title by dispossessing a former owner, acts must be done which are inconsistent with the enjoyment of the land for the purposes for which the owner intended to use it. If the possession is ‘equivocal’ there usually will be insufficient evidence to demonstrate from those acts that the possession of the owner was excluded. 246. Hence, in Leigh v Jack (1879) 5 Ex D 264 the possessor’s acts of placing rubbish on the owner’s land were not regarded as inconsistent with the owner’s plan to dedicate the land as road for the public some time in the future. 247. West Bank Estates Ltd v Arthur [1967] 1 AC 665 at 677; Ashburnam Golf Club Ltd v Hogan (22 July 1982, unreported), cited in Butt, Land Law, note 54 above, p 870. In the latter case, the land was unused but it effectively provided a buffer zone for poor golfers, whose balls went astray and deviated from the fairway. The squatter’s possession was not seen as inconsistent with use of the land as a buffer zone for wayward balls. See Williams Bros Direct Supply Ltd v Raftery [1958] 1 QB 159 for another case where acts including the cultivation of land, building sheds and greyhound breeding did not support a claim for adverse possession over land on which development was later planned. 248. Treloar v Nute [1976] 1 WLR 1295 at 1302; Powell v McFarlane (1979) 38 P & CR 452; Buckinghamshire County Council v Moran [1990] Ch 623; [1989] 2 All ER 225; JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 437–8 demonstrate the rejection. Note also that s 15(6) and Sch 1 para 8(4) of the Limitation Act 1980 (UK) inhibits application of the implied licence doctrine but does not totally prevent its application. If the facts of the case suggest a finding of a licence is justified, the court may still imply one. Also note that the English High Court decision in Beaulane Properties v Palmer [2005] EWHC 1460 (Ch) expressed the view that the law had gone awry since Buckinghamshire County Council’s case. In Beaulane’s case, the court stated that as (a) Beaulane had no immediate plans for the land and (b) Beaulane was content for Palmer to remain on the land, Palmer could not show that his use was inconsistent. Beaulane’s case may be interpreted as an attempt to make the English domestic law consistent with the decision JA Pye (Oxford) Ltd v United Kingdom (2008) 46 EHRR 45 (Application no 44302/02) (ECtHR Grand Chamber, 30 August 2007). This reflected a return to the test that JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 had specifically rejected. The position taken in Beaulane has been strongly criticised. See R Kerridge and A H A Brierley, ‘Adverse Possession, Human Rights and Land Rights Legislation: And They All Lived Happily Ever After’ [2007] Conv 552–8. 249. Buckinghamshire County Council v Moran [1990] Ch 263; [1989] 2 All ER 225. 250. Wallis’ Cayton Bay Holiday Camp Ltd v Shell Mex and BP Ltd [1975] QB 94; [1974] 3 All ER 575. 251. Buckinghamshire County Council v Moran [1990] Ch 263; [1989] 2 All ER 225 at 238 per Slade J. The court in Moran’s case, of course, was also bound by s 15(6) and Sch 1 para 8(4) of the Limitation Act. Note that Lord Browne-Wilkinson in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 437 attributed the English court’s mistaken requirement that the acts of the stranger must be inconsistent with the ‘purposes for which he intended to use [the land]’ to the judgment of Bramwell B in Leigh v Jack (1895) 5 Ex D 264. 252. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 437–8. See later discussion as to the persuasiveness of Pye’s case at 5.65.

253. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 437–8. 254. Leigh v Jack (1897) 5 Ex D 264; Wallis’ Cayton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94 at 103; [1974] 3 All ER 575 at 584. 255. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 437–8. 256. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 437–8. See also Buckinghamshire County Council v Moran [1990] Ch 623; [1989] 2 All ER 225; Richardson v Greentree (NSWSC, Einstein J, 1 December 1997, unreported, BC9706375) at 21. 257. The recommendations of the English Law Reform Committee were incorporated into s 15(6) and Sch 1 para 8(4) of the Limitation Act. It does away with a blanket implied licence, but states that the court is still able to find implied permission ‘where such a finding is justified on the actual facts of the case’. 258. Monash City Council v Melville (2000) V ConVR 54-261. 259. Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at 61 [6(h)]. Note, however, that South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716 at [17] muddies the waters a little by stating, ‘[t]o defeat a title by dispossessing a former owner, acts must be done which are inconsistent with the enjoyment of the land for the purposes for which the owner intended to use it’. 260. Woodward v Wesley Hazell Pty Ltd (1994) ANZ ConvR 624 at 627. See also D Skapinker, ‘Adverse Possession’ [1994] Law Soc J 32. 261. South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716 at [17]. 262. See M Dockray, ‘Adverse Possession and Intention I’ [1982] Conv 256; O Radley-Gardner, ‘Civilised Squatting’ (2005) 25(4) OJLS 727; William Bros Direct Supply Ltd v Raftery [1958] 1 QB 159; George Wimpey & Co Ltd v Sohn [1967] Ch 487; Riley v Penttila [1974] VR 547; Littledale v Liverpool College [1900] 1 Ch 19. 263. Riley v Penttila [1974] VR 547. 264. Buckinghamshire County Council v Moran [1990] Ch 263; [1989] 2 All ER 225. 265. Cervi v Letcher (2011) 33 VR 320 at [17](4) (but note that Dixon J makes it a joint requirement for there to be a failure to make it clear to all the world that there is an intention to exclude the documentary owner); South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716. 266. Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at 60 [6]. 267. But see South Maitland Railways Pty Ltd v Satellite Centres Australia Pty Ltd [2009] NSWSC 716. Intention will commonly need to be demonstrated through acts and conduct rather than simple reliance on the adverse possessor’s statements of intention. See also JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419: M P Thompson, ‘Adverse Possession: The Abolition of Heresies’ [2002] Conv 480. 268. Powell v McFarlane (1979) 38 P & CR 452. 269. Murnane v Findlay [1926] VLR 80; Riley v Penttila [1974] VR 547. 270. Powell v McFarlane (1979) 38 P & CR 452 at 471–2 per Slade J. This reasoning was applied in Sunny Corporation Pty Ltd v Elkayess Nominees Pty Ltd [2006] VSC 314. 271. Moran v Buckinghamshire County Council (1988) 86 LQR 472 at 479.

272. Buckinghamshire County Council v Moran [1990] Ch 623 at 643; [1989] 2 All ER 225 at 238. 273. Kierford Ridge Pty Ltd v Ward [2005] VSC 215 at [132]. 274. Bayport v Watson [2002] VSC 206 at [40]. 275. Kierford Ridge Pty Ltd v Ward [2005] VSC 215 at [132]. 276. Powell v McFarlane (1979) 38 P & CR 452. 277. Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 14 above, p 141. 278. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at [42] per Lord Browne-Wilkinson; at [71] per Lord Hope. See L Griggs, ‘Possession, indefeasibility and Human Rights’ (2008) 8(2) QUTLJ 286. 279. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at [71] per Lord Hope of Craighead. See Marchesi v Apostoulou [2006] FCA 1122 for a recent application of the principle that the intention of the possession must be to exclude everyone including the documentary owner. See also Cervi v Letcher (2011) 33 VR 3206. 280. Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at 81 [101]. 281. Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at 80 [96]–[98]. 282. Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at 81 [101]. 283. Whittlesea City Council v Abbatangelo (2009) 259 ALR 56 at 82 [106]. Note that Quach v Marrickville Municipal Council (No 2) (1999) 22 NSWLR 65 at [67] pointed out that the payment of rates is often seen as an indication of an intention to possess. See Quarmby v Keating [2008] TASSC 71 which considered s 138U of the Land Titles Act 1980 (Tas). That distinctive provision does not permit time to run against the documentary owner if he or she has paid rates and taxes on the relevant land. 284. Cervi v Letcher (2011) 33 VR 320. 285. Whittlesea City Council v Abbatangelo (2009) 259 ALR 56. 286. Cervi v Letcher (2011) 33 VR 320 at [17](4). 287. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 435. 288. Gray and Gray, Elements of Land Law, note 10 above, p 1169. 289. Seddon v Smith (1877) 36 LT 168 at 169; George Wimpey & Co Ltd v Sohn [1966] 1 All ER 232 at 240. Abbatangelo v Whittlesea City Council [2007] VSC 529 at 20. Affirmed in Whittlesea City Council v Abbatangelo (2009) 259 ALR 56. 290. In Riley v Penttila [1974] VR 547, although the land was fenced for use as a tennis court there was not an intention to take actual possession and exclude the documentary owner. The intention was simply to gain special enjoyment. In both Watu-Ofei v Danquah [1961] 1 WLR 1238 at 1243 and Fowley Marine (Emsworth) Ltd v Gafford [1967] 2 QB 808 at 832–3, the court pointed out that the type of conduct necessary to prove adverse possession will vary with the particular land. 291. Buckinghamshire County Council v Moran [1990] Ch 263; [1989] 2 All ER 225. 292. Quach v Marrickville Municipal Council (No 2) (1990) 22 NSWLR 55 at 67. An adverse possessor who is not in occupation but is paying rates on the relevant land will not usually be able to demonstrate the requisite intention. See Shaw v Garbutt (1996) 7 BPR 14, 816 at 14,833; Cooke v Dunn (1998) 9 BPR 16,489 at 16 and 505. 293. O’Neil v Hart [1905] VLR 107 at 120.

294. Bank of Victoria v Forbes (1887) 13 VLR 760 at 764–5. 295. Shaw v Garbutt (1996) 7 BPR 14,816 at 14,833–4. 296. Bree v Scott (1904) 29 VLR 692 at 701–2. 297. McGuiness v Registrar-General; Barrett v McGuiness [1998] NSWSC 215, in part reported as McGuiness v Registrar-General (1998) 44 NSWLR 61. 298. McGuiness v Registrar-General; Barrett v McGuiness [1998] NSWSC 215, in part reported as McGuiness v Registrar-General (1998) 44 NSWLR 61 at 69. See 5.148 for a discussion of possessory title and Torrens land. 299. Bridges v Bridges [2010] NSWSC 1287 at [14]. 300. Limitation Act 1969 (NSW) s 65, Sch 4. See also Park v Brady [1976] 1 NSWLR 119 and Park v Brady [1976] 2 NSWLR 329 (CA), explaining possession as being qua mortgagee. 301. The limitation period is 12 years in New South Wales in regard to mortgage claims, too. See Limitation Act 1969 (NSW) s 41. 302. See Sardon Pty Ltd v Registrar of Titles [2004] WASC 56 (Barker J). 303. Ashe v Westminster Bank plc [2008] 1 WLR 710. 304. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419. 305. The mortgagor was in adverse possession of his own land even though the mortgagee had acquiesced to him being in possession. The mortgagor’s possession was pursuant to his own title and not based on any permission given by the mortgagee. See Ashe v Westminster Bank plc [2008] 1 WLR 710 at [88]. 306. Mr Justice P Young, ‘Limitation of Actions: Mortgagor in Possession’ (2008) 82 ALJ 445 at 447 (Recent Cases Section). 307. See Webeck v Foley (1992) NSW ConvR 59, 717. 308. Re Franklin [2009] VSC 496. 309. N Skead, ‘Giveth with One Hand, Taketh Away with Possession?’ (2010) 19 APLJ 103 at 107. Re Franklin also raises the issue of what happens to the interest of a joint tenant on his or her death if a possessory interest exists at the same time. See Chapter 9 on joint tenancies. 310. New South Wales Law Reform Commission, First Report on the Limitation of Actions, Report No R03, October 1967, [230]–[236]. 311. Limitation Act 1969 (NSW) s 27. 312. See 3.47. 313. Note that it is possible for the trustee to bring an action on behalf of a party who holds a beneficial interest in possession. 314. See Limitation Act 1969 (NSW) s 37(2), (3). 315. See Bridges v Mees [1957] Ch 475. 316. See L Voumard, The Sale of Land in Victoria, 5th ed, Law Book Co, Sydney, 1986, [10 310], for a discussion of how this principle applies in relation to trusts for sale, settled land and other situations. See also Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 14 above, p 152; Hyde v Pearce [1982] 1 WLR 560. 317. See 5.76 on when the limitation period starts.

318. Limitation Act 1969 (NSW) s 11(3)(a). 319. Limitation Act 1969 (NSW) s 11(3)(b)(i). 320. Limitation Act 1969 (NSW) s 11(3)(b)(iii). Note also s 11(3)(b)(iv) of the Limitation Act, which refers to circumstances arising out of ‘war or warlike operations’. 321. Limitation Act 1969 (NSW) s 11(3)(b)(ii). 322. Limitation Act 1969 (NSW) s 51. 323. Limitation Act 1969 (NSW) s 52(e). 324. Limitation Act 1969 (NSW) s 55. 325. Seymour v Seymour (1996) 40 NSWLR 358. 326. Seymour v Seymour (1996) 40 NSWLR 358 at 372. 327. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 477; Limitation Act 1969 (NSW) s 38(2). 328. Asher v Whitlock (1865) LR1QB 1 at 5 and 6. See also Perry v Clissold [1907] AC 73. 329. Allen v Roughley (1955) 94 CLR 98 at 118. 330. Mulcahy v Curramore Pty Ltd [1974] 1 NSWLR 464 at 471; Shelmerdine v Ringen Pty Ltd [1993] 1 VR 315; Cawthorne v Thomas (1993) 6 BPR 13,840; Roy v Lagona [2010] VSC 250. In regard to Crown land, see s 27(1) of the Limitation Act. Where land is held adversely against the Crown, Butt argues that it would seem the Crown Suits Act 1769 (UK), known as the Nullum Tempus Act, requires each adverse possessor in the chain to take by virtue of a conveyance or by inheritance: Butt, Land Law, note 54 above, p 832. 331. Shaw v Garbutt (1996) 7 BPR 14,816; Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 476. See also Limitation Act 1969 (NSW) s 38(2). 332. Limitation Act 1969 (NSW) s 38(2). 333. See Limitation Act 1969 (NSW) s 38(3). 334. Trustees, Executors and Agency Co Ltd v Short (1888) 13 App Cas 793; Limitation Act 1969 (NSW) s 38(3). 335. See 5.135–5.136. 336. P Butt, ‘Adverse Possession: Stopping Time Running’ (2001) 75 ALJ 727. 337. Randall v Stevens (1853) 2 El & Bl 641 at 652; 118 ER 908 at 911–12. 338. Worssam v Vandenbrande (1858) 17 WR 53. 339. Limitation Act 1969 (NSW) s 39. 340. Symes v Pitt [1952] VLR 412. 341. Simpson v North West County District Council (1978) 4 BPR 9277 at 9293–4. 342. O’Neil v Hart [1905] VLR 107. 343. Mount Carmel Investments Ltd v Peter Thurlow Ltd [1988] 1 WLR 1078; Cooke v Dunn (1998) 9 BPR 16,489 at 16,499. 344. An aphorism also used in Symes v Pitt [1952] VLR 412 at 429. 345. Symes v Pitt [1952] VLR 412 at 430; Simpson v North West County District Council (1978) 4 BPR 9277.

346. See Shaw v Garbutt (1996) 7 BPR 14,816 at 14,825. Should the documentary title holder later change his or her mind and no longer have an intention to obtain an order for possession or alternatively if the summons is dismissed, it will not matter. Recovery of possession by virtue of court proceedings will still have taken place. Should the order be dismissed and the adverse possessor remains in possession, the adverse possession clock will start ticking afresh from the date the proceedings are dismissed. English courts have attempted to prevent a documentary owner simply using the issuance of a summons to stop the clock every 12 years, by requiring that proceedings be pursued. See Markfield Investments Ltd v Evans [2001] 1 WLR 131. See Butt, Land Law, note 54 above, p 912. 347. Randall v Stevens (1853) 2 El & Bl 641; 118 ER 908; Worssam v Vandenbrande (1858) 17 WR 53; Scanlon v Campbell (1991) 11 SR (NSW) 239; Robertson v Butler [1915] VLR 31 at 37. 348. Or confirms. See Limitation Act 1969 (NSW) s 54(1). 349. Ofulue v Bossert [2009] 2 WLR 749. 350. Limitation Act 1969 (NSW) s 54(4). 351. McGuren v Simpson [2004] NSWSC 35. 352. In Edgington v Clark [1964] 1 QB 637, a signed offer to purchase land amounted to an acknowledgment of the true owner’s title. 353. Sze To Chun Keung v Kung Kwok Wai David [1997] 1 WLR 1232. 354. Furdson v Clogg (1842) 10 M & W 572; 152 ER 599. 355. Ofulue v Bossert [2000] WLR 749 (HL) at [72], [79]. 356. Furdson v Clogg (1842)10 M &W 572; 152 ER 599. 357. Edgington v Clark [1964] 1 QB 367 at 376–7. 358. Refina Pty Ltd v Binnie [2009] NSWSC 914 at [29]. 359. The effect of a ‘without prejudice’ offer to purchase is discussed above at 5.92. 360. See Limitation Act 1969 (NSW) s 38(3). 361. Nicholas v Andrew (1920) 20 SR (NSW) 178 at 184. 362. Grave v Wharton (1879) 5 VLR 97. 363. Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 476. 364. See 5.137. 365. See Allen v Roughley (1955) 94 CLR 98; Holdsworth, A History of English Law, note 47 above, Vol 2, pp 57–81. 366. Perry v Clissold [1907] AC 73; Allen v Roughley (1955) 94 CLR 98; Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464. See also Ferguson v Registrar of Titles [1919] VLR 509; Kirk v Sutherland [1949] VLR 3. 367. Allen v Roughley (1955) 94 CLR 98; Asher v Whitlock (1865) LR1QB 1. 368. See 5.49. 369. Fairweather v St Marylebone Property Co Ltd [1963] AC 510 at 535. 370. The position in relation to Torrens is slightly different. 371. A leaseholder is an example of such a third party. For an example of a recent Land and Property

Information (LPI) primary application notice, see Wentworth Courier (accessed 27 July 2017), click on the calendar (‘Back issues’) icon, click on ‘8 March 2017’, scroll through to p 152. This advertisement pertains to the bringing of old system title land in Woollahra, Sydney, under the Torrens system. The land was also subject to an adverse possession claim. It is an extremely rare type of advertisement. 372. See Quach v Marrickville Municipal Council (No 2) (1990) 22 NSWLR 55. 373. Limitation Act 1969 (NSW) s 11(1). The definition of ‘land’ under the Act excludes easements. 374. It has always been possible to hold Torrens title land by virtue of long-continued possession, rather than registration, but that right of possession was, until 1979, not able to be enforced against the registered proprietor. It could only be enforced against others. Today it can still be enforced against others and may, in the correct (and limited) circumstances, be enforced against the registered proprietor. For a discussion of adverse possession and Torrens title in other states, see T Hunter, ‘Uniform Torrens Title Legislation — Is There a Will and a Way?’ (2010) 18 APLJ 201 at 213– 214. 375. Note that the ability to bring an adverse possession claim in relation to Torrens title land varies markedly across Australian jurisdictions. In Tasmania, eg, it is possible to claim adverse possession of Torrens title land but not if the registered proprietor has paid rates during the relevant period of adverse possession. See s 138U of the Land Titles Act 1980 (Tas). See Quarmby v Keating [2008] TASSC 71. 376. Bartlett v Ryan (2000) 10 BPR 18,007. 377. See Real Property Act 1900 (NSW) s 45D(1). 378. Seyffer v Adamson [2001] NSWSC 1132 at [51]. 379. The occupational boundary may be marked out with a fence or by a river, for example. 380. For a diagrammatic representation of how this works, see R A Woodman, K Nettle, F Ticehurst, P Butt and L Hughes, Torrens System in NSW, Lawbook Co, looseleaf, ‘Possessory Title to Land Under the Act, Occupational Boundary’, [45D.60]. 381. Applications may be made in relation to ‘residue lots’ pursuant to s 45D(2A), (2B) and (5) of the Real Property Act. Only ‘dunny lanes’ that are the subject of private (compare with public) property may be claimed as residue lots by way of adverse possession. Weber v Ankin (2008) 13 BPR 25,231 at [94] noted that ‘the amendments did not affect public lanes’. The term, ‘residue lots’ also includes ‘spite strips’ designed to prevent direct access to a road. 382. See Real Property Act 1900 (NSW) s 45D(2A), (2B). 383. In some areas, local residents complained that unused night soil lanes became places for drug abuse, drinking and violence. 384. See New South Wales, Parliamentary Debates, Legislative Assembly, Second Reading Speech, Land Titles Legislation Amendment Bill 2001 (NSW), 19 September 2001 (Donald Page, Member for Ballina). 385. In Sydney, eg, Paddington and Glebe are suburbs where many ‘night soil’ lanes exist. Land in those suburbs is highly valued. 386. Seyffer v Adamson [2001] NSWSC 1132 at [1]. 387. Webeck v Foley (1992) 5 BPR 11,694; Real Property Act 1900 (NSW) s 45D(4). It is possible, however, for the adverse possessor to register before the expiration of the statutory period if he or

she registers subject to the interest of the registered proprietor. It would seem that this facility would be available only to an adverse possessor registering an interest less than that held by the registered proprietor. 388. The latter position is so because of the operation of s 45D(1), which applies to possession of ‘land under the provisions of this Act’, and land that vests in a council under local government legislation, eg, is not ‘land under the provisions of this Act’. See Butt, Land Law, note 54 above, p 914. 389. See Real Property Act 1900 (NSW) ss 45D, 45E(1) and 45E(3). The Registrar-General should only grant a possessory application if there is not serious dispute about it. If he or she has reservations, discretion should be exercised and the application should not be granted. See Bartlett v Ryan (2000) 10 BPR 18,077 at [11]. 390. See Real Property Act 1900 (NSW) s 45C and Limitation Act 1969 (NSW) s 65. The latter overrides the former. 391. See Real Property Act 1900 (NSW) s 45C. 392. Public Trustee v Bellotti (1986) 4 BPR 9196. 393. Words of the Minister introducing Pt 6A into the Real Property Act; cited in Butt, Land Law, note 54 above, p 916, and reported in New South Wales Government, Parliamentary Debates, Legislative Assembly, 28 February 1979. See also Refina Pty Ltd v Binnie [2009] NSWSC 914 at [37]–[43]. 394. Woodman and Butt raise the idea of an inchoate title existing prior to the possessory grant. See R Woodman and P Butt, ‘Possessory Title and the Torrens System in New South Wales’ (1980) 54 ALJ 79. 395. For some discussion of adverse possession in the context of registered land in the English jurisdiction, see B Bogusz, ‘Bringing Land Registration into the Twenty-First Century — The Land Registration Act 2002’ (2002) 65(4) Mod LR 556. 396. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419; JA Pye (Oxford) Ltd v United Kingdom (2006) 43 EHRR 3; [2005] ECHR 921 (Application no 44302/02, Strasbourg, 15 November 2005) (EctHR). 397. It is interesting to consider these comments in the light of the loss (without compensation) of Indigenous land to Europeans at ‘settlement’. The following jurisdictions, among others, permit adverse possession claims without compensation: Northern Ireland, Scotland, Ireland, Hungary, Poland, Sweden, The Netherlands, Spain, Germany and France. 398. See also W Saxe, ‘When “Comprehensive” Prescriptive Easements Overlap Adverse Possession: Shifting Theories of “Use” and “Possession”’ (2006) 33(1) Boston College Environmental Affairs Law Review 175. P Butt, ‘Property and Conveyancing’ (2004) 78 ALJ 775 notes that although the doctrines of prescriptive easements and adverse possession might seem related, they are distinct. He notes that prescription allows ‘the acquisition of rights superimposed on the rights of others’ while ‘“adverse possession” extinguishes the rights of others. The former leaves the underlying ownership of land intact; the latter extinguishes that ownership’. 399. JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 426. In Pye’s case, the adverse possessor’s claim was over land reputedly worth £10 million. 400. See also H Charlton, ‘The Criminalisation of the Squatter’ (1993) 143 (6627) NLJ at 1721; D O’Leary, ‘Adverse Possession at the Dawn of the Twenty-First Century’ (2004) Irish Student Law Review 12.

401. Gray and Gray, Elements of Land Law, note 10 above, p 1116. 402. See P Omar, ‘Limitation and Prescription in English Law: Argument and Pressures for Reform’ (2006) 14 APLJ 72–89; B Edgeworth, ‘Adverse Possession, Prescription and their Reform in Australian Law’ (2007) 15 APLJ 1; L Griggs, ‘Possessory Titles in a System of Titles by Registration’ (1999) 21 Adel LR 157. 403. For an understanding of how adverse possession law serves the poor, consider the favela dwellers of Brazil or the rural dwellers in the Missiones region of Argentina. See J Gray, ‘Stories from a Favela: The Limits of Property Law’ (2005) 30(4) Alternative Law Journal 184. For further insight into international urban squatting, see R Neuwirth, Shadow Cities: A Billion Squatters, A New Urban World, Routledge, New York, 2006. 404. On this reasoning, the paramountcy of the Register overrides the ‘active use’ consideration. For examples of how other jurisdictions have considered reforming the area, see: Alberta Law Reform Institute, Limitations Act — Adverse Possession and Lasting Improvements, 2003; Ireland, Law Reform Commission, Title by Adverse Possession, 2002; United Kingdom Law Commission, Land Registration for the Twenty-First Century: A Conveyancing Revolution, 2001; Limitations of Actions, 2001; Queensland Law Reform Commission, Review of the Limitation of Actions 1974 (Qld), 1998; Law Reform Commissioner of Tasmania, Report on Adverse Possession and Other Possessory Claims to Land, 1995; United Kingdom Law Commission, Law Commission and Her Majesty’s Land Registry, Land Registration for the Twenty-First Century, UK Law Comm No 254, September 1998. For support for the view that the adverse possession doctrine does not undermine Torrens policy in New South Wales, see Butt, Land Law, note 54 above, p 916.

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Chapter 6

Law, Equity and Trusts Introduction 6.1 This chapter will examine the formalities necessary to create and transfer interests in property. These formalities originate in two areas of law: first, the general common law requirements for the creation and transfer of proprietary interests; and second, equity and those of its doctrines that are the more important mechanisms for the fragmentation of interests in property. The strict requirements for the creation and transfer of interests in land perform the important function of providing certainty in commercial dealings. However, these requirements can also have the effect of sometimes creating injustice in the very different context of intra-family transactions — transactions that are often characterised by informality and tacit trust. The possibility of injustice is even more evident in light of the changes in gender roles and family structures. Legislatures and, to a lesser degree, the courts have responded constructively to these changes over the last couple of decades, and have extensively reformed the law. This is an ongoing process, reflecting, among other things, the centrality of ‘identity politics’,1 including the recognition of the LGBTI (Lesbian Gay Bisexual Transgender and Intersex) movement and marriage equality, in the landscape of contemporary policy and legislative debates. It is, therefore, no longer possible to examine the common law and equitable rules regarding the creation and transfer of interests in

property independently of these reforms without giving a misleading impression of their scope and application. The object of this chapter is to develop an understanding of, first, the difference between legal and equitable interests; and, second, the manner in which the fragmentation of rights into legal and equitable interests occurs. Finally, the chapter will focus on legislative reforms that substantially overreach the common law and equitable rules in the domestic context. [page 264]

Legal and Equitable Ownership Historical introduction 6.2 The paradigm case of fragmentation of rights over property into legal and equitable interests is the trust. As Simpson noted, the concept of a trust over land is not very different from that of the deposit of a chattel.2 Both types of transactions may be driven by similar motives. A car may be left with, or entrusted to, a friend because the owner is going overseas, or for safe-keeping. Or it may be left for fraudulent purposes; for instance, with a view to preventing creditors getting their hands on it. As we have seen, the common law developed rules to allow this fragmentation of interests over chattels.3 To supplement these rules, the common law introduced protections for the bailor by obliging the bailee to respect the terms on which the chattel was to be held, and more general rules to prevent harm to the bailor’s interest. Yet no such rules were developed by medieval lawyers in relation to land, though there were many policy reasons to protect arrangements of this kind. To be sure, the common law did recognise many overlapping interests in land, in the form of tenures and estates. A particular parcel of land could have a number of persons claiming rights over it, from the Crown, to a tenant in chief, down to the freehold tenant in demesne.4 However, the common law would not enforce a fragmentation of rights over property in a case where A, a freeholder, conveyed land to B on the understanding that B would hold it for A’s, or C’s, benefit. At common law, the conveyance to B conferred a

legal title on B, but the obligation undertaken by B to allow A or C the benefit of the land would not be enforceable. The common law protected rights over land (eg, by protecting seisin),5 but the person for whose benefit the arrangement was made did not have seisin. It followed that legal ownership of land could be fragmented only in the limited ways provided by the doctrine of tenures and estates. 6.3 Incentives to allow a fragmentation of rights so that land could be entrusted from one person to another for the benefit of a designated person, or persons, were plentiful. The most attractive of these incentives was the avoidance of the often onerous feudal ‘incidents’. The Crown, as the paramount lord, acquired the greatest benefits from these rights. In general, the incidents were levied on the death of the landholder.6 If land were legally held by a person who did not ‘die’, such as a number of joint tenants who arranged for a replacement on each death, and the joint tenants held for the benefit of a line of descendants,7 there would be no point at which a feudal incident could arise. This was because the death of a joint tenant did not give rise to an inheritance of land: the surviving [page 265] joint tenants took by right of survivorship, not by inheritance. Further, any transfer inter vivos by a small number of joint tenants to a larger group to avoid such an event would not attract incidents. The same arrangement made it possible for property holders to circumvent the prohibition on wills. From the middle of the 15th century,8 petitions were being made successfully to the Court of Chancery for the recognition of the obligations of conscience imposed on such joint tenant transferees, or ‘feoffees to uses’, in favour of the beneficiary, or ‘cestui que use’.9 In time, both the Lord Chancellor and later the court, in the exercise of its separate jurisdiction, began to compel trustees to honour their obligations. In this way, it came to be possible to talk of two interests in the land: the trustee’s or ‘legal’ interest, recognised by the common law; and the beneficiary’s or ‘equitable’ interest, which could be enforced only in a court of equity. In so far as the common law refused to

acknowledge such fragmentation of rights over property, equity’s jurisdiction in this area was exclusive. As we shall see below, different rules govern the formalities for transferring or fragmenting legal interests, on the one hand, and equitable interests, on the other.10 The resulting loss of revenue to the Crown led to legislation to restore the status quo. The Statute of Uses 1535 deemed the beneficiary to be the legal owner, so that, when he or she died, the incidents were incurred as if there had been no trust created in the first place. The resulting financial burdens placed on landowners led them to seek a way around the legislation and so, by the middle of the 17th century, the ‘use upon a use’ appeared, such as a gift ‘to A and his heirs to the use of B and his heirs to the use of C and his heirs’. A gift of this nature was held by courts of equity to give the legal interest to B (by the operation of the statute), and C would be able to enforce the obligation imposed on B in the instrument in equity.11 The Statute of Uses was effectively circumvented, and the modern trust was successfully established. Conventional interpretations of this oscillating historical process suggest that the Court of Chancery was remedying a ‘defect’ in the common law. But, as the historian E W Ives makes clear, the process of change is better understood as part of a protracted political battle over revenue between the Crown and the wealthier landowners.12 6.4 In addition to the exclusive jurisdiction exercised by equity in relation to the trust, equity developed a concurrent jurisdiction. The essence of its concurrent jurisdiction lay in the provision of remedies that were unavailable to successful litigants in the common law courts. One example of the concurrent jurisdiction was the remedy of specific performance, where the common law’s exclusive remedy was damages for breach of contract. The effect of concurrent jurisdiction has important consequences for property law; if A can compel B to transfer a specific block of land to A in accordance with a [page 266] contractual promise to do so, it is possible to say that A has a proprietary

interest in the land. Accordingly, from the time that the equitable remedy of specific performance is available to A, there is a fragmentation of property rights: the proprietary right of the vendor as recognised by the common law; and the property right of the purchaser protected by the equitable remedy.13 It follows that there are two distinct jurisdictional origins of property rights: common law and equity. The relevant property rights are known as ‘legal’ and ‘equitable’ interests respectively, depending on the principles that establish them and the courts in which they were enforced. Interests in land may be created at law (legal interests), and transferred at law; while equitable interests, or equitable property rights, can be created and transferred only in accordance with equitable rules. Moreover, because equitable interests were simply not recognised by the common law, it was not possible to create or transfer a legal interest out of an equitable interest, even where the formalities required for transfer or creation at law were followed. As there are marked differences in the formal requirements for the creation and transfer of legal and equitable interests, and in the doctrinal bases on which they arise, they will be treated separately for the remainder of this chapter.

Creation and Transfer of Interests in Land at Law Deeds 6.5 The general rule is that interests in land must be created and transferred by deed to be effective at law. Section 23B(1) of the Conveyancing Act 1919 (NSW) provides: No assurance of land shall be valid to pass an interest at law unless made by deed.

An ‘assurance’ of land is defined as including ‘a conveyance and a disposition made otherwise than by will’.14 A deed is a formal document which at common law had to be written on vellum or parchment, and had to be sealed and delivered. The requirements for a valid deed are now specified in s 38(1): Every deed … 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.

A document is sealed if some mark is placed on it intended to be a seal.15 Sealing will not be necessary where the instrument is expressed to be sealed or

expressed to be a deed, and is signed and attested.16 Delivery of the deed was an essential condition of its validity at common law. This continues to be the case after the enactment of s 38, but the term has a special meaning: in order for delivery to take place, the maker of the deed must [page 267] demonstrate that he or she intends the deed to be immediately binding on execution.17 This may occur whether or not the deed is physically handed over.18 A witness to the deed must be someone who is not a party to it and, in the case of a deed with multiple parties, the witness or witnesses cannot be other parties to the deed.19 As we saw in Chapter 2, there are many interests in land other than freeholds and leaseholds.20 Generally speaking, these must also be created and transferred by deed to be effective at law. For example, to create or transfer a mortgage or easement, the instrument must be in the form of a deed which meets the requirements of s 38. The requirement for a deed does not apply to ‘land under the provisions of the Real Property Act 1900’ (NSW), that is, land under the Torrens system.21 The appropriate instrument for creating and transferring interests under the Torrens system is a memorandum of transfer, which, to be effective at law, must be registered.22 Section 7 of the Conveyancing Act provides a definition of ‘land under the provisions of the Real Property Act’, namely, ‘estates registered under that Act’. Therefore, unregistered dealings under the Torrens system, such as the assignment of an unregistered lease, must be by deed to be effective at law.23

Legal interests created by parol or by conduct 6.6 By s 23B(2)(d) of the Conveyancing Act, leases that are not required to be in writing are exempted from the requirement that they must be by deed to be effective at law. By s 23D(2), leases for a period not exceeding three years, at a market rent, taking effect immediately in possession, and without taking a fine, may be validly created orally at law.24 A fine is a lump-sum

payment in the nature of a premium. Other leases not required to be in writing to be valid at law are implied yearly tenancies at common law (as modified by s 127 of the Conveyancing Act), and general periodic tenancies implied from the manner of payment of rent.25 Furthermore, by s 23E(c) of the Conveyancing Act, interests acquired by taking possession, or possessory titles, which are legal in nature are valid at law without documentation of any kind.26 However, if such non-documentary legal interests are to be conveyed validly at law, a duly executed deed must be used. So, if an adverse possessor wishes to transfer his or her inchoate title, the transaction may be only effected at law by means of a deed. [page 268]

Interests in personalty 6.7 Since the enactment of s 8 of the Imperial Acts Application Act 1969 (NSW), the requirement under the Statute of Frauds 1677 that transfers of interests in personalty be made in writing has been repealed. Generally, interests in personalty therefore can be created without documentation of any kind, though certain types of choses in action, such as shares and some forms of intellectual property, may only be transferred at law by registration.27

Creation and Transfer of Interests in Land in Equity — Contracts for the Sale of Land General 6.8 Contracts for the sale of an interest in land, as distinct from conveyances or assurances, are subject to different formal requirements. A contract for the sale of land is unlike a conveyance or an assurance by virtue of the fact that it is a binding promise to convey or assure the interest at some time after the formation of the contract, usually on tender of the balance of the agreed purchase price. Until that time, the vendor (or landlord or mortgagor)

remains the owner at law.28 By s 54A(1) of the Conveyancing Act 1919 (NSW), following the Statute of Frauds 1677: 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.

A contract for sale signed by the other party is the most obvious way of meeting the requirement. The introduction of electronic transactions legislation means that ‘signatures’ need not necessarily be to paper copies of documents.29 But a sufficient memorandum of agreement exists if it contains a description of the land, identification of the parties and a reference to the transaction.30 Also, a telegram, a letter to a third party, a written offer and a recital of the transaction in a will all qualify as sufficient memoranda.31 In Stellard Pty Ltd v North Queensland Fuel Pty Ltd,32 the exchange of emails was also held to satisfy the Queensland equivalent to s 54A of the Conveyancing Act 1919 (NSW). [page 269] In ANZ Banking Group Ltd v Widin,33 the parties executed a mortgage document that did not include any details of the title. Earlier authority had held that if a signed document makes reference to another document that contains the relevant details, those documents could be read together.34 In Widin, the bank manager’s diary notes contained details of the title, but Hill J held that those notes could not be incorporated. This was because the diary notes could only be linked to the mortgage by oral evidence. It follows that, in order to comply with the requirements of the statute where more than one document is relied on, the plaintiff must prove the existence of three things: first, a document signed by the defendant; second, an express or implied reference in that document to a second document; and third, a sufficiently complete memorandum represented by the two when read together. In Perpetual Trustee v Motive Finance,35 these requirements were met, and so the four documents could be read together. In that case, the four documents — a loan offer identifying the property subject to the mortgage, the loan contract, the mortgage form for registration purposes and a ‘Company Certificate’ —

were capable of being read together because the ‘Company Certificate’ had been signed by the party to be charged and referred to each of the other documents.

Auctions 6.9 A special rule exists in relation to auction sales. An auction sale is generally believed to be concluded at the moment the hammer falls, but at this point in time the contract is merely oral, and so falls foul of s 54A of the Conveyancing Act. Moreover, there is no part performance at this time,36 so no equitable interest is conferred on the successful bidder. Nonetheless, the requirements of s 54A have been held to apply to auction sales in the same manner as other sales of land.37 To resolve this predicament, the requirements of s 54A are met by an implied authority on the part of the auctioneer to sign on behalf of either vendor or purchaser.38 This right ensures that the oral contract becomes a written one on the intervention of the auctioneer in the event of either party refusing to proceed.39 However, the auctioneer’s authority must be exercised during the course of the sale transaction, and not afterwards.40

Overcoming the absence of formal requirements — the equitable doctrine of part performance 6.10 The doctrine of part performance has been developed by courts of equity to assist purchasers where there is no signed documentation capable of satisfying the requirements [page 270] of s 54A of the Conveyancing Act, and has been preserved by ss 23E(d) and 54A(2) of that Act. The origins of the doctrine lie in preventing the requirements of s 54A being used as an instrument of fraud: that is, if one party honestly believed a contract existed, and in doing so incurred expenses

(which might include conferring benefits on the other party), it would be unjust for the other party to then plead the statute.41 Equally, the doctrine of part performance can be seen as consistent with the Lockean principle discussed in Chapter 1: namely, if someone has exerted his or her labour on something, a proprietary right should result.42 That is, ‘equities’ should arise on which the defendant is ‘charged’.43 6.11 The classical statement of the test for part performance is contained in Maddison v Alderson.44 In that case, the testator Alderson promised Maddison that if she acted as unpaid housekeeper he would leave her a life estate in the property in his will. However, although Alderson’s will purported to make this bequest, the will failed on the ground that it was not attested. The court held that in order to constitute sufficient acts of part performance, the party seeking to enforce the agreement must perform an act: … unequivocally and in its own nature … referable to “some such agreement as that alleged”. That is, it could be done with no other view than to perform such an agreement.45

Where a court finds that the acts constitute sufficient acts of part performance, the resulting order is not an enforcement of the oral (or otherwise unenforceable) agreement as that would be contrary to the statute. Rather, the court is, in the oft-quoted words of Lord Selborne LC, giving effect to ‘equities resulting from the acts done in execution of the contract, and not (within the meaning of the statute) upon the contract itself’.46 On the facts of Maddison, however, Maddison could not satisfy this test. In contrast, in Regent v Millett47 the High Court upheld an oral contract as satisfying the Maddison test. There, the owners of land had offered to transfer it to their daughter and son-in-law provided that they paid off the mortgage. In that context, a change in possession of the property was regarded as ‘the act of part performance ‘par excellence’.48 It was not necessary for the contract to require the acts which were alleged to form the part performance; it was enough that they were carried out ‘pursuant to the contract’. [page 271] The phrase ‘unequivocally and in its own nature referable to some such agreement as that alleged’ has been interpreted as requiring that the acts are

‘consistent only with some such contract subsisting’.49 In Khoury v Khouri,50 Bryson JA emphasised that the whole circumstances of the case must be considered in assessing whether sufficient acts of part performance arise: In the present case there are no acts of ownership such as taking possession, paying rates or paying for the upkeep or improvement of the property, or receipt of rent or profits, or any other act at all. Acts of part performance have been almost universally closely related to possession and use or tenure of the land itself, such as where a purchaser is put into possession by the vendor, or allowed to take possession by the vendor, or where the purchaser carries on improvements. They have not necessarily been acts which the contract required to be done. Acts on the land can much more readily be seen as unequivocally referable to the contract than payments of money. 51

6.12 A special example of the doctrine of part performance is seen in the law of mortgages, where an equitable mortgage will be created if the mortgagor (the borrower) hands over the title deeds as security for the loan.52 Indeed, the doctrine of part performance operates in a more expansive way in deposit of title deeds cases: deposit by the mortgagor counts as part performance by both parties. Not all deeds in the chain of title need to be deposited as long as the relevant deeds are clear evidence of title.53 It follows that, unlike other instances of part performance, there is no possibility that the contract may be enforceable by one party only; that is, the party who has undertaken the acts of part performance. The extension of the doctrine in this context may be explained by the requirements of business efficacy. The Maddison test sets a high threshold for acts of part performance.54 However, in Regent the High Court refused to consider the more relaxed requirements of the House of Lords in Steadman v Steadman.55 Accordingly, it would seem that the somewhat stricter requirements for part performance in Australia continue to apply.56 6.13 At times the stringency of the requirement of unequivocal referability can cause hardship. This is especially the case where the alleged acts of part performance are equally [page 272] consistent with some other laudable motive; for instance, love and affection. Thus, as in Maddison itself, the plaintiff was unable to satisfy the test for part

performance, as her acts as an unpaid housekeeper, and staying in the employ of the testator, could not ‘of itself’ evince the promise she alleged, that he would leave her a life estate in his will. Similarly, in Ogilvie v Ryan,57 Miss Ryan had left her home to move in with the plaintiff’s father, having been promised that if she looked after him she could remain there as long as she wished. The father left the house to his son in his will, with no mention of Miss Ryan rights.58 The court held that the acts relied on by Miss Ryan as part performance of the oral contract were equally consistent with the voluntary expression of love and affection as they were with an oral contract. These cases therefore illustrate that the stringency of the unequivocal referability requirement under the Maddison test can apply in a discriminatory way against women: as the prevailing sexual division of labour, and in particular unpaid labour, means that the acts of women in the cases failed the Maddison requirements because they were capable of being characterised as acts of love and affection.59 As will be seen later, the constructive trust, freed from a narrowly defined labour requirement, has proved to be rather more flexible and equitable in dealing with situations such as these.60

Equitable interests arising under contract — the doctrine of conversion and requirement of specific enforceability 6.14 The essence of the contract for the sale of land is to promise a conveyance or transfer at a later stage; that is, at the time of settlement. Although a contract for the sale of land is enforceable if there is a sufficient memorandum signed by the party to be charged with it, a proprietary interest under an executory contract for the transfer of land cannot exist at law. Thus, the legal interest in the property does not pass until settlement. However, courts of equity may order the remedy of specific performance; that is, an equitable discretionary remedy to force the vendor to make good the promise to transfer the property. In equity, the purchaser of an interest in land therefore is considered to be an owner in equity if, and when, the contract is specifically enforceable.61 In these circumstances, the purchaser acquires an equitable interest in the property at the time

[page 273] that an enforceable contract is made.62 This is also known as the equitable doctrine of conversion. Without the order of specific performance of the contract, however, the purchaser’s remedy lies only in damages for breach of contract. The remedy of specific performance therefore is a condition precedent for the acquisition of this equitable proprietary interest by the purchaser.63 The right to a grant of an order for specific performance of the agreement is not automatic. As the remedy is an equitable one, relief is only possible if the legal remedy is inadequate. It is generally assumed that damages are not an adequate remedy for breach of a contract to transfer or create an interest in land.64 Also, there is a general equitable requirement that to be granted an order of specific performance, the plaintiff must not have been guilty of unconscionable or inequitable conduct, and must be ready, willing and able to perform the contract.65 Thus, persistent breach of an agreement, or failure to fulfil an essential contractual term,66 will mean that the court will not order specific performance. 6.15 The ‘long held view of the law’67 favoured conceptualising the purchaser’s interest under a specifically enforceable contract for the sale of land as analogous to a constructive trust. The classical analysis is that in Lysaght v Edwards.68 In that case, a vendor died prior to completion of a contract for sale. The court held that although the vendor was still seised of the legal estate, the vendor had become ‘trustee’ in equity on exchange, and so held the property on constructive trust for the purchaser. Jessel MR described the vendor’s position as something between a bare trustee for the purchaser and a mortgagee who in equity is entitled to possession of the land and a charge on it for the purchase money. As the transaction proceeds from exchange until the payment of the purchase price in full, this trusteeship transforms from limited trusteeship into a bare trusteeship. The nature of the vendor’s trusteeship is unusual, however, because the vendor commonly retains a beneficial interest in the property as well: the right to remain on the property until settlement, and even later if the full purchase money is not paid.69 In Lysaght, it followed that the purchaser’s equitable interest could be enforced

against the executors of the vendor’s estate. In Bunny Industries Ltd v FSW Enterprises,70 the court applied Lysaght to [page 274] hold that if a vendor contracts to sell to A but then the vendor sells to C, the vendor has committed both a breach of the contract to A and a breach of trust. Importantly, the recognition of the constructive trust gives the purchaser rights that are enforceable against C in a priority dispute, not simply a remedy against A for breach of contract. The Lysaght constructive trust was created by equity acting on the conscience of the vendor once the contract becomes specifically enforceable.71 The principle in Lysaght also applies to contracts to sell interests in land other than a fee simple. In Walsh v Lonsdale,72 for example, a tenant took possession of premises pursuant to a written and signed agreement to grant a lease for a term of seven years. No formal lease was ever drawn up. The tenant paid rent on a periodic basis, and the landlord claimed that only an implied periodic tenancy arose.73 It was held that the tenant had an equitable lease for seven years. As Jessel MR concluded: The tenant holds under an agreement for a lease. He holds, therefore, under the same terms in equity as if a lease had been granted, it being a case in which both parties admit that relief is capable of being given by specific performance.74

6.16 The recognition of a purchaser’s equitable ‘constructive trust’ style interest under a contract for sale has a number of consequences. As trustee, for example, the vendor must manage the property as a trustee would before it is formally given over to the purchaser. So, for example, a vendor will be liable to the purchaser where a trespasser enters and removes a large amount of topsoil prior to settlement.75 If the vendor hands over possession prior to receipt of the full purchase money, he or she retains an equitable lien over the property, which, like a mortgage, confers a right to an order of the court for sale to satisfy the debt.76 Under the rule in Lysaght, the purchaser also takes the risk at the same time that the equitable interest came into existence. It follows that if the property was destroyed before settlement, it is the purchaser’s loss, and not the

vendor’s. As a consequence, under these general law principles the purchaser had to arrange insurance for the property effective from the date of the contract, even though he or she did not have the benefit of the property at the time the risk arose. Legislation has varied these general rules: by s 66K of the Conveyancing Act, on the sale of land, the risk does not pass until completion, or until a time after the purchaser takes possession of the land when risk is to pass according to the terms of the contract, whichever is the earlier. If the land is damaged prior to sale, the purchaser may either rescind the contract or proceed to settlement with a right to have the purchase price reduced by such amount as is just and equitable in the circumstances.77 The onus of proving the extent of the loss lies with the purchaser.78 [page 275] 6.17 However, the trust analogy from Lysaght cannot be pushed too far. Rather, as Jensen has observed, the analogy is used to underline the concept that the vendor is no longer free to deal with the property at will.79 In this context, ‘constructive trust’ has therefore been used as ‘simply shorthand for the purchaser’s right against the vendor’s right to the land and the vendor’s correlative duty to the purchaser in respect of that right’.80 In this sense, the Lysaght ‘trust’ has always been taken to mean ‘something less than’81 a typical express trust. This is because the vendor has not undertaken ‘to be a trustee’,82 nor is the vendor a fiduciary.83 Thus, as Heydon and Leeming explain, the vendor and purchaser’s interests ‘are to a degree hostile’84 as the vendor retains an interest in the property that permits the vendor to act in his or her own interest to the extent that the contract allows. The purchaser’s so-called ‘constructive trust’ therefore takes its substance from the terms of the contract (and the defeasible nature of that contract), and remains limited by the availability of the remedy of specific performance. 6.18 It is this ‘contingent and defeasible’85 nature of the purchaser’s rights, by virtue of its relationship to the contractual terms and their dependence on a court’s the grant of the discretionary remedy of specific performance, that has led to a critique of the ‘trust’ conceptualisation of the purchaser’s equitable interest under an executory contract. The High Court raised, but did not

resolve, these issues in Tanwar Enterprises Pty Ltd v Cauchi.86 In that case, the purchaser had delayed completion of the contract for sale of a number of parcels of land, in the context of a contract that had stipulated that time was of the essence. The purchaser sought relief against forfeiture — a claim that was ultimately unsuccessful. In the course of determining whether relief should be granted, the High Court observed that the purchaser’s equitable interest must, necessarily, be ‘commensurate with the availability of specific performance’.87 As such, the plurality reasoned that the constructive trust analogy was ‘bedevilled by circularity’,88 and so should be ‘no longer accepted’.89 Instead, where specific performance is available, the court noted that the extent of the purchaser’s equitable interest in the property would vary, depending on the interests under contract as the transaction approached settlement. In that case, the purchaser was in serious breach, and so could not insist on specific performance. As a consequence, the characterisation of the Lysaght-interest as an equitable lien was to be preferred to that of a [page 276] ‘constructive trust’90 and the purchaser was limited merely to a lien over payments made by it to the vendor to which it was entitled to return under the contract. The High Court’s discussion of the purchaser’s interest in an executory contract in Tanwar has itself not escaped criticism. For example, McClure P has argued, extra-judicially, that: … it is too late in the day to challenge the existence of the vendor-purchaser constructive trust. It is so much part of the legal landscape that it is recognised in legislation relating to the formalities for dealings with land. Moreover, the vendor-purchaser constructive trust is not the (non) functional equivalent of a human appendix. … It cannot be said that the removal of the constructive trust from the body of law relating to the transfer for assignment of property would go unnoticed and without any adverse consequence.91

6.19 Lower courts have proceeded on the basis that, post-Tanwar, the ‘use of the language of the trust … has fallen out of favour’,92 but that the fundamental principle that a purchaser under a specifically enforceable contract has proprietary rights prior to acquiring legal ownership has not been questioned.93 Careful attention must therefore be given to describing the

purchaser’s interest as delimited by reference to the extent to which the equitable remedy of specific performance is available in the given case.94 In Golden Mile Property Investments Pty Ltd (in liq) v Cudgegong Australia Pty Ltd,95 Emmett JA explained that as a contract proceeds towards completion, the equitable interests in the property pass to the buyer in stages, and comprise ‘four separate rights, or “equities”’: (i) the purchaser’s interest enforceable against third parties; (ii) the purchaser’s equitable right that the vendor exercise due care to preserve and maintain the land pending completion; (iii) the purchaser’s equitable right to the rents and profits received by the vendor between the agreed date for completion and the actual date of completion; and (iv) the purchaser’s equitable lien for repayment of the purchase price in the event of non-conveyance by the vendor. In Golden Mile, Emmett JA noted that even where specific performance may not be available, a purchaser may nevertheless be able to obtain a remedy (such as an injunction) to enforce one of the ‘four “equities”’ arising from the transaction.96 [page 277]

Creation and Transfer of Interests in Land in Equity — Trusts Express trusts — general 6.20 A trust is a relationship in which one person (the trustee) holds property, real or personal, for another (the beneficiary) on certain conditions. A trust may be express or non-express. In the case of express trusts, no particular form of words is necessary; as long as the person who creates the trust expresses a clear intention to create it and meets the requisite documentary formalities, it is validly created.97 The trust may be created in two ways: by declaration or by settlement. In the case of a declaration, the person seeking to set up the trust continues to own the property, but declares that he or she now holds it as trustee for a stated beneficiary. If the declaration is formally valid, the former owner becomes a trustee, retaining the legal interest in the property while the beneficiary has an equitable interest enforceable against the

whole world, including the trustee. In the case of a settlement, the owner transfers the property to a third party as trustee and so relinquishes any rights over the property. The trustee then holds the property on condition that it is held on trust for beneficiaries.

Transfer of equitable interests 6.21 Once a trust has come into existence, both trustee and beneficiary have separate proprietary interests that may be freely transferred. We have already examined the formalities necessary for the transfer of legal interests.98 In this section, we will analyse the different formalities necessary for the creation and transfer of equitable interests. In addition to the creation of trusts by declaration or settlement, equitable interests may form the subject matter of a trust or transfer. The three ways in which equitable interests may be voluntarily disposed of are detailed in a classic summary by Dixon J in Comptroller of Stamps v Howard-Smith.99 First, the owner of an existing equitable interest may declare that he or she holds the interest on trust for a named beneficiary. The person who makes the declaration is now subject to the obligations specified in favour of the beneficiary. Second, the holder of an equitable interest already in existence, such as the beneficiary under a trust, may transfer that interest to a third party. Third, the equitable interest holder may direct his or her trustee to hold the interest from that time for a nominee.100 In each of the first three ways, the intending donor needs to meet the formal requirements for the creation and disposal of equitable interests. It is to these that we now turn. [page 278]

Formalities 6.22

The key provision is s 23C of the Conveyancing Act 1919 (NSW):

(1) Subject to the provisions of this Act with respect to the creation of interests in land by parol: (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; (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; (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. (2) This section does not affect the creation or operation of resulting, implied, or constructive trusts.

It is important to note that this provision is conceptually different from s 54A(1) of the Conveyancing Act. Section 54A(1) is concerned with the enforcement of contracts where ‘an owner is not himself actively disposing of that interest, and therefore does not need to comply with paragraph (a)’ of s 23C(1).101 That is, if an owner wishes to use an agent, the agent does not need to be given signed authority in the case of a contract,102 but does require such an authority if he or she proceeds to convey an interest. The distinction between s 54A(1) and s 23C(1) has been recognised in Marist Bros Community Inc v Shire of Harvey,103 where the court held that the Western Australian equivalent of s 23C(1)(a)104 does not apply to contracts for the sale of land ‘as distinct from [instruments] creating an interest in land’. That case has clarified much contradictory authority on the interrelationship between the two provisions. It was followed by the decision of the New South Wales Court of Appeal in Baloglow v Konstantinidis,105 where Giles JA identified the different rationales underpinning the two provisions. He held that s 54A: … arises at the stage of agreement to create or dispose of an interest in land. It has its own requirement of writing, less stringent than the requirement in s 23C in that a note or memorandum of the agreement is sufficient and the signing agent need not be authorised in writing. The latter [s 23C] arises at the stage of performance of an agreement or where there is no prior agreement, and in keeping with the importance attached to property rights has a more stringent requirement of writing and the signing agent must also be authorised in writing.

[page 279] 6.23 The meaning of paras (a)–(c) of s 23C(1) of the Conveyancing Act is not easy to discern, as they appear to overlap to a significant degree.106 The

extent of the overlap appears from the judgments of the members of the High Court in Adamson v Hayes.107 In this case, the parties, who had a written agreement by which mining claims were shared, orally agreed to vary the arrangement. The question arose as to whether the oral agreement was enforceable. A majority of the court (Menzies, Walsh, Gibbs and Stephen JJ, Barwick CJ dissenting) held that the lack of writing invalidated the transaction. Menzies J thought that para (a) of s 23C(1) had no application because that paragraph was confined to legal interests. However, this interpretation was rejected by Walsh, Gibbs and Stephen JJ, who held that para (a) applied only to equitable interests. This argument seems to be entirely convincing on the ground offered by Walsh J: s 23B of the Conveyancing Act would be unnecessary if s 23C(1)(a) applied to legal interests. For Walsh J, the oral agreement in this case created an equitable interest, and so was caught by para (a). By contrast, Menzies, Stephen and Gibbs JJ concluded that the oral agreement amounted to a declaration of trust and, as writing existed that was signed and manifested and proved such a declaration, as required by para (b), the agreement was unenforceable. Menzies J added that even if the transaction could not be seen as a declaration of trust, and so be covered by para (b), it came within para (c) as a disposition of subsisting equitable interests. There is much to be said to support the majority in Adamson on the non-overlap between paras (a) and (b). If para (b) is not to be otiose, it must deal exclusively with declarations of trust which for the same reason must be beyond the reach of para (a). 6.24 The range of disagreement between the judges in Adamson renders this area of law somewhat uncertain. A further question is whether s 23C(1)(c) applies to personalty as well as realty. Unlike paras (a) and (b), there is no confinement of the ‘equitable interest or trust’ in s 23C(1)(c) to interests in land. Despite this, Gibbs J, in obiter, suggested that it applied to personalty as well as land, while Menzies J disagreed. In Grey v Inland Revenue Commissioners,108 the House of Lords resolved this particular question by holding that the paragraph was intended to apply to personalty, and so covered a disposition of a beneficial interest in shares. It followed that an oral direction by the settlor to the trustees to dispose of a subsisting equitable interest in a block of shares in favour of his grandchildren was ineffective. In Secretary, Department of Social Security v James,109 the respondent purchased

a unit as accommodation for her adult invalid daughter. In a subsequent application for an invalid pension, the respondent stated that she presently retained title to the unit, but only for her daughter’s protection, and that it was to pass to her daughter under the terms of her will. The Department of Social Security considered the unit as part of the respondent’s [page 280] property. In the Federal Court, Lee J concluded that in order for para (b) not to be ‘either an odd exception or otiose’, it had to be interpreted as requiring different formalities for declarations of trust as distinct from other dealings with equitable interests (ie, being manifested and proved by writing rather than being in writing). His Honour concluded that, while the paragraph permitted a number of documents to be read together, it did not allow oral evidence to form part of the proof of the declaration. Accordingly, he remitted the matter to the Administrative Appeals Tribunal for it to determine whether all the available signed writing would suffice to ‘manifest and prove’ the essential elements of the trust. In contrast, an oral declaration made while holding a Bible, such as ‘I promise to live in the house and care for the home and property for all of us’ is not an effective declaration of trust.110 Section 23C(1)(b) does not apply to a transaction that purports to create and declare a trust; in this instance, the requirements of s 23C(1)(a) must be met.111

Non-express trusts 6.25 Non-express trusts arise by virtue of the conduct of the parties. They may be either resulting trusts or constructive trusts. Unlike express trusts, no documentary formalities are necessary.112

Resulting trusts 6.26 Resulting trusts are an exception to the requirement of writing,113 and so come into existence informally by way of a presumption of law from certain facts. However, the presumption of a resulting trust is a rebuttable one,

so there will be no resulting trust if parties clearly indicate that they did not want a trust to come into operation. Resulting trusts arise in the following situations. 6.27 Failed express trust Where a settlor fails to dispose of the entire beneficial interest, while at the same time conferring the entire legal interest on trustees, a resulting trust will arise in his or her favour.114 Thus, a grant to A on trust for B for life, but with no remainder, will give rise to a reversionary interest in favour of the settlor. To do otherwise would be to enrich the trustee unjustly. Also, where an express trust is either void or unenforceable, the trustee will hold the property on resulting trust for the settlor, as in the case where a charitable trust fails because it is impossible to carry into effect and no general charitable intent can be identified.115 6.28 Purchase in the name of another Where one person purchases property and puts it into the name of another, equity presumes that a trust was intended, so that the holder of the legal title holds on trust for the purchaser. So, where A purchases Greenacre, [page 281] but B’s name appears on the title deed or certificate of title, B holds Greenacre on trust for A. The basis for this trust is that equity presumes that the person who pays for a property is the owner of that property. However, it is possible to rebut the presumption by adducing evidence that the intention was to benefit the person whose name is on the title documents, or by operation of the presumption of advancement (see below). 6.29 Contribution to purchase price Where a party contributes to the ‘purchase price’, and that contribution is not accurately reflected in the ownership of the legal title to the property, a presumption of resulting trust may arise whereby the parties will hold the beneficial title to the property in the proportions in which they have contributed to the purchase price.116 So, if the legal title to Greenacre is solely in A’s name, but A and B each contribute 50% of the ‘purchase price’, A will hold the property on resulting trust for himself or herself and B in equal portions. Also, if A contributed 40% of the

purchase price and B contributed 60%, but the title deed or certificate of title simply states that A and B are tenants in common, equity will impose a resulting trust so that they will hold in proportion to their respective contributions. ‘Purchase price’ in this context is narrowly defined as a direct financial contribution to the purchase price. Purchase price includes the full settlement price (comprising cash payments and, where a mortgage is required, the liability under the mortgage), legal fees and governmental fees (eg, stamp duty and registration fees) and the purchase price.117 As the key criterion is the direct contribution to the purchase price, contribution to the repayment of the mortgage debt — which occurs after settlement over the course of the mortgage term — is not relevant to the calculation of a share under a resulting trust.118 As it operates presumptively on payment of the purchase price, this trust can be rebutted in one of two ways: first, by operation of the presumption of advancement (discussed below); or second, by evidence that the parties in fact intended that the beneficial ownership mirror the legal ownership. However, the extent to which the presumption of a purchase price resulting trust may be modified in the context of the family home, or by the later imposition of a constructive trust, is discussed below. In Calverley v Green,119 a couple who lived in a de facto relationship agreed to purchase property. It was to be held in their joint names. The purchase money was to be made up of a $9000 cash contribution from Mr Calverley and an $18,000 loan from a bank, secured by a mortgage over the home for which they would be jointly liable. The purchase went ahead as planned, and for five years Mr Calverley paid the mortgage instalments, while Ms Green paid household expenses. The High Court confirmed that the starting point for analysis is whether the presumptions of resulting trust (or advancement) applied. The court found that there was a resulting trust, measured by the contributions of the parties [page 282]

to the purchase at the time of purchase. Thus, Ms Green owned approximately one-third of the property. By contrast, the court held that contributions made after the purchase were irrelevant to the principles governing resulting trust.120 The High Court considered the operation of the purchase price resulting trust in the context of the family home in Trustees of the Property of Cummins (a bankrupt) v Cummins.121 The question in that case was the extent of Mr Cummins’ beneficial ownership in the family home. Mr Cummins was a bankrupt barrister, and in an effort to recover unpaid income tax the Australian Tax Office instituted proceedings claiming that he had owned a 50% beneficial interest in the property. Legal title in the home was held by Mr and Mrs Cummins as joint tenants.122 Mrs Cummins, who had separated from her husband by this time, argued that the presumption of resulting trust should apply, as she had contributed 76.3% of the purchase price of the property. Rather than apply the Calverley principles, however, the High Court quoted with approval the following passage from Scott and Fratcher: Where a husband and wife purchase a matrimonial home, each contributing to the purchase price and title is taken in the name of one of them, it may be inferred that it was intended that each of the spouses should have a one-half interest in the property, regardless of the amounts contributed by them.123

Thus, rather than start from the position that Mrs Cummins was entitled to a 76.3% share in the home by virtue of her greater contribution to the purchase price, the starting point in Cummins was that Mr and Mrs Cummins had both contributed to the purchase of the family home. The inference of equal beneficial ownership in marriage therefore applied. On the facts of Cummins, the court concluded that the joint legal title accurately reflected the parties’ beneficial interests, and so the Australian Taxation Office was able to recover the unpaid tax debt from Mr Cummins’ share of the property. Unfortunately, as Sarmas has argued, Cummins has introduced ‘layers of obfuscation’ to the analysis of resulting trusts and, as she has shown, this has led to ‘lack of doctrinal clarity and consistency’ particularly its application by lower courts.124 As she notes, for example, it is not clear whether the inference of equality applies exclusively in marriages, or only to the matrimonial home, or how the principle operates with the presumption of

advancement.125 Post–Cummins, however, equality of ownership appears to be the [page 283] starting assumption, displacing the presumption of a resulting trust in the context of marital homes.126 This starting point remains subject to displacement where evidence can be provided that demonstrates that the parties expressly, or impliedly, agree to hold property in unequal shares (evidence that could not be adduced in Cummins). Pre-Cummins principles remain applicable to properties that are not purchased as family homes by married couples. 6.30 Presumption of advancement The presumption of advancement operates as a limitation on the operation of resulting trusts. This is because, in certain situations, equity presumes that the person who purchases property in the name of another intends to make a gift of the property. The other person holds the property, not as trustee (as in the normal case of the resulting trust), but as outright owner. The presumption of advancement arises where: a husband or male fiancé purchases property and puts it in the name of his wife or future wife;127 and where a person in loco parentis puts the property in name of the child.128 There is no presumption of advancement from a wife to her husband,129 nor does the presumption of advancement apply in de facto relationships (whether heterosexual or same-sex).130 It was once the case that no presumption of advancement arose between mother and child. However, since Brown v Brown131 and Nelson v Nelson132 the presumption of advancement has been held to apply equally to gifts made to children by mothers as well as fathers.133 The presumption is rebuttable if it is clear that the intention is that the transfer is not to be donative.134 For example, in Brown v Brown,135 a mother purchased a house for herself and her children to live in. She put the title in the names of her two sons. On the evidence, it was held that she did not intend to make a gift of the property to her sons, so the presumption of advancement did not apply. Accordingly, there was a resulting

trust in her favour.136 As this case illustrates, the operation of a presumption will clearly have significant consequences for the parties, as it will determine questions of [page 284] evidence and onus of proof. Given that the presumption of advancement only arises in family circumstances, where informal arrangements may be more likely, the allocation of the burden of proof is likely to be significant.137

Constructive trusts 6.31 The constructive trust arises independently of both documentary formalities and an express arrangement between the parties. Rather, it is imposed on parties by courts of equity in order to prevent unconscionable behavior arising from their conduct. As Dal Pont has observed, ‘when and why constructive trusts are imposed’ remains ‘[o]ne of the most contentious areas of equity doctrine’.138 Courts have traditionally separated constructive trusts into remedial and institutional categories. Institutional constructive trusts tend to arise in situations where fiduciary or contractual duties exist, such as receipt of trust property;139 an improper gain made by a fiduciary by virtue of his or her position;140 or due to the failure of an express trust.141 The ‘more common’142 form of constructive trust, and that discussed in brief below, is the remedial constructive trust. Although the categories are not closed, constructive trusts of this kind have been recognised in two key areas: (i) the so-called ‘common intention constructive trust’; and (ii) a constructive trust based solely on unconscionable reliance on legal title to deny a beneficial interest in the property.143 6.32 Common-intention constructive trust A constructive trust will arise in the context of a transaction for the acquisition of an interest in land where the holder of the legal title has, in conjunction with the non-owner, demonstrated a common intention that the non-owner will receive an interest and the legal title holder ‘has so conducted himself that it would be inequitable to allow

him to deny to the cestui que trust a beneficial interest in the land acquired’.144 But when will equity consider it inequitable so to deny the cestui que trust? In Gissing v Gissing, Lord Diplock observed: [page 285] And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring an equitable interest in the land.145

This principle has been applied to cover a case where an owner sold land at an undervalue to the purchaser, who promised to let her live there rent free for as long as she wished. The purchaser was held to hold the property on constructive trust for the former owner.146 Also, where the owner induced the plaintiff to pay for an extension to the owner’s home by promising her that she could live there as long as she wished, the owner was held to be subject to a constructive trust in favour of the plaintiff.147 The plaintiff’s beneficial interest in the property was held to be proportionate to her contribution. 6.33 A further reason for the imposition of a constructive trust is that a court of equity will not allow a statute to become an instrument of fraud. So, where A sold his half share to B on the basis of an oral agreement that, if B did not live in the property for 12 months, B would transfer the share back to A, and B breached the condition, B will be found to hold the half share in the property on trust for A.148 To do otherwise would be to allow B to commit a fraud on A. In Allen v Snyder,149 it was held that a common intention must arise from an express or implied agreement between the parties. The implied agreement may be evidenced by conduct, but there is no scope for the court to impute a common agreement. Thus, the court will not impose an intention on the parties from an examination of their conduct if they did not actually reach such an agreement.150 On the facts of that case, the court held that there was no evidence of an actual or implied common intention that the woman would have an equitable interest in the property. The couple had been in a de facto relationship for 13 years, but the court found that the performance of

household chores or contributions to domestic expenses was not sufficient to establish a common intention. In Ogilvie v Ryan, as we have seen above,151 although Miss Ryan failed to establish an equitable interest arising under the part performance of an oral contract, the court enforced her interest in the property by means of a constructive trust. This was because it would have been unconscionable for the plaintiff (Mr Ogilvie’s son) to rely on the statutory requirements to defeat Miss Ryan’s claim. The circumstances in that case were that Miss Ryan had moved into Mr Ogilvie’s house on terms that she would look after him and that she would be able to live in the house as long as she wished. Holland J held, first, that there was clearly a common intention that Miss Ryan receive an interest in the land; second, that she was induced to alter her position, and confer great benefit on Mr Ogilvie, [page 286] in reliance on the common intention; and third, it would be an unconscionable use of Mr Ogilvie’s legal title to deny the claim. His Honour acknowledged that the facts in this case differed from others in that the acts beneficial to Mr Ogilvie, and otherwise detrimental to Miss Ryan, were not in any way directed to the acquisition or improvement of the property.152 Yet the fraud on her would be no less if such acts were not to form the basis of the constructive trust. In this way, the constructive trust proved itself more flexible in delivering a just result than the doctrine of part performance. 6.34 Constructive trust based solely on unconscionable use of legal title In certain circumstances, the absence of a clear common intention can work to the significant disadvantage of the person who contributes labour or money to improving a property. The limitation on courts of equity imputing a common intention after Allen v Snyder153 further restricts the scope to do justice in these circumstances. However, courts have recently found other ways of establishing the existence of a constructive trust in circumstances where parties either failed to turn their minds to the particular question of property rights or,

where, if they did, they intended a different distribution of rights from those which a common-intention constructive trust would have given them. In Muschinski v Dodds,154 a couple in a de facto relationship agreed to purchase land and build a house on it. Mr Dodds and Mrs Muschinski respectively contributed approximately one-eleventh and ten-elevenths to the purchase price, but they separated before the house was built. The presumption of resulting trust was rebutted in this case, because the parties clearly indicated that they wanted to hold the property equally. But this common intention to hold equally would, on conventional analysis, give rise to a constructive trust that would be unfair to Mrs Muschinski: she would receive only a half share of the property despite contributing a much greater share of the purchase price. The High Court held that the facts of the case gave rise to a constructive trust in favour of Mrs Muschinski based on the principle of unconscionability. The court held that, where one party makes contributions to a joint endeavour that fails without attributable blame, he or she is entitled to those contributions as beneficiary under a constructive trust if: … the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it.155

6.35 This principle was extended in Baumgartner v Baumgartner.156 The parties were in a de facto relationship when the man bought land in his own name. Later, a house was built on the land, and they moved in. The woman was in paid employment for all [page 287] of the four years they were together, except for a period of three months after the birth of their child. She generally handed over her pay packet to the man, which he used, in conjunction with his own pay, to meet household expenses, including mortgage loan repayments. The parties agreed that their respective contributions to the pool of earnings were in the proportion 55:45, with the man contributing the larger amount. The High Court held that in this case

there was no common intention that the woman would have a beneficial interest in the property. However, following Muschinski, they emphasised that constructive trusts were not confined to cases of common intention, but that ‘the imposition of a constructive trust’ may be warranted where unconscionable conduct arises.157 Where parties pool their earnings, as in this case, ‘it is proper to regard the arrangement … as one which was designed to ensure that their earnings would be expended for purposes of their joint relationship and for their mutual security and benefit’.158 In such circumstances, it was inappropriate to consider the woman’s contribution as a gift and as such an unconscionable use of the man’s legal title to deny her interest in the property. The court therefore concluded that there was a constructive trust proportionate to their respective contributions; that is, 55:45. The ‘Baumgartner calculus’159 takes into account both financial and non-financial contributions, and so, in computing the woman’s share, the court included within the calculation credit for time she had taken off after the birth of their baby, but not for any general domestic labour or care of the child. 6.36 A failure to pool earnings — for instance, where one partner is homemaker and does the unpaid domestic labour while the other partner is engaged in paid employment, and thereby is in a position to pay off the mortgage and bills — will be fatal to the existence of a Baumgartner constructive trust. In Bryson v Bryant,160 for example, a majority of the New South Wales Court of Appeal held that even where the parties were married for a period of 60 years, the husband’s use of his legal title to defeat the wife’s interest after benefiting from her labour for all that time was not unconscionable. However, in Miller v Sutherland,161 the court held that a woman who substantially assisted in renovating the house of her de facto partner came within the Baumgartner rule. Cohen J held in that case that the contributions to the renovations on the part of the woman, and her father, amounted to a ‘pooling of labour’ that had been accepted by the man ‘on the basis that these would contribute to the making of a home for their joint occupation and enjoyment’.162 ‘In those circumstances’, Cohen J reasoned, ‘it would be unconscionable of the defendant to deny to the plaintiff an equitable interest in the house and accordingly a constructive trust will arise in favour of the plaintiff.’ 163

[page 288]

Estoppel Proprietary estoppel 6.37 The doctrine of proprietary estoppel is so described because it prevents, or estops, a person relying on his or her strict legal property rights as against a third party. In this way, it indirectly confers an equitable proprietary interest on another party. The basis of the principle is that: where the documentary titleholder, A, induces or encourages another person, B, to perform certain acts; which involve detriment to B; in the belief that, as a consequence of those acts, B will acquire rights over the property; A’s rights based on his or her documentary title may be held in equity to be restricted or extinguished in favour of B. Equitable doctrine thus redistributes rights in these circumstances. Proprietary estoppel may arise in two ways: 1.

The documentary titleholder may induce the belief by means of a representation.

2.

The belief may be induced by means of acquiescence in the other party’s expenditure of money or other detrimental acts where that party is mistaken as to his or her legal rights.164

Belief induced by representation 6.38 The first form of proprietary estoppel is illustrated by Inwards v Baker.165 In that case, a father made an oral offer to his son of a parcel of land on which to build a house. The son proceeded to build the house. The trustees under the father’s will claimed that the son had only a licence to occupy the land. It was held that, where a landholder encourages a licensee to expend money in the expectation of being allowed to stay on the land, an equity arises in the licensee. It is not necessary for the landholder to promise a particular proprietary interest in return for the expenditure. The court will determine the equity from the circumstances. In this case, the court held that the son had a life interest, and so could remain on the land for as long as he

desired to live there. Similarly, in Dillwyn v Llewellyn166 a father made his son an offer of a fee simple in the land in a defective instrument. The House of Lords held that the son was induced to act to his detriment by the promise and, accordingly, was entitled in equity to a fee simple. 6.39 The fact that different plaintiffs receive different entitlements in equity reflects the principle at work in these cases, namely, that a court of equity will order the minimum equity to do justice to the plaintiff. In Crabb v Arun District Council,167 for example, Crabb was led by the local council to believe that he would be granted a right of access to a part of his land that he was proposing to subdivide. After subdivision, the council decided not to proceed with the grant of an access point and right of way. The English Court of Appeal held that it would be unconscionable to allow the council to resile from its [page 289] representation when, first, the plaintiff relied on it; and second, the plaintiff suffered detriment in consequence of the reliance. ‘The minimum equity to do justice to the plaintiff’ was to estop the council from not proceeding with its promise.168 The minimum equity may require the plaintiff to make some payment for the land, but not, as was the case here, where the council’s actions rendered the land sterile for some years. In contrast, in Cameron v Murdoch,169 a representation was made by two brothers who owned land to another brother that he would be able to acquire land if he built a house on it and farmed it. He did this, but they refused to transfer the land to him. The Privy Council held that the brother had an equity entitling him to buy the land at a one-third discount.

Belief induced by acquiescence 6.40 An example of the second way in which the doctrine of proprietary estoppel is established is by acquiescence on the part of the documentary titleholder. This principle is also known as an ‘equity of acquiescence’. In E R Ives Investment v High,170 the plaintiffs’ predecessor in title, Mr Westgate,

acquiesced to Mr High’s building of a garage on his land, to which he could gain access only by crossing the plaintiff’s land. The acts of acquiescence were evidenced by Mr Westgate’s failure to raise any objections to Mr High’s entry to and exit from the garage over their property, and various compliments offered to Mr High on the construction of the garage. It was held that these acts created a reasonable expectation in Mr High’s mind that access would not be disturbed, and in these circumstances the court found that it would be inequitable to allow the reasonable expectation to be defeated.

Equitable estoppel 6.41 The conclusion reached in the above proprietary estoppel cases was endorsed and extended by the High Court in Waltons Stores (Interstate) Ltd v Maher.171 The Mahers were owners of land. They negotiated the grant of a lease over the land with Waltons. The negotiations reached a stage where a lease was drawn up and executed by the Mahers, and the lease was then sent to Waltons’ solicitors to be signed. Waltons decided to go slow on the deal and failed to sign the lease, in full knowledge that the Mahers were engaged in extensive demolition work in accordance with the terms of the lease. A majority of the High Court found that the Mahers were acting in the belief induced by Waltons, that is, that Waltons would proceed with the execution of the lease. The court in Waltons Stores held that both proprietary and promissory estoppel are instances of a single doctrine of equitable estoppel.172 The object of the doctrine of equitable [page 290] estoppel is not to make good representations but rather to prevent unconscionable conduct. Unconscionability is not established merely by the failure to honour a representation, but where the representation induces the plaintiff to act to his or her detriment and the person who makes the representation fails to fulfil the representation. It followed that in Waltons Stores, equitable estoppel was made out because on the facts: the owner of the

land was encouraged to believe that the execution of the lease was a mere formality and that it would be carried out; the owners acted to their detriment in reliance on that representation by carrying out extensive demolition work; and Waltons ‘failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise’.173 The court held that equitable estoppel was not confined to cases where the owner has made representations, as in each of the cases noted above. Rather, it would be equally applicable where a prospective owner, or tenant as in this case, induces the plaintiff to act to his or her detriment. Analogously with the doctrine of part performance, there can be no estoppel until there has been an unambiguous inducement. For example, in Austotel Pty Ltd v Franklins Self-Serve Pty Ltd174 there was found to be no lease on the basis of equitable estoppel in circumstances where two large business organisations were engaged in protracted negotiations over a lease of a part of a shopping centre. The prospective tenant ordered equipment to be used on the premises and failed to renew a lease on other premises in the expectation that a lease would be granted. However, the parties had yet to agree on the rent payable under the lease and so in these circumstances it was not possible to find that there was encouragement that a contract would come into existence, and accordingly it was not unconscionable for the prospective landlord to refuse to proceed with the grant of a lease. In contrast, the House of Lords in Thorner v Major175 held that a farmer who did substantial work over a period of almost 30 years, without pay, on the farm of his father’s cousin had established a proprietary interest by estoppel. It was found that the property holder had encouraged him to act in this way in the expectation that he would inherit the farm on the owner’s death. The latter’s words and actions over time would have reasonably induced a belief that he would be inheriting it. In such domestic situations, the courts will not require evidence of a specific promise, but rather a pattern of behaviour over time, so that imprecise understandings at one point may be given clarity by later actions. In the words of Lord Hoffmann, ‘subsequent events throw retrospective light upon the meaning of past events. The owl of Minerva spreads its wings only with the falling of the dusk’.176

[page 291] This Hegelian allusion shows equity at its most flexible, but it is not so flexible as to cover all instances of what might be called unjust enrichment. In Angelopoulos v Sabatino,177 compensation was awarded in respect of work carried out by a proposed lessee of hotel premises during negotiations for a lease that did not lead to a binding agreement to lease. The court held that the defendant was unjustly enriched by the plaintiff’s improvements to the property, and was therefore required to reimburse the plaintiff for this cost. In Yeoman’s Row v Cobbe178 the plaintiff was also entitled to a personal restitutionary remedy for his costs and outlay, despite failing to establish proprietary estoppel. The basis for these monetary awards was that the defendant was enriched, at the expense of the plaintiff, and that it would be unjust for the landholder to retain the benefit. But in order to secure a proprietary remedy in these cases, representation, reliance and detriment must be established. The High Court in Sidhu v Van Dyke179 established that it is not necessary for the representation to be the sole inducement or basis for the relying party’s conduct, but the party seeking to establish an estoppel bears the onus of proving detrimental reliance. In that case, the Van Dykes occupied a cottage on property belonging to the Sidhus, and subsequently Mrs Van Dyke and Mr Sidhu commenced a sexual relationship. Mr Sidhu represented that he wanted Mrs Van Dyke to have a home and that he intended to subdivide the property in order to transfer the cottage to Mrs Van Dyke. He later provided a handwritten note to Mrs Van Dyke confirming that intention. When the Van Dykes subsequently divorced, Mrs Van Dyke did not seek a property settlement from her husband, and continued to live in the cottage with her son, and paid nominal rent to the Sidhus. In this period, Mrs Van Dyke did not seek full-time employment, and also undertook maintenance on the property. However, when Mrs Van Dyke later asked to purchase the cottage from the Sidhus, they refused. Mrs Van Dyke left the cottage, and later successfully claimed equitable compensation to the value of the cottage (the cottage itself having burned down), on the basis that Mr Sidhu was estopped from denying her interest in the cottage. The High Court concluded that, taking into account Mrs Van Dyke’s circumstances, Mr Sidhu’s promises were

‘objectively likely to have had a significant effect’180 on her decision-making and have been a contributing cause to her actions. 6.42 What ‘detriment’ is required? In Sidhu, the detriment suffered by Mrs Van Dyke included the financial disadvantage she suffered through her decision not to seek a property settlement in her divorce, and not to seek out full-time employment. That is, detriment caused both by positive actions and action that the party has omitted to take [page 292] is relevant.181 Waltons Stores (Interstate) Ltd v Maher provides a different illustration: if all that the Mahers had done prior to discovering that Waltons were pulling out of the deal was to get tenders from a number of demolition contractors, would they have succeeded in their action? Would such detriment be enough for it to be unconscionable to allow a departure from the assumed state of affairs, and so to give them an equitable lease with Waltons? An indication of a possible answer to this question arises in the judgment of Deane J in Commonwealth v Verwayen.182 In that case, Deane J gave the example of the detriment of a $100 shed to suggest that the flexibility inherent in the doctrine of estoppel might preclude a finding of estoppel if the allegedly estopped party offered adequate compensation, or an order for compensatory damages would make good the detriment. The High Court decision of Giumelli v Giumelli183 provides an example of how the court’s discretion can be utilised to make good the detriment suffered by the person to whom a representation was made. The appellants were the parents of Robert Giumelli, the respondent. They had made three key representations to Robert over a number of years: (i) that he could have part of a property that he had developed, working without wages; (ii) that he could have that part of the property on which he built a house, on completion of construction; and (iii) that, if he did not accept work elsewhere, he could have the subdivided lot where the house stood. Robert Giumelli claimed that each of the three promises gave rise to an estoppel. The High Court granted relief, relying on the notion of unconscionability and the equitable discretion

relevant to cases such as these. Citing Verwayen, the High Court overturned the decision of the Full Court of the Supreme Court of Western Australia, which had ruled that the parents held the property on constructive trust for their son on the basis of estoppel. The High Court held that the order to be made must meet the requirements of ‘conscientious conduct’184 and no more. It followed that the estoppel gave rise only to a right to monetary compensation in this instance. This was because an order that Robert receive the beneficial interest in the property would exceed what was required for conscientious conduct, and would also disadvantage third parties, namely Robert’s brother Steven, and his family, who continued to reside on the promised lot. Importantly, however, the estoppel in this instance gave rise to a proprietary interest, as evidenced by the court’s order that the monetary sum be a charge on the land. 6.43 While the above illustrations have arisen in the context of claims of proprietary interests, equitable estoppel can also arise in relation to interests in personalty. For example, in Olsson v Dyson,185 the property in question was a debt (a chose in action)186 that a [page 293] testator had ineffectively assigned by way of gift to the donee, his wife. The High Court held that if, after failing to make an effective gift, the donor had, by some subsequent conduct, induced the donee to act to her prejudice, either by not stopping her from acting in the belief that the gift was perfect or by actively encouraging her to act, it might be ‘unconscionable for the donor to withhold the property or interest from the donee, and equity may on that ground hold the donee entitled to the property’.187 The wife claimed that she had failed to make an application under the testator’s family maintenance legislation because of her husband’s inducement. However, it was held that, on the facts, there was no evidence that the husband had given any such inducement. The mere attempt to make the gift was not enough to establish an equity. The case is an example of equity not perfecting an imperfect gift in the absence of an estoppel.188

6.44 Use of the language of ‘equities’ in these cases gives rise to the difficult question of whether the interest in land found by courts is a fully fledged equitable interest, or whether it is a rather more shadowy ‘equity’. The distinction is important where priorities arise,189 as holders of equities are generally in a weaker position than the holder of an equitable interest. The cases are very unclear on this point, though it is arguable that where, as in E R Ives Investment v High190 and Inwards v Baker,191 the courts refer to the standard priority rule, this might be taken to imply that they have the status of equitable interests. In principle, it is difficult to see why someone in the position of the son in Inwards v Baker should be in a weaker position than the holder of an equitable interest under the doctrine of part performance, given that the bases for the two doctrines are so similar.

Gifts Personalty 6.45 A gift of property will be effective at law when the donor has transferred the legal title to the donee. If the property is personalty, the gift is perfect at law on delivery of the chattel, and it does not matter whether the chattel is delivered to the donee before or after the expression of intention to donate.192 The position is rather more complicated in equity. The position of the donee is rather more precarious, because of the equitable maxim that ‘equity will not assist a volunteer’ and that, in consequence, ‘equity will not perfect an imperfect gift’. Despite these maxims, however, equity does have a role to play in the case of gifts not effective at law. The leading case is Milroy v Lord.193 In this case, the donor made a gift of a parcel of shares in favour of his daughter. The court held that, in order for the gift to be effective in equity, the donor must do everything according to the nature of the property that is [page 294] necessary to be done to effect the gift. The donor had executed a deed setting

out the terms of the trust, but failed to execute a transfer of the shares to the trustees. The gift failed. In Re Rose,194 the donor executed a transfer of shares and as agent for the donee handed them to the company secretary to be registered. He died before registration. The donee was held to have an equitable interest in the shares on the basis that the donor had done all in his power to transfer title to them. If a cheque made out to the donor is not delivered to an intended donee, but remains in the possession of the donor, an expression of intention to give it to the donee will not be sufficient for an effective gift, even when accompanied by a symbolic but temporary handing over.195

Land 6.46 In the case of land, the gift will be complete at law when, in the case of old system title, the donor duly executes a deed in the donee’s favour; or, in the case of Torrens title, when the donee becomes the registered proprietor. It is possible for a gift to be effective in equity if it meets the requirements of s 23C of the Conveyancing Act 1919 (NSW). So, if the donor executes a document and signs it, creating an equitable interest in favour of the donee, the donee will acquire a valid equitable interest. Equally, if the donor declares that he or she holds land on trust for the donee, the gift will be valid if ‘manifested and proved’ by writing.196 A gift of land will also be effective in equity if the donor has done everything to put the gift beyond his or her recall; that is, the donor has put the donee in the position where he or she can secure the legal title without any further intervention by the donor. In Corin v Patton,197 Mr and Mrs Patton held Torrens title land as joint tenants. Mrs Patton was suffering a terminal illness, and executed a memorandum of transfer in favour of her brother, Mr Corin, and a deed of trust whereby he would become trustee of her interest in the property. However, she failed to either give Mr Corin the certificate of title of the property, or authorise the bank (which had custody of the certificate of title) to produce the document for the purposes of registering the transfer of her interest to her brother. The High Court held that the gift was imperfect. Mrs Patton, by neither giving the certificate of title to her brother, nor giving him a right to acquire the document from the bank, had not perfected the gift in

equity. As a consequence, the joint tenancy was not severed and the right of survivorship meant that Mr Patton acquired the whole interest in the property.

Trusts and Domestic Relationships — Statutory Intervention 6.47 Changing patterns of domestic relationships place dramatically different demands on the old law of property interests. The equitable property doctrines that have allowed interests in land to be created in the absence of documentary formalities have now been overtaken by statutory reforms. The reforms have appeared in two key statutes: the Family [page 295] Law Act 1975 (Cth) and Property (Relationships) Act 1984 (NSW).198 This legislation, which is briefly discussed below, allows courts much wider discretion to determine, and vary, property rights in the context of a breakdown of relationships, be they marriage, de facto or certain other domestic relationships. While the reforms have extensively affected the scope of operation of the equitable doctrines, they have not eliminated them. In particular, the equitable doctrines will continue to apply in two situations: 1.

where the relationship does not qualify as a marriage, de facto or domestic relationship as defined by these Acts; and

2.

where the parties to a marriage or qualifying domestic relationship are not terminating the relationship or marriage, or have terminated their relationship outside the limitation periods stipulated within these Acts.

In these situations, as Sarmas observed, ‘the question of “who owns what?” in the relationship is central’199 and remains governed by common law and equitable rules.

Property (Relationships) 1984 Act (NSW) s 20

6.48 Most of the relationships where constructive trusts were found to exist in the cases discussed above would now be covered by the Property (Relationships) Act 1984 (NSW). By s 20 of that Act, the court has power to divide property held by the parties on the breakdown of the relationship in a manner that ‘seems just and equitable having regard to … [the parties’] contributions’. Claims under the Act are also subject to time limits. The proceedings must be commenced within two years from the end of the relationship, unless the court gives a party leave to apply out of time.200 In making an order, the court must take into account the financial and nonfinancial contributions each party has made to the acquisition, conservation or improvement of any of the property or financial resources of the parties.201 These contributions may be direct or indirect, and, in particular, the court must have regard to contributions made as homemaker and parent, and contributions to the welfare of the other party, in determining what is just and equitable.202 The Act applies to ‘domestic relationships’, which are defined in s 5 as de facto and ‘close personal’ relationships.203 A de facto relationship is defined as ‘a relationship between two adult persons who: (a) live together as a couple; and (b) are not married to one another [page 296] or related by family.204 When determining whether a de facto relationship exists for the purposes of the Act, a court may have regard to a range of matters, although these factors are expressed not to be determinative.205 Some of these factors include: the ‘nature and extent of common residence’; whether the relationship is sexual; the ‘degree of financial dependence … between the parties’; the ‘ownership and use of property’; the ‘care and support of children’; and the ‘performance of household duties’.206 6.49 Importantly, the reference to ‘the ownership, use and acquisition of property’ under s 4(2) of the Property (Relationships) Act preserves the common law and equitable rules in relation to property, but affords them a minor role in how property is to be distributed on the breakdown of the

relationship. However, many of the themes developed by the courts in relation to constructive trusts form part of the matters to be taken into account in finding that a de facto relationship exists in the first place. Thus, matters such as the mutual financial interdependence and ‘mutual commitment to a shared life’ evoke the joint responsibilities assumed by the parties as justifying the imposition of a constructive trust in Baumgartner v Baumgartner.207 The relevance of the performance of household duties also has resonances of Ogilvie v Ryan,208 while ‘the ownership, use and acquisition of property’ echoes the detailed computation undertaken by the court in Muschinski v Dodds.209 However, unlike the position in equity, where the requirements of establishing an express or implied common intention and detrimental acts in reliance on that intention are central, a much wider range of considerations may be brought before the court under the Act. 6.50 In contrast to earlier New South Wales legislation, the definition of ‘de facto relationship’ in the Property (Relationships) Act is not restricted to heterosexual de facto couples. ‘Close personal relationships’, also categorised as ‘domestic relationships’ under the Act are still more broadly defined, as a: … relationship (other than a marriage or de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.210

The typical relationships envisaged by the definition of ‘close personal relationships’ are those between parents and children, siblings sharing accommodation, and even friends who live on the same premises. In this way, the Act would therefore encompass interdependent and care-type relationships. However, care relationships encompassed by the Act are those undertaken voluntarily. Support and personal care provided for a fee or reward, or on behalf of another person or organisation (such as a charity), are excluded from the operation of the Act.211 [page 297] Section 17 of the Property (Relationships) Act provides that a person can apply for a property order under s 20 of the Act provided that the domestic relationship exhibits of the following characteristics: it has lasted for two years

or more; there is a child of the relationship; ‘serious injustice’ would result in circumstances where a partner who has made substantial contributions that would not otherwise be compensated; or one partner has the ‘care or control of a child’ of the other partner.

Family Law Act (Cth) s 79 6.51 Section 79 of the Family Law Act 1975 (Cth) gives the Family Court considerable discretion to vary rights to property that couples would have under the traditional common law and the equitable principles outlined above.212 Unlike the Property (Relationships) Act 1984 (NSW), however, the Family Law Act only applies to couples: married, de facto or same sex. As in the New South Wales Act, under the Family Law Act the Family Court will take into account a range of factors in determining whether persons seeking the court’s jurisdiction are genuinely living together as a couple. These factors similarly include a range of social and financial indicia, such as: the duration of the relationship; the extent and nature of the common residence; ‘whether a sexual relationship exists’; the ‘degree of mutual commitment to a shared life’; the care of children; financial dependence; and, the ownership of property.213 Under s 79 of the Family Law Act, the Family Court may make such orders as it considers appropriate altering the interests of the couple in the property, and those of third party creditors.214 This may include an order for a settlement or transfer of property in substitution for any interest in the property.215 The section requires the court not to make an order ‘unless it is satisfied that, in all the circumstances, it is just and equitable’ to do so.216 In Mallett v Mallett,217 Dawson J described the ‘just and equitable’ requirement as the ‘overriding requirement’ of s 79. The primacy of this requirement was confirmed by the High Court in Stanford v Stanford,218 and accordingly the provision confers a wide [page 298] discretion on the court.219 In particular, although commentators have

observed that the long-term impact of the High Court’s decision in Stanford remains unclear, the case cast doubt on an early approach of the Family Court to proceed from a starting point of equality of contribution in long-term relationships. Rather, Stanford requires courts to have a ‘principled reason for interfering with the existing legal and equitable interests of the parties to the marriage’.220 6.52 When a court determines that it is ‘just and equitable’ to make a property order, s 79 of the Family Law Act requires it to consider a variety of factors, including financial and non-financial contributions made directly or indirectly by the parties to the acquisition, maintenance or improvement of the property, and any contribution made to the welfare of the family, including contributions as homemaker or parent.221 In this way, s 79 overcomes many of the limitations of the traditional doctrinal principles, and, in particular, the traditional hesitation of courts to give primacy to nonfinancial, and homemaking, contributions to a relationship. Significantly, the Family Court must also take into account the future effects of an order on earning capacity and liability for child support in determining property rights, as well as the future needs and earning capacities of the couple.222 In contrast to the exclusively ‘backward-focused’223 principles of equity, the Family Law Act therefore adopts a 360-degree perspective, examining past contributions as well as future contributions and needs.

Reform Uncertainty surrounding Conveyancing Act 1919 (NSW) s 23 6.53 As noted above in the discussion of Adamson v Hayes,224 s 23C(1) of the Conveyancing Act 1919 (NSW) presents grave difficulties of interpretation. The reasons for this are twofold: 1.

There appears to be substantial overlap between the relevant provisions. Thus, s 23C(1)(a) deals with the creation and disposition of interests in land, while s 23C(1)(c) deals with the disposition of subsisting equitable interests. Section 23C(1)(c) differs to the extent that it has been

interpreted to cover personalty as well as land; however, it is difficult to see that a ‘disposition of a subsisting equitable interest [in land]’ is not also within the meaning of s 23C(1)(a). 2.

The definitions of ‘disposition’ and ‘dispose’ in s 7 of the Act are expressed to include a declaration of trust, so that para (b) of s 23C(1) would appear to be unnecessary. The uncertainty of the meaning of the provisions has, if anything, been rendered all the [page 299] more acute by the judicial disagreement as to their meaning, evidenced in Adamson v Hayes. In consequence, as Meagher, Gummow and Lehane conclude, transactions may be rendered needlessly void ab initio, and unnecessary revenue liabilities may result from excessive caution in ensuring that the requirements are met.225

In light of these and other difficulties of interpretation,226 it is difficult to disagree with Meagher, Gummow and Lehane’s conclusion that the effect of s 23C: … on dealings with equitable interests is in many respects thoroughly obscure … In the absence of further legislative intervention there is little that a conveyancer can do except bewail the consequences of the transplanting (without amendment) of an English provision — not impeccably drafted in the first place — to an inappropriate context in the local statute.227

Presumptions of resulting trust and advancement 6.54 The presumptions of resulting trust and advancement give expression to two cardinal ideas about property: 1.

in the case of the purchase-money resulting trust, that a person buying property is presumed to be acting to benefit himself or herself, not another person; and

2.

that in certain rigidly defined circumstances where the purchaser is under an obligation to support the person whose name appears on the title

document, the purchaser is presumed to be making a gift. It is difficult to see how these presumptions are helpful in determining the property rights of family members. To begin with, because the rules have been developed over hundreds of years, they are unsuited to the very different family structures, variety of family forms and changes in the sexual division of labour that are characteristic of contemporary advanced societies. As Murphy J noted in Calverley v Green: Presumptions arise from common experience … If common experience is that when one fact exists, another fact also exists, [the law] sensibly operates on the basis that if the first is proved, the second is presumed. It is a process of standardised interests. As standards of behaviour alter, so should presumptions, otherwise the rationale for the presumptions is lost, and instead of assisting the evaluation of evidence, they may detract from it. There is no justification for maintaining a presumption that if one fact is proved, then another exists, if common experience is to the contrary.228

Implicit in the presumptions of advancement and resulting trust in the family context is a notion of women as dependants in a marriage, rather than as equal contributors to it and equal partners in it. Underpinned by older ideas of beneficence and moral obligation, [page 300] the presumptions presuppose more fundamentally different roles for men and women than is the case in contemporary marriage. It follows that their present effect can only be of a discriminatory nature. Recognition of the changed landscape of marriage and family relationships was referred to by Kirby P as requiring property rights to be determined ‘by the application, not of fixed presumptions … but by the application of unencumbered reason and logic’.229 Equally, noting that the resulting trust arose historically as a mechanism for dealing with the medieval practice of concealment of ownership of land behind a purchase in favour of others, Hope JA in Dullow v Dullow concluded: It seems rather ridiculous that troubles in England at the end of the Middle Ages should be the basis, in the late twentieth century, for making findings of fact, for that is what the presumption essentially involves.230

In Cummins,231 the High Court further complicated the landscape in relation to the presumptions by introducing the concept of the ‘equality of

ownership’ principle for marital homes. As Sarmas has indicated, how this starting point operates in relation to either or both of the presumptions of advancement and resulting trust is unclear. 232 In light of this array of powerful criticisms, it is time to do away with these presumptions once and for all.

Domestic labour and unconscionability 6.55 Despite the advances made in legislative reforms for the purpose of doing justice in distributing property rights on the breakdown of marriages and de facto relationships, the judicial development of the constructive trust in this area has not been so marked. To be sure, the expansion of the constructive trust into the area of unconscionable use of legal title, as in Muschinski v Dodds233 and Baumgartner v Baumgartner,234 has reduced the scope for unfairness in the allocation of property rights within the family. However, there is still a significant gap in the protection offered, particularly to those who work exclusively or predominantly unpaid in the home. The key philosophical principle here, one which clearly informs many of the legislative and judicial reforms noted above, is that property rights should not afford a means for overpowering and exploiting others. This general principle evokes a prominent theme in the writings of the ‘justice and equality’ theorists discussed at 1.32–1.35; however, in the context of the traditional family, a feminist reworking of those theories reveals a site of gendered injustice and inequality. The greater formal legal property rights of men, therefore, can be seen to reflect both a generally unequal distribution of economic power and an increased power in domestic relations, because the traditional division of labour (man as wage-labourer, woman as unpaid domestic worker) has been historically reflected [page 301] in property doctrines that have given little recognition to domestic labour. As we have seen above, in the last one-third of the 20th century there was a revolution in property law in the context of the family, no less than in the structure of the family itself and the social division of labour. Yet the

unconscionability principle as articulated in Baumgartner tends to confine contributions and pooling arrangements to financial contributions, or nonfinancial contributions such as house renovations that can be given a clear economic value.235 It can be seen, therefore, as a limited gain for non-legal titleholders where no common intention to create an equitable interest exists. It also appears to revive, as Kirby P noted in Bryson v Bryant,236 a narrow feature of the family property law of 20 years before (ie, pre-Ogilvie v Ryan),237 where a requirement of common-intention constructive trusts was that the detriment suffered was in the form of expenditure on the property. A fairer solution would be to factor into the question of unconscionable use of legal title the responsibility for housework and care of dependent family members. It is difficult to argue that it would do violence to the reasoning in Baumgartner, which favoured a constructive trust on the basis that ‘it is proper to regard the arrangement for the pooling of earnings as one which was designed to ensure that their earnings would be expended for their joint relationship and for their mutual security and benefit’.238 The ‘pooling of domestic and nondomestic labour’ would make for fairer results than the narrower ‘pooling of earnings’. In this regard, the powers of the Family Court both offer a model and provide a mechanism for recognising the ongoing impact of structural imbalances in society. 239

1.

For an overview, see N Fraser, Justice Interruptus: Critical Reflections on the ‘Post-socialist’ Condition, Routledge, New York, 1997.

2.

A W B Simpson, An Introduction to the History of Land Law, Clarendon, Oxford, 1961, p 164.

3.

See 1.11 and 2.46.

4.

See 3.8–3.19.

5.

For a discussion of seisin, see Chapter 3.

6.

See B Edgeworth, C J Rossiter, M A Stone and P J O’Connor, Sackville and Neave Australian Property Law, 10th ed, LexisNexis Butterworths, Sydney, 2016, pp 164–7.

7.

For other reasons for fragmenting ownership in this way, see Edgeworth et al, Sackville and Neave Australian Property Law, note 6 above, pp 185–9.

8.

J H Baker, An Introduction to Legal History, Butterworths, London, 1971, p 131.

9.

The plural of this term is cestui que usent, ‘an expression’, concludes Simpson, ‘calculated to give a grammarian bad dreams’: Simpson, An Introduction to the History of Land Law, note 2 above, p 164.

10.

See 6.5–6.36.

11.

For a general discussion, see Baker, An Introduction to Legal History, note 8 above, pp 129–36.

12.

E W Ives, ‘The Genesis of the Statute of Uses’ (1967) English Historical Review 673.

13.

As to the precise nature of these interests, see 6.14–6.19. Note also equity’s auxiliary jurisdiction, where equity assists in the establishment of legal rights — for instance, by means of quia timet injunctions and discovery. See, generally, J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 5th ed, LexisNexis Butterworths, Sydney, 2014, pp 10–12.

14.

Conveyancing Act 1919 (NSW) s 7(1).

15.

Sandilands (1871) LR 6 CP 411.

16.

Conveyancing Act 1919 (NSW) s 38(3).

17.

Xenos v Wickham (1867) LR 2 HL 296. Compare Hooker Industrial Developments Pty Ltd v Trustees of the Christian Brothers [1977] 2 NSWLR 109 where the document was not intended to have formal effect until formal exchange.

18.

Doe d Garnons v Knight (1826) 5 B & C 671 at 689.

19.

Mostyn v Mostyn (1989) 16 NSWLR 635.

20.

See 2.1–2.2.

21.

Conveyancing Act 1919 (NSW) s 23B(3).

22.

For the Torrens system generally, see Chapter 8.

23.

Chronopoulos v Caltex Oil (Australia) Pty Ltd (1982) 45 ALR 481.

24.

For a discussion of the operation of such leases, see 11.6.

25.

For implied leases, see 11.12–11.15.

26.

See Chapter 5.

27.

See, generally, A Stewart, P Griffith and J Bannister, Intellectual Property in Australia, 4th ed, LexisNexis Butterworths, Sydney, 2010. See further, Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, pp 307–23.

28.

For the application of the Statute of Frauds requirements to agreements to lease and mortgages, see, eg Pirrie v Saunders (1961) 104 CLR 149 and Harrison v Murphy (1877) 3 VLR (E) 105.

29.

Electronic Transactions Act 2000 (NSW). See, eg, Universal Music Australia Pty Limited v Pavlovic [2015] NSWSC 791 (in relation to settlement negotiations); and, generally, Stuart v Hishon [2013] NSWSC 766.

30.

Toogood v Mills (1896) 23 VLR 106.

31.

See, respectively, Godwin v Francis (1870) LR 5 CP 295; Gibson v Holland (1865) LR 1 CP 1; Parker v Clark [1960] 1 All ER 93; [1960] 1 WLR 286; Re Hoyle, Hoyle v Hoyle [1893] 1 Ch 84.

32.

See also Vantage Systems Pty Ltd v Priolo Corp Pty Ltd [2015] WASCA 21.

33.

ANZ Banking Group Ltd v Widin (1990) 102 ALR 289.

34.

Thomson v McInnes (1911) 12 CLR 562.

35.

Perpetual Trustee Co Ltd v Motive Finance & Leasing Pty Ltd (2011) 15 BPR 29,267.

36.

As to part performance, see 6.10–6.13.

37.

Daulia Ltd v Four Millbank Nominees Ltd [1978] 1 Ch 231.

38.

Sims v Landray [1894] 2 Ch 318.

39.

For a succinct summary of the relevant law, see P Butt, ‘Sale of Land by Auction in New South Wales’ (1980) L Soc J 720.

40.

Wright v Madden [1992] 1 Qd R 343.

41.

On the origins of the doctrine, see further, Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, pp 678–9.

42.

See 1.23–1.28. The analogy is not exact: part performance originates in agreement, as opposed to an act of acquisition.

43.

Maddison v Alderson (1883) 8 App Cas 467 at 475 per Lord Selborne LC.

44.

Maddison v Alderson (1883) 8 App Cas 467. For an extensive discussion of the history and key developments in the doctrine, see further Khoury v Khouri (2006) 66 NSWLR 241 at 262–9 per Bryson JA.

45.

Maddison v Alderson (1883) 8 App Cas 467 at 479 per Lord Selborne LC.

46.

Maddison v Alderson (1883) 8 App Cas 467 at 475 per Lord Selborne LC.

47.

Regent v Millett (1976) 133 CLR 679.

48.

Regent v Millett (1976) 133 CLR 679 at 683 per Gibbs J. See also Reitano v Reitano [2012] NSWSC 1127 where the fact that the son was given sole possession of a property, and sole responsibility for its upkeep and maintenance, in addition to the son’s contribution to the purchase price of another property in which the mother was to live, was construed as sufficient acts of part performance of an oral contract to transfer legal title from the mother to the son.

49.

J C Williamson Ltd v Lukey (1931) 45 CLR 282 at 297 per Dixon J.

50.

Khoury v Khouri (2006) 66 NSWLR 241.

51.

Khoury v Khouri (2006) 66 NSWLR 241 at 268 per Bryson JA.

52.

Russel v Russel (1783) 1 Bro CC 269; Theodore v Mistford (2005) 219 ALR 296. For further discussion, see S Hepburn, ‘Reconsidering the Scope of the Equitable Mortgage Arising from Deposit of Title Deeds’ (2007) 80 ALJ 121.

53.

Lacon v Allen (1856) 3 Drew 579.

54.

For further examples of acts that have, or have not, been held to be sufficient acts of part performance, see Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, pp 678–86.

55.

Steadman v Steadman [1976] AC 536. For an example of the many critical comments directed at this decision, see the note at H W R Wade, ‘Part Performance: Back to Square One’ (1974) 90 LQR 433.

56.

See ANZ Banking Group Ltd v Widin (1990) 102 ALR 289 at 303–4 and Khoury v Khouri (2006) 66 NSWLR 241 at 268, observing that it is for the High Court to determine whether the Maddison test or Steadman test applies in Australia.

57.

Ogilvie v Ryan [1976] 2 NSWLR 504.

58.

See also in Smilevska v Smilevska (No 2) [2016] NSWSC 397 where long-term acts of domestic support were insufficient to demonstrate part performance of an oral contract, particularly in the context of familial relations culturally defined by the duties of daughters-in-law to parents-in-law. In that case, Slattery J also found that the applicant could not demonstrate intention to create legal

relations arising from conversations in relation to the disputed property. However, she was ultimately successful in her estoppel-based argument. On estoppel, see 6.37–6.44. 59.

According to one line of feminist critique of law, the doctrine of part performance is another example of an abstract rule applied in a discriminatory way. See 1.41–1.47. See also D Otto, ‘A Barren Future? Equity’s Conscience and Women’s Inequality’ (1992) 18 MULR 808.

60.

See 6.31–6.36. The powers of the court under s 20 of the Property (Relationships) 1984 Act (NSW) may also go some way towards protecting the interests of carers. See further, 6.48.

61.

For an overview of the interests in land pending settlement, see generally, ‘Rights Pending Completion’ in D Skapinker and P Lane, Sale of Land in NSW: Commentary and Materials, 5th ed, Thomson Reuters, Ch 8.

62.

See Lysaght v Edwards (1876) 2 Ch D 499; Bunny Industries v FSW Enterprises Pty Ltd [1982] Qd R 712.

63.

Stern v McArthur (1988) 165 CLR 489 at 537 per Gaudron J; Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315. The remedy extends to protecting the putative interest by injunction: Stern v McArthur (1988) 165 CLR 489 at 522 per Deane and Dawson JJ.

64.

Adderley v Dixon (1824) 1 Sim & St 607.

65.

Eg, being ready, willing and able to pay the outstanding purchase moneys in full. See, eg, Westpac Banking Corporation v Ollis [2008] NSWSC 824.

66.

Eg, in Westpac Banking Corporation v Ollis [2008] NSWSC 824 a contract was found not to be specifically enforceable because completion was conditional on a subdivision application being registered, and that application was refused.

67.

C McClure, ‘Specific Performance and the Constructive Trust’ in E Bant and M Bryan (eds), Principles of Proprietary Remedies, Lawbook Co, Sydney, 2012, p 127.

68.

Lysaght v Edwards (1876) 2 Ch D 499 at 506.

69.

Phillips v Silvester (1872) LR 8 Ch App 173.

70.

Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qd R 712.

71.

Acorn Computers v MCS Microcomputer Systems Pty Ltd (1984) 6 FCR 277.

72.

Walsh v Lonsdale (1882) 21 Ch D 9.

73.

For implied periodic tenancies, see 11.12–11.15.

74.

Walsh v Lonsdale (1882) 21 Ch D 9 at 14–15.

75.

Clarke v Ramuz [1891] 2 QB 456.

76.

Mackreth v Symmons (1808) 15 Ves Jun 328.

77.

Conveyancing Act 1919 (NSW) ss 66L, 66M.

78.

See Pryke v Blazai (2000) 10 BPR 18,489.

79.

D Jensen, ‘A Typology of Trusts by Analogy’ in E Bant and M Bryan (eds), Principles of Proprietary Remedies, Lawbook Co, Sydney, 2012, p 63.

80.

Jensen, ‘A Typology of Trusts by Analogy’, note 79 above, p 62.

81.

Jensen, ‘A Typology of Trusts by Analogy’, note 79 above, p 61.

82.

Jensen, ‘A Typology of Trusts by Analogy’, note 79 above, p 61 (original emphasis).

83.

McClure, ‘Specific Performance and the Constructive Trust’, note 67 above, p 139.

84.

J D Heydon and M Leeming, Cases and Materials on Equity and Trusts, 8th ed, LexisNexis Butterworths, Sydney, 2011, p 165.

85.

McClure, ‘Specific Performance and the Constructive Trust’, note 67 above, p 137.

86.

Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315. See also Chang v Registrar of Titles (1976) 137 CLR 177 at 184 per Mason J; at 190 per Jacobs J.

87.

Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 333.

88.

Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 333.

89.

Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 332.

90.

Affirmed in Black v Garnock [2007] HCA 31; (2007) 230 CLR 438 at [32].

91.

McClure, ‘Specific Performance and the Constructive Trust’, note 67 above, pp 139–40. See also Heydon and Leeming, Cases and Materials on Equity and Trusts, note 84 above, who observe (at p 165) that ‘so many judges of the greatest eminence have described the vendor as a trustee as from the date of the contract, that the proposition is beyond challenge’.

92.

Golden Mile Property Investments Pty Ltd (In Liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237 at 261 [100] per Emmett JA.

93.

See, eg, Golden Mile Property Investments Pty Ltd (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237; Fuentes v Bondi Beachside Pty Ltd [2016] NSWSC 531; Australian Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99.

94.

See, eg, Atwell v Roberts (No 3) [2009] WASC 96 at [106]–[109] per Emmett JA; Circuit Finance Australia Ltd v Panella (2012) 16 BPR 30,347 at [21] per Pembroke J; Australian Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 at [96]–[109] per Ward JA (McColl JA and Gleeson JA agreeing).

95.

Golden Mile Property Investments Pty Ltd (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237 at 262 [104] per Emmett JA.

96.

Golden Mile Property Investments Pty Ltd (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237 at 263 [105] per Emmett JA.

97.

On the essential attributes of express trusts, see, eg, Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62; 317 ALR 225.

98.

See 6.5–6.6.

99.

Comptroller of Stamps v Howard-Smith (1936) 54 CLR 614 at 621–2 per Dixon J.

100. As noted above, there is also a further way to dispose of an equitable interest: by means of a contract for valuable consideration. See 6.14. 101. D Everett, ‘Reconciliation of the Statutory Requirements for Writing in Land Transactions’ (1987) 17 UWALR 301 at 304. 102. Conveyancing Act 1919 (NSW) s 54A(1). 103. Marist Bros Community Inc v Shire of Harvey (1994) 14 WAR 69 at 85 per Pigeon J, Seaman J concurring at 91. 104. Property Law Act 1969 (WA) s 34(1)(a). 105. Baloglow v Konstantinidis (2000) 11 BPR 20,721 at 20,757–8.

106. On the interaction of the provisions and the relationship between s 23C and s 54A, see also Khoury v Khouri (2006) 66 NSWLR 241 at 256–7 per Bryson J. 107. Adamson v Hayes (1973) 130 CLR 276. The following account of the case is necessarily simplified. For a fuller analysis, see, Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, pp 306–7. 108. Grey v Inland Revenue Commissioners [1960] AC 1; [1959] 3 All ER 603. 109. Secretary, Department of Social Security v James (1990) 95 ALR 615 at 622. 110. Wratten v Hunter [1978] 2 NSWLR 367. 111. JS and GP (2006) 35 Fam L R 88. 112. Conveyancing Act 1919 (NSW) s 23C(2). 113. Conveyancing Act 1919 (NSW) s 23C(2). 114. Longley v Longley (1871) LR 13 Eq 133. 115. Re West Sussex Constabulary’s Widows, Children and Benevolent (1930) Fund Trusts [1971] Ch 1. 116. Note, however, that a presumption of advancement may arise in the alternative, depending on the relationship between the parties. See further, 6.30. 117. Ryan v Dries (2002) 10 BPR 19,497; Dinsdale v Arthur [2006] NSWSC 809. 118. Payment of mortgage installment payments will be relevant, however, as a contribution in the recognition of a constructive trust. See further, 6.31. 119. Calverley v Green (1984) 155 CLR 242. 120. However, the court considered that after-purchase contributions to the property were relevant to the question whether the court should further alter the proportionate ownership of the property by means of a constructive trust, a topic discussed further below. See 6.31. 121. Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278. 122. Mr Cummins had earlier attempted to transfer his interest in the property to Mrs Cummins, but this transfer was declared void under s 121 of the Bankruptcy Act 1966 (Cth). 123. Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278, 303 at [71], quoting with approval from A W Scott and W Fratcher, The Law of Trusts, Little Brown, 4th ed, 1989, Vol 5, pp 197–8 (footnote omitted in original). 124. L Sarmas, ‘Trusts, Third Parties and the Family Home: Six Years since Cummins and Confusion Still Reigns’ (2012) 36 MULR 216 at 249, 237–44. 125. Sarmas, ‘Trusts, Third Parties and the Family Home’, note 124 above, p 230. 126. The policy assumptions underlying this approach have been criticised. See discussion at 6.54–6.55. 127. Wirth v Wirth (1956) 98 CLR 228. 128. Dullow v Dullow (1985) 3 NSWLR 531. Traditionally the presumption of advancement operated from father to child, but in Nelson v Nelson (1995) 184 CLR 538 this was extended to mother to child. See further, A Dowling ‘The Presumption of Advancement between Mother and Child’ [1996] Conv 274. The presumption may also arise in favour of a stepchild: see Olivieri v Olivieri (1993) 38 NSWLR 665. 129. March v March (1945) 62 WN (NSW) 111. 130. Mason and Brennan JJ in Calverley v Green (1984) 155 CLR 242 at 259–60 drew a clear distinction

between marriage and de facto relationships in the application of the presumption of advancement. 131. Brown v Brown (1993) 31 NSWLR 582. See also Paulet v Stewart [2009] VSC 60. 132. Nelson v Nelson (1995) 184 CLR 538. 133. On the application of the presumption in favour of a stepchild, see Olivieri v Olivieri (1993) 38 NSWLR 665. 134. Martin v Martin (1959) 110 CLR 297. 135. Brown v Brown (1993) 31 NSWLR 582. 136. See also Swettenham v Wild [2005] QCA 264 (presumption of advancement of a gift from father to daughter rebutted by evidence of a joint endeavour). 137. On the contemporary significance of the presumption of advancement, see further: J Glister, ‘Is there a Presumption of Advancement?’ (2011) 33 Syd LR 39; L Sarmas, ‘A Step in the Wrong Direction: The Emergence of Gender “Neutrality” in the Equitable Presumption of Advancement’ (1994) 19 MULR 758. 138. G Dal Pont, Equity and Trusts: Commentary and Materials, 6th ed, Thomson Reuters, 2015, p 1227 (see also, at p 1227, judicial and academic commentaries exploring the many and disparate forms of constructive trust, and the consequent confusion in this area of equitable doctrine). 139. The rule in Barnes v Addy (1874) LR 9 Ch App 244 (the knowing receipt of trust property) is discussed further in its relation to actions in personam in the Torrens system at 8.102–8.105. 140. See, eg, Hospital Products v United States Surgical Corp (1984) 156 CLR 41 per Mason J. 141. See Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566. 142. P Young AO, C Croft, M Smith, On Equity, Lawbook Co, Australia, 2009, p 442. Dal Pont observes that these trusts arise most commonly in cases of the breakdown of a relationship, in circumstances where equity would hold that beneficial ownership should be held in a manner inconsistent with the legal ownership. See G Dal Pont, Equity & Trusts in Australia, 6th ed, Thomson Reuters/Lawbook Co, Australia, 2015, p 1261. 143. See Giumelli v Giumelli (1999) 186 CLR 101. 144. Gissing v Gissing [1971] AC 886 at 905 per Lord Diplock. ‘Cestui que trust’ is an alternative expression for cestui que use. See 6.3. 145. Gissing v Gissing [1971] AC 886 at 905. 146. Bannister v Bannister [1948] 2 All ER 133. 147. Hussey v Palmer [1972] 1 WLR 1286; [1972] 3 All ER 744. 148. Last v Rosenfeld [1972] 2 NSWLR 923. 149. Allen v Snyder [1977] 2 NSWLR 685. For a further discussion, see Edgeworth et al, Sackville and Neave Australian Property Law, note 6 above, pp 326–34. 150. Allen v Snyder [1977] 2 NSWLR 685 at 690. 151. Ogilvie v Ryan [1976] 2 NSWLR 504. See 6.13. 152. Hussey v Palmer [1972] 1 WLR 1286; [1972] 3 All ER 744. 153. Allen v Snyder [1977] 2 NSWLR 685. 154. Muschinski v Dodds (1985) 160 CLR 583.

155. Muschinski v Dodds (1985) 160 CLR 583 at 620 per Deane J, with whom Mason J agreed. See also Sirtes v Pryer [2006] ANZ ConvR 188 (gift of a share of property to a daughter-in-law on the understanding that marriage would continue. The court found that the gift was to be held on constructive trust for the donor, but subject to charge in favour of the daughter-in-law for improvements she made to the property). 156. Baumgartner v Baumgartner (1987) 164 CLR 137. 157. Baumgartner v Baumgartner (1987) 164 CLR 137 at 147 per Mason CJ, Wilson and Deane JJ (emphasis added). 158. Baumgartner v Baumgartner (1987) 164 CLR 137 at 149. 159. This descriptor was suggested to the author by Michael Tarlowski (Australian National University). 160. Bryson v Bryant (1992) 29 NSWLR 188. 161. Miller v Sutherland (1990) 14 Fam LR 416 at 424. 162. Miller v Sutherland (1990) 14 Fam LR 416 at 424. 163. Miller v Sutherland (1990) 14 Fam LR 416 at 424. 164. See further discussion in Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, p 524. 165. Inwards v Baker [1965] 2 QB 29. 166. Dillwyn v Llewellyn (1862) 4 De GF & J 517; 45 ER 1285. 167. Crabb v Arun District Council [1976] 1 Ch 179. 168. Crabb v Arun District Council [1976] 1 Ch 179 at 198 per Scarman LJ. 169. Cameron v Murdoch (1986) 63 ALR 575. 170. E R Ives Investment v High [1967] 2 QB 379; [1967] 1 All ER 504. 171. Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. 172. On the debate regarding the interaction of the various forms of estoppels, including attempts by some judges to establish ‘a single overarching doctrine’ which would fuse common law and equitable estoppel (not simply merging species of equitable estoppel), see further, Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, Ch 17. 173. Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 429 per Brennan J. 174. Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582. See also Yeoman’s Row Management Ltd v Cobbe [2008] 4 All ER 713 where an experienced property developer was encouraged to secure planning permission, at great personal expense, on the basis of an expectation induced by the landowner that he would be granted an interest in the property on doing so. It was held that he was not entitled to half the increase in the value of the land attributable to the grant of permission, for the reason that he knew that a formal, written contract was required to give him an interest. 175. Thorner v Major [2009] 3 All ER 945. 176. Thorner v Major [2009] 3 All ER 945 at [8]. 177. Angelopulos v Sabatino (1996) 65 SASR 1. 178. For a further discussion of these matters, see N Hopkins, ‘Proprietary Estoppel: A Functional Analysis’ (2010) 14 J Eq 201; P Butt, Land Law, 6th ed, Thomson Reuters, Sydney, 2010, p 61; S

Degeling and B Edgeworth, ‘Improvements to Land Belonging to Another’ in L Bennett Moses, B Edgeworth and C Sherry (eds), Property and Security: Selected Essays, Thomson Reuters, Sydney, 2010, pp 277–90. 179. Sidhu v Van Dyke (2014) 251 CLR 505. 180. Sidhu v Van Dyke (2014) 251 CLR 505 at 525 [69] per French CJ, Kiefel, Bell and Keane JJ. 181. See also Smilevska v Smilevska (No 2) [2016] NSWSC 397 at [122]. 182. Commonwealth v Verwayen (1990) 170 CLR 394 at 441–3. 183. Giumelli v Giumelli (1999) 196 CLR 101. For further discussion, see F Burns, ‘Giumelli v Giumelli Revisisted: Equitable Estoppel, the Constructive Trust and Discretionary Remedialism’ (2001) 22 Adel LR 123; S Evans, ‘Defending Discretionary Remedialism’ (2001) 22 Syd LR 463. 184. Giumelli v Giumelli (1999) 196 CLR 101 at 123 [42] per Gleeson CJ, McHugh, Gummow and Callinan JJ, citing Commonwealth v Verwayen (1990) 170 CLR 394 at 442 per Deane J. 185. Olsson v Dyson (1969) 120 CLR 365. 186. For more information on choses in action, see 13.8. 187. Olsson v Dyson (1969) 120 CLR 365 at 376 per Kitto J. 188. For discussion of this principle, see 6.45–6.46. 189. For the difficult question of mere equities and priorities, see 7.45–7.46. 190. E R Ives Investment v High [1967] 2 QB 379; [1967] 1 All ER 504. 191. Inwards v Baker [1965] 2 QB 29. 192. Re Stoneham; Stoneham v Stoneham [1919] 1 Ch 149; [1918–19] All ER Rep 1051. 193. Milroy v Lord (1862) De GF & J 264; 45 ER 1185. 194. Re Rose [1952] Ch 499. 195. Jones v Lock (1865) 1 Ch App 25. 196. Conveyancing Act 1919 (NSW) s 23C(1)(b). 197. Corin v Patton (1990) 169 CLR 540. The position has now been changed by statute. See 9.33. 198. A discussion of the detail of these Acts, and their operation within the wider landscape of family law in Australia, is outside the scope of this chapter. See further, B Fehlberg, R Kaspiew, J Millbank, F Kelly, J Behrens, Australian Family Law: The Contemporary Context, 2nd ed, Oxford University Press, Melbourne, 2015. 199. Sarmas, ‘Trusts, Third Parties and the Family Home’, note 124 above, p 217. 200. Property (Relationships) Act 1984 (NSW) s 18(1). 201. Property (Relationships) Act 1984 (NSW) s 20(1). 202. Property (Relationships) Act 1984 (NSW) s 20(1)(b). 203. Property (Relationships) Act 1984 (NSW) s 5. On the definition of ‘close personal relationship’ see Jurd v Public Trustee [2001] NSWSC 632, and discussion in Fehlberg et al, Australian Family Law: The Contemporary Context, note 198 above, pp 98–9. 204. Property (Relationships) Act 1984 (NSW) s 4(1). 205. Property (Relationships) Act 1984 (NSW) s 4(3).

206. Property (Relationships) Act 1984 (NSW) s 4(2). 207. Baumgartner v Baumgartner (1987) 164 CLR 137; Property (Relationships) Act 1984 (NSW) s 4(2) (f). 208. Ogilvie v Ryan [1976] 2 NSWLR 504; Property (Relationships) Act 1984 (NSW) s 4(2)(e). 209. Muschinski v Dodds (1985) 160 CLR 583. 210. Property (Relationships) Act 1984 (NSW) s 5(1)(b) (emphasis added). 211. Property (Relationships) Act 1984 (NSW) s 5(2). 212. For further discussion of s 79 of the Family Law Act 1975 (Cth), see, generally, Fehlberg et al, Australian Family Law: The Contemporary Context, note 198 above, Ch 13. 213. Family Law Act 1975 (Cth) s 4AA(2). See, eg, Gissing and Sheffield [2012] FMCAfam 111; Jonah and White [2011] FamCA 22. 214. See further, Sarmas, ‘Trusts, Third Parties and the Family Home’, note 124 above, p 248. 215. Family Law Act 1975 (Cth) s 79(1) (emphasis added). The court may make an order in relation to de facto couples only in the event of a breakdown in the relationship. Stanford v Stanford (2012) 247 CLR 108 illustrates that s 79 permits a court to make orders under the Family Law Act while a marriage is ongoing. In that case, the wife’s daughter initiated s 79 proceedings (in her capacity as the wife’s guardian) when she was unhappy with the nursing care arranged by the wife’s husband. The proceedings were continued after the wife’s death. While the couple were not co-habiting while the wife was in a nursing home, the 37-year marriage had not been dissolved. See further, discussion in Fehlberg et al, Australian Family Law: The Contemporary Context, note 198 above, pp 497–8, 501–10. 216. Family Law Act 1975 (Cth) s 79(2) (emphasis added). 217. Mallett v Mallett (1984) 156 CLR 605 at 647. 218. Stanford v Stanford (2012) 247 CLR 108. 219. Bevan v Bevan [2014] FamCAFC 19 at [92] per Bryant CJ and Thackray J. 220. Stanford v Stanford (2012) 247 CLR 108 at [41]. See further, Fehlberg et al, Australian Family Law: The Contemporary Context, note 198 above, pp 523–4. 221. Family Law Act 1975 (Cth) s 79(4)(a)–(c). See further Fehlberg et al, Australian Family Law: The Contemporary Context, note 198 above, Chs 13 and 14. 222. Family Law Act 1975 (Cth) s 79(4)(d), (g). 223. Sarmas, ‘Trusts, Third Parties and the Family Home’, note 124 above, p 248. 224. Adamson v Hayes (1973) 130 CLR 276. See 6.23. 225. Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, pp 211–12. 226. See Edgeworth, Rossiter, Stone and O’Connor, Sackville and Neave Australian Property Law, note 6 above, pp 310–18. 227. Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 13 above, p 322. 228. Calverley v Green (1984) 155 CLR 242 at 264. 229. Brown v Brown (1993) 31 NSWLR 582 at 601.

230. Dullow v Dullow (1985) 3 NSWLR 531 at 535. 231. Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278. 232. Sarmas, ‘Trusts, Third Parties and the Family Home’, note 124 above, p 230. 233. Muschinski v Dodds (1985) 160 CLR 583. 234. Baumgartner v Baumgartner (1987) 164 CLR 137. 235. As in Miller v Sutherland (1990) 14 Fam LR 416. 236. Bryson v Bryant (1992) 29 NSWLR 188 at 204. 237. Ogilvie v Ryan [1976] 2 NSWLR 504. 238. Baumgartner v Baumgartner (1987) 164 CLR 137 at 147 per Mason CJ, Wilson and Deane JJ (emphasis added). 239. F Bartlett, ‘Formal Equality and Third Party Interests in the Family Home: Trustees of the Property of John Daniel Cummins, a Bankrupt v Cummins’ in H Douglas, F Bartlett, T Luker and R Hunter, Australian Feminist Judgments: Righting and Rewriting the Law, Hart Publishing, Oxford, 2014, p 207.

[page 303]

Chapter 7

Old System and Priorities Introduction 7.1 Priority rules determine how conflicting claims over interests in land are resolved. In Chapter 6, we explored the many ways in which such interests in land could be created. This chapter examines the common law and equitable rules that govern these disputes in land yet to be converted to Torrens title, so-called ‘old system’ land. Under old system title, there are four key rules, which depend on the nature of the interest and the timing of the acquisition of each interest. These are competitions between: 1.

an earlier legal versus a later legal interest;

2.

an earlier legal versus a later equitable interest;

3.

an earlier equitable versus a later legal interest; and

4.

an earlier equitable versus a later equitable interest.

As discussed in Chapter 6, courts have also recognised the existence of ‘mere equities’ in land. The priority rules applicable to mere equities are discussed within the context of the final (fourth) rule. 7.2 While currently New South Wales land is overwhelmingly Torrens title,1 the importance of these rules for a contemporary understanding of New South Wales land law belies the smaller land mass still governed by them. This is for two reasons. First, the old system rules provided the historical framework that the drafters of the Torrens regime railed against, and so an understanding

of the old system rules illuminates the intent that informs Australia’s contemporary land registration scheme. Second, the Torrens system does not represent a complete override of the old system rules. Thus, particularly in the context of disputes between unregistered interests (see 8.161–8.170), an appreciation of the old system priority rules remains significant. [page 304] The balance of this chapter then examines the statutory deeds registration system applicable to old system, or ‘general law’ land, and the priority rules applicable under that system.

Common law and equitable priority rules Earlier legal interest versus later legal interest 7.3 Imagine the following scenario: A is the holder of the legal fee simple. In 2010, A granted a legal lease to E for 10 years. In 2017, A completed the sale of the legal fee simple to B. Is B bound by E’s lease? The priority rule governing this situation is nemo dat quot non habet: no one can give what he or she does not have (the nemo dat rule). In 2017, A was not the holder of an unencumbered fee simple, but rather held a reversionary interest in the fee simple, falling into possession in 2020. Thus, B, as transferee of A’s revisionary interest, is subject to E’s lease until 2020. In a competition between B and E, E therefore prevails over B to the extent of his or her interest. 7.4 The language of competition and of a priority dispute is also traditionally used to describe the following simple example: A completed the sale of the unencumbered legal fee simple to B on 2 January, and later purported to complete the sale to C on 3 February. In this scenario, B would prevail in the ‘competition’ because, on 3 February, A had no interest to transfer to C. Although C in this circumstance has no interest, the language of priority is used to describe C’s claim. This is important in light of the court’s recognition of an equitable exception to the nemo dat rule. At law, the nemo dat rule will prevail, with the result that B is holder of the legal title.

However, this exception holds that if B had been guilty of ‘postponing conduct’, C’s interest will prevail — in equity. Accordingly, B will hold the legal title on trust for C under this rule. This rule is discussed below.

Earlier legal interest versus later equitable interest 7.5 The operation of the nemo dat rule, discussed above, would seem at first instance to prevent a later equitable interest being in competition with an earlier legal interest. If the legal interest has been transferred, how is it possible to create a later equitable interest, given that the grantor has already parted with his or her interest in the land? The priority rule applied between an earlier legal and later equitable interest is ‘where the equities are equal, the law prevails’.2 Under this rule, equity will intervene to prevent a legal owner from taking priority in circumstances where there has been inequitable conduct on his or her part. It is the conduct of the legal interest holder that justifies the intervention of equity. 7.6 The facts of Walker v Linom3 illustrate how a dispute between an earlier legal interest and a later equitable interest can arise, and the determination whether the ‘equities are equal’ in such circumstances. In that case, a dispute arose between trustees of certain trusts [page 305] (the holders of the legal interest in the land) and a later equitable interest holder. When the trust was created, the settlor had handed over the title deeds, but dishonestly withheld the deed that had conveyed title to the settlor himself. Armed with that deed, which showed him as the holder of the legal estate, the settlor then created the later equitable interest. In the subsequent dispute between the trustees’ legal interest and the equitable interest holder, the latter prevailed. This was because the subsequent interest could not have been created but for the trustees’ ‘gross’ negligence in failing to make inquiries about the missing deed.4 Had the trustees inquired, and not been given a

reasonable explanation5 for the absence to the deeds, this too would be sufficient conduct to justify postponement. 7.7 In addition to failing to obtain possession of title deeds, legal interest holders may also lose priority under this rule in circumstances where they have obtained the title deeds but subsequently part company with them. The case of Northern Counties Fire Insurance Co v Whipp6 suggests that a high threshold is required. In that case, the legal interest holder, Mr Crabtree, owned several properties and mortgaged them to his employeer, Northern Counties Fire Insurance. The deeds to the properties were held in the company safe, one key to which was retained by Crabtree in his role as manager of the company. Crabtree took the title deeds from the safe and, removing the mortgage to the company from the chain of title documents, then utilised those documents to obtain a loan from Mrs Whipp. When the company went into liquidation, the liquidator sought to foreclose. Mrs Whipp sought a declaration that the company’s legal mortgage should be postponed to her equitable mortgage. Her action was unsuccessful, however, for the court found that although the company had acted with more than ‘mere carelessness or want of prudence’, it had not acted with ‘great carelessness’. Accordingly, the company’s conduct was not sufficient to render the equities unequal.7 The requisite standard has been described in subsequent cases as one of ‘gross negligence’ on the part of the legal interest holder.8 7.8 While conduct in relation to the custody (or failure to obtain custody) of title deeds accounts for many priority disputes of this category, courts have found that other conduct by the legal interest holder can also justify postponement of their interest, on the basis that that conduct rendered the equities unequal. Unsurprisingly, the legal interest holder will be postponed if he or she is party to some fraud by means of which the later equitable interest holder is deceived as to the existence of the legal interest.9 This was an example [page 306] given by the court in Whipp, although on the facts of that case the court found

that the company had been careless but not fraudulent. Entrusting the title deeds to an agent who exceeds his or her authority will also be postponing conduct; for example, when the agent has been authorised to raise money on the basis of a mortgage for one sum, and the agent raises a mortgage for a larger sum.10

Earlier equitable interest versus later legal interest 7.9 Imagine that A is the holder of the legal fee simple, and, in 2010, granted a 10-year lease to E. The lease is in writing, but not by deed. In 2017, A completes the sale of the legal fee simple to B. In a priority dispute between E’s equitable lease and B’s legal fee simple, who will prevail? The rule governing this dispute, derived from the 1872 case of Pilcher v Rawlins,11 is that the equitable interest prevails unless the later legal interest was acquired by a bona fide purchaser for value who takes without notice of the equitable interest. Thus, if B can satisfy these requirements, B will have an ‘absolute, unqualified, unanswerable’12 defence against E’s claim.

Bona fide purchaser and for value 7.10 The first requirement of this priority rule is that the legal interest holder must be a purchaser. While in our example above (at 7.9), the purchaser B completed the purchase of the fee simple, a ‘purchaser’ for the purposes of this priority rule may be the purchaser of any interest (eg, leases, mortgages, easements).13 The ‘purchaser’ requirement in this rule derives from the equitable maxim that equity will not assist a volunteer. Accordingly, a person who inherits a legal estate, or receives the legal estate as a gift, will take his or her interest subject to all prior equitable interests. Thus, in our example, if A had died in 2017 and left Blackacre by will to B, B would take the reversionary interest until E’s lease expired in 2020. 7.11 To modern ears, the requirement that a purchaser be ‘for value’ is redundant. In contemporary parlance, to ‘purchase’ means to pay value for an item. However, historically the legal definition of ‘purchaser’ meant a person taking by way of grant, and so a purchaser could include a volunteer. The requirement of ‘value’ thus ensured that this rule only protected the legal

interest holder who had provided money, or money’s worth, for the interest. Anything that would constitute consideration under a contract can therefore constitute ‘value’ under this priority rule. For example, money, chattels, services, or the satisfaction of an existing debt,14 can constitute value. However, love and affection,15 is not ‘value’. As the contract law principles dictate, ‘value’ need not be market or full value,16 [page 307] but must be more than nominal value.17 Accordingly, for example, in a recent Torrens title case, the High Court held that the payment of $1 for a transfer of an estate in fee simple of a property called the ‘Dairy Farm’ did not constitute valuable consideration.18 7.12 The requirement of ‘bona fide’ means that the purchaser must act in good faith. An element of taking in good faith means that the purchaser must not have notice of the prior equitable interest. However, in Midland Bank Trust Co Ltd v Green,19 Lord Wilberforce noted that the test of good faith is ‘a separate test which may have to be passed even though absence of notice is proved’.20 Equitable doctrines such as fraud, or undue influence or unconscionability are therefore likely to be encompassed within the good faith test.

Doctrine of notice 7.13 A purchaser who does not have notice of the equitable interest holder will take the legal estate free of the equitable interest. Two questions therefore arise: 1.

At what time is the purchaser’s notice assessed?

2.

What is ‘notice’ of the equitable interest?

7.14 Timing of notice The purchaser who takes free from notice at the time of acquiring his or her legal interest gains the protection of this rule. In our example, this means that if B does not have notice of E’s lease at the time of the completion of the sale between A and B, B will not be bound by E’s lease.

However, if B learned of E’s lease following exchange of contracts, but before completion, B could not gain the protection of the ‘bona fide purchaser’ rule. This is because at exchange, B does not have a legal estate. However, what is the situation if B has paid full consideration, but there is a delay in taking the legal title? In this circumstance, the doctrine of tabula in naufragio (discussed below at 7.31) allows the holder of the later equitable interest to take priority over the earlier interest, provided that the transfer of the legal interest is not in breach of trust. 7.15 What is ‘notice’? Section 164 of the Conveyancing Act 1919 (NSW) sets out the three types of notice recognised by the common law as relevant to the bona fide purchaser priority rule: (i) actual notice; (ii) imputed notice; and (iii) constructive notice. Section 164 provides: (1) A purchaser shall not be prejudicially affected by notice of any instrument, fact or thing unless: (a)

it is within the purchaser’s own knowledge;

(b) it … would have come to the purchaser’s knowledge, if such … inquiries, and inspections had been made as ought reasonably to have been made by the purchaser; or

[page 308] (c) in the same transaction with respect to which a question of notice to the purchaser arises, it has come to the knowledge of the purchaser’s counsel as such, or of the purchaser’s solicitor or other agent as such, or would have come to the knowledge of the purchaser’s solicitor or other agent as such, if such searches, inquiries, and inspections had been made as ought reasonably to have been made by the solicitor or other agent.

7.16 Actual notice A purchaser with actual knowledge of the existence of the prior equitable interest will take subject to the prior interest. Vague rumour regarding a relevant fact does not constitute actual notice of that fact.21 However, provided that the information is clear, it does not matter how the legal interest holder came to have knowledge of the earlier interest.22 7.17 Constructive notice Constructive notice will fix the purchaser with notice of those facts, or instruments, the purchaser ought to have discovered had the purchaser conducted the usual and proper inquiries that a reasonably

prudent purchaser should make. This principle ensures that equitable interests are not made vulnerable in circumstances where purchasers, through laziness or negligence, have failed to discover the existence of the interest. Thus, a purchaser who fails to conduct the relevant inquiries will be fixed with notice of all relevant facts that the purchaser would have discovered had he or she conducted the proper investigations. In addition, if the purchaser receives notice of a relevant fact, and then abstains from making further inquiries, the purchaser will be fixed with notice of those facts that the purchaser would have discovered had he or she conducted those inquiries. At common law, the purchaser’s reasonable inquiries fall in two areas: (i) a duty to inspect the land; and (ii) a duty to inspect the title documents. Each duty is discussed below. Constructive notice — duty to inspect the land 7.18 The basic rule regarding physical inspection of the land, from Barnhart v Greenshields,23 provides that: … possession of the tenant is notice that he has some interest in the land, and that a purchaser having notice of that fact, is bound, according to the ordinary rule, either to inquire what the interest is, or to give effect to it, whatever it may be.24

Under these principles, the purchaser is fixed with constructive notice of the interest of the person in possession. Thus, in our example above (at 7.9), if E was the tenant in possession, the doctrine of constructive notice will fix B with notice of E’s interest. This is because, as an ordinary and prudent purchaser, B would have discovered E in possession following B’s physical inspection of the land, and as a prudent purchaser, B would have inquired of E about the nature of his or her interest.25 [page 309] 7.19 Constructive notice will extend also to fixing a purchaser with notice of interests collateral to the tenancy agreement, such as options to renew,26 or options to purchase.27 The principle is limited, however, to those interests that the purchaser could identify from making reasonable inquiries of the instrument. Thus, in Smith v Jones28 a purchaser was held not to have constructive notice of a right to rectification that the tenant held in respect of

a lease. Nor is a purchaser required to inquire as to the identity of the ultimate recipient of rental payments of tenants in possession.29 7.20 While it is generally the case that a purchaser will be fixed with constructive notice of an interest where a person other than the vendor is in possession, such as in our example of B and E above, the position is more complex when the vendor is also in possession. Imagine, for example, that the legal estate to a property is solely in the name of Mr P, but his wife, Mrs P, has an equitable interest in the property arising under a Baumgartner constructive trust,30 as she had contributed most of the purchase price. Mr P executed a mortgage, and a priority dispute arose between Mrs P and the mortgagee. In Platzer v Commonwealth Bank of Australia,31 the court found that as the mortgagee had knowledge of Mr and Mrs P’s relationship, including that they were living together in a different property, and that they were constructing the house on the disputed property together, this was sufficient to give rise to constructive notice of Mrs P’s interest. McPherson JA observed in that case that: Under prevailing social conditions, the subsistence of equitable interests in land is a phenomenon now so widespread that it cannot be safely ignored. Trusts, whether express, resulting or constructive, are nowadays a common feature of matrimonial and other such relationships.32

Accordingly, the mortgagee’s duty to make such inquiries as ‘ought reasonably’ be made extended in that case to asking Mrs P herself about her interest in the property. 7.21 Other examples where a purchaser of the legal estate for value has been held to have constructive notice of an equitable interest on the basis of occupation include: a clear and demonstrable use of a right of way;33 and easements to discharge sewage through sewerage lines if inspection points were visible.34 However, the purchaser will not be bound by the vague and ill-defined rights of a person in occupation.35 [page 310] Constructive notice — duty to inspect title 7.22

Under the traditional common law rules, a purchaser was fixed with

constructive notice of all documents in the chain of title. Common law conveyancing practice required the purchaser to search the chain of title for a ‘good root of title’, of at least 60 years prior to the transaction. This meant that the reasonably prudent purchaser would search the chain of title to locate an instrument that: conveyed the entirety of the legal and equitable estate (eg, a conveyance of the legal fee simple, or a legal mortgage); described the property adequately; and, did not throw doubt on the title. That instrument was required to be at least 60 years prior to the date of the transaction. This would mean that, for example, if the title offered by the vendor consisted of a series of conveyances of 55, 75 and 80 years prior to the date of the transaction, the purchaser was required to call for the production of the 75year-old conveyance, and each more recent conveyance after that date. The doctrine of constructive notice would fix the purchaser with notice of all interests that the purchaser would have discovered had he or she properly and diligently investigated the whole title for the requisite period. These principles would, of course, not impact on the enforceability of legal interests created at any time, or interests created by adverse possession. Such legal interests remain enforceable under the nemo dat rule.36 7.23 Section 164 of the Conveyancing Act confirms the common law rule that the purchaser is fixed with notice if he or she fails to inspect title, or does so without reasonable diligence. However, s 53(1) of the Act has significantly varied the common law standard, by halving the required period for a good root of title to only 30 years. Section 53(3) also protects a purchaser from constructive notice of equitable interests prior to that good root of title. These protective provisions do not apply if the purchaser fails to investigate the title at all,37 or only investigates part of the period, or makes no objection or inquiry in relation to a doubtful transaction.38 In such cases, the purchaser will be fixed with notice of everything that might have been discovered by such an investigation. In addition, s 53(3) does not protect the purchaser if he or she actually searches beyond the 30-year good root of title. In circumstances where the purchaser has conducted a longer search, the purchaser will then be fixed with constructive notice of interests that he or she would have found had the longer search been conducted to the standard of the reasonably prudent purchaser.39 7.24

Imputed notice Imputed notice arises when a purchaser is deemed to

know the relevant facts learned by his or her agent (eg, a solicitor or real estate agent). Section 164 of the Conveyancing Act confirms that the agent is under the same obligations as the purchaser, to inspect both the land and title documents, and so the purchaser will be fixed with the actual and constructive knowledge of the agent. Section 164(1)(b) also provides that the agent’s notice will only be imputed to the principal if it is obtained in the course [page 311] of the same transaction. This means that if an agent acquires knowledge in the course of previous business dealings, that knowledge is not brought home to the principal.40

Successors in title and the rule in Wilkes v Spooner 7.25 Where the legal interest holder is a bona fide purchaser for value without notice of the equitable interest, the rule in Wilkes v Spooner41 provides that that purchaser can pass good title clear of the equitable interest. Accordingly, a person who claims an interest through a bona fide purchaser for value who is without notice is entitled to the same protection as that purchaser, even if the person making the claim acquired his or her interest with notice. In our example at 7.9, imagine that B later sold the legal fee simple to C, who had had actual notice of E’s lease. Had B been a bona fide purchaser for value without notice of E’s equitable lease, C would take free of the lease under the rule in Wilkes, even though C himself or herself had notice and therefore would not satisfy the bona fide purchaser rule. However, the rule in Wilkes is subject to two exceptions that prevent the bona fide purchaser being used as part of a scheme to ‘clean’ the title. Thus, the later owner will remain subject to the prior equitable interest, despite the intervening sale to a bona fide purchaser without notice, if: (a) that later owner is a trustee who had sold the property to the bona fide purchaser in breach of trust; or (b) if the later owner had acquired the property through actual fraud.42

Prior equitable interest versus later equitable

interest 7.26 The general principle governing the competition between two equitable interests is the equitable maxim qui prior est tempore potior est jure: ‘whoever is first in time is in the stronger position in law’.43 Therefore, the onus lies with the later interest holder to demonstrate that it is inequitable for the first equitable interest to prevail.44 As the New South Wales Court of Appeal in Australia Capital Financial Management Pty Ltd v Linfield Development45 observed in 2017, there continues to be academic and judicial debate regarding the ‘correct approach’ to be taken to resolving disputes between two equitable interests through the ‘first in time’ rule. On the one hand, the maxim suggests that temporal order is the critical issue in determining priority. On the other hand, the [page 312] leading case of Rice v Rice46 endorsed the position that the test is not to be applied by reference to a ‘technical rule’47 but rather by reference to the question: ‘As between persons having only equitable interests, if their equities are in all other respects equal, priority of time gives the better equity’.48 However, if it is conceded that the maxim is not to be applied ‘mechanically’49 according to temporal priority, the question remains, is the ‘first in time’ rule a ‘rule of first or last resort’50? 7.27 In Latec Investments Limited v Hotel Terrigal Pty Ltd (in liq),51 Kitto J emphasised that the inquiry as to ‘where the better equity lies’52 under the ‘first in time’ rule requires a consideration of the following: If the merits are equal, priority in time of creation is considered to give the better equity. … But where the merits are unequal, as for instance where conduct on the part of the owner of the earlier interest has led the other to acquire his interest on the supposition that the earlier did not exist, the maxim may be displaced and priority accorded to the later interest.53

After endorsing Kitto J’s approach in this passage, Mason and Deane JJ in Heid v Reliance Finance Finance Corp Pty Ltd54 observed that the court’s role in determining the ‘better equity’ was to examine all the circumstances of the case. This inquiry includes a consideration of whether the conduct by the

owner of the prior equity led the later interest holder to acquire their interest in the mistaken belief that the earlier interest did not exist.55 However, Mason and Deane JJ also observed that a prior equitable interest may not be postponed merely because of the existence of such a ‘causal nexus’. Rather, the court will ultimately consider whether ‘in fairness and justice’, in light of the conduct of both parties and all the circumstances of the case, the first in time interest holder should be postponed to the later interest.56 Conduct including ‘fraud, unfairness, negligence, [or] the wrongful creation of particular assumptions by representations’ will be factors the court will consider in evaluating the behaviour on the part of the holders of each equitable interest.57 [page 313] 7.28 One ‘common illustration’58 of circumstances in which the first in time interest holder has been postponed is the so-called ‘arming’ conduct cases. In Rice v Rice,59 for example, the competition was between the holders of a prior equitable unpaid vendor’s lien and a later equitable mortgage. In that case, the vendor signed a receipt declaring that the full purchase price had been paid. This receipt was given to the purchaser, who then held himself out as the holder of the unencumbered fee simple in order to secure an equitable mortgage. Applying the ‘first in time’ rule, the court held that the vendor had ‘voluntarily armed the purchaser with the means of dealing with the estate as the absolute and beneficial owner, free from every shadow of encumbrance or adverse equity’.60 While there are many illustrations of first in time interest holders losing priority by virtue of ‘arming conduct’, the court in Heid recognised that ‘arming conduct’ does not automatically postpone the holder. In that case, for instance, Mason and Deane JJ intimated that entrusting title documents to a solicitor for the purposes of effecting the transaction would not be postponing conduct.61 These arming cases illustrate situations in which the conduct by the first in time interest holder lead to the creation of the later interest in ignorance of the first interest. However, in Australia Capital Financial Management Pty Ltd v Linfield Development62 the New South Wales Court of Appeal observed that

postponing conduct is not to be narrowly conceived, and so may arise in circumstances where the first in time interest holder encouraged the later interest holder to ‘alter his position’63 by not to taking steps to protect his or her existing contractual rights.64

Relevance of notice in the application of the ‘first in time’ rule 7.29 In contrast to the ‘bona fide purchaser’ rule, on its face it would not appear that notice would necessarily be a decisive factor in the assessment of priority between two competing equitable interests under the ‘first in time’ rule. Applying Mason and Deane JJ’s test in Heid, the fact that the second in time interest holder was a bona fide purchaser for value without notice will not automatically secure the second in time purchaser priority. The lack of notice will be taken into account in assessing the equities in the case. [page 314] However, what is the position if the second in time interest holder has notice of the earlier notice? In Moffett v Dillon,65 Brooking JA (with Buchanan JA concurring) held that if the later interest holder had actual notice of the earlier equitable interest this was a threshold consideration, that would automatically deprive the later interest holder of priority.66 As actual notice was in dispute in Moffett, the issue of constructive notice and the ‘first in time’ rule did not directly arise. The preferable approach would seem to be that constructive notice by the later interest holder should not operate as a threshold issue. Rather, applying Mason and Deane JJ’s approach in Heid, constructive notice will be a factor evaluated by the court in considering the causal nexus between the interests and an assessment of ‘fairness and justice’ in a particular case. In Perpetual Trustees Co v Smith,67 for example, Moore and Stone JJ held that the prior interest holders’ possession of the property gave rise to constructive notice of their interest, and that this was a significant factor in determining whether they had engaged in ‘postponing conduct’.68

The special position of beneficiaries under a trust

7.30 Where the earlier equitable interest holder is a beneficiary under a trust, the general position is that the beneficiary will retain priority if the trustee acts in breach of trust.69 However, the three exceptions to the basic rule that the beneficiaries (ie, the ‘first in time’ interest) will prevail, are as follows: 1.

Where the trustee fails to acquire all the deeds in the first place, the beneficiaries will lose priority in the same way that the trustee will.70

2.

A beneficiary under a voluntary settlement will be postponed where a later equitable interest is created for value without notice of the earlier interest.71

3.

A beneficiary will be postponed where the trustee would be postponed on normal equitable principles.72 Thus, imagine a situation where a trustee sells trust property to X and retains an unpaid vendor’s lien because purchaser X has not paid the full purchase price. Purchaser X then creates an equitable interest in favour of Y. In this [page 315] scenario, Y will take priority over the beneficiary as under normal equitable rules the trustee’s conduct (by arming purchaser X) would have led to the trustee’s equitable interest being postponed to the later equitable interest holder Y.73

Tabula in naufragio 7.31 The term tabula in naufradio (‘plank in a shipwreck’)74 provides a mechanism for the second in time equitable interest holder to escape the consequences of postponement.75 It is most commonly associated with priority disputes between mortgagees, but is not confined to such disputes.76 It applies where a later equitable interest holder obtains notice of an earlier equitable interest (after the acquisition of his or her equitable interest), and proceeds to acquire the legal estate.77 In these circumstances, he or she will take priority over the earlier equitable mortgage.

The doctrine not only appears as an exception to the rule governing priority as between competing equitable interests, but also allows a later equitable interest holder to escape the effects of a bona fide purchaser for value where there is a competition between an earlier equitable interest and a later legal interest.78 In this instance, the doctrine of tabula in naufragio allows the holder of the later equitable interest, on discovery of the earlier equitable interest, to take priority over the earlier interest even if he or she acquires the legal estate with notice. 7.32 However, the doctrine does not apply where the transfer of the legal estate is a breach of trust towards the earlier equitable interest holder.79 For example, in Mumford v Stohwasser,80 a lessee agreed to grant a sublease to A, but later gave an equitable mortgage to B, who did not know of the sublease until after he advanced money to the lessee. The mortgagee was held not to be able to take advantage of the doctrine, though he took a later legal deed of mortgage of the lease, because this act was a breach of trust.81

Mere equities versus later legal or equitable interests 7.33 An equity, or ‘mere equity’, has a different status from an equitable interest. Palmer J in Mills v Ruthol Pty Ltd82 described a mere equity as a ‘slippery creature’, capable of being ‘cornered and illuminated by example but not captured and confined [page 316] by definition’.83 The use of a variety of terms to describe this type of interest — equities, personal equities and mere equities — adds to the uncertainty. The crucial difference between an equity and an equitable interest is that an equity is ‘a right to sue which must be successfully exercised as a necessary condition of there being any relation back to the equitable interest established by the suit’.84 In other words, the equity, once proved, gives the plaintiff an equitable interest. While it can be said with some certainty that an equity of rectification,85 or an equity to set aside a transaction for fraud86 or undue

influence87 are ‘mere equities’, the same cannot be said for an equity of acquiescence, or an interest arising under a constructive trust.88 7.34 The uncertainties surrounding mere equities were illustrated by the differing approaches of the members of the High Court in the leading case of Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq).89 In that case Hotel Terrigal, the mortgagor, sought to set aside the sale of the land by Latec, its mortgagee. Latec had sold the property to Southern, a subsidiary company. Hotel Terrigal was successful in demonstrating that Latec had fraudulently exercised its power of sale. However, prior to Hotel Terrigal bringing an action, Southern had created an equitable charge over the land in favour of MLC Nominees. All members of the court found that MLC Nominees had priority over Hotel Terrigal. However, different approaches emerged regarding how to characterise Hotel Terrigal’s interest, and the applicable priority rule. Taylor J found that Hotel Terrigal’s interest was a full equitable interest. However, because Hotel Terrigal required the assistance of the court to remove the impediment to its title, Taylor J did not apply the general rule as between equitable interests (ie, the ‘first in time’ rule), but instead held that Hotel Terrigal would lose its priority where the later equitable interest holder, MLC Nominees, was a bona fide purchaser for value without notice.90 Kitto J concluded that Hotel Terrigal’s interest was better described as a mere equity, not an equitable interest. He applied the bona fide purchaser rule, concluding that as MLC Nominees took without notice of Hotel Terrigal’s mere equity, MLC prevailed.91 Menzies J, the third member of the court, did not definitively resolve these differences.92 His decision was that, for the purposes of the priority dispute, Hotel Terrigal’s interest was a mere equity. However, Menzies J did not foreclose the possibility that that interest might be, for other purposes, an equitable interest. [page 317] 7.35 In Double Bay Newspapers Pty Ltd v A W Holdings Pty Ltd,93 Bryson J applied Kitto J’s approach to find that mere equities ‘do not participate in

competitions of priorities on the same basis as equitable interests’.94 Thus, a mere equity would only bind third parties in circumstances where the later interest was not taken by a bona fide purchaser for value. In contrast, as has been seen, if the competition is between two equitable interests, the ‘first in time’ rule applies. It is for this reason that the classification of a ‘mere equity’, as distinct from an equitable interest, remains a topic of practical significance.

Registration of deeds and priorities Introduction 7.36 Legislation has been in place since the earliest days of the Australian colonies to induce parties to private land transactions to register those dealings in a state-run register. Unlike the Torrens system, discussed in Chapter 8, statutory systems of deeds registration do not operate as guarantees of title. The instruments registered under a statutory deeds registration regime therefore have validity by virtue of the operation of general law principles.95 However, the incentive to induce parties to register instruments under these schemes is priority — that is, priority is afforded by reference to the time at which the instrument was registered. This type of registration system, therefore, represents something of a hybrid between the old system priorities and a statutory scheme for validating title. In New South Wales, that system is governed by Pt 23 of the Conveyancing Act 1919 (NSW).

Registration of ‘instruments’ 7.37 Section 184C of the Conveyancing Act establishes a ‘General Register of Deeds’. Despite the name of the register, s 184G of the Act allows for the registration of instruments generally, including those instruments that do not relate to land.96 However, instruments that are registrable under the Torrens system, and relate to Torrens title land, are specifically excluded from the General Register of Deeds.97 Where two instruments are created in the course of one transaction, both, or either, may be registered.98 The legislation confers priority only on interests that are created by instruments that are registered. Interests that arise other than from the execution of instruments, such as an interest that arises by part performance of an oral agreement, or an equitable

mortgage created by deposit of title deeds without an accompanying written memorandum, continue to operate according to common law priority rules.99 In cases such as these, if the earlier equitable interest would have taken priority over a later interest created by an instrument under the common law [page 318] rules, registration of the later instrument will not improve its position. Equally, the priority of an earlier legal interest created other than by instrument, such as a short-term lease by parol or an estate by adverse possession, will be unaffected by the registration of an interest created by a later instrument.100

Registration and priority 7.38 The purpose of the deeds registration provisions is to confer priority by the order of registration. Section 184G(1) of the Conveyancing Act is expressed to apply to: All instruments (wills excepted) affecting, or intended to affect, any lands in New South Wales which are executed or made bona fide, and for valuable consideration, and are duly registered …

No distinction is drawn between legal and equitable interests. It follows that if either an earlier legal or equitable interest is created but is unregistered, that interest will lose priority to a later legal or equitable interest that is registered bona fide and for valuable consideration.101 The provision as drafted appears to envisage competitions between registered instruments only and, therefore, would not cover situations where one instrument is registered and the other is not. It has been held that such an interpretation is too restrictive and that the section should also give priority to later registered interests against earlier unregistered interests affected by instruments.102 As noted above, unregistered interests that are not created by instruments will operate under the normal priority rules.103 Registration is irrelevant in that case, though of course it will be important for the purposes of protecting the later interest holder against interests created even later in time. In addition, the provision will only apply where there is a competition

between the interests. That is, if the instruments can be read together and effect given to them, the provision will not apply. Where one agreement is not expressed to be subject to another, this may involve questions of construction concerning whether the later agreement was intended to apply generally, or concurrently with the earlier interest.104 Registration of one instrument will prevent the priority of a later instrument, not by virtue of the fact that the later interest will be deemed to have notice of the former, but because the earlier interest was registered first. It generally follows that the position of a later interest holder will be the same whether or not he or she searches the General Register of Deeds.105 [page 319]

Bona fide and for valuable consideration 7.39 Section 184G(1) of the Conveyancing Act provides that the interest holder who claims priority under a deeds registration scheme must take under an instrument ‘executed or made bona fide’. The bona fide requirement is imposed on the party taking an interest under the instrument; s 184G(2) provides that lack of bona fides on the part of the ‘conveying party’ is immaterial. Fraudulent, dishonest or malicious motives in the act of procuring the execution or registration of an instrument will clearly fail the ‘bona fide’ requirement.106 However, in this context, ‘bona fide’ goes beyond meaning and ‘honest’ intent.107 It also incorporates a requirement that the interest holder is free from notice, so that any instrument made where the purchaser has notice of an existing interest will be unable to take advantage of registration to gain priority.108 Notice in this context includes actual and constructive notice.109 Thus, in Marsden v Campbell,110 for example, where a tenant was in possession under an unregistered lease, a subsequent purchaser was fixed with constructive notice of his rights, and so did not defeat the lease by registration. If notice is received after the instrument is executed, the purchaser is still able to register bona fide, and so the purchaser will be able to take advantage of the priority offered by registration.111 In a standard conveyance, if notice is

received after execution of the contract but before settlement, the deed will not be bona fide and, therefore, cannot attract priority by registration.112 In these circumstances, however, it would be possible for the purchaser to get priority if he or she registered the contract (which instrument was not tainted by notice).113 7.40 A further requirement for the benefit of registration is that the instrument must be executed or made ‘for valuable consideration’.114 Importing contract law principles, the courts recognise that consideration must be ‘sufficient’, but need not be full value or market value, or even adequate, to satisfy this requirement provided that the consideration is not nominal.115

Effect of registration on void instruments 7.41 In contrast to the Torrens system of registration, a forged deed registered under a deeds registration system remains void,116 as will an instrument void for fraud.117 However, an instrument that under the old system priority rules would fall victim to the [page 320] nemo dat rule, and therefore be completely ineffective,118 can be given priority, and therefore efficacy, by virtue of registration. To take the example from the commencement of this chapter (at 7.3): imagine that A, the owner of the fee simple in the property ‘Blackacre’, conveys the legal fee simple to B, and then replicates a conveyance of the fee simple in favour of C. Under the nemo dat rule, the conveyance to C would be void. However, if C registered the instrument first, without notice of B’s interest at the time of the acquisition of the legal estate, C would take priority.119

Reform 7.42 1.

Three reforms of this area of the law seem particularly pressing: the general persistence of a title system based on title deeds;

2.

the doctrine of tabula in naufragio; and

3.

the conceptual and practical difficulties surrounding the distinction between equities and equitable interests.

Persistence of old system title generally 7.43 As the above priority rules demonstrate, old system title is hampered by its fundamental reliance on the acts of private parties to ensure valid title. The opportunity for documents that form part of the chain to go missing (through accident or fraudulent conduct), be invalidly executed or be forged can leave purchasers vulnerable and uncertain as to the validity of the vendor’s title. After paying for and receiving the conveyance, the purchaser does not want to find that his or her title is at risk of being disturbed by someone claiming another earlier interest — such as a legal easement — which, as we have seen, binds subsequent purchasers regardless of notice. It is difficult to guard against the deliberate removal by the vendor (or another person) of documents from a chain of title. Equally, the task of verifying the documents that form the chain of title, such as deeds of conveyance, deeds of mortgage, wills and deeds of trust, is time consuming, fraught with difficulty and expensive. In the language of economists, these difficulties drive up ‘transaction costs’. In addition, sometimes searches do not reveal defects in title (such as forgery). However, the nemo dat rule means that title is insecure in the face of such defects. Attempts to improve old system title through statutory reform, such as s 53 of the Conveyancing Act 1919 (NSW) and its reduction of ‘good root of title’ to 30 years, have failed to resolve all the difficulties associated with proof of good title, for the reason that legal interests are binding irrespective of notice. The other major attempt at reforming the shortcomings of old system title has been the statutory deeds registration scheme — but, as we have seen above, this, too, was built on a shaky foundation of deeds. [page 321]

The question of the continued use of a deeds-based system still manages to linger on in New South Wales. This is so notwithstanding the introduction, over a century ago, of the Torrens system. The additional costs, uncertainty and complexity of old system title are destined to diminish further within the next decade. We are surprised, however, that at the time of writing this 4th edition, it is not possible to state that land in New South Wales is entirely within the Torrens title system, despite the fact that at the writing of the last edition this figure was less than 0.5% of dealings by Land and Property Information. While old system title still exists, it can continue to create pitfalls for the unwary, and thereby unnecessarily complicate property law. The best reform of this system is its accelerated elimination and replacement.

Tabula in naufragio 7.44 The doctrine of tabula in naufragio has long had its detractors. In 18th century England, for example, Lord Chancellor Hardwicke lamented that the doctrine ‘could not happen in any other country but this’.120 The Lord Chancellor was not to know that some Australian jurisdictions would follow suit. The rule seems to be beset by a number of different problems: 1.

It does not seem to be soundly based. The case law appears to create an exception that would eat up the rule — namely, that if it can arise only where no breach of trust arises, then most, if not all, equitable interests would seem to be vulnerable.

2.

It is uncertain. It is unclear what role notice plays in the doctrine from the rule in Mumford v Stohwasser.121

3.

It confers undue benefits on the person who later acquires the legal estate. The intermediate equitable interest holder who has clean hands is unfairly disadvantaged by the operation of the rule. The statutory rules in relation to tacking under the Torrens system are as much of the doctrine as is necessary to do justice between competing interest holders.122

Equities and ‘mere equities’ 7.45 A further issue for reform is that of the status of equities, or ‘mere’ equities. This issue is not going to disappear with (eventual) abolition of old

system title, as it arises under the Torrens system too.123 Indeed, the key case of Latec Investments Limited v Hotel Terrigal Pty Ltd (in liq)124 was a Torrens title case. [page 322] Much commentary has surrounded the ambit of this vaguely defined category of rights.125 A threshold question is whether such rights are proprietary at all. The more convincing view is that, on the basis that equities can bind third parties (if there is notice of them at the time the later equitable interest is acquired), then they would seem to pass the basic test for a proprietary right noted in Chapter 1.126 Yet two further problems remain. First, is this category exhausted by rights of rectification and rights to set aside for fraud and mistake? Second, when does a proprietary interest arise? In relation to the first issue, the case law does not clearly distinguish between the different types of interests. While there is no doubt that rights of rectification and rights to set aside for fraud and mistake are equities, and that they, therefore, fall under a different priority rule rendering them more vulnerable than full equitable interests, can the same be said for equities of acquiescence, equitable estoppel, and interests under common-intention constructive trusts? There are two reasons for suggesting that the category should remain limited, excluding the latter forms of interests.127 First, what authority there is on this matter is against expansion.128 Second, while it may be a justifiable policy to give a weaker measure of protection for those who have a right to rectify or set aside transactions, on the grounds suggested by Upjohn J in Smith v Jones,129 the same does not apply to parties such as cohabiting partners under a constructive trust. Their interest, if a full equitable interest, will only bind if they are in occupation or if the subsequent purchaser has notice of their interest by other means. There is therefore no justification for treating interests arising under constructive trusts differently to beneficiaries under an express trust, or the holder of an earlier equitable interest under an enforceable contract for sale. The second problem stems from the analysis of Deane J in Muschinski v

Dodds,130 which drew distinctions between the institutional and remedial aspects of the constructive trust, and has provoked much discussion and commendation.131 While not addressing the distinction between equitable interests and equities specifically, his Honour suggested that the constructive trust might be treated as a remedy where [page 323] ‘the legitimate claims of third parties [are] affected’.132 In these circumstances, ‘the constructive trust should be imposed only from the date of publication of reasons for judgment’.133 But this approach raises exactly the same problems as those listed above. Authority is against it: the purchaser under a contract for sale, for instance, is the beneficiary of a ‘trust’ type interest where specific performance is available under the rule in Lysaght v Edwards,134 and is not seen as so vulnerable to ‘legitimate third party rights’ as to have his or her interest effectively postponed by virtue of a purely prospective order in these circumstances; nor is there any policy that would justify such an approach in any situation other than the ‘equity’ cases.135

1.

At the time of writing, the total number of old system titles remaining in New South Wales is estimated at less than 0.027% of titles: personal communication from Robert Doherty, Team Leader Old System, Title and Plan Services, Land and Property Information, New South Wales, 8 June 2017.

2.

Bailey v Barnes [1894] 1 Ch 25 at 36 per Lindley LJ.

3.

Walker v Linom [1907] 2 Ch 104.

4.

Walker v Linom [1907] 2 Ch 104.

5.

As to what constitutes a reasonable explanation, it was found to be reasonable when the mortgagee was informed that the title deeds were in a jurisdiction other than where the mortgaged property was actually situated, and where the mortgagor told the first mortgagee that he was too busy to produce the deeds immediately, but would do so later: Agra Bank v Barry (1874) LR 7 HL 135; Hewitt v Loosemore (1851) 9 Hare 449. Note, however, that these cases were decided in an age in which transportation times varied significantly. It is arguable that, in modern times, such explanations may not be judged to be ‘reasonable’.

6.

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

7.

Northern Counties of England Fire Insurance Co v Whipp (1884) 26 Ch D 482 at 496 per Fry LJ.

8.

Evans v Bicknell (1801) 6 Ves 174 at 190. On the difference between mere negligence and gross negligence, see further Armitage v Nurse [1998] Ch 241 at 254 per Millett LJ.

9.

Peter v Russel (1716) 1 Eq Ca Abr 321 (Thatched House case); Northern Counties of England Fire Insurance Co v Whipp (1884) 26 Ch D 482 at 490.

10.

Brocklesby v The Temperance Permanent Building Society [1895] AC 173. See also Perry-Herrick v Attwood (1857) 2 De G & J 21; 44 ER 895.

11.

Pilcher v Rawlins (1872) LR 7 Ch App 259.

12.

Pilcher v Rawlins (1872) LR 7 Ch App 259 at 269 per James LJ.

13.

Brace v Duchess of Marlborough (1728) 2 P Wms 491.

14.

Thorndike v Hunt (1859) 3 De G & J 563.

15.

Goodright d Humphreys v Moses (1774) 2 Wm B1.

16.

Bassett v Nosworthy (1673) Rep t Finch 102.

17.

Bullen v A’Beckett (1865) 1 Moo NS 223; 15 ER 684.

18.

Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425 at 444. See further discussion of this case at 8.20, 8.62–8.63 and 8.127.

19.

Midland Bank Trust Co Ltd v Green [1983] AC 513.

20.

Midland Bank Trust Co Ltd v Green [1983] AC 513 at 528 per Lord Wilberforce.

21.

Williamson v Bors (1900) 21 NSWLR (Eq) 302.

22.

Lloyd v Banks (1868) 3 Ch App 488.

23.

Barnhart v Greenshields (1853) 9 Moo PC 18.

24.

Barnhart v Greenshields (1853) 9 Moo PC 18 at 32 per Mr Pemberton Leigh.

25.

Marsden v Campbell (1897) LR (NSW) Eq 33; Clyne v Lowe (1968) 69 (NSW) 433.

26.

Taylor v Stibbert (1794) 2 Ves 437; 30 ER 713.

27.

Daniels v Davison (1809) 16 Ves 249; 33 ER 978; Allen v Anthony (1816) 1 Mer 282; 35 ER 978.

28.

Smith v Jones [1954] 1 WLR 1089.

29.

Hunt v Luck [1902] 1 Ch 428.

30.

Baumgartner v Baumgartner (1987) 164 CLR 137. See 6.34–6.36.

31.

Platzer v Commonwealth Bank of Australia [1997] 1 Qd R 266.

32.

Platzer v Commonwealth Bank of Australia [1997] 1 Qd R 266 at 288.

33.

Jensen v Hawksley [1955] VLR 470.

34.

State Transit Authority of NSW v Australian Jockey Club (2003) 11 BPR 21,107 (reversed on another point on appeal: Williams v State Transit Authority of NSW (2004) 60 NSWLR 286).

35.

Short v Gill (1892) 13 LR(NSW) Eq 155.

36.

As to the operation of this priority rule, see 7.3–7.4.

37.

Worthington v Morgan (1849) 16 Sim 547; 60 ER 987.

38.

Re Nisbet and Potts’ Contract [1906] 1 Ch 386.

39.

P Butt, Land Law, 6th ed, Thomson Reuters/Lawbook Co, Sydney, 2010, p 721.

40.

For a recent discussion of agency principles in the context of Torrens title land, see Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425. For a critique of the High Court’s conclusion in that case, see D Thampapillai, ‘The Vexed Question of Agency and Torrens Fraud: The High Court in Cassegrain’ (2016) 35 UTasLR 43.

41.

Wilkes v Spooner [1911] 2 KB 473.

42.

Re Stapleford Colliery Co (1880) 14 Ch D 432 at 445.

43.

Many of the Australian cases on the priority rule between two equitable interests arise in the context of land registered under the Torrens system. The relevance of the ‘first in time’ rule within that system is discussed further at 8.161–8.170.

44.

See, eg, Lapin v Abigail (1930) 44 CLR 166 at 204 per Dixon J; Breskvar v Wall (1971) 126 CLR 376 at 388 per Barwick CJ (with whom Owen and Windeyer JJ agreed). See recently, Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 at [231].

45.

Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 at [229]; and, generally, at [228]–[260] per Ward JA (McColl and Gleeson JJA agreeing).

46.

Rice v Rice (1853) 61 ER 646.

47.

Rice v Rice (1853) 61 ER 646 at 648 per Kindersley VC.

48.

Rice v Rice (1853) 61 ER 646 per Kindersley VC (italics in original).

49.

Latec Investments Limited v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 at 276. See also the extensive discussion of the test, and the debate as to the weight to be attached to the chronology of the acquisition of interests, by Holmes JA in AG(CQ) Pty Ltd v A&T Promotions Pty Ltd [2011] 1 Qd R 306 at [26]–[36] (McMurdo P and McMeekin J agreeing).

50.

Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 at [229].

51.

Latec Investments Limited v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265.

52.

Latec Investments Limited v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 at 276. In Lapin v Abigail, Isaacs J also referred to the search for the better equity as that of seeking ‘the most meritorious’ interest: Lapin v Abigail (1930) 44 CLR 166 at 185–6 per Isaacs J.

53.

Latec Investments Limited v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 at 276. See, to similar effect, Lapin v Abigail (1930) 44 CLR 166 at 183 per Knox CJ.

54.

Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326 at 339.

55.

Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 at 339 per Mason and Deane JJ.

56.

See AG(CQ) Pty Ltd as Trustee for AG(CQ) Family Trust v A & T Promotions Pty Ltd as Trustee for Toowoomba Unit Trust [2011] 1 Qd R 306 at [26]–[36] per Holmes JA (McMurdo P and McMeekin J agreeing).

57.

Moffett v Dillon [1999] 2 VR 480 at 500 per Ormiston JA.

58.

Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 at 339 per Mason and Deane JJ.

59.

Rice v Rice (1853) 61 ER 646.

60.

Rice v Rice (1853) 61 ER 646 at 450 per Kindersley VC (emphasis added). See also Farrand v Yorkshire Banking Co (1888) 40 Ch D 182.

61.

Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 at 344–5. It was also found not to be ‘arming’ conduct where the title deed had come into the possession of a third party, in

circumstances where the first in time interest holder had not been negligent: Allen v Knight (1846) 5 Hare 272; Re Castell & Brown Ltd [1898] 1 Ch 315. 62.

Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99.

63.

Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 at [242]–[243], quoting Lapin v Abigail (1930) 44 CLR 166 at 196 per Gavan Duffy and Starke JJ (in dissent).

64.

Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd [2017] NSWCA 99 at [228]–[260] per Ward JA (McColl and Gleeson JJA agreeing).

65.

Moffett v Dillon [1999] 2 VR 480.

66.

Moffett v Dillon [1999] 2 VR 480 at 492 [46] per Brooking JA (referring to the rule about notice ‘as a distinct and fundamental one’); at 506 per Buchanan JA (agreeing). However, Ormiston JA did not describe the consequences of notice in such a definitive manner: see [79]–[87]. This principle was affirmed in Capital Finance Pty Ltd v Struthers [2008] NSWSC 440. See also Perpetual Trustee Co v Smith (2010) ALR 469 at [86]. See further, discussion in S Rodrick, ‘Resolving Priority Disputes Between Competing Equitable Interests in Torrens Title Land — Which Test?’ (2001) 9 APLJ 172.

67.

Perpetual Trustee Co v Smith (2010) ALR 469.

68.

Perpetual Trustee Co v Smith (2010) ALR 469 at 490 [73]. In this case, the prior interest holders’ possession was weighed against their failure to caveat their interest in Torrens title land, as part of assessing potential postponing conduct. Failure to caveat is discussed at 8.164–8.168.

69.

Shropshire Union Railways & Canal Co v R (1875) LR7HL 496.

70.

Walker v Linom [1907] 2 Ch 104.

71.

Taylor v London and County Banking [1901] 2 Ch 231. This result in this case is characterised as ‘celebrated, but obscure’ by J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 5th ed, LexisNexis Butterworths, Australia, 2014, pp 334–5.

72.

Rice v Rice (1853) 61 ER 646.

73.

Lloyd’s Bank v Bullock [1896] 2 Ch 192.

74.

See Brace v Duchess of Marlborough (1728) 2 P Wms 491 per Jeckyll MR.

75.

Bailey v Barnes [1894] 1 Ch 25.

76.

Mumford v Stohwasser (1874) LR 18 Eq 556; McCarthy & Stone v Julian S Hodge & Co Ltd [1971] 1 WLR 1547 at 1556 per Foster J. As to mortgages, see Chapter 14.

77.

Bailey v Barnes [1894] 1 Ch 25.

78.

See 7.9–7.25.

79.

Mumford v Stohwasser (1874) LR 18 Eq 556.

80.

Mumford v Stohwasser (1874) LR 18 Eq 556.

81.

It is not clear from the reasoning in this case whether it is also necessary that the person who takes the legal interest has notice of the breach of trust (as was the case in Mumford), or whether the person assigning the legal estate has notice of the breach of trust: see Mumford v Stohwasser (1874) LR 18 Eq 556 at 563.

82.

Mills v Ruthol Pty Ltd (2002) 10 BPR 19,381.

83.

Mills v Ruthol Pty Ltd (2002) 10 BPR 19,381 at [126] per Palmer J.

84.

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 at 290 per Menzies J.

85.

Garrard v Frankel (1862) 30 Beav 445; Smith v Jones [1954] 1 WLR 1089.

86.

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 per Kitto and Menzies JJ (Taylor J dissenting).

87.

Bainbrigge v Browne (1881) 18 Ch D 188.

88.

Muschinski v Dodds (1985) 160 CLR 583 at 615; 62 ALR 429 at 451 per Deane J.

89.

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265. See further discussion in Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 71 above, pp 128–32.

90.

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 at 282–6 per Taylor J.

91.

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 at 276–9 per Kitto J.

92.

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 at 290–1 per Menzies J.

93.

Double Bay Newspapers Pty Ltd v A W Holdings Pty Ltd (1996) 42 NSWLR 409.

94.

Double Bay Newspapers Pty Ltd v A W Holdings Pty Ltd (1996) 42 NSWLR 409 at 424. See also Shawyer v Amberday Pty Ltd (in liq) (2001) 10 BPR 18,869 at [11]; Ruthol Pty Ltd v Mills (2003) 11 BPR 20,793.

95.

See Chapter 8.

96.

Conveyancing Act 1919 (NSW) s 184B(1).

97.

Conveyancing Act 1919 (NSW) s 184G(1).

98.

Moonking Gee v Tahos (1961) 63 SR (NSW) 935.

99.

White v Neaylon (1886) 11 App Cas 171; White v Hunter (1868) 5 WW & A’B (E) 178.

100. White v Neaylon (1886) 11 App Cas 171. See Chapters 5 and 11. 101. Darbyshire v Darbyshire (1905) 2 CLR 787. 102. Fuller v Goodwin (1865) 4 SCR (NSW) 66. 103. White v Neaylon (1886) 11 App Cas 171. 104. Boyce v Beckman (1890) 11 LR (NSW)(L) 139 at 146. 105. Mills v Renwick (1901) 1 SR (NSW) Eq 173. 106. Mills v Renwick (1901) 1 SR (NSW) Eq 173. 107. Wilde v Spratt (1986) 70 ALR 171 (examining the provisions of the Bankruptcy Act 1966 (Cth) s 135). See further, discussion in Butt, Land Law, note 39 above, p 727. 108. Scholes v Blunt (1916) 17 SR (NSW) 36. See also Agra Bank v Barry (1874) LR 7 HL 135 at 148–9; Jones v Collins (1891) 12 LR (NSW) L 247; Sydney & Suburban Mutual Permanent Building Society Ltd v Lyons [1894] AC 260. 109. Sydney & Suburban Mutual Permanent Building Society Ltd v Lyons [1894] AC 260. 110. Marsden v Campbell (1897) 18 LR(NSW) Eq 33. 111. Blackwood v London Chartered Bank of Australia (1871) 10 SCR (NSW) Eq 91. 112. Burrows v Crimp (1887) 4 WN (NSW) 11b.

113. Moonking Gee v Tahos (1961) 63 SR (NSW) 935. 114. Conveyancing Act 1919 (NSW) s 184G(1). 115. Bullen v A’Beckett (1865) 1 Moo NS 223; 15 ER 684. 116. Re Cooper (1882) 20 Ch D 611. 117. Sutherland v Peel (1864) 1WW & A’B 18. 118. See 7.3. 119. Blaxland v Grattan (1887) 8 LR (NSW) (L) 287. See also Fuller v Goodwin (1865) 4 SCR (NSW) 66; Smith v Deane (1889) 10 LR (NSW) Eq 207. 120. Wortley v Birkhead (1754) 2 Ves Sen 571 at 574, cited in R Megarry and H Wade, The Law of Real Property, 5th ed, Stevens, London, 1984, p 1006. 121. Mumford v Stohwasser (1874) LR 18 Eq 556. 122. See 14.130–14.134. 123. See, eg, Ruthol Pty Ltd v Mills (2003) 11 BPR 20,793; Re Jonton Pty Ltd [1992] 1 Qd R 105. 124. Latec Investments Limited v Hotel Terrigal Pty Ltd (in liq (1965) 113 CLR 265. 125. See, eg, D Skapinker, ‘Equitable Interests, Mere Equities, “Personal” Equities and “Personal Equities” — Distinctions with a Difference’ (1994) 68 ALJ 593; D Wright, ‘The Continued Relevance of Divisions in Equitable Interests in Real Property’ (1995) 3 APLJ 163; J Levine, ‘The Timing of the Imposition of a Constructive Trust’ (1997) 5 APLJ 74; M Stone, ‘The Reification of Legal Concepts: Muschinski v Dodds’ (1986) 9 UNSWLJ 63; S Hepburn, ‘Reconsidering the Benefits of Equitable Classification’ (2005) 12 APLJ 157; Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 71 above, pp 124–32. 126. See 1.9. 127. See further, S Hepburn, ‘Reconsidering the Benefits of Equitable Classification’ (2005) 12 APLJ 157. 128. See 7.33. 129. Smith v Jones [1954] 1 WLR 1089. 130. Muschinski v Dodds (1985) 160 CLR 583; 62 ALR 429. 131. See, eg, Stone, ‘The Reification of Legal Concepts: Muschinski v Dodds’, note 125 above; P O’Connor, ‘Happy Partners or Strange Bedfellows? The Blending of the Remedial and Institutional Features of the Constructive Trust’ (1996) 20 MULR 735. 132. Muschinski v Dodds (1985) 160 CLR 583 at 623; 62 ALR 429 at 458. 133. Muschinski v Dodds (1985) 160 CLR 583 at 623; 62 ALR 429 at 458 (emphasis added). 134. Lysaght v Edwards (1876) 2 Ch D 499. See Chapter 5. 135. See further, Skapinker, ‘Equitable Interests, Mere Equities’, note 124 above; Wright, ‘The Continued Relevance of Divisions in Equitable Interests in Real Property’, note 124 above; Levine, ‘The Timing of the Imposition of a Constructive Trust’, note 124 above; Stone, ‘The Reification of Legal Concepts’, note 124 above.

[page 325]

Chapter 8

Torrens Title Introduction 8.1 As noted in Chapter 7, the main problems with old system title were the uncertainty, unreliability, complexity and cost caused by a land transfer system that was exclusively dependent on chains of title deeds.1 None of the many reforms enacted, such as the Deeds Registration Act 1898 (NSW), solved all the inadequacies endemic to this system. From the early years of settlement, therefore, the question of a more fundamental reform of the system of land titles came to be a prominent feature of local politics. The problems inherent in old system title were particularly evident in South Australia, where land speculation was rife. Indeed, by 1857 it was believed that over 40,000 land title documents dealing with transactions should have been in existence, but apparently up to three-quarters of these had been lost. Up to one-third were technically meant to be in the hands of people who lived overseas, but these proved difficult to trace.2 Furthermore, the validity of the titles themselves was also called into question, with it being said that as many as 5000 could have been invalid and perhaps even entirely defective.3 Aside from the web of problems associated with establishing a valid chain of title, the magnitude of legal costs became exorbitant. For instance, Pike identified a newspaper report in 1857 revealing that, on the sale of a portion of land worth £20, the conveyancing costs were £39.4 Unsurprisingly, this regime had many critics. The most prominent of these

was Sir Robert Richard Torrens. Motivated by what he saw as the inadequacies of old system title, his dislike of the monopoly on land transfers exercised by the legal profession and his [page 326] abhorrence of the high price of conveyancing, he sought to develop a more secure and efficient system of land registration and transfer.5

Sir Robert Torrens 8.2 Sir Robert Torrens is a controversial figure in Australian property law.6 He was aware that the old system of title transfer and validation, congenial as it may have been to its origins in the mother country, was one that on transfer to a different setting, produced dire and unpredictable results. It was wholly unsuited to a local environment where populations were rapidly mobile, land speculation was rampant, and where economic and ambitious settlement policies were inextricably entwined. Accordingly, Torrens made it his purpose ‘to escape from the grievous yoke of English Property Law’.7 8.3 The actual extent of Torrens’ contribution to the development and implementation of the improved system of conveyancing and registration embodied in the Real Property Act 1886 (SA) remains the subject of debate.8 Whether he was the creative architect behind the scheme or whether he merely collated a pastiche of ideas and approaches developed by others is still contentious. 8.4 Torrens oversaw the introduction of the Real Property Act from his position as Registrar-General of South Australia, but he did so in the face of often vicious attack from his opponents, many of them lawyers, who feared loss of work because of the introduction of a simpler scheme. As Kercher noted, resistance to the scheme might also be explained by the fact that: [page 327]

… nineteenth-century conservatives saw the Torrens system as more than a break from English law. It was a challenge to their self-perceptions of Englishness and of a stratified society based on land holding.9

Torrens remains a colourful and controversial figure in the introduction of the scheme that bears his name.10

Introduction of the Torrens scheme 8.5 The Torrens legislation in New South Wales had its genesis in the original scheme designed for South Australia by Sir Robert Torrens. In New South Wales, the system was introduced by the Real Property Act 1862 (NSW).11 Rather than ‘patch’ or ‘mend’ old system title, it, like its South Australian counterpart, created a new system of titling based on registration.12 The system used today still retains many key features of the 1862 Act.13

How land is brought under the Torrens system 8.6 Land is Torrens title land because either it was originally granted by the Crown as Torrens title land or because it was converted to Torrens title from old system title or Crown lands title. All Crown grants of freehold land in New South Wales after 1 January 1863 are held according to the Torrens system and are subject to the Real Property Act 1900 (NSW). All Crown grants of freehold title made before that date need to be converted if they are to be held under the Torrens system.14 The Real Property Act provides for [page 328] conversion of old system land and Pts 4, 4A and 4B of the Real Property Act are relevant to this process.15 Not all parties with an interest in land can apply to have it brought under the Torrens system. Hence, a mortgagor cannot apply without the mortgagee’s consent, but a fee simple holder and a life tenant may do so. An applicant for conversion must surrender the title documents (where they exist) to the Registrar-General before the conversion process can proceed. After this, the Registrar-General must advertise the proposed conversion so that

parties may object.16 If the Registrar-General is not satisfied that the evidence is sufficient to demonstrate good title, the Registrar-General may reject the application.17 However, whereas the threshold to establish good title was once quite high, it has now been lowered in order to encourage remaining old system owners to convert their titles. Parties who have statute-barred the documentary title holder by virtue of an adverse possession claim are also able to apply for conversion under the primary application provisions. Applications based on possessory title of old system land and brought under s 14(2)(b) of the Real Property Act may be made in respect of either a whole or part of a parcel. It is notable that traditionally the boundaries of old system land have been defined not only by documentary metes and bounds descriptions but by occupations such as fences or other structures on or near the boundary.18 (According to what was formerly the Department of Lands, quite a number of the primary applications lodged with it have historically been made in respect of strips of old system land that were fenced in with adjoining land.19) If another person claims an estate or interest in land that is the subject of a primary application, that person is, pursuant to s 74B(1) of the Real Property Act, able to lodge a caveat prohibiting the conversion of the land.20 If the application is successful, the Registrar-General will grant an ordinary folio pursuant to s 17(2) of the Real Property Act. 8.7 Land may also be brought under the Torrens system by virtue of a ‘qualified folio’. A qualified folio may arise by virtue of a primary application, subdivision, registered deed or on investigation by the Registrar-General. Additionally, it may arise in relation to aquaculture leases by virtue of s 13D(3) of the Real Property Act in conjunction with the [page 329] Fisheries Management Act 1994 (NSW). A qualified folio initially creates only a limited form of Torrens title that later may develop into an interest attracting all the usual benefits of indefeasibility. The folio is qualified because it is subject to any ‘subsisting interest[s]’ in the land.21 Alternatively, the Registrar-

General may issue a limited folio where the boundaries of land are not adequately defined, thus making an ordinary or qualified folio unsuitable.22 As may be seen from the material immediately below, the above provisions have become less significant today because most of the land in New South Wales has already been converted to Torrens title.

Old system title and computerisation conversions 8.8 Historically, two types of conversions have been undertaken by the relevant government entities administering land title.23 These are distinct, and should not be confused: (i) the initial conversion of old system title to Torrens title; and (ii) for land already within the Torrens system, the conversion of manual titles to electronic or computerised titles. The following outlines details of the progress in relation to each of these schemes.

Old system title to Torrens title 8.9 The process of conversion of all land to Torrens title has been sporadic. Between 1863 and 1999, the Land Titles Office, as it then was known, converted some 204,000 old systems titles to Torrens title.24 By 1975, it was estimated that 150,000 parcels or approximately 6% of old system land was left to be converted.25 By 1993, that number had reduced to approximately 60,000 to 80,000 parcels.26 However, between 1999 and 2003 many thousands of parcels of land still remained under old system title and, therefore, outside the Torrens system. 8.10 Between December 2004 and August 2006, more than 12,500 old system land parcels were converted to the Torrens Integrated Titling System (ITS) and as a result more than 11,000 new legal identifiers were entered into Land and Property Information (LPI)’s [page 330] databases.27 However, in 2009 a review revealed more old systems parcels

than previously thought and estimates were revised upwards by 7000 parcels, leaving 36,000 old system parcels remaining to be converted.28 A further conversion project was undertaken in 2015, which brought the number of old system titles down to under 1000. As at the time of writing, it is therefore estimated that under 0.027% of all titles in New South Wales remain under old system title.29

Conversion to computerisation 8.11 Computerisation of Torrens records and transactions began in New South Wales with the passing of amendments to the Real Property Act 1900 (NSW) in 1979,30 and in 1983 computerised titles were issued for the first time. Since 1983, there has been steady progress towards greater computerisation of Torrens recording and administration in New South Wales, so that by 2013 approximately 99% of the Torrens Title Register (the Register) had been computerised.31 In 2015, LPI reported that a further 5420 old system, Crown and manual Torrens title land parcels were converted to electronic titles in 2014–15, and held within the Integrated Titling system (ITS), presumably further raising this percentage.32

Torrens Register, folios and dealings The Register 8.12 The Register is central to the Torrens system. It is a record of land details and, according to s 31B(2) of the Real Property Act, it must include: folios, dealings, records kept pursuant to s 32(7), instruments of a prescribed class, and records that the regulations require be kept as part of the Register. Section 31B(3) of the Real Property Act also states that the Register may be in ‘any medium or combination of mediums’. Accordingly, it may be both manual and/or computerised. As noted above, most titles are now recorded electronically on the Register. Parcels of land mentioned in the Register are identified by reference to a numbered deposited plan and each lot or parcel of land is the subject of a separate folio in the Register. [page 331]

Section 12D of the Real Property Act permits the Registrar to provide guidance and information with respect to approved forms, the preparation and lodgment of documents and plans for registration, recording and other appropriate matters. In the interests of transparency, these are to be published on the internet or made available through any other means the RegistrarGeneral determines. It is envisaged that this facility will help maintain the accuracy of the Register.

Folios 8.13 Pursuant to s 32(1) of the Real Property Act, the Registrar-General creates a folio in the Register by recording a description of the land (which usually includes details of the dimensions and boundaries); a description of the proprietor (which usually includes his or her name and, if the proprietor is a minor, his or her date of birth as well);33 such particulars as the RegistrarGeneral thinks fit; and any other estates or interests that affect the land. 8.14 Land is considered to be registered land under the Real Property Act on creation of a folio.34 When a folio is created, the Registrar-General will allocate a ‘distinctive reference’ to it.35 Historically and prior to computerisation, each Crown grant, along with the certificate of title, together constituted the folium. The Register was, in turn, made up of all the folios. Since computerisation the process operates slightly differently. See below at 8.16–8.18. 8.15 Folios may be created for fee simple estates and life estates.36 Further, in New South Wales a lessee with a lease of not less than 25 years, which pertains to land not held under the Torrens system, may apply to have his or her interest registered under the system.37 It is also possible for the RegistrarGeneral to create a separate folio for a leasehold estate.38

Certificate of title 8.16 The certificate of title is a document that provides details of interests that are recorded in the Register and which relate to a particular parcel of land.39 It is effectively a copy of the folio of the Register. Only those who are entitled to the interest will be eligible to apply for and receive a certificate of title.40 As the certificate of title is

[page 332] evidence of an interest in land actually having been registered and, therefore, recognised under the Torrens system, it is of vital importance to proprietors and others dealing with the land. Records of dealings with land in the form of transfer, mortgage or lease, for example, may be registered. Pursuant to s 38 of the Real Property Act, it is usual for the certificate of title to be produced to the Registrar-General when a dealing in land is to be registered.41 Any registered dealings are, in turn, shown on the updated version of the certificate of title.42 Before amendments in 1970 to the Real Property Act, when land was brought under the provisions of the Torrens system the Registrar-General prepared two identical instruments which were both called certificates of title.43 One was bound in the Register Book after the Registrar-General had allocated a volume and folio number to it. This copy was known as the ‘folium’. The other certificate was given to the registered proprietor and was known as the ‘duplicate’ certificate of title. The version in the Register Book was manually altered to reflect later transactions. After the 1970 amendments to the Act, the term ‘Register Book’ was replaced by ‘Register’, while after the 1979 amendments embodied in the Real Property (Computer Register) Amendment Act 1979 (NSW), the term ‘folio of the Register’ was introduced. Once the folio is created, the registered proprietor is usually issued with a certificate of title. Section 33 of the Real Property Act requires the Registrar-General to issue a certificate of title to a registered proprietor, registered mortgagee or chargee, if he or she requests one.44 Since the computerisation reforms, the certificate of title which is given to the registered proprietor is simply a copy of what is recorded in the relevant folio of the Register. Each time a transaction alters the Register (such as a transfer, mortgage, easement or lease) a new certificate of title is generated to reflect the currency of the Register.45 It is the practice in New South Wales to require that the certificate of title be lodged along with the dealing for which registration is sought, and the Registrar-General may refuse to register a dealing lodged without it.46 As alluded to above, in relation to conversion of titles, tenants in common

may apply for separate certificates of title.47

Electronic conveyancing 8.17 In July 2008, the Council of Australian Governments (COAG) agreed to the development and implementation of a single, national electronic conveyancing system [page 333] as part of a larger agenda to address inconsistent national regulation in a range of areas.48 The National Partnership Agreement to Deliver a Seamless National Economy released by COAG in March 2009 gave responsibility to the states and territories to implement a ‘national coordinated approach’ to electronic conveyancing.49 In 2011, all states and the Northern Territory agreed to a framework for the implementation of electronic conveyancing, including the preparation, introduction and amendment of an Electronic Conveyancing National Law (ECNL).50 New South Wales was the first jurisdiction to adopt the national law in 2012, through the Electronic Conveyancing (Adoption of National Law) Act 2012 (NSW).51 With the exception of the Australian Capital Territory, all other states and territories either applied the New South Wales legislation52 or enacted corresponding legislation.53 The ECNL is intended to allow transactions in relation to land to be conducted entirely online by users (or ‘subscribers’) through regulated Electronic Lodgment Network Operators (ELNOs). ELNOs and subscribers are required to comply with the relevant Operating Requirements and Participation Rules issued in each jurisdiction concerning eligibility, use and security. In New South Wales, the Registrar-General has issued54 both Operating Requirements for ELNOs55 and Participation Rules for subscribers.56 Only one ELNO is currently operating in New South Wales.

Electronic certificates of title 8.18

In paper conveyancing transactions, possession of the duplicate paper

certificate of title has been referred to as evidence of ‘control of the right to deal’57 in conveyancing [page 334] transactions, preventing other dealings from being registered without the consent of the certificate’s holder. The Registrar-General may refuse to register a dealing if it is not accompanied by the certificate58 and, in certain circumstances, orders may be sought compelling its production.59 In an e-conveyancing transaction, the requirement to provide the paper certificate of title to register a dealing is both inconsistent and unnecessary. Consistent with the move to an e-conveyancing system, s 33AAA of the Real Property Act (which commenced in March 201660) allows the RegistrarGeneral to publish notice of an intention to cease providing paper certificates of title from a nominated ‘cessation day’ no less than three months after the date of the notice.61 The section complements s 33AA, introduced almost two years earlier,62 which allows the Registrar-General to determine circumstances in which a certificate may not be issued. Where the Registrar-General has determined under s 33AAA that certificates of title will not be provided, the section deems that any existing certificate of title has no effect for the purposes of registering a dealing.63 The operation of s 33AA is slightly different, making the decision to cancel a certificate dependent on the request of the ‘holder’ and that a replacement certificate may still be provided on request.64 In order to address who has control of the right to deal in the absence of a certificate of title, ss 33AAA and 33AA provide that the Registrar-General may record the name of any party who the Registrar-General considers has ‘control of the right to deal’ on the Register.65 Any subsequent dealings must then be accompanied by a consent from the person recorded on the Register as having control of the right to deal, rather than requiring the production of a certificate of title.66 The Registrar-General has already taken steps to allow the conversion of some certificates of title to an electronic version, or eCT, as prescribed by s

33AA.67 In addition, mortgagees regulated by the Australian Prudential Regulatory Authority, and who hold a first mortgage subscribed (or are represented by a subscriber) to an ELNO, are able to elect to convert the paper certificate to an eCT.68 The position in relation to regulated [page 335] mortgagees represents the proposal developed following an agreement reached between the states and Northern Territory on a single practice in relation to certificates of title.69 However, at the time of writing there has as yet been no notice under s 33AAA published that signals the Registrar-General’s intention to phase out paper certificates of title. Statements made both on the introduction of the amendments and throughout the consultation process have continued to remark on the need to retain paper-based transactions and consult with both stakeholders involved in land transactions as well as the public generally, before phasing out certificates of title completely.70

Dealings 8.19 A dealing constitutes any instrument except a Crown grant or a caveat that, in the words of s 3(1)(a) of the Real Property Act, is: … registrable or capable of being made registrable under the provisions of this Act, or in respect of which any recording in the Register is by this or any other Act … required or permitted to be made.

A dealing must be in approved form pursuant to s 104(1) of the Real Property Act. According to s 104(2), the Registrar-General may register a dealing containing departures from the approved form, so long as those departures are not matters of substance. A dealing in registrable form may still be registrable although a long period has elapsed before it is actually lodged for registration.71 Dealings may include, for example, transfers, mortgages, easements, profits à prendre and leases.72 It should be noted that some instruments, such as a trust instrument, cannot be the subject of a registrable dealing in New South Wales.73 However, a trust instrument, duplicate or attested copy of it may be lodged with the Registrar-General for safe keeping

and reference.74 Should such an instrument be lodged, the Registrar must record a caveat forbidding registration of any instrument not in accordance with the trust.75 The Registrar-General may register a dealing even it contains [page 336] an error or an omission;76 or, alternatively, he or she may correct any ‘patent’ error.77 The Registrar-General may refuse to register a dealing (memorandum or caveat) that does not comply with any requirement of the Act.78 A dealing is given a ‘distinctive reference’, pursuant to s 36(1A) of the Real Property Act, and registered when the Registrar-General makes a recording in the Register in respect of the dealing. In practical terms, this occurs when the computer record concerning the dealing is altered. At that point, the dealing takes effect as if it were a duly executed deed.79 Once registration has taken place, an up-to-date version of the certificate of title can be created and issued. In the past, where folios were manually updated, the updating process consisted of crossing out old dealings if they were no longer relevant (eg, a mortgage that had been discharged) and writing in new dealings (eg, transfer details). The changes were made to the folio itself. Nowadays, as explained above, under the computerised system a new edition of the certificate of title is simply computer-generated from records on the Register. It is the practice of the relevant government entity to update information overnight so that upto-date records are available the following day.80 When a dealing is registered, the folio of the Register is updated to reflect the newly registered interest. Both manual folios and computer folio certificates are evidence of the details recorded in them.81

Principles underpinning the Torrens system 8.20 As the High Court recently affirmed in Cassegrain v Gerard Cassegrain & Co Pty Ltd,82 a ‘central and informing tenet’ of the Torrens system is that it is not a system of registration of title, but a system of title by registration. The title certified by the Torrens Register is therefore not ‘historical or derivative’ but rather the ‘title which registration itself vests in the proprietor’.83 The

system was designed to obviate the need for a chain of title and the necessity of tracing the vendor’s title through a series of documents.84 Under the Torrens system, title to land requires intervention by the state and is not created merely [page 337] by private arrangements between parties. The Torrens system substitutes ‘conveyance by registration for conveyance by deed’.85 Prima facie, the Torrens system provides a title that is also guaranteed by the state while the Register provides a complete record of land falling under the system.86 The Torrens system of land titling attempts to make titles ‘independent’ by making the Register conclusive and thus avoiding the need to search the genealogy of title.87 The English commentator Sir Theodore Ruoff stated that the Torrens scheme reflects three principles, these being the: 1.

mirror principle;

2.

curtain principle; and

3.

insurance principle.88

Mirror principle 8.21 The mirror principle referred to above is evidence of the centrality of the Register: it reflects all interests in the land for the time being. The importance of the Register to the Torrens system was made evident in Waimiha Sawmilling Co v Waione Timber Co,89 where the court said that ‘the cardinal principle of the Statute is that the Register is everything’. Recent cases dealing with inconsistent statutes have reinforced the significance of the Torrens Register, as have amendments to the Real Property Act attempting to ameliorate the challenges posed by inconsistent statutes.90

Curtain principle 8.22

The significance of the curtain principle as central to the Register was

referred to in Gibbs v Messer,91 where the court discussed the issue in the following terms: The object is to save persons dealing with registered proprietors from the trouble and expense of going behind the register, in order to investigate the history of their author’s title, and to satisfy themselves of its validity. That end is accomplished by providing that everyone who purchases, in bona fide and for value, from a registered proprietor and enters his deed of transfer or mortgage on the register shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author’s title.

[page 338] 8.23 If registration is so important, one might expect that the RegistrarGeneral would be under a duty to register all instruments that are lodged with the Registrar-General’s Office. However, this is not so, and the redress of a registered proprietor whose instrument has been lodged but not registered lies in s 122 (in concert with s 121) of the Real Property Act. Section 122 permits a party who is dissatisfied with a decision of the Registrar-General (made pursuant to s 121) to have that decision reviewed by the Supreme Court.92 Section 121 allows a person to apply to the Registrar-General for a copy of his or her reasons for the decision.93 Further, registration determines priority, and hence an earlier registered instrument has priority over a later registered instrument.94 The order of registration is determined by the order in which the documents (in registrable form) are lodged.95

Insurance principle 8.24 The final principle, the insurance principle, is concerned with ensuring that no innocent party whose interest is defeated by virtue of the operation of the mirror and curtain principles will have to suffer that loss.96

Indefeasibility of Title What is indefeasibility? 8.25 The Torrens system is founded on the concept of indefeasibility of title. The term is not used in the Real Property Act 1900 (NSW) but was used

in Torrens’ writings, and is used freely in case law and commentary. Indefeasibility of title means that the registered proprietor has a title that is conclusive. Indefeasibility makes the interest one that is unable to be defeated by claims of prior defectiveness in the title.97 Hence, indefeasibility provides a protection or sanctity from erosion by certain other claims or interests. Although a registered interest in some ways parallels a legal interest (eg, it is a title considered to be good against the whole world), in other ways it is very different from a legal interest, particularly in relation to the doctrine of notice and methods of transfer. In summary, an indefeasible title is one that is unimpeachable in the face of pre-registration defects.98 [page 339] The key indefeasibility provision is s 42(1) of the Real Property Act, which states: 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 Registrar-General shall, except in the 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: (a)

the estate or interest recorded in a prior folio of the Register by reason of which another proprietor claims the same land,

(a1) in the case of the omission or misdescription of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act, (b) in the case of the omission or misdescription of any profit à prendre created in or existing upon any land, (c) as to any portion of land that may by wrong description of parcels or of boundaries be included in the folio of the Register or registered dealing evidencing the title of such registered proprietor, not being a purchaser or mortgagee thereof for value, or deriving from or through a purchase or mortgage thereof for value, and (d) a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected: Provided that:

(i)

The term for which the tenancy was created does not exceed three years, and

(ii) in the case of such an agreement or option, the additional term for which it provides would not, when added to the original term, exceed three years.

Section 42 needs to be read in conjunction with s 40 (manual folio and computer folio certificate as evidence of title), s 41 (dealings not effectual until recorded in the Register),99 s 43 (purchaser not affected by notice), s 44 (suing for specific performance), s 45(1) (bona fide purchasers or mortgagees for value protected from deprivation of interest), s 45(2) (prohibits recovery of land from a registered purchaser merely because their vendor may have been registered through fraud)100 and s 118 (prohibits recovery of land from the person registered as the proprietor except as set out in the section) of the Real Property Act.

Deferred versus immediate indefeasibility 8.26 In the history of the Torrens system, two principles have striven for supremacy in defining the extent of the indefeasibility or protection afforded by registration: [page 340] immediate indefeasibility and deferred defeasibility.101 Immediate indefeasibility means that a proprietor is protected as soon as he or she is registered, regardless of defects in his or her transferor’s title. Under the doctrine of deferred indefeasibility, if the instrument of the transferor is a nullity, the transferee is unable to defeat a claim by the true owner; indefeasibility is deferred to the next person to be registered as owner of the land. The debate around whether immediate or deferred indefeasibility should prevail raises the issue of how comprehensive the mirror and curtain principles are. The difference in effect of the deferred and immediate indefeasibility principles may be best illustrated by an example. Assume that A is the registered proprietor and B steals A’s certificate of title. Assume also that B then forges A’s signature on a memorandum of transfer of the property in

favour of C. B then collects the purchase money from C and C (unaware that A’s signature is a forgery) registers the transfer and later contracts to sell to D. Under immediate indefeasibility, C receives an indefeasible title once registered.102 Registration cures voidness. Under deferred indefeasibility, this transaction remains void. C’s title may be defeated by A. Moreover, A can also defeat D at any time up until D registers. C’s title is defeasible but on registration D’s title would be indefeasible. Until 1967, the doctrine of deferred indefeasibility as established in Gibbs v Messer,103 and followed in Clements v Ellis104 and other cases,105 enjoyed significant judicial support in Australia. 8.27 Ellis:

The principle was stated by Dixon J, as he then was, in Clements v

The principle, in my opinion, is that a prior registered estate or interest, for the removal of which from the Register there is no authority but a forged or void instrument, is not destroyed unless afterwards a person, who according to the existing condition of the Register is entitled to do so, gives a registrable instrument which is taken bona fide for value and registered. The justification for destroying an existing legal estate or interest, which has already been duly established upon the Register, is, in other words, found only in the necessity of protecting those who subsequently deal in good faith and for value in a manner, which, upon its face, the Register appears to authorise, and who then obtain registration.106

This conclusion was based on the view of Lord Watson in Gibbs v Messer,107 which supported the proposition that the protection afforded by the legislation is confined to those who actually deal with the registered proprietor, that is, the person whose name is on the Register. In Gibbs,108 a case that went to the Privy Council on appeal from [page 341] the Supreme Court of Victoria, two forgeries were involved. Mrs Messer, the registered proprietor, executed a power of attorney in favour of her husband, and left the power and the certificate of title with her solicitor, Creswell, while she travelled to Scotland. First, Creswell forged Mrs Messer’s husband’s signature (as attorney) and transferred the property to a fictitious person, Hugh Cameron. Later, Creswell forged a mortgage, as the fictitious Cameron, in favour of the McIntyres (real people). Creswell then kept the money lent

under the mortgage for himself. The McIntyres took their mortgage for value without fraud and became registered. Clearly, both Mrs Messer and the McIntyres were innocent parties in the circumstances. The Privy Council found in favour of Mrs Messer by holding that her title was not burdened by the mortgage in favour of the McIntyres. The McIntyres’ mortgage, although registered, did not give them an indefeasible title. Accordingly, Mrs Messer’s name was restored to the Register without mention of the McIntyres’ mortgage.109 The effect of the decision was to uphold the deferred indefeasibility doctrine. Although the McIntyres’ interest did not attract indefeasibility on registration, the court did point out that if a party whose indefeasibility was deferred later dealt with another party who acted on the basis of the Register, then that other party’s interest would receive immediate indefeasibility on registration.110 There are a number of ways in which Gibbs111 may be read. Its ratio could, for example, be restricted to cases involving a forged instrument and it could be said that if one is dealing with a forger, then clearly one is not dealing with the registered proprietor. A literal interpretation of s 43 of the Real Property Act (which, for a time, was considered the key indefeasibility section rather than s 42) supports this approach, because that section refers to a person dealing with the ‘registered proprietor’.112 Another reading of Gibbs is dependent on aligning the Torrens legislation with some general principles of old system title relating to void documents.113 Under old system title, a void instrument remains null and void. Perhaps Gibbs may be said to apply a similar principle, that is, a void instrument remains void and registration will not cure the defect. Although the Torrens legislation says nothing specifically on the issue of void documents, this reading of Gibbs arguably aligns the principles in old system title, relating to void documents, with those under the Torrens system. Hence, a void document will not be validated by mere registration under the Torrens system.114 A third reading of the case would limit the ratio to circumstances where a fictitious person was involved. Such a [page 342]

reading would severely limit the circumstances in which the deferred indefeasibility principle could operate. 8.28 An attempt to contain and restrict Gibbs v Messer may arguably be seen in Assets Co Ltd v Mere Roihi,115 a New Zealand case that went on appeal to the Privy Council. Although the decision in Assets Co looked to uphold immediate indefeasibility, the court refused to disturb the authority of Gibbs. The result of this inconsistency was that New Zealand cases followed the immediate indefeasibility line, while on this side of the Tasman, Australian courts continued to follow the deferred indefeasibility doctrine in cases such as Clements v Ellis.116 8.29 However, in 1967 a more definitive break with the doctrine of deferred indefeasibility in the Australian context came with the decision in Frazer v Walker,117 a case that affirmed the immediate indefeasibility doctrine. In this case, Mrs Frazer forged her husband’s signature to obtain a new mortgage on their jointly owned property. She also discharged the old mortgage. The mortgagees, the Radomskis, registered their mortgage and later, when the Frazers did not pay the money owing under the mortgage, the Radomskis exercised their power of sale. They sold the Frazers’ property to Walker. Mr Frazer, an innocent victim, sought to be re-instated to the Register. Even under the doctrine of deferred indefeasibility, Mr Frazer was bound to lose because, although the Radomskis had registered first, they then on-sold the property to Walker. The Radomskis took their interest on the basis of a void instrument, but once they passed their interest to the next person in the transactional chain and that person (Walker) registered, then that next person was able to enjoy the benefits of indefeasibility. The Privy Council held that, on registration of the mortgage, the mortgagees (the Radomskis) obtained an immediately indefeasible title. In doing so, the court went out of its way to affirm the doctrine of immediate indefeasibility. This decision was reaffirmed in Breskvar v Wall.118 8.30 In Breskvar, the appellants, the Breskvars, wished to borrow money from Petrie. Instead of entering into a mortgage to secure the loan, they executed a transfer of their land, but they did not complete the section calling for the name of the transferee. A failure to include the name of the transferee

on the transfer meant that the instrument was void under s 53(5) of the Stamp Act 1894 (Qld). According to the Breskvars, the intention was for the transfer to act as a security rather than a genuine transfer. Presumably, if the loan were not repaid, Petrie would have had the property transferred to him. However, Petrie fraudulently inserted the name of his grandson, Wall, in the blank section on the transfer. Registration of this void instrument was secured. Wall then sold the land to Alban Pty Ltd and executed a memorandum of transfer in its favour. After this was done, but before the [page 343] transfer had been registered, the Breskvars found out that these events had ensued and tried to prevent any further dealings by lodging a caveat. The High Court found that Wall and Petrie had been complicit in the fraud against the Breskvars, with the consequence that the transfer to Wall would have been defeasible by the Breskvars.119 However, the court took the opportunity to explore the consequences of the void transfer, indicating that although effected by a void instrument: … the conclusiveness of the certificate of title is definitive of the title of the registered proprietor … Consequently, a registration which results from a void instrument is effective according to the terms of the registration. It matters not what the cause or reason for which the instrument is void.120

8.31 As a result of these decisions, immediate indefeasibility has been accepted throughout Australia.121 However, as observed above, the triumph of immediate indefeasibility has not been complete, because Gibbs v Messer122 has never been expressly overruled.123 Nevertheless, attempts have been made to confine it to a very limited set of circumstances. For example, in Garofano v Reliance Finance Corp Ltd, Meagher JA commented that Frazer v Walker124 is ‘authority for the proposition that Gibbs v Messer, insofar as it is still good law, only applies where the forgery is in the name of the fictitious person’.125 8.32 From time to time, there have been revivals of the deferred indefeasibility doctrine, reflected in cases such as Chasfild v Taranto126 and Rogers v Resi-Statewide Corp Ltd;127 but arguably, decisions such as these may be limited to the jurisdictions from which they come (Victoria and South

Australia respectively), where the wording of the Torrens statutes is slightly different from that in New South Wales. Although the revivals look to have been short-lived and later cases in those jurisdictions, such as Vassos v State Bank of South Australia,128 suggest that immediate indefeasibility has won judicial favour and become the dominant theory, some commentators have expressed a lack of satisfaction with that [page 344] position.129 Others have argued that, perhaps somewhat surprisingly, there is evidence of land fraud being less prevalent in some jurisdictions where the doctrine of immediate indefeasibility operates.130 8.33 The dominance of the immediate indefeasibility doctrine was bolstered in New South Wales by the extension in s 3(1) of the Real Property Act of the definition of ‘fraud’ to include ‘a fictitious person’. Professor Butt has commented that the 2000 amendment ‘appears designed to confirm the judicial quarantining of Gibbs v Messer’.131 8.34 Having said this, the indefeasibility debate continues, with some of the academic literature contending that, in some circumstances at least, the deferred indefeasibility doctrine may provide better outcomes.132 Further, some also argue that legislative reform, in the form of s 56C of the Real Property Act, has limited the scope of immediate indefeasibility by denying its benefits to mortgagees who fail to check satisfactorily the identity of mortgagors.133 8.35 As a point of reference, it is notable that not all jurisdictions operating a Torrens system of registration have taken the path of immediate indefeasibility. For example, the Malaysian jurisdiction has fluctuated but generally favoured the position of the original registered proprietor by embracing the doctrine of deferred indefeasibility.134

What will attract indefeasibility on registration? Ambit of indefeasibility

8.36 As we have seen above, s 42 of the Real Property Act provides for indefeasibility of an estate or interest on registration. 8.37 Yet, there is a growing body of case law and academic literature that ‘unpacks’ this seemingly simple proposition, revealing it to be more complex than it first appears. Further investigation demonstrates, for example, that registration also confers indefeasibility on the [page 345] provisions of the dealing that are intimately connected with or have direct application to the interest. Indefeasibility is not restricted to the interest itself.135 8.38 Other cases, however, demonstrate that not every interest that is registered will necessarily attract indefeasibility. Hahndorf Golf Club Inc v John Nitschke Nominees Pty Ltd136 is a case in point. It held that registration will not confer indefeasibility on an interest if that interest is too uncertain. 8.39 Further, the decision in Re Lehrer and the Real Property Act 1900137 considered the issue of whether registration would provide the benefits of indefeasibility to an interest that is unknown to the law, such as a so-called ‘lease’ with an intrinsically uncertain term.138 That case found it would not. Meanwhile, Travinto Nominees v Vlattas139 raised the indefeasibility issue in the context of an option to renew and found that, if a lease containing an option to renew was rendered illegal by statute, registration did not result in the validity of the option.

Touching and concerning the land 8.40 Even where indefeasibility does generally attach, not every provision in an instrument will necessarily receive its benefits, despite the fact that the instrument has been registered. For example, in Mercantile Credits Ltd v Shell Co of Australia Ltd,140 the question of the indefeasibility of covenants relating to the renewal of a lease arose. There Gibbs J found that registration will not always ‘give priority or the quality of indefeasibility to every right which the instrument creates.’141

8.41 The decision in Mercantile Credits142 hinged on whether an option to renew, contained in a lease, received indefeasibility by virtue of registration of the headlease, or whether the leases arising from the exercise of the option needed to be registered independently in order to attract indefeasibility. In his judgment, Stephen J relied on the importance of the Register but, according to Gibbs J, the answer to the question depended on whether the covenant or term to renew the lease was a personal right only, or whether the covenant ‘touch[ed] and concern[ed]’ the land. In exploring the ambit of the phrase ‘touching and concerning’ the land, Gibbs J stated that: [page 346] The right of renewal is so intimately connected with the term granted to the lessee, which it qualifies and defines, that it should be regarded as part of the estate or interest which the lessee obtains under the lease, and on registration is entitled to the same priority as the term itself.143

8.42 Accordingly, an option to renew contained in a registered lease receives the benefit of indefeasibility because of its intimate connection with the lease itself. To this conclusion, Barwick CJ (in Mercantile Credits) added an additional requirement. Picking up on the reasoning in Travinto Nominees Pty Ltd v Vlattas,144 he introduced a requirement whereby a covenant that was legal also needed to be specifically enforceable before it attracted indefeasibility. (Travinto Nominees had found that a covenant that was illegal could not attract indefeasibility because it could not be specifically enforced.) Hence, in Mercantile Credits,145 Barwick CJ found that whether indefeasibility attached to a legal covenant to renew depended not only on whether that covenant was intimately connected to the land but also on whether the covenant would have been enforceable under the general law. If it would not have been enforceable, the fact that the covenant was registered and intimately connected to the interest would still not be sufficient to allow it to attract indefeasibility. Some commentators have questioned the correctness of this view.146 Further, where an option to renew (contained in a registered lease) is found to create an interest in land, that interest (the option) will defeat a later registered interest such as that of a mortgagee, for example.

8.43 While the option to renew (contained in a registered lease) attracted indefeasibility in Mercantile Credits,147 an option to purchase was found not to attract the benefits of indefeasibility because it ‘does not directly affect or concern the land’ and is ‘not a provision for the continuance of the term, like a covenant to renew’.148 The court regarded a covenant to purchase as collateral. However, in New South Wales, statutory intervention in the form of s 53(3) of the Real Property Act now governs the position of covenants to purchase. The subsection states that if a covenant to purchase has specifically been included in a registered lease and the option to purchase is exercised, ‘the lessor shall be bound to execute a transfer of the said land to such lessee’. The effect of the subsection is, therefore, to make the option indefeasible. [page 347]

Void instruments and indefeasibility 8.44 The issue of which covenants attract indefeasibility is more complex in circumstances where the registered instrument is void. Incidents of forged mortgages and identity fraud giving rise to void instruments, have, in recent years, been on the increase, leading parliament to seek to address the problem by introducing legislative reforms.149 Although the starting point is, as we have observed above, that registration and the concomitant indefeasibility that attaches by way of s 42 of the Real Property Act cures a void instrument,150 questions have emerged as to whether registration cures all void covenants in void instruments.151 8.45 Registration may cure the proprietary covenants of a mortgage, such as the charge on the land that secures the debt, but whether it also cures the void non-proprietary covenants, such as the personal covenant to repay, is proving more contentious.152 Where the covenant to repay is contained in a forged instrument, such as a forged mortgage, the practical results of the two different positions emerge quite clearly. 8.46 For the purposes of clarity, the following scenario outlines the circumstances in which forged mortgages and the fraud associated with them commonly occur.153

The first step involves the fraudster obtaining the registered proprietor’s certificate of title, after which the fraudster pretends to be the registered proprietor himself or herself and seeks a loan from a financial institution or moneylender. The mortgagee (lender), seeing the certificate of title, responds by thinking that there is good security for the loan and accordingly enters into a mortgage and then advances money to the fraudster. Once the fraudster has the money, he or she disappears along with the money. Meanwhile, the ‘mortgagor’ defaults on the mortgage because he or she does not even know that a mortgage has been entered into, let alone that he or she has obligations under it as a ‘mortgagor’. The next step in the scenario involves the mortgagee exercising the power of sale to recover the moneys advanced under the mortgage. Once the property is sold, the innocent ‘mortgagor’ is commonly left with nothing other than a right to make a claim on the Torrens Assurance Fund.154 [page 348] Douglas J in Hilton v Gray155 observed that this scenario, or one similar to it, is often the result of parties descending into the ‘demimonde of low finance, of high interest, [and] short term loans granted by demanding lenders to desperate borrowers’.156 Notably, the era immediately preceding the Global Financial Crisis in 2008 appeared to capture many of these conditions. In a forgery scenario such as the one outlined above, if all the covenants in the mortgage (ie, both proprietary and non-proprietary) receive indefeasibility on registration, then the mortgagee may sue the ‘mortgagor’ personally for the balance of the debt owing in cases where an exercise of the power of sale does not satisfy the debt. By contrast, if indefeasibility does not attach to the personal covenant (ie, does not attach to a non-proprietary covenant) in a forged but registered mortgage, the mortgagee may sue for the debt which the mortgage secures by way of a charge over the land but may not additionally sue on the personal covenant for any balance owing. In other words, on the latter approach, the mortgagor’s liability will end once the mortgagee has received the proceeds of sale. The mortgagee cannot sue the mortgagor personally for the balance. Given that the mortgagor did not enter into the

mortgage in the first place but, rather, was the victim of a forgery, there is perhaps some merit in the second approach, which limits the mortgagor’s liability.157 The two approaches outlined above are represented in two competing lines of authority. The first line may be seen in cases applying the principle in Mercantile Credits Ltd v Shell Co of Australia,158 while the second may be seen in cases such as Grgic v Australia and New Zealand Banking Group Ltd and Chandra v Perpetual Trustees Victoria Ltd.159 The second approach has been applied more recently in a number of cases, several of which involve what are colloquially called ‘all moneys’ clauses. Accordingly, it is worth considering briefly how the question of indefeasibility applies in the context of all moneys clauses.160 [page 349]

All moneys clauses and indefeasibility 8.47 Traditional ‘old style’ mortgages secure a single amount that is stated in the mortgage instrument itself.161 Old style mortgages also record that the money has actually been lent. By contrast, an all moneys mortgage, which is a newer type of mortgage product, secures not just a mortgagor’s indebtedness to a lender under a specific loan, but also all money that is advanced to the mortgagor at various intervals in the future.162 All moneys mortgages have proved particularly popular in relation to building works where money may be advanced along the way, at different stages of construction. However, their use is not limited to those circumstances as the case law demonstrates.163 While traditional mortgages expressly stipulated how much and under what terms the debt had to be repaid, all moneys mortgages commonly do not include such terms. Instead all moneys mortgages, which permit later drawdowns, tend simply to secure the repayment of advances made from time to time under the loan agreement(s). That is, the all moneys mortgage itself does not contain all relevant and specific details. These are contained in an extrinsic instrument, usually in the form of a loan agreement.

One question which arises in this context is: If the mortgage is registered, does indefeasibility attach to the collateral loan agreement as well as the mortgage, even though the loan agreement is not registered?164 PT Ltd v Maradona Pty Ltd165 suggests that even though the debt in an all moneys clause is not created by the mortgage (but rather by the loan agreement), the registered mortgagee’s title may still receive indefeasibility. The situation may be different when a mortgage containing an all moneys clause and a loan agreement are both void. Such a situation arises when a fraudster forges the mortgagor’s signature on both the all moneys mortgage and the loan agreement. In those circumstances, although there is registration of the mortgage and registration would usually be found to cure a void instrument, the relevant indebtedness may, in these circumstances, be contained in the loan agreement, not the mortgage. Hence, the registered mortgage may technically give rise to indefeasibility, but indefeasibility of what? The answer is, prima facie, indefeasibility of nothing because registration of the mortgage does not cure the relevant ‘voidness’ of the extrinsic, collateral loan agreement. The loan agreement itself remains unregistered166 yet the loan agreement is where the mortgagor’s personal covenant as to his or her indebtedness is to be found. 8.48 This position prevails unless a link can be established between the loan and the mortgage, causing the void loan agreement to be incorporated into the forged but [page 350] registered mortgage.167 Where there is no statement in the mortgage as to the amount lent in the mortgage, proof of indebtedness must be established ‘in some other way’.168 Incorporation of the loan agreement into the mortgage has the effect of proving that the mortgagor owed a debt to the mortgagee. Should the obligations under the loan be incorporated into the registered mortgage, then the mortgagee may enjoy the benefits of indefeasibility that attach to the personal covenant to repay.169 Put another way, if the loan agreement is

incorporated into the registered mortgage, the loan (including the personal covenant as to indebtedness) receives indefeasibility; but if the loan agreement is not incorporated, the position remains as outlined above. Without incorporation of the void loan agreement, there is indefeasibility of the mortgage but it amounts to indefeasibility of nothing. In practical terms, the effect is that the registered mortgage does not secure any indebtedness. Such a result is cold comfort for the mortgagee but a happy outcome for the innocent mortgagor whose signature was forged. One reason behind the conclusion that there is indefeasibility of nothing (ie, just indefeasibility of an empty shell) is based on an interpretation of s 57(2)(a) of the Real Property Act that makes a mortgagee’s power of sale dependent on the existence of a ‘default’ on a covenant ‘in the mortgage’. If the loan agreement is not incorporated into the mortgage, the default clearly cannot be a default on a covenant ‘in the mortgage’. Whether a void but registered all moneys mortgage incorporates the loan agreement into the registered mortgage will depend on the construction of the mortgage itself.170 Hence, the mortgage needs words that effectively link the registered mortgage to the collateral loan agreement resulting in the agreement’s incorporation. However, even though it is theoretically possible to incorporate the loan agreement into the mortgage, case law suggests that, in practice, incorporation is rather difficult to achieve.171

All moneys clauses, indefeasibility and two mortgagors 8.49 Several of the cases dealing with the question of indefeasibility in the context of all moneys clauses are further complicated by an additional layer of complexity caused by there being two mortgagors, one being innocent and the other being a fraudster. In such cases, the fraudster will sign an all moneys mortgage and loan agreement on his or her own behalf but will also forge the other (‘innocent’) mortgagor’s signature on both documents. [page 351] This scenario often, but not necessarily, involves husbands and wives.172 Yazgi

v Permanent Custodians Ltd173 is a case in point. 8.50 In Yazgi, Mrs Yazgi was jointly registered with her former husband as a proprietor of their home. Later, a mortgage that specified both Mr and Mrs Yazgi as joint mortgagors was registered in favour of Permanent Custodians Ltd. However, Mrs Yazgi did not execute either the mortgage or the loan agreement. Instead, Mr Yazgi forged her signature on both. In this case, the loan agreement was described as a ‘Secured Agreement’ for the purpose of the mortgage. The key question was whether the void instruments, one of which was registered (the mortgage) and one of which was not (the loan agreement), secured Mrs Yazgi’s indebtedness to her interest in their joint property. The court found that Permanent Custodians’ indefeasible title created by registration of the mortgage was limited to securing Mr Yazgi’s interest in the property. The mortgage did not charge Mrs Yazgi’s interest in the property. Hence, when the property was sold, Mrs Yazgi was entitled to her equity in the property.174 Yazgi confirmed the position taken in Perpetual Trustees of Victoria v Tsai; Chandra v Perpetual Trustees and Provident Capital Ltd v Printy.175 If the loan agreement is not incorporated, then the personal covenant to repay cannot be relied on by the mortgagee because that covenant is contained in the collateral loan agreement. Yazgi also confirmed that whether the mortgagee with an all moneys mortgage receives indefeasibility depends on the construction of the relevant instruments and whether those instruments secure the money that has been specified.176 8.51 Perpetual Trustees Victoria Ltd v English177 also considered which aspects of the mortgage and collateral loan agreements gained the benefits of indefeasibility. In that case, a husband and wife had separated but not divorced, and they remained joint tenants of the relevant property. The husband forged his wife’s signature on a loan application with the mortgagee. The wording of the loan that the mortgagee offered proved very significant. It said that a loan was offered to ‘You’ and the word ‘You’, in this context, meant both the husband and the wife. The husband accepted the loan and then forged his wife’s signature on the loan acceptance. The solicitor purported to attest the wife’s signature. Additionally, the husband forged his wife’s signature on the mortgage — a mortgage that incorporated

[page 352] another memorandum but not one that specified the extent of the liability. (The quantum of the debt was not evident in the documentation.) Once again, the solicitor purported to attest the wife’s signature on the mortgage instrument. The mortgagee lent the money and, as is the usual tale in such cases, the fraudster (in this case, the husband) defaulted on the mortgage. 8.52 The Court of Appeal in English found that the wife was not liable for any moneys.178 In that respect, the court affirmed the first instance decision of Simpson J, who had found that to attract the benefits of indefeasibility a loan agreement specifying the debt will need to be incorporated into the mortgage or, alternatively, the debt must be specifically mentioned in the mortgage itself.179 Simpson J had also noted that ‘the debt’ arising from forged documents is no more a ‘debt’ just because it is contained in a mortgage than it is when it is contained only in loan documents; but, in such circumstances, s 42 of the Real Property Act creates ‘an irrebuttable fiction that it is a debt’.180 Her Honour in remarking on the unusual outcome of the case, stated that: It may seem odd that the fate of an innocent owner, entirely ignorant of a purported loan and mortgage in his/her name, can depend upon the fortuitous circumstance that the mortgagee has or has not included, with sufficient specificity in the mortgage documents, the debt the subject of the mortgage. Yet that appears to be the position. Printy provides a fine illustration.181

8.53 In English, it was also highly relevant that the loan offer required that both Mr and Mrs English sign the offer, and clearly they did not. Accordingly, the forgery of Mrs English’s signature on the loan agreement meant that no money was payable under the ‘Secured Agreement’ and, in turn, nothing was payable under the registered mortgage either. The construction of the contractual documents was crucial to the finding at both first instance and on appeal. Sackville JA, on appeal, observed that: … the irony is that as lenders draft ever-wider clauses they make themselves more vulnerable to the effects of forgery. This is because all moneys clauses may depend for their effectiveness on the validity of antecedent instruments that have not been, and indeed cannot be registered under the Torrens system. Since forgery renders such instruments void under the general law, the indefeasibility provisions of the [Real Property] Act may not protect the mortgagee.182

8.54

The inclusion of a ‘joint and several liability’ clause in a mortgage

over the whole property may also prove critical. Its inclusion may mean that the charge under the [page 353] mortgage does secure the whole interest, even though the mortgage is forged and the loan agreement remains unincorporated in a collateral document. The forger’s own ‘real’ signature will be enough to secure the charge over the interest of the ‘innocent’ mortgagor as well as that of the forger, once the mortgage is registered.183 Again, the specific wording of the instrument will need to be considered to decide on the effect. 8.55 The case of Van den Heuvel v Perpetual Trustees Victoria Ltd184 also demonstrates the importance of the particular wording of the mortgage. In this case, a gambler husband forged his wife’s signature on a mortgage that was then registered. The money secured under the mortgage included, ‘any present or future agreement between me or us, or any one of us’.185 At first instance, Price J found in favour of the mortgagee. 8.56 The appellate court upheld the lower court’s decision. On appeal, the majority found that an agreement could include an implied agreement between the husband and the mortgagee and, on the facts of Van den Heuvel, an implied agreement gave effect to the intentions of the husband and mortgagee in the advancing and accepting of money ‘conformably’ with the terms of the agreement.186 Although Van den Heuvel picked up on some of Sackville JA’s reasoning in English,187 particularly in relation to implied agreements, the particular wording of the mortgage in Van den Heuvel distinguished it from English. In Van den Heuvel, there was not a requirement that both parties sign the loan offer. Hence, the loan agreement could work as intended. Notably, Van den Heuvel was not a unanimous decision of the Court of Appeal188 and the case has been the subject of criticism.189 It is a decision that will be popular with lenders but arguably is unnecessarily harsh on the defrauded party (the wife). It has been arrived at by reliance on an implied agreement and, as has been noted elsewhere, ‘one would think the burden

should be squarely upon the lender to make out its own case on its own documentation, in the absence of which the defrauded wife should not be put to the emotional strain and cost of defending proceedings to protect the matrimonial home’.190 In his dissenting judgment, Basten JA noted that an alternative decision to that of the majority could have been arrived at without undermining the public interest and, specifically, without undermining the ‘conclusiveness of the register’.191 It is to be hoped that the amendments to the Real Property Act in the form of s 56C (discussed in Chapter 14) will reduce the number of cases involving fraud and, [page 354] consequently, the number of cases involving the question of indefeasibility in the context of mortgage forgery and identity fraud.192

Void leases and indefeasibility 8.57 The issue of what actually gains indefeasibility on registration of a void instrument is not limited to cases of forgeries, and, in particular, forged mortgages. Karacominakis v Big Country Developments193 raised the issue of the indefeasibility of specific provisions in a registered but void lease. Among other issues, Karacominakis was concerned with, first, the effect of registration in conferring title on the leasehold estate; and, second, whether, and to what extent, registration gave validity to rent covenants that were made void at common law, not by forgery but rather by application of the rule in Pigot’s Case.194 Karacominakis posed a question similar to that which Mason JA dealt with, under different circumstances, in Travinto Nominees v Vlattas: Are the ordinary covenants in the lease enforceable by the parties, notwithstanding that the instrument, apart from the effect given to it by registration, is expressed to be void and illegal?195

In Karacominakis, Big Country, the respondent land developer, acquired property and planned a staged development. It entered into a lease with L, which was not registered before its subsequent assignment (to A1). A1 then assigned the lease to Karacominakis (A2), who registered the assignment and,

in turn, assigned the lease to a third assignee (A3). The third assignment was not registered. When the third assignee defaulted in the payment of rent, the respondent claimed arrears in rent and damages for repudiation of the lease. The respondent sued L, A1, A2 and A3, all of whom sought indemnities. The original lessee and assignees under the lease sought to rely on the fact that a material and unauthorised alteration to the lease had been made at the outset (by the addition of a mortgage as a prior encumbrance), so rendering the lease void by application of the rule in Pigot’s Case; a case which held that at common law, if a deed were materially altered after execution, it would be rendered void. If void, it was argued that the rent covenant could not be enforced, despite registration.196 [page 355] In coming to its decision, the court was forced to consider the status of the lease, and in so doing had to decide whether registration of the lease made the rent covenant in a lease purportedly void at common law, indefeasible. The court found that Big Country was entitled to enforce the rent covenant in the lease, even though at common law the lease was rendered void by the rule in Pigot’s Case. According to Giles JA, registration created entitlements beyond those recognised as being created by personal covenants.197 Registration gave validity to the rights under a lease made void by application of the rule in Pigot’s Case, at least in so far as they related to the payment of rent, an essential term of the lease. Hence, on registration the lease became indefeasible but only the covenants that were considered to be essential elements of the lease were found to be enforceable by assignees of the lessor and the tenant respectively. Giles JA reasoned in the following way: Payment of the agreed rent is an essential part of the transaction between the lessor and the lessee. The covenant to pay rent, to adopt the words of Blanchard J in Duncan v McDonald, is a condition upon which the leasehold interest is held and intimately related to the lessee’s title created upon registration; taking up concepts found in Travinto Nominees Pty Ltd v Vlattas and in Mercantile Credits Ltd v Shell Co of Australia Ltd, because of its connection with the continuance of the lessee’s interest in the land, it delimits or defines that interest. Hence, in my view, if the lease becomes void by the operation of the rule in Pigot’s case, on its

registration the lessee’s covenant to pay rent became effective and Big Country was entitled to enforce payment of rent under the lease.198

8.58 The focus on the intimate relationship between rent and the lessee’s title gained on registration would appear quite critical to Giles JA’s reasoning. In that sense, Giles JA’s words seem to hark back to the first-instance judgment of Mason JA in Travinto. There, Mason JA stated that: I am prepared to assume that the indefeasibility of title which arises on registration is not something which exists in the abstract, independently of the provisions of the lease, but that it relates to the terms and conditions upon which the estate is held, certainly so far as they have a direct application to the term vested in the lessee by registration. Thus it may be that a consequence of registration is that within the limits which I have mentioned the covenants in the lease are enforceable between the parties. If so, in an action brought on those covenants the defendant could not successfully plead the invalidity of the lease as a defence because to do so would be to deny the effect of registration.199

8.59 Mason JA’s words uphold the possibility of enforcing some covenants in a registered lease that is made void at common law, and not others. To that extent, Mason JA’s words are consistent with Giles JA’s view in Karacominakis. They support the view that if the covenant qualifies or is intimately connected with the lessee’s interest, then the covenant will be indefeasible once it is registered. If it does not so qualify the lessee’s interest, then [page 356] it will not be indefeasible.200 However, anomalies still exist between a number of cases in this area of the law and there appear to be restrictions on the application of the principle outlined immediately above.201 Some of these were discussed at 8.37–8.43.

Exceptions to Indefeasibility 8.60 The Torrens system contains several exceptions to indefeasibility. Some are express, others are not. As noted earlier, s 42(1) of the Real Property Act 1900 (NSW) lists the following exceptions:202 fraud; other estates or interests recorded in the folio;

prior folio recorded interests; omission or misdescription of easements; omission or misdescription of profits à prendre; wrong descriptions of parcels; and short-term tenancies. As discussed below, indefeasibility of title may also be found not to apply by the operation of: rights in personam; adverse possession; overriding statutes; grant reservations and conditions; the general power of the Registrar-General to correct the Register; and other provisions in the Real Property Act. In some jurisdictions, immediate indefeasiblity will not operate in the case of volunteers. The express statutory exceptions to indefeasibility will be discussed first.

Fraud 8.61 Fraud is identified as an exception to indefeasibility at various points in the Act; for example, in ss 42 and 43 of the Real Property Act. Section 42(1) states that: … [the] registered proprietor … of any estate or interest in land … shall, except in the case of fraud, hold the same, subject to such other estates … as are recorded … but free from all other estates and interests that are not so recorded.

Section 43(1) states that: … [e]xcept in the case of fraud no person … dealing with … the registered proprietor need inquire into the circumstances surrounding registration and nor does any person need to see to the application of the purchase moneys or be affected by notice of a trust or unregistered interest.

[page 357]

It also adds, ‘the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud’.

Fraud by whom? 8.62 Under the fraud exception of s 42 of the Real Property Act, it is only the fraud that can be ‘brought home’203 to the registered proprietor that is relevant. That is, Torrens fraud requires fraudulent conduct by the current registered proprietor, or his or her agent. As recently confirmed by the High Court in Cassegrain v Gerard Cassegrain & Co Pty Ltd,204 however, s 118(1)(d) (ii) of the Act provides an exception to this principle: a volunteer registered proprietor’s title will be defeasible if the volunteer obtained title ‘through fraud’.205 Outside the limited operation of s 118(1)(d)(ii), however, the fraud exception to indefeasibility does not have a retrospective application. This means that, under s 42, fraud that is perpetrated in an earlier transaction, prior to that leading to the present registered proprietor’s interest, has no bearing on the question of the indefeasibility of that present registered interest. Thus, only fraud that the present registered proprietor has been involved in, or implicated in through an agent, has bearing.206 8.63 The High Court in Cassegrain also explored the concept of Torrens fraud being ‘brought home’ to the registered proprietor under s 42, and, in particular, the interaction between Torrens fraud principles and the law of agency and co-ownership. The facts of Cassegrain involved the transfer of ownership in a property called the ‘Dairy Farm’ from Cassegrain Pty Ltd to Felicity Cassegrain. That transfer occurred through two transactions: first, a transfer of the fee simple from the company to Claude and Felicity Cassegrain, as joint tenants; and, second, a transfer from Claude to Felicity of his interest in the ‘Dairy Farm’, for $1. The second transaction raised s 118(1)(d)(ii) issues, and is discussed further below (at 8.127). It was undisputed at trial that in the first transaction Claude Cassegrain had committed fraud within the meaning of s 42. At the time of the first transfer, he had been a director of Cassegrain Pty Ltd, and had induced the company to transfer the ‘Dairy Farm’ to him and his wife in purported payment of a debt. In fact, the company did not owe a debt. It was also undisputed that Felicity Cassegrain had not, by her own conduct, or omission, behaved in a manner

that would constitute Torrens fraud.207 Rather, the question was whether the fraud could be ‘brought home’ to Felicity by virtue of the fact that Claude was acting as Felicity’s agent in the first transaction, or because the principles of joint tenancy meant that fraud by one joint tenant rendered the interests of both joint tenants defeasible. The High Court answered both questions in the negative. On Torrens fraud and agency, the court confirmed the well-established principle that if fraud by an agent can be ‘brought home’ to the registered proprietor, the registered proprietor’s title will be defeasible. However, proof of agency in this context requires more than merely the fact [page 358] that someone acted for the interests of another.208 In this case, Claude Cassegrain had been the driving force behind the transaction; in every way, he had facilitated the registration on her behalf. However, the court found that Claude was not Felicity’s agent. On joint tenancies and Torrens fraud, it was argued that as fraud could be proved against Claude, Felicity’s title was automatically defeasible to the company, because fraud of one joint tenant was sufficient to ‘bring home’ fraud to all joint tenants. However, the court found that joint tenancy did not have this effect; rather, fraud must be brought home to each joint tenant. As it could not be proved that fraud could be ‘brought home’ to Felicity, the interest in the ‘Dairy Farm’ that she obtained through the first transfer was indefeasible. In the next section, we consider what kinds of conduct must be ‘brought home’ to the registered proprietor.

What kind of fraud? 8.64 In considering how fraud operates as an exception to indefeasibility, it is useful to explore the kind of conduct that constitutes fraud in the Torrens system. The term commonly used to describe the fraud relevant to the Real Property Act is ‘statutory fraud’. It goes beyond common law fraud (which is limited to deceit or fraudulent misrepresentation), but does not go as far as embracing all manner of equitable fraud. As the term ‘fraud’ is not defined in

the Act, its meaning must be distilled from the way it is used in various provisions of the Act and how it has been judicially interpreted. 8.65 Section 43 of the Real Property Act indicates that a narrow definition of ‘fraud’ is necessary. This conclusion is available because s 43 excludes actual and constructive notice from the definition of fraud. In this way the old system concept of equitable fraud, based on notice, which was seen by Robert Torrens to give rise to acute conveyancing complexities and search requirements, has been dispensed with. Accordingly, a registered purchaser of Torrens title land, outside of cases of fraud, defeats unregistered interests of which he or she has actual or constructive notice. However, this does not mean that notice of unregistered interests has no consequences at all. If notice is accompanied by certain other conduct, fraud may be found to exist. For example, if, in order to be able to register his or her interest, a purchaser deliberately discouraged or frustrated the attempts of an earlier unregistered interest holder (of whom he or she had notice) to register, that conduct would amount to fraud.209 8.66 The classic definition of (statutory) fraud in s 42 is ‘actual fraud’,210 a definition that originally emerged from two key cases: Assets Co Ltd v Mere Roihi and Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd.211 In Assets Co, it was held that: [page 359] … by fraud in [the New Zealand Act which was similar to the New South Wales provisions] is meant actual fraud, that is, dishonesty of some sort, not what is called constructive or equitable fraud.212

In Butler v Fairclough,213 the High Court indicated that Torrens fraud imports the concept of ‘personal dishonesty or moral turpitude’. 8.67 Loke Yew v Port Swettenham Rubber Co Ltd214 raises the fine line between: (a) mere notice of a prior interest (which would not amount to statutory fraud215 but under old system title may have amounted to equitable fraud); and (b) actual fraud or dishonesty. In this case, 322 acres of land were granted to Eusope, who then registered the land. Loke Yew became the

owner of 58 acres out of the 322, but he did not register the Malay instruments by which he acquired his interest. In the meantime, Port Swettenham Rubber negotiated for sale of the whole 322 acres of land from Eusope, who agreed to sell only if Loke Yew’s interest remained undisturbed. Port Swettenham Rubber agreed and signed a document to this effect. However, after the sale was complete, Port Swettenham Rubber registered the whole 322 acres and refused to recognise any rights in Loke Yew. In response, Loke Yew claimed that he was entitled to his 58 acres and that Port Swettenham Rubber’s conduct amounted to fraud. He argued that the title Port Swettenham Rubber gained from registration was defeasible by virtue of the fraud exception and that the Register should be rectified to reflect his interest. The court found that Port Swettenham Rubber had made statements for the purpose of inducing Eusope into executing the conveyance and that these statements were ‘false and fraudulently’ made.216 The court found that where assurances were given for the preservation of an acknowledged, unregistered interest, and that those assurances had served as an inducement but were dishonest from the outset, they amounted to fraud. Accordingly, the court ordered a transfer of the 58 acres from Port Swettenham Rubber to Loke Yew. Hence, it was not merely having notice of Loke Yew’s prior unregistered interest that constituted the fraud. It was notice plus statements of inducement that had, according to Lord Moulton, been ‘falsely and fraudulently’ made. Accordingly, notice of itself is insufficient to constitute fraud but notice plus additional factors may lead the court to find statutory fraud. 8.68 Applying this reasoning, it is not fraud to purchase and register with notice of another party’s unregistered mortgage or lease, for example. Even though the purchaser may have had notice of the prior unregistered interest(s), on registration indefeasibility will attach to the purchaser’s interest and the effect will be that the prior unregistered interest is ‘defeated’. A purchaser may even go as far as shutting his or her eyes to the fact that an unregistered interest may exist.217 ‘Without more’ taking with notice of an unregistered [page 360]

interest is treated as ‘morally, and therefore, therefore, legally neutral’.218 However, the position is different if the purchaser goes one step further and, in addition to having notice of a prior unregistered interest, has given assurances that he or she would act so as to preserve that interest and then refuses to recognise that interest.219 Indeed, even if the undertaking to respect or preserve the interest is given to someone else and not the party who is the subject of the dispute, this may still amount to fraud.220

Fraud, wilful blindness and knowledge 8.69 The question of what may be caught by the net of statutory fraud (for the purposes of the Real Property Act) has been considered in a range of cases. Those cases raise a number of questions such as: Does statutory fraud simply cover cases of actual fraud? Is wilful blindness tantamount to actual fraud? Is constructive knowledge of conduct pursuant to which a person may have been deprived of an interest sufficient to amount to statutory fraud? The following discussion turns attention to these issues. 8.70

The Privy Council in Assets Co Ltd v Mere Roihi commented:

… the mere fact that he [the purchaser] might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. But if it be shown that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different and fraud may be properly ascribed to him.221

The last sentence in this extract from Assets Co raises the relationship between fraud, aroused suspicions and the need to make further inquiries. It is a formulation that suggests that having a suspicion of fraudulent activity on the part of one’s vendor, for example, and not following up on it for fear of what one might find may also be brought under the definition of statutory fraud. In other words, wilful blindness to the existence of fraud — for that is what this conduct is — amounts to statutory fraud. 8.71 Some years later, Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd222 approached the issue in a similar way. In Waimiha, Salmond J noted that the real issue was not simply knowing that an adverse claim existed, but whether the registered proprietor or his or her agent ‘knew enough to make it his duty as an honest man to hold his hand’ and yet still proceeded ‘without further enquiry’.223 If the registered proprietor did this, he or she would be

‘guilty of wilful blindness or voluntary ignorance’, both of which equate to actual knowledge and, therefore, constitute statutory fraud for the purposes of the [page 361] Real Property Act.224 Wilful blindness may be seen as ‘a form of designed or calculated ignorance’.225 8.72 Pyramid Building Society (in liq) v Scorpion Hotels Pty Ltd226 also discussed the issue of wilful blindness. There, the mortgagor claimed that the mortgagee had been wilfully blind in not inquiring into whether the mortgage had been properly attested and authorised. Such wilful blindness, it was argued, amounted to statutory fraud. However, the Victorian court did not find that wilful blindness existed on the facts. The court affirmed that the relevant statutory fraud required actual dishonesty or moral turpitude, and because: (a) the mortgagee did not know that the attestation was not in order; (b) the mortgagee did not know that the mortgage authorisation may have been improper; and (c) the mortgagee’s suspicions were not aroused, leading it to resist further inquiry, no fraud existed for the purposes of the relevant Torrens statute. The court did chastise the mortgagee for not making further inquiries, but it did not go on to find that the mortgagee had failed to inquire because it was fearful of finding out information that it did not want to know. Thus, lack of diligence is not sufficient to be ‘personal dishonesty’, and therefore statutory fraud, by the registered proprietor.227

Statutory fraud and equitable fraud 8.73 The boundaries between statutory fraud and equitable fraud are a little blurred in relation to the question of exceptions to indefeasibility. This is so despite a desire by the Privy Council to stem the flow of equity into statutory definitions and interpretations.228 The following discussion highlights the different positions on ‘fraud’, ‘statutory fraud’ and ‘equitable fraud’ that courts have taken. 8.74

In Stuart v Kingston229 the requisite level of fraud necessary to satisfy

fraud under the Real Property Act was held to be ‘actual fraud’, with the court commenting that for the conduct to be regarded as fraud, it must involve some ‘consciously dishonest act’. Indeed, in that case the court went as far as to say: Fraud will no longer be imputed to a proprietor registered under the [Real Property] Act unless some consciously dishonest act can be brought home to him. The imputation of fraud based upon the refinements of the doctrine of notice has gone.230

8.75 This would seem to suggest that the doctrine of notice that may give rise to equitable fraud under the common law is not relevant to establishing statutory fraud. However, some dicta recognise the continuing relevance of equitable fraud in the Torrens system. [page 362] Accordingly, in Bahr v Nicolay,231 Mason CJ and Dawson J stated, in dissent on this issue, that ‘not … all species of equitable fraud stand outside the statutory concept of fraud’. If not all species stand outside statutory fraud, then presumably some stand inside statutory fraud. In that case, their Honours went on to allow the dishonest repudiation of a prior interest to constitute fraud, and, in so doing, also gave support to the view that fraud that occurs after (as well as before) registration may give rise to fraud amounting to an exception to indefeasibility. They asked: And granted that an exception is to be made for fraud, why should the exception not embrace fraudulent conduct arising from the dishonest repudiation of a prior interest which the registered proprietor has acknowledged or has agreed to recognise as a basis for obtaining title, as well as fraudulent conduct which enables him to obtain title or registration?232

8.76 The Bahr v Nicolay position seems to have received some indirect support from the later High Court case of Bank of South Australia Ltd v Ferguson.233 The court in that case observed that ‘[n]ot all species of fraud which attract equitable remedies will amount to fraud in the statutory sense’,234 suggesting that some species of fraud that attract equitable remedies might, in fact, amount to statutory fraud.235 In New South Wales, Grgic v Australia and New Zealand Banking Group Ltd236 made it plain that if equitable fraud is to be treated as a subset of statutory fraud, dishonesty or moral

turpitude must also be demonstrated. On the facts of that case, a false attestation was found not to constitute statutory fraud. 8.77 In Grgic, an officer of the bank attested the signature of a person purporting to be the registered proprietor, Mr Grgic senior. In fact, the man was not Mr Grgic, but a friend of his son. The words in the bank officer’s attestation stated ‘signed in my presence by the mortgagor who is personally known to me’ and were therefore untrue and, hence, falsely sworn. Powell JA, with whom Meagher and Handley JJA agreed, found that the bank officer had not been fraudulent. To establish fraud, it was necessary that the bank officer knew the impostor was not really Mr Grgic senior — or at least was recklessly indifferent to whether the person signing the document was Mr Grgic senior. Merely being ‘less meticulous’ than one could have been does not amount to fraud.237 Thus, fraud under [page 363] the Torrens system remains a much narrower concept than the equitable fraud of old system title.238 8.78 While we have considered cases dealing with the registered proprietor’s avoidance of finding out information that may disentitle his or her interest, there is another line of cases that deals with whether actual knowledge or reckless indifference by the registered proprietor that the instruments on which he or she relies to effectuate registration have been falsely attested or improperly executed. In the second group of cases, courts have found that fraud has existed on the part of the registering party if he or she has such knowledge. Australian Guarantee Corporation v De Jager239 involved this scenario. There, employees of the mortgagee knew that a witness’s attestation was not contemporaneous with the mortgagee’s execution of the mortgage, although the documentation said it was. The court held that this constituted an attempt to defraud the Registrar-General, leading him or her to believe that a state of affairs was the case when clearly it was not. Ratcliffe v Watters240 involved similar facts, but in that case the party alleging fraud was unsuccessful. There, a husband and wife were the joint owners of

property, and the husband forged his wife’s signature on a mortgage document. The mortgagee did not know of the forgery, but it was clear to the mortgagee’s employees that the purported signature of the wife had not been properly attested. The mortgage was then registered. The wife alleged fraud on the part of the registered mortgagee. Ultimately, she was unsuccessful in her claim. The result in this case depended in part on the role of the agent in perpetrating the fraud. In cases involving fraud by an agent, the fraud becomes the registered proprietor’s fraud only if the agent’s knowledge can be imputed to the principal.241 Meanwhile, Russo v Bendigo Bank Ltd242 also demonstrated that not every case involving a false attestation followed by registration will amount to fraud, which in turn operates as an exception to indefeasibility. This is because conscious dishonesty is required. In Russo, a young, inexperienced law clerk falsely attested the signature of the registered proprietor (Mrs Russo) on a mortgage. In fact, the registered proprietor’s son had forged his mother’s signature on the mortgage. The question was whether the bank’s registered mortgage was defeasible because the bank’s agent (the solicitor’s clerk) had committed fraud. In this regard, Ormiston J commented, ‘I believe [the clerk] knew what she had done was false but I do not believe that she has been shown to be dishonest’. He went on to say: In my view it would be a curious consequence that her behaviour should be characterised for this purpose as fraud, for the very essence of that concept is to relieve people from the

[page 364] consequences of indefeasibility only when their behaviour, or the behaviour of those for whom they are responsible, has that element of dishonesty, or conscious moral turpitude or wickedness such as would justify the intervention of a court to set aside the mortgage or other registered estate.243

In regard to the effect of fraud, cases such as Hickey v Powershift Tractors Pty Ltd244 are instructive. That case demonstrated that if the mortgagor’s signature has not been witnessed according to the terms of the attestation, but there is no forgery of the signature, then the registration will be found to be void but the underlying agreement will operate as an equitable mortgage.

8.79 Amendments to the Real Property Act now provide some relief to mortgagors in certain cases of mortgagee recklessness. Section 56C of the Act imposes a duty on mortgagees to take reasonable steps to confirm the identity of the mortgagor. (This provision is discussed further in Chapter 14.) Where the Registrar-General is satisfied that the mortgagee breached the duty in s 56C, the Registrar-General has the power to cancel the recording of the mortgage. In this way, the provision confers on the mortgagor the remedy sought in cases such as Grgic v Australia and New Zealand Banking Group Ltd,245 and imposes obligations on mortgagees that should limit the possibility of fraud occurring in Grgic-style situations in the future.

Other estates and interests in land 8.80 Section 42 of the Real Property Act states that the interest of a registered proprietor is ‘subject to such other estates and interests and such entries, if any, as are recorded on that folio’. This means the registered proprietor’s title is defeasible in favour of the ‘other estates and interests’ that are recorded in the Register as affecting it. The operation of this exception to indefeasibility raises the question of whether there should be an obligation to ‘go behind’ the Register in order to check the nature and extent of those other interests recorded on the folio of the Register. It is often argued that one of the main benefits of the Torrens system is that the Register is paramount and, as a result, the system does away with the cumbersome, time-consuming and expensive searches associated with old system title. However, in the context of the ‘other folio-recorded interests’ exception to indefeasibility, it seems that diligent searching behind the Register may still be necessary, particularly where details of those estates or interests are only cursorily recorded on the Register. 8.81 Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd246 highlighted the importance of searching behind the Register in order to ascertain what estates and interests affect indefeasibility. The case involved interpreting an earlier version of s 42, under which the registered proprietor held subject to encumbrances, liens, estates or interests that were

[page 365] ‘notified in the folium of the register-book’.247 Bursill’s case concerned two adjoining blocks of land, where the certificate of title to each referred to a right of way. On Bursill’s certificate of title, the encumbrance was recorded in the following terms: Right of Way created and more fully set out in … Transfer No 7922 affecting parcels [X] and [Y].

The effect of Transfer No 7922 had been determined by the RegistrarGeneral for the purposes of recording it in the Register, but the RegistrarGeneral’s interpretation turned out to be at variance with what the High Court found to be the effect of the transfer. The High Court found that the transfer not only revealed notice of a right of way, but that the original grant also included a grant in fee simple of rights in the airspace above the right of way. Bursill had claimed that Berger held only the interests that were notified on the Register, and that, if Bursill’s certificate of title did not actually notify an interest in airspace, then Bursill’s title was not encumbered by that interest. The question, therefore, became whether the registered proprietor’s title was burdened by the additional rights the court found to exist, or only by the interpretation of those rights as recorded by the Registrar-General. To decide the issue, the court considered whether the additional rights were ‘notified upon the folium of the registerbook’. The majority of the court found that they were, although further investigation of them needed to be undertaken in order to appreciate fully their nature and extent. Accordingly, the registered proprietor’s title was burdened by the additional rights. This case, therefore, serves to demonstrate the extent of inquiry one must undertake in order to be satisfied as to the nature of any estate or interest that may have been recorded and that will affect the indefeasibility of the registered proprietor’s title. It also demonstrates how the Registrar-General’s interpretation of the nature and/or extent of rights cannot be taken at face value. The court made it plain that the Register notified recordings of the actual rights which existed (even though, at times, it may be necessary to seek the court’s assistance to determine the nature of those rights). One cannot rely on the Registrar-General’s interpretation of rights and the label which he or she may accordingly give

them. The Registrar-General’s function is administrative and his or her interpretation of rights will not prevail over a legal interpretation of rights. Hence, it is necessary to investigate fully all estates or interests or other entries that are recorded as affecting the registered interest. Under the amended wording of s 42, and in light of Bursill, to be an adequate record of an estate or interest on the folio of the Register, the registration number of the dealing creating the interest must be recorded248 and the recording must identify the interest, even if only broadly. [page 366] 8.82 In cases where the interest is no longer current, there is no need to search the dealing. For example, if the Register records a discharge of mortgage, there is no need to investigate the mortgage itself.249 It should also be noted that Menzies J, in dissent in Bursill, thought that the test set in place by the majority judgments improperly extended the notion of indefeasibility. He favoured asking whether a transfer of the property interest was of itself notified by the reference to an instrument which created the interest, instead of asking whether a careful and prudent purchaser might be expected to inspect the instruments behind the transfer and, in so doing, discover that the notification was actually incomplete.250 It is perhaps convenient to think of abbreviated or inadequately explained recordings of other estates or interests in the folio of the Register as rather like footnotes in an essay. The recording, like a footnote, highlights that further explanation and details are available elsewhere and that it is the responsibility of the reader, or here the registered proprietor, to investigate the leads and references provided and then be bound by what they reveal. If, however, such footnotes or recordings need to be checked all the way back to the original Crown grant in order to ascertain that the Registrar-General’s understanding of the rights accord with the actual legal effect of those rights, it may be the case that the paramountcy of the Register is undermined.

Prior folio

8.83 This exception to indefeasibility applies when an earlier title has already been created for the same interest in land.251 In such a case, there is a competition between the interests under the prior folio and the interests under the later one.252 The prior folio will prevail and, although the later folio has been issued, the title it provides is defeasible in favour of the earlier folio.253 It will matter not that the later folio holder is a bona fide purchaser for value. The circumstances where this situation is likely to occur are where: the prior and later folio relate to exactly the same parcel of land; or the later folio relates to a subset of the land in the prior folio; or the later folio relates to an adjoining strip of land in a prior folio. It is possible that, in some cases, this exception may interact with s 42(1)(c) of the Real Property Act. [page 367]

Omission or misdescription of easements 8.84 Pursuant to s 42(1)(a1) of the Real Property Act, the omission or misdescription of easements (as an exception to indefeasibility) arises in two different contexts. One is where the easement subsisted immediately before the land was converted from old system title to Torrens title, while the other is where the easement was ‘validly created’ by the Real Property Act or ‘any other Act or Commonwealth Act’ at either the time of conversion or after that time.254 These issues are discussed in Chapter 12.

Omission or misdescription of profits à prendre 8.85 The 1995 amendments to the Real Property Act moved omissions and misdescriptions of easements out of s 42(1)(b) and into a paragraph of their own: s 42(1)(a1). That left s 42(1)(b) dealing only with profits à prendre. As a result, the law that dealt with this section when it applied both to easements and profits à prendre now guides us in relation to profits à prendre. James v Stevenson255 stands for the view that, if the profit à prendre had been

properly created but was left off the Register in the conversion of land from old system to Torrens title, then it can be construed as an omission, irrespective of whether it was created by express grant or by prescription. If, however, the land was already under Torrens title when the profit à prendre was left off the Register, then it will not be construed as an omission, unless the parties have done everything that is required to create the profit à prendre in compliance with the Act. That includes executing the relevant instruments and lodging them for registration. 8.86 Profits à prendre by prescription are more problematic. If the profit à prendre has arisen by prescription (ie, long user), it would seem that it will be treated like an easement which arose by prescription. We know that the profit à prendre created by prescription, and therefore not registered, will be enforceable against the holder of the servient tenement only if the owner of that tenement remains the same (ie, if the registered proprietor remains the same.)256 The profit à prendre will not be enforceable against later owners. This situation may be different if, at the time the transferee takes the transfer, documentation that will bring about the recording of the profit à prendre has been executed and lodged with the Registrar-General.257 In such cases, the profit à prendre may survive despite a change in ownership of the burdened land. Whether the holder of a prescriptive profit à prendre is able to compel the owner of the burdened land to provide the documentation necessary for a recording to be made on [page 368] the Register is a moot point. One would think that such compulsion would be possible but, on the basis of Williams v State Transit Authority,258 the answer is probably that it is not because the Torrens system does not recognise prescriptive profits à prendre. Whether this result is desirable remains another issue.

Wrong descriptions of parcels

8.87 Pursuant to s 42(1)(c) of the Real Property Act, a wrong description of a parcel or boundary of the land amounts to a misdescription. This exception to indefeasibility does not apply where the registered proprietor is a purchaser or someone deriving through the purchaser. The exception covers surveying mistakes that lead to land being included in the folio, which the parties did not intend to be included.259 A distinction needs to be drawn between: (a) land which the applicant intended to be included in the folio but which was wrongly described; and (b) land which the applicant correctly described but which was not land belonging to the applicant and should not rightly have been included in the application.260 The latter case will fall outside s 42(1)(c) because the land was correctly described rather than wrongly described. In the former case, the land will be covered by the exception and title to it will rest with the true owner.261 Section 42(1)(c) also covers the situation where the certificate of title actually describes, for example, ‘Whiteacre’ instead of ‘Blackacre’.262

Short-term tenancies 8.88 Section 42(1)(d) of the Real Property Act sets out what is commonly called the short-term tenancy exception to indefeasibility.263 In order to satisfy this exception: the term of the lease must not be for more than three years; the tenant must either be in possession or be entitled to immediate possession; any option to renew must not be capable of extending the total period of the lease beyond three years; and the purchaser (in this context, meaning any person taking for value) of the reversion must have taken his or her interest with the relevant notice of the tenant’s interest. 8.89 Although a short-term lease may be registered, there is no requirement to register it under the Torrens system.264 The term ‘tenancy’ used in this section applies to legal [page 369]

tenancies and periodic tenancies,265 as well as equitable leases that arise as a result of agreements to lease.266 If the registered proprietor took without notice of the tenant’s interest under the lease, he or she will not be bound by that lease.267 In these circumstances, either actual or constructive notice will be sufficient to burden the title of the purchaser,268 with the effect that, in practical terms, there are few cases when the purchaser does not take with notice (although it remains possible, but unlikely, for a purchaser to take without notice of a tenant in possession). 8.90 Importantly, if a purchaser is to escape being bound by notice of a short-term tenancy, that purchaser must not have notice of the short-term tenancy at the time of settlement.269 This is because ss 42(1)(d) and 43A(1) of the Real Property Act are interlinked (s 43A(1) being the provision that deals with the unregistered purchaser’s protection against notice, and discussed below).270 The position in regard to short-term tenancies, notice and indefeasibility may therefore be summarised as follows: If at settlement the tenant is in possession, then the purchaser of the fee simple is bound by actual or constructive notice of the tenant. The purchaser does not benefit from s 43A(1) because the purchaser has ‘notice against which he or she was not protected’ pursuant to s 42(1)(d). The purchaser’s interest will be burdened by that of the tenant both before and after registration. If, up until settlement, the tenant is entitled to possession, but he or she is not in actual possession, the purchaser will be protected by s 43A(1) and will take free of the tenancy — unless he or she has received notice of the tenancy from some other source. If, up until settlement, the tenant is not in possession, the purchaser will be protected before registration by virtue of s 43A(1) and, on registration, will be fully protected against any claim which might arise by virtue of s 42(1)(d) — unless the purchaser has notice from some other source.271

Options to renew and s 42(1)(d) 8.91 Traditional wisdom has favoured the view that if a lease and an option together extend beyond three years, protection under s 42(1)(d) of the Real

Property Act is unavailable. In this instance, the total possible period of the lease would exceed the [page 370] three-year limit contained in the short-term lease exception; therefore, the lease itself is denied protection.272

Some Other Exceptions to Indefeasibility In personam exception 8.92 An in personam right arises by virtue of an obligation of conscience created by the registered proprietor.273 That obligation of conscience may arise out of the registered proprietor’s conduct, before or after registration,274 concerning either legal or equitable obligations. Accordingly, there may be a conflict between in personam rights created by the registered proprietor, and the interest that is actually recorded in the Register.275 Such personal claims form the basis of an exception to indefeasibility because the registered proprietor cannot avoid fulfilling the conscientious obligations that he or she has created by hiding behind the indefeasibility that his or her interest acquired on registration. In order to uphold the obligations arising from the rights enforceable in equity or at law, and created by the registered proprietor, it may be necessary to treat the registered proprietor’s title as defeasible. That the Torrens system is able to accommodate these rights that exist ‘off the Register’ was recognised in Frazer v Walker,276 when the Privy Council observed that registration: … in no way denies the right of a plaintiff to bring against a registered proprietor a claim in personam, founded in law or equity, for such relief as a court acting in personam may grant.277

[page 371] Although rights in personam are sometimes called ‘personal equities’,278 in

personam rights do not arise only from equitable causes of action. For example, the non-fulfilment of legal obligations under a legal lease may give rise to a right in personam that may, in turn, be enforced against the registered proprietor. Further, although the term ‘in personam’ suggests that the right is one which is directed against a specific person (rather than a thing), an in personam right may also operate to create unregistered property rights; for example, by means of contracts for the sale of land and grants of leases. However, where the registered interest is found to be subject to an in personam interest, up until an order of the court is granted and the Register is altered pursuant to its terms, the Register remains intact. This ensures that upholding ‘proper conduct’ does not interfere with the ‘mirror principle’, one of the key tenets of the Torrens system. The varying approaches that courts have taken to delimiting the scope of in personam rights clearly have significant consequences for the operation of the Torrens system.279 The following section discusses important elements of the in personam exception.

Known causes of action 8.93 In considering whether an in personam right exists, it is important to be aware that an in personam right can only emerge if the registered proprietor’s conscience is affected as the result of a known cause of action which is enforceable against him or her.280 This issue is dealt with by later examples, but for present purposes it can be noted that mere events or incidents that do not give rise to a known cause of action cannot be said to play on the conscience of the registered proprietor such as to create a right in personam exception to indefeasibility.281 Accordingly, the mere existence of a dealing registered on the basis of forgery (a circumstance that does not give rise to a known cause of action) has been held not to be a basis for a right in personam.282 Further, if a registered proprietor is merely neglectful (a circumstance not giving rise to a known cause of action), mere neglect cannot form the basis of an in personam right.283 What emerges is that an in personam right [page 372]

is not simply a means by which any obligation of conscience may be enforced. Only a subset of obligations of conscience are potentially enforceable, and that subset consists of those obligations which give rise to known causes of action.284

Proper conduct and unconscionability 8.94 Although under the Torrens system certainty of title usually flows from registration, the in personam exception recognises that registration will not extinguish the personal obligations created by the registered proprietor. Cases such as Barry v Heider and Vassos v State Bank of South Australia285 assume that an in personam right will not arise unless the registered proprietor’s conscience is touched by the circumstances that gave rise to the legal or equitable cause of action.286 Such an approach, therefore, requires a party seeking to demonstrate that he or she has an in personam right to establish two elements: (i) a legal or equitable cause of action; and (ii) that it is unconscionable for the registered proprietor to ‘obtain or retain’ his or her registered interest.287 However, there is a contrary (and arguably more appealing) approach that confines unconscionability to the cause of action itself.288 The latter approach would seem more consistent with the view that in personam rights are grounded in obligations arising out of both legal (ie, without an innate unconscionability element) and equitable causes of action.289

Examples of rights in personam 8.95 The interplay between indefeasibility and in personam rights has the potential to create tensions. For example, assume that A, the vendor, is the registered proprietor of Torrens title land, and that A enters into a contract with B for sale of that land. A cannot rely on his or her indefeasibility of title to avoid the rights and obligations that he or she has created by entering into the contract with B. That is, A’s indefeasibility cannot be used in these circumstances to defeat B’s claim arising out of the contract. Instead, as A has created B’s interest by virtue of the contract of sale, a court would act to ensure that A upheld the obligations which he or she had created. Another example of where an in personam right may interact with

indefeasibility may be demonstrated in the context of trusts. Assume A is the trustee of real property. As trustee, A has rights and duties that must be fulfilled. These include a duty to hold the trust [page 373] property on behalf of the beneficiaries B, C and D. A is not permitted to assert that as the registered proprietor he or she can rely on the indefeasibility of title arising from registration to ignore the obligations that he or she owes under the trust.290 8.96 Further examples of where rights in personam have arisen include where: the registered proprietor, or someone for whom the registered proprietor was responsible, used the certificate of title in an unauthorised manner;291 the registered proprietor breached statutory requirements that needed to be fulfilled before registration could take place;292 the registered proprietor demonstrated conduct that led to the dealing being regarded as voidable or capable of being set aside for mistake;293 the registered proprietor breached a fiduciary duty or the registered proprietor breached a trust;294 the registered proprietor became registered as a result of an estoppel that binds him or her to uphold the claimant’s interest;295 and a dealing was registered as the result of the registered proprietor’s unconscionable or unconscientious conduct.296 8.97 Bahr v Nicolay297 is a leading authority on the in personam exception. In that case, the Bahrs did not have enough money to develop their own land, so they sold it to Nicolay on terms that they could lease it back, and later repurchase should they wish. Nicolay, in turn, sold the land to the Thompsons. Clause 4 of the contract between Nicolay and the Thompsons contained an acknowledgment of the earlier Bahr–Nicolay agreement. Subsequent to the purchase from Nicolay, the Thompsons also acknowledged the Bahrs’ right to repurchase in correspondence. However, when the Bahrs

sought to repurchase the land, the Thompsons refused to sell the land to them, relying on their status as the registered proprietor and the indefeasible title that flowed from it. As discussed previously, the Bahrs were unsuccessful in convincing a majority of the High Court that the Thompsons’ conduct constituted Torrens fraud. However, the High Court found unanimously that the Bahrs could establish an in personam exception to the Thompsons’ indefeasible title, on the basis that the Thompsons’ conduct gave rise to a trust in favour of the Bahrs. [page 374] In speaking of the in personam exception, Brennan J observed: … the title of a purchaser who not only has notice of an antecedent unregistered interest but who purchases on terms that he will be bound by the unregistered interest is subject to that interest. Equity will compel him to perform his obligation.298

Thus, according to Brennan J, an in personam action is clearly different from the registered proprietor’s title being defeated by fraud pursuant to s 42 of the Real Property Act. It is also different from the protection from notice afforded by s 43 of the Real Property Act. In practice, it is often very difficult to establish a clear-cut difference between: (a) a purchaser who takes with (mere) knowledge of a prior interest; and (b) one who takes an interest agreeing to be bound by a prior interest.299 In Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd,300 Austin J referred to the difference as ‘the additional ingredient’, that is, ‘some form of acknowledgement of the unregistered interest, or an agreement or undertaking to act in accordance with it, from which the registered proprietor later resiles’. The difficulty of establishing this ‘additional ingredient’ commonly arises in relation to leases. For example, it is sometimes not easy to determine if a purchaser’s awareness of a lessee in possession amounts to an undertaking to be bound by that state of affairs or whether it simply means that the purchaser will not require the vendor to hand over vacant possession.301 On the facts in Bahr v Nicolay, however, the High Court found that the Thompsons acquired their interest with more than mere notice; rather, their conduct constituted an undertaking to honour the Bahrs’ interest, which gave rise to a trust in the Bahrs’ favour. 302

8.98 Mercantile Mutual Life Insurance Co Ltd v Gosper303 is another example of the in personam exception in operation. However, the finding in this case has proved contentious because on one interpretation it enables the in personam exception to supplement the fraud exception.304 Mrs Gosper was the sole registered proprietor of land that she had used as security for a mortgage in 1982, for $205,000 — a mortgage for which she subsequently increased the amount owed by a further $60,000 by way of variation. Unknown to her, however, Mrs Gosper’s husband fraudulently arranged for an additional loan of $285,000 from Mercantile Mutual Life. That company understood that security for Mr Gosper’s loan was to be provided by way of Mrs Gosper’s property. A variation of mortgage was prepared and lodged with the Registrar-General together with the certificate of title that had been held by the earlier mortgagee company in the Mercantile group, which had dealt with Mrs Gosper’s original mortgage. The variation (which was the product of [page 375] both Mr Gosper’s fraud and forgery) was registered, and hence the Register recorded a mortgage over Mrs Gosper’s property that neither she, nor an agent duly acting on her behalf, had entered into. Mercantile Mutual Life sought to enforce its mortgage by arguing that, except in the case of fraud, registration made its interest indefeasible. It argued that as it had not been a party to fraud, it was not bound by Mrs Gosper’s interest. Mrs Gosper argued that she had a right in personam enforceable against the appellants (Mercantile Mutual Life). The result of the enforcement of this obligation, she argued, would allow her to be put back in the position she was in before registration of her husband’s fraudulently created mortgage. Mahoney JA found that Mercantile Mutual Life had only been able to register the variation of mortgage because the certificate of title was delivered to it from Mrs Gosper’s mortgagee company. However, as Mrs Gosper had not produced the certificate of title herself, nor had she given her mortgagee authority to hand it over on her behalf, a personal equity was created. The personal equity lay in a breach by the mortgagee of its contractual obligations to Mrs Gosper. Hence, Mahoney JA, with whom Kirby P agreed, held that

the variation of mortgage should be set aside. However, Meagher JA strongly dissented, referring to the arguments on which Mrs Gosper relied as resting on ‘something like a sleight of hand’.305 This extension of the in personam exception in Gosper has been the subject of academic interest and critique.306 While the majority’s finding meant that Mrs Gosper’s interest was not burdened by a mortgage that she did not authorise, it also meant that the protection usually afforded to a mortgagee on registration was cut back. As Butt has argued, had Mr Gosper simply stolen Mrs Gosper’s certificate of title, forged her signature and given the necessary documentation to Mercantile Mutual Life, that company could have registered its mortgage and gained all the benefits of indefeasibility.307 Instead, Mercantile Mutual Life’s indefeasibility was attacked because another of the companies in the Mercantile group (the original mortgagee company) gave Mercantile Mutual Life the certificate of title, the delivery of which permitted registration. The majority’s decision in Gosper’s case seems to mean that the registered interest of the mortgagee may be defeated despite a broad definition of immediate indefeasibility and a narrow definition of fraud under s 42. The result could be to include within the scope of the in personam exception conduct that was traditionally understood to be equitable fraud and, therefore, outside the definition of fraud relied on by s 42 of the Real Property Act.308 [page 376]

Known causes of action revisited 8.99 Some of the controversy in Gosper’s case was generated by debate over whether the kind of personal equity relied on was based on a known cause of action. Accordingly, it is useful to explore further the circumstances in which the court will find a cause of action and, with this precondition established, be disposed to find the existence of an in personam right. A discussion of Vassos v State Bank of South Australia309 assists in that regard. While Gosper’s case may be seen as the high-water mark of the in personam

exception, cases such as Vassos have cut it back a little. In Vassos, the court was not prepared to find a personal equity. Hayne J stated that: … it may well be that the [mortgagee] did not act without neglect but there is in my view no material which would show that the bank acted unconscionably. There was no misrepresentation by it, no misuse of power, no improper attempt to rely upon its legal rights, no knowledge of wrongdoing by any party. Even if by making reasonable inquiries the bank could have discovered the fact of forgery I do not consider that that fact alone renders its conduct unconscionable.310

8.100 The circumstances were clarified a little more when the court in Garofano v Reliance Finance Corp Pty Ltd311 examined what could be included in the content of a personal equity. Meagher J, with Priestley JA in agreement, stated: I cannot see what the expression [personal equity] is meant to cover except known legal causes of action (for example, deceit) and known equitable causes of action (for example, undue influence).312

However, in the following year, Mahoney JA suggested that the law on the in personam exception was still evolving, and that ‘the law is in the process of defining what interests are or are not personal equities’.313 8.101 Skapinker has pointed out that there is still great confusion about the definition and application of the in personam exception, and has illustrated that confusion by reference to Grove J’s decision in Lissa v Cianci.314 In Lissa v Cianci, Grove J stated that ‘as [one of the mortgagors] can rely upon non est factum he does not really need to demonstrate personal equity’.315 However, as Skapinker has convincingly argued, without fraud by the registered proprietor, a defence of non est factum will not be enough to cause the title to be defeasible.316 In such circumstances, the earlier registered proprietor would be dependent on the in personam exception in order to demonstrate defeasibility of title.317 [page 377] Since Grove J’s words, Powell JA, with whom Meagher and Handley JJA agreed, stated in Grgic v Australia and New Zealand Banking Group Ltd that: … the expressions “personal equity” and “right in personam” encompass only known legal causes of action or equitable causes of action, albeit that the relevant conduct which may be relied

upon to establish a “personal equity” or “right in personam” extends to include conduct not only of the registered proprietor but also of those for whose conduct he is responsible, which conduct might antedate or postdate the registration of the dealing which it is sought to have removed from the Register.318

Receipt of trust property 8.102 Another set of circumstances that was thought to give rise to an in personam exception was in the context of trusts and the limbs of Barnes v Addy.319 In particular, the relevant question before several state courts was: Does the application of the first limb of Barnes v Addy320 cause the registered proprietor’s interest to be defeasible? 8.103 Barnes v Addy has two limbs. The first limb states that if a person takes a transfer of property knowing that the transfer is in breach of trust, that person will hold the property subject to the trust. Put another way, the recipient of the property will become a constructive trustee of the property. The first limb of Barnes v Addy is sometimes referred to as the ‘knowing receipt’, or ‘recipient liability’ limb. The second limb of Barnes v Addy relates to circumstances where a party knowingly assists the trustee to breach the trust and misapply the trust property.321 The second limb is referred to as the ‘accessory liability’ limb. A registered proprietor who ‘knowingly assists’ in a breach of trust under the second limb of Barnes v Addy, will, by nature of that assistance, be participating in a ‘dishonest and fraudulent design’ sufficient to constitute fraud under s 42 of the Real Property Act. As such, conduct constituting ‘accessory liability’ will constitute an established exception to indefeasibility. Until 2007, however, Australian authority diverged on whether the first limb of Barnes v Addy constituted an exception to indefeasibility under the in personam exception. [page 378] 8.104 Two conflicting lines of authority emerged on the question of the ‘knowing receipt’ limb of Barnes v Addy and the in personam exception. Tara Shire Council v Garner,322 a Queensland Court of Appeal decision, and Say-Dee Pty Ltd v Farah Constructions Pty Ltd,323 a New South Wales Court of Appeal

decision, both held that there was an arguable case for the existence of an in personam claim against the registered proprietor, where the registered proprietor knowingly took a transfer (a ‘receipt’) of trust property in breach of trust.324 In so doing, both cases took a different approach to the majority decision in the Victorian case of Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd325 and the Western Australian case of LHK Nominees Pty Ltd v Kenworthy.326 The Victorian and Western Australian decisions thus rejected the view that the ‘knowing receipt’ of Barnes v Addy could give rise to an in personam exception to indefeasibility. The 2007 High Court decision in Farah Constructions Ltd v Say-Dee Pty Ltd appears to have now resolved this question.327 In Farah Constructions, the High Court overturned the New South Wales Court of Appeal decision in Say-Dee Pty Ltd v Farah Constructions,328 and instead preferred the approach of the Victorian case of Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd.329 The High Court emphasised that title is created by registration under the Real Property Act, as cases such as Breskvar v Wall330 have long held. Title is not created by acts prior to registration. Therefore, a person acquiring property by operation of the Torrens statute cannot be characterised as having received trust property from the trustee. Rather, title comes from the very act of registration.331 The High Court also found that the indefeasibility provided by s 42 is sufficient to defeat any such pre-existing unregistered equitable claim under the rule in Barnes v Addy, except in circumstances where the fraud exception applies.332 [page 379] 8.105 The High Court decision in Farah Constructions has since been followed in a number of cases333 including Jin v Yang,334 a case where the aged plaintiff (Mr Jin) argued that he held an equitable interest in an apartment registered in his partner’s name because he had contributed to its purchase price and also to the reduction of the mortgage. When the property was transferred by his partner to her son, the issue arose as to whether the son’s interest was indefeasible. The court found that there were no relevant dealings giving rise to a ‘personal equity’ that the plaintiff could have enforced against

the son, and that, on the authority of Farah Constructions, ‘it would be insufficient for the plaintiff to show that [the son] acquired trust property with notice that the transfer was in breach of trust property’.335

Adverse possession 8.106 A party possessing adversely to the registered proprietor (for the relevant time) is able to submit a possessory application to be recorded as the registered proprietor pursuant to Pt 6A (ss 45B–45G) of the Real Property Act. Hence, the title of the earlier registered proprietor is defeasible in favour of the adverse possessor who fulfils the relevant statutory requirements. See Chapter 5 for a fuller account of the interaction of possessory title with the Torrens scheme.

Overriding statutes 8.107 As Gibbs J observed in Travinto Nominees Pty Ltd v Vlattas, ‘[a]though the Real Property Act is of the greatest importance in relation to land titles it is not a fundamental or organic law to which other statutes are subordinate’.336 Accordingly, pursuant to the principle of parliamentary sovereignty, like other Acts, the Real Property Act may be overridden by later inconsistent statutes. Sometimes this involves express repeal, while at other times it is implicit. The statutory override may also be total or partial. In a Torrens context, the main area for concern is where the overriding statute authorises the creation of a property interest without registration of that interest.337 In such [page 380] circumstances, it is very difficult for a purchaser to know what interests created by other statutes may affect the land which he or she is about to purchase.338 There are numerous statutes that have the capacity to create rights over land. These rights may range from rights of access or easements, on one hand, to the imposition of a charge, for example, on the other.339 As it is

virtually impossible to keep abreast of all the legislation that may affect indefeasibility of title, registered proprietors, and those dealing with registered interests, are placed in an increasingly difficult position. They can rely on the Register less and less as interests under it are eroded by overriding statutes. The situation is exacerbated when the interests created by other statutes are incapable of being recorded or registered themselves,340 or where there is not a mechanism for recording them. Pratten v Warringah Shire Council341 illustrates these issues. 8.108 In Pratten, a drainage reserve was marked on a plan for land. Pratten was interested in purchasing the land, so he asked his solicitors to make inquiries of the council as to who owned the drainage reserve. The council replied saying, ‘the land is of no use to [us] for drainage purposes’.342 Not entirely satisfied by this, Pratten made further inquiries, including an official search of the Register. The search revealed that the vendor was the registered proprietor of the drainage reserve in question. Only then did Pratten enter into a contract. However, the registration process was held up. In the course of attempting to facilitate registration, Pratten offered to buy the drainage land from the council if the earlier information proved to be incorrect and it indeed owned the land. The council replied, stating that it had ‘no interest in the easement’.343 Registration of Pratten’s interest eventually took place and a new certificate of title was issued. At this point, the council decided to claim an interest in the drainage land. The council was ultimately successful pursuant to s 398 of the Local Government Act 1919 (NSW), which vested drainage reserve land ‘in the council in fee simple for drainage purposes’.344 [page 381] 8.109 Where possible, courts will try to read two statutes in such a way to prevent a direct conflict, and thereby avoid having one override the other.345 This may be achieved by a variety of methods, including by recognising that a statute on a specific subject matter will prevail over a statute on a general subject matter.346 Other methods include recognising that two statutes operate sequentially rather than simultaneously,347 or that a statute creating private rights will not prevail over a statute creating public rights.348

8.110 City of Canada Bay Council v Bonaccorso Pty Ltd349 utilised sequential application as a method of reconciling two statutes. There, the council purchased land designated as a reserve but later sold the land to a private company, Omaya Holdings Pty Ltd. Omaya Holdings registered the transfer and sought to claim the benefits of indefeasibility, but another resident objected to the sale of council land on the basis that s 45(1) of the Local Government Act 1993 (NSW) prevented the council from selling or disposing of ‘community land’. The objector sought to have the council reinstated to the Register, while Omaya Holdings asserted its indefeasible title. One issue raised in the case was whether the Local Government Act, being a later statute, prevailed over the indefeasibility provisions of the Real Property Act 1900 (NSW). Although the Court of Appeal found that the reserve was community land, it also found that the two statutes were not inconsistent. It came to this conclusion by finding that up until registration, the transfer to Omaya Holdings was void, but after registration Omaya Holdings gained indefeasible title by virtue of the Real Property Act.350 8.111 The High Court in Hillpalm Pty Ltd v Heaven’s Door Pty Ltd351 also considered the issue of overriding statutes and the Real Property Act, eventually coming to the conclusion that there was no actual inconsistency in that case. The Hillpalm litigation involved land that was subdivided. The subdivision plan (later the deposited plan) lodged with the Registrar-General bore on it a diagram showing what was described as a ‘proposed right of way 10 wide’ (sic). There was no more specificity than this. Many years after the subdivision was approved, the appellant bought land that adjoined the respondent’s land within the subdivision. The respondent argued that it was entitled to a declaration that the appellant was in breach of the condition in the original subdivision plan. The respondent also sought that the appellant create a 10-metre wide carriageway on its land by registering an [page 382] easement on the appellant’s title, as well as constructing a track (of at least 2.5 metres in width) within the carriageway.

At both first instance and then on appeal to the New South Wales Court of Appeal, the Local Government Act 1919 (NSW), which permitted a party to enforce conditions in subdivisions, was found to prevail over the Real Property Act 1900 (NSW). This was because the Local Government Act was the later statute and its provisions were seen as inconsistent with indefeasibility under the Real Property Act. As a consequence, the registered proprietor’s title was defeasible. However, a majority in the High Court (comprising McHugh ACJ, Hayne and Heydon JJ) found that in sealing the subdivision plan, the council had abandoned any insistence on compliance with the conditions in the subdivision.352 As a result, the question of inconsistency did not arise. All the plan did was indicate that the original developer began with an intention to create an easement some time in the future. That intention was not binding on the respondent and, as a result, when the respondent registered its interest it obtained an indefeasible title free from any encumbrance of the nature that appellant sought to establish. Further, the majority held that even if there were a condition that had to be fulfilled, it was only enforceable against the party who originally benefited from the subdivision consent. The condition could not be enforced against a subsequent owner because he or she could not be said to ‘carry out’ the development simply by occupying and using the land. ‘Carrying out’ the development, as required by the Local Government Act, meant implementing the development and, in this case, that translated into subdividing the land. As a result, any breach of the conditions in the consent were not enforceable against later owners such as Hillpalm.353 8.112 The case of Kogarah Municipal Council v Golden Paradise Corp354 applied Hillpalm. However, Basten JA voiced some concern over whether the indefeasibility attaching to registration should have prevailed. He stated: In the present case, s 45 of the Local Government Act speaks in unequivocal terms. It renders a council powerless to sell, exchange or otherwise dispose of “community land”. If, by providing a transfer in registrable form to a third party, the Council was able to effect a disposal of community land, which the Parliament has stated in the clearest terms it has not power to do, there would be a wholesale abrogation of the statutory provision. It is, at the very least arguable, that in such circumstances the Local Government Act has, by necessary implication, amended s 42 (or possibly other provisions) of the Real Property Act, to the extent that that provision would not give effect to a transfer of such land upon registration.355

[page 383] If indefeasibility does not prevail, the outcome seen in Quach v Marrickville Municipal Council356 would be more likely. That case held that a ‘drainage reserve four feet wide’ marked on a deposited plan vested a fee simple estate in the council and so affected the indefeasibility of the interest recorded on the Register. 8.113 Amendments to the Real Property Act effective from 13 May 2009 by the Real Property and Conveyancing Amendment Act 2009 (NSW) attempt to resolve issues of inconsistency between s 42 of the Real Property Act and later statutes that impact on registered proprietors’ rights. Section 42(3) provides that ‘[t]his section prevails over any inconsistent provision of any other Act or law unless the inconsistent provision expressly provides that it is to have effect despite anything contained in this section.’ At the same time that s 42(3) was inserted into the Real Property Act, 23 other Acts were amended to include provisions expressly overriding s 42.357 8.114 As a consequence, s 42(3) has resolved many issues of inconsistent legislation. Under ordinary principles of statutory construction, s 42(3) now prevails where the inconsistent provision was enacted prior to 13 May 2009.358 This is because s 42(3) is the later provision and so prevails to the extent of the inconsistency. The 2015 case Re Sundara Pty Ltd359 provides an illustration of how s 42(3) may arise. In that case, it was argued that sections of the Farm Debt Mediation Act 1994 (NSW) (FDMA), which restricted action that could be taken under a farm mortgage against a farmer, were inconsistent with the indefeasibility of a registered mortgage. However, the relevant provisions of the FDMA were enacted prior to s 42(3), and did not contain an express override of s 42. Although not necessary to decide in that case, Black J noted that s 42(3) created ‘formidable obstacles’ to an argument that the FDMA would affect the registered proprietor’s indefeasible title.360 However, s 42(3) cannot prevail over inconsistent legislation enacted after 13 May 2009, and so the principles of statutory construction discussed above will apply. Indeed, a similar provision to s 42(3) was considered by the High Court in South Eastern Drainage Board (SA) v Savings Bank of South Australia,361

and the High Court found in that case that the South Australian provision was ineffective in its attempt to entrench indefeasibility. [page 384]

Registrar-General’s general power to correct 8.115 The fact that the Registrar-General has the power to correct the Register at all arguably undermines the concept of indefeasibility and the paramountcy of the Register. If the Register is altered after entries have been made, it may become an unstable record for those relying on it. However, any potential attack on, or diminution of, the indefeasibility that registration provides, needs to be weighed up against the importance of having an accurate Register that values and reflects ‘truth’. 8.116 Section 12(1)(d) of the Real Property Act gives the RegistrarGeneral a general power to ‘correct errors and omissions in the Register’.362 What constitutes an error has been the subject of judicial consideration.363 It has been found that an ‘error’ exists if there is a difference between what is recorded on the Register and what is contained in the instrument lodged with the Registrar for registration.364 Traditionally, this fairly narrow interpretation of ‘error’ has been applied so as to cover minor alterations to the Register, commonly described as ‘slips’ or clerical or administrative errors, many of which pertain to information that has been inadvertently left off the Register by the Registrar-General’s staff.365 In this context, for example, it was held that the Registrar could not correct an error involving a mistaken statement in a registered discharge of mortgage asserting that all moneys under the mortgage have been repaid, for example.366 However, the Court of Appeal in Sahab Holdings Pty Ltd v Registrar-General held that ‘errors and omissions’ within the meaning of s 12(1)(d) were not confined to those that may be described as merely ‘departmental errors and omissions’.367 8.117 However, even when seemingly minor corrections of this nature are made, the Registrar-General must ensure that the original entry is not completely erased.368 The genealogy of the correction needs to be retained because a party who relies on the earlier, incorrect entry may still have rights

on the basis of that earlier entry. Perhaps in anticipation of such scenarios, the Real Property Act includes a provision that deems a correction not to have force or effect if it would prejudice or affect a right accrued on the basis of the earlier uncorrected entry.369 [page 385] 8.118 In relation to when the Registrar-General’s power of correction may be exercised, it was once thought that if a bona fide purchaser or mortgagee had registered, having acquired his or her interest on the faith of an uncorrected Register, then the Register could not be corrected at a later time.370 This now appears not to be the case. It now appears that corrections may also be made after registration has been effected by a party who acquired rights on the faith of an uncorrected Register.371 However, the situation is complicated by the inclusion of an additional requirement (mentioned above) that the Registrar-General cannot correct if to do so would prejudice rights emanating from interests recorded prior to the correction.372 8.119 Another provision, s 138(1) of the Real Property Act, may provide for a wider range of corrections to the Register. It operates not by investing the Registrar-General with a power of correction himself or herself but rather by giving the court a method by which the Register may be altered. This provision specifically relates to where there are proceedings for the recovery of any land or interest from the registered proprietor and it permits the court to make one or more of the following ancillary orders: (a)

cancel or amend a folio of the Register,

(b) cancel, or amend or make a recording in a folio of the Register, (c) create a new folio of the Register, (c1) create a new edition of a computer folio, [or] (d) issue a new certificate of title.373

8.120 Mogo Local Aboriginal Land Council v Eurobodalla Shire Council374 is an example of a case that relied on s 138(1). In that case, s 138(1) was used to restore registration of a proprietor’s interest after the Registrar-General had

erroneously cancelled a folio on the Register on the mistaken assumption that the land had vested in the Crown. 8.121 Sections 136 and 137 of the Real Property Act operate in conjunction with s 138. Section 136, for example, permits the RegistrarGeneral to summon and recall any relevant document so that it may be cancelled or corrected where the Registrar-General is satisfied that a certificate of title or a recording has been wrongfully or fraudulently obtained or retained. Hence, these sections operate so as to provide for rectification of the Register.

Other provisions in the Real Property Act 8.122 Section 56C of the Real Property Act is an example of a provision that affects indefeasibility. It arguably makes defeasible the title of a mortgagee who does not take [page 386] reasonable care in checking the identity of the mortgagor, because the Registrar-General is able to cancel the mortgagee’s title.375

Volunteers General principles 8.123 One of the key issues in the context of volunteers is whether a volunteer should receive the benefits of indefeasibility.376 A volunteer under old system title could never stand in a better position than his or her predecessor in title. This was a result of the application of the maxim that ‘equity will not assist a volunteer’ (see 8.126 below). In regard to Torrens land, the Real Property Act has no specific provision dealing with volunteers, although there are scattered references in the Act to purchasers for value.377

8.124 In Victoria, this matter was confronted in King v Smail,378 where Adam J held that these scattered references to purchasers for value clearly suggested that the Act meant to treat volunteers differently. Accordingly, volunteers did not receive the benefits of indefeasibility. Had they received indefeasibility, the volunteer’s interest would have been able to defeat the unregistered interests that affected the title of the volunteer’s donor. King voided such an outcome and found that the interests of the trustee in bankruptcy took priority over the registered title of the (volunteer) donee.379 By contrast, the New South Wales Court of Appeal case of Bogdanovic v Koteff,380 found that volunteers were able to gain indefeasibility on registration in the same way as purchasers for value. In that case, the interest of the testator’s beneficiary son (a volunteer) prevailed over the interest of an earlier unregistered life estate holder, because the son, on registration, obtained an indefeasible title that defeated the unregistered life-estate holder’s interest. The court held that Frazer v Walker381 and Breskvar v Wall382 had weakened the basis on which King as decided: the unambiguous endorsement of immediate indefeasibility in Frazer and Breskvar implied that no distinction be drawn between purchasers and volunteers. Bogdanovic raises a number of problems.383 First, Priestley JA made reference to the possibility that notice on the part of the respondent might have had a bearing on whether the life interest was enforceable against him. It is difficult to see how this can be in the [page 387] light of s 43 of the Real Property Act. If, as was found in Frazer and Breskvar, s 43 must be read as subject to s 42, then notice must be irrelevant to the indefeasibility acquired on registration. In the case of Arambasic v Veza (No 4),384 Sackville JA held, applying Bogdanovic, that notice by the registered volunteer did not preclude the volunteer gaining immediately indefeasible title. In that case, Mr Arambasic had constructive notice of Ms Veza’s interest, by virtue of her possession of the property. However, Sackville JA conceded

that ‘there is much to be said for the Victorian view’385 regarding volunteers and indefeasibility. Second, while it seems Frazer may have dealt a blow to one of Adam J’s reasons for finding that volunteers do not receive an indefeasible title (ie, that deferred indefeasibility indicated general limitations on the title of the registered proprietor), it had nothing to say about the other: that the Act draws a distinction between the protection of purchasers for value and others in various provisions, and that this suggests that s 42 must be interpreted accordingly.386 8.125 Nevertheless, in New South Wales volunteers are not a general exception to indefeasibility.387 Whether they should be, as indeed they are in states such as Victoria, raises some important policy issues. Coldrey J in Rasmussen v Rasmussen388 discussed some of these issues when he chose to follow King v Smail, stating that the indefeasibility provisions needed to be considered by reference to ‘an overriding principle of fairness’. In Lowe v Sze Tu,389 an application for special leave to reopen Bogdanovic v Koteff390 was refused on the grounds that there were not sufficient prospects of success to warrant an appeal.

When does a volunteer receive an interest? 8.126 The above discussion raises the question of when a volunteer can be said to have taken a gift. For a gift of Torrens title land to be effective at law, the interest must be registered. If the gift is not registered, it is still possible that the donor has passed an interest to the donee in equity. The test as to whether the gift has been effective to pass an interest in equity is whether the donor has done all that is necessary to be done, by the donor [page 388] alone, to transfer the legal title according to the selected mode of dealing.391 The high level of ‘doing’ required of the donor is necessary because of the maxim that ‘equity will not assist a volunteer’. In practical terms, this means that the donor must give the donee a registrable instrument, and that the

donor must have either provided or orchestrated the provision of, all relevant title documents (eg, the certificate of title) so that the donee can proceed with registration.392 The donor’s acts must be irrevocable, so that he or she puts the transfer beyond recall.393 In these circumstances, the equitable maxim that ‘equity regards as done that which ought to be done’ defeats the competing equitable maxim that ‘equity will not assist a volunteer’. Hence, the donee is said to receive an equitable interest in land.394 In New South Wales, the donatio mortis causa doctrine (which permits gifts of interests in personalty without writing, in contemplation of death) is not applicable to land.395 However, the rule in Strong v Bird396 has been held to apply to gifts of land so that a donee of a purported (but unsuccessful) gift, who is also appointed as executor of the donor/testator’s will, may be able to take the property if he or she can show that up until the donor’s death, the donor regarded the property as already transferred.397

Volunteers and fraud 8.127 Section 118(1)(d)(ii) of the Real Property Act modifies the protection conferred on registered volunteers, by providing an exception to indefeasibility when persons ‘other than transferees bona fide for valuable consideration’ receive their interest ‘from or through a person registered as proprietor of the land through fraud’. This provision was recently examined by the High Court in Cassegrain v Gerard Cassegrain & Co Pty Ltd,398 and discussed above (at 8.62–8.63) in the context of the meaning of s 42 fraud. In Cassegrain, the High Court concluded that s 42 fraud could not be ‘brought home’ against Felicity Cassegrain, and so the first transfer of a joint interest in the ‘Dairy Farm’ to her was indefeasible. However, the subsequent transfer of Claude’s interest to Felicity was defeasible by virtue of s 118(1)(d)(ii). There was no question, on the facts, that Claude’s interest had been obtained by ‘fraud’ (he was in breach of his director’s duties in effecting the transfer), nor that Felicity had not paid ‘valuable consideration’ for the interest [page 389]

(she had only paid $1 for her interest under the second transfer). Thus, the court concluded that the second transfer to Felicity was therefore defeasible under s 118(1)(d)(ii), for she had received her interest through Claude’s fraud. In this way, s 118(1)(d)(ii) preserves a limited operation for deferred indefeasibility in circumstances where a volunteer obtains an interest that had previously been acquired by fraud.

Unregistered Interests under the Torrens system 8.128 Although s 41(1) of the Real Property Act 1900 (NSW) states clearly that ‘[n]o dealing, until registered … shall be effectual to pass any estate or interest in any land’, this provision has not been interpreted as meaning unregistered interests have no place in the Torrens scheme.399 In fact, several other provisions in the Act give implicit recognition to the existence and status of unregistered interests. For example, s 74F(1) provides for the lodgment of a caveat to protect an interest that has arisen by way of ‘any unregistered dealing or by devolution of law or otherwise’; and s 82 prevents the registration of trusts but allows a caveat to be lodged over an instrument that creates a trust.400 The basis on which the clear wording of s 41(1) may be read down seems to be grounded in the distinction between the effect of an instrument before registration and the rights that arise out of a transaction.401 Hence, an unregistered dealing cannot create any interest in land, but the agreement between the parties which lies behind the dealing may create an equitable interest in the land. On this analysis, ‘no violence is done to the statutory command’.402 Accordingly, the agreement behind the dealing is recognisable by a court exercising its equitable jurisdiction but the instrument itself has no force until registered. 8.129 As noted in 8.107, some unregistered interests will receive protection as exceptions to indefeasibility, such as an unregistered interest created by virtue of an overriding statute. Most unregistered interests, however, will not fall into this category, and hence are dependent on the caveat provisions for protection. Left unprotected, an unregistered interest will be defeated by a registered interest in the absence of fraud or in personam rights. Where an unregistered interest is defeated it cannot be revived.403 In

the case of a competition between two unregistered interests, the outcome will usually be determined on the basis of the equitable principles.404 The latter position is so because [page 390] the unregistered interests are regarded as similar to equitable interests.405 However, not all unregistered interests are automatically equivalent to equitable interests. We know this because s 74F(1) of the Real Property Act refers to a person holding ‘a legal or equitable estate or interest in land’ being able to lodge a caveat to prohibit the recording of any dealing affecting his or her estate. If all unregistered interests were equitable, there would be no need to include the word ‘legal’. Further, the word ‘legal’ cannot be referring to a registered interest, because there is no need to caveat a registered interest — it already has the maximum protection available. Examples of a legal interest under the Torrens system would include an unregistered oral lease that complies with s 23D(2) of the Conveyancing Act 1919 (NSW), an easement implied under the Wheeldon v Burrows doctrine, or an implied tenancy at will under s 127 of the Conveyancing Act. Examples of unregistered interests that are not legal would include an equitable lease, an equitable mortgage by deposit of title deeds or a vendor’s lien. The following discussion will examine in detail how the caveat provisions enable unregistered interests to be protected. 8.130 One of the practical issues arising in relation to unregistered interests is this: How should priority disputes between an unregistered interest and a registered interest, or between two unregistered interests, be resolved? The starting point is that in a competition between a registered interest an unregistered interest, the registered interest will prevail by virtue of the principle of indefeasibility of title. But in a competition between two competing unregistered interests, the old system priority rule applicable to two competing equitable interests will resolve the issue.406 However, in the competition between two unregistered interests, certain complexities emerge as to whether time should be used as the preliminary determinant, or whether

having the better equity should be used. Further, in deciding what constitutes the ‘better equity’ a range of factors may need to be considered, including the effect of lodging a caveat. Accordingly, we shall discuss caveats below and return later to the question of priorities.

Caveats 8.131 A caveat is similar to a statutory injunction.407 It obstructs dealings with the registered interest by preventing the Register from being altered.408 Put another way, it acts: … as an injunction against the registration of an inconsistent dealing otherwise than in accordance with the caveat so as to enable, in the ultimate analysis, a determination of the conflicting claims.409

[page 391] It may be said to place a freeze on the registration of dealings. It was suggested in Butler v Fairclough410 that recognition of equitable estates in land was ‘the foundation of the scheme of caveats which enable such rights to be temporarily protected in anticipation of legal proceedings’. The effect and operation of a caveat was spelled out in Abigail v Lapin,411 where the Privy Council stated that: … no instrument will be registered while the caveat is in force affecting the land, estate or interest until after a certain notice to the person lodging the caveat. Thus, though the legal interest is in general determined by the registered transfer, and is in law subject only to registered mortgages or other charges, the Register may bear on its face a notice of equitable claims, so as to warn persons dealing in respect of the land and to enable the equitable claimant to protect his claim by enabling him to bring an action if his claim be disputed.

Since 1986, the caveat provisions have been consolidated in Pt 7A of the Real Property Act. The Registrar-General continues to be able to lodge his or her own caveats, but nowadays the remaining caveats fall into two main categories: 1.

caveats against primary applications; and

2.

caveats that pertain to land that has already been brought under the Torrens system.

The following discussion briefly examines caveats lodged by the RegistrarGeneral and primary application caveats, but then focuses on s 74F(1) caveats, or ‘caveats against dealings’ as they are commonly known.412

Caveats lodged by the Registrar-General 8.132 Section 12(1)(e) of the Real Property Act provides for a number of situations where caveats may be lodged by the Registrar-General. These include situations where the Registrar-General acts on behalf of Her Majesty or where a person is under some disability. The Registrar-General may also lodge a caveat where an instrument has declared a trust. The effect of such a caveat is to prohibit any registration of dealings not in compliance with the trust. If, pursuant to s 82 of the Act, an instrument declaring a trust has been lodged, then the Registrar-General must, according to s 82(3), record a caveat preventing the registration of an interest that conflicts with the terms of the trust. 8.133 The Registrar-General may also lodge a caveat where, on a primary application (discussed below), a mortgagee is recorded as proprietor on the Register. Further, the Registrar-General may lodge a caveat to protect a mortgagee when a qualified folio of the Register has been issued in the name of the mortgagee. Indeed, s 12(1)(f) of the [page 392] Real Property Act provides for protection in a wide range of circumstances when it refers to ‘the protection of any person interested in’ Torrens title land.

Caveats preventing registration under primary applications 8.134 Caveats that are designed to prevent land being brought under the Torrens scheme may be lodged pursuant to s 74B of the Real Property Act. Pursuant to s 74C, these caveats have a shelf life of three months from the date of lodgment, unless the caveator has commenced proceedings to establish his or her title or, alternatively, unless he or she has been granted an injunction

which prevents the Registrar-General from registering the land under the Torrens scheme. These caveats are known as ‘primary’ caveats. If a primary caveat has been lodged, the Registrar-General must examine the primary applicant’s title, bearing in mind that the primary applicant can succeed only on the strength of his or her title.413

Caveats preventing dealings in land 8.135 Caveats preventing dealings in land are governed by a bundle of provisions.414 The High Court has stated collectively demonstrate that: … the Act contains a complete code for the lodgment, recording, maintenance, removal, renewal and lapsing of caveats. They mesh neatly with the system of registration of titles and dealings generally. In doing so, they also give effect to the purposes of the Act and the means by which it gives priority to instruments according to their time of lodgment.415

8.136 These kinds of caveats are used by parties seeking to protect unregistered interests in land. Sometimes they are called ‘private’ caveats. Section 74F of the Real Property Act, read in conjunction with s 74A(1) and (2)(b), also provides that a caveator may lodge a caveat if plans (including, but not limited to, delimitation plans) might affect his or her alleged interest.416 These provisions come into play in circumstances where, for example, subdivision plans detrimentally affect purchasers who have not yet registered. Although s 74F(5) requires a caveat to be in an ‘approved form’,417 s 74L requires the court to disregard a caveator’s lack of compliance with the requirements of Pt 7A of the Real Property Act. At first blush, this section represents a more liberal approach to [page 393] the form of caveats than that contained in earlier legislation;418 however, it has been noted elsewhere that the caveat regulations under the Real Property Act are quite rigorous despite the more relaxed approach taken by the Act itself in relation to compliance with formal requirements.419 Jones v Baker attempts to find a balance between these two competing positions by assessing whether the formal requirement is ‘so far removed that the court cannot disregard the noncompliance’ and accordingly must treat the caveat as being invalid.420

When the caveator lodges a s 74F caveat (or a caveat against possessory applications, plans and applications for cancellation of easements or extinguishment of restrictive covenants), the Registrar-General will note the caveat on the Register.421 The Registrar-General is then obliged to notify the registered proprietor that a caveat has been lodged.422 Once lodged, the caveat will stay in place until it is removed by way of: (a) a lapsing notice following lodgment of a dealing;423 (b) a lapsing notice without lodgment of a dealing;424 or (c) pursuant to a court order.425 One purpose of a caveat is, after all, to protect the caveator’s interest until the caveator is able to prove the substantive nature of the asserted interest.426 8.137 While a new certificate of title is issued when a dealing is recorded, the lodgment and noting of a caveat does not lead to the issuance of a new certificate of title. Instead, the Register simply notes the caveat.427 The caveat does not create any new interest. It merely notifies the alleged existence of an unregistered interest. In New South Wales, caveats also have a role to play where a registered proprietor has lost his or her certificate of title.428 To prevent the certificate of title being used unscrupulously by its finder, the registered proprietor is able to lodge a caveat to prevent any dealings with the land.429 There are, however, restrictions on who can lodge caveats. Indeed, only a party who has a [page 394] caveatable interest is able to lodge a caveat. In practice, the most common circumstances where caveats are used are in regard to mortgagee sales. If the mortgagor believes that the mortgagee is improperly exercising his or her power of sale, it is usual and prudent for the mortgagor to protect his or her interest by the lodgment of a caveat that will prevent the purchaser registering his or her interest. It is customary for the caveator to provide an undertaking as to damages before the Registrar-General will permit the caveat to remain in force, but the court does have a discretion in this regard.430 A caveat becomes operative as soon as it is lodged and is given a distinctive reference number.431

Purpose of a caveat

8.138 As noted in 8.131, the effect of a caveat is to freeze the Register in relation to the registered interest. As a result, a caveat provides protection to the caveator; once lodged, a caveat has the effect of giving ‘notice to all the world that the registered proprietor’s title is subject to the equitable interest alleged in the caveat’.432 Although Barwick CJ in J & H Just (Holdings) Pty Ltd v Bank of New South Wales433 may have sought to limit the above description of the purpose of caveats by stating that ‘the caveat is protective: it is not to give notice’, the High Court more recently has revisited that view, in the case of Black v Garnock.434 In that case, the appellants (the judgment creditors) obtained a judgment for a sum of money against the judgment debtor, who was the registered proprietor of land. After the judgment against him but before a writ of execution had been issued, the judgment debtor agreed to sell the relevant land to the purchasers. The contract of sale was completed and the judgment debtor (vendor) gave the purchasers the relevant documentation in registrable form. At 9.00 am on the day of settlement, the purchasers’ solicitor undertook a title search, which was clear. About half an hour after the search was made, the solicitor for the judgment creditor notified the purchasers’ solicitor of a number of things, including that the judgment creditors had an unsatisfied debt. At around 11:53 am on the very same day (ie, about two hours before settlement), a writ of execution (issued the day before at the instance of the judgment creditors) was recorded on the Torrens Register. There was nothing unconscientious in either the seeking or registering of the writ. However, the judgment creditor’s writ prevented the purchasers from registering their interest. The purchasers sought an interlocutory injunction restraining the exercise of the writ. The High Court held that the purchasers were unable to restrain the sale of the property by way of an injunction, but the majority of the court, including Callinan J whose judgment was particularly forceful, seemed to suggest that had the purchasers lodged a caveat — although this would not have been able to prevent the writ being recorded [page 395] on the Register — it may have prevented the registration of a transfer by the

Sheriff in execution of the writ. Black v Garnock may, therefore, serve to encourage the lodgment of a caveat as soon as an unregistered interest in the relevant property is acquired. In particular, Callinan J commented that caveats were included in the Torrens legislation: … not just to forbid registration of dealings not yet the subject of an instrument lodged with the Registrar, but also to serve as a notice to anybody interested in the land, and troubling to search the Register, that there was some other dealing or transaction on foot of which any interested person should be aware.435

8.139 There are three exceptions in the Real Property Act to the statement that a caveat freezes the Register. They are: 1.

Pursuant to s 74H(1)(b), a caveat prohibits the recording of dealings only to the extent to which they impact on the caveatable interest. Hence, recording of dealings which lie outside the ambit of the caveat will not be frozen.

2.

Pursuant to s 74H(5), certain dealings and entries are still permitted despite the existence of a caveat. These include, but are not limited to, applications by executors, administrators, trustees or surviving joint tenants to record dealings or entries following the death of a registered proprietor, as well as applications made under s 12 of the Trustee Act 1925 (NSW), resumptions and writs.

3.

Pursuant to s 74H(4), a caveat will not block the registration of a dealing in registrable form if the dealing was lodged before the caveat itself was lodged.436

8.140 There is no obligation on a person holding an unregistered interest either to register his or her interest or lodge a caveat. (Indeed, some unregistered interests cannot be registered.) However, a wise, unregistered interest holder would lodge a caveat where possible because a failure to do so may lead to extinguishment of his or her unregistered interest by the registration of another interest.437 8.141 Accordingly, a failure to lodge a caveat could have unfortunate consequences in a priority dispute concerning unregistered interests: it may mean that the unregistered interest holder’s interest is postponed. This issue is explored below.438 Lodging (or seeking to lodge) a caveat will not prevent a party from also

seeking an injunction in the attempt to protect an interest in land.439 [page 396]

What is a caveatable interest? 8.142 A caveatable interest is one that amounts to an interest or an estate in land.440 Hence, a caveator needs a proprietary interest in order to lodge a caveat. Further, an interest that usually would not be regarded as an estate or interest in land, but that statute defines as caveatable, will also be sufficient to support a caveat.441 Yet a statutorily based right that does not give rise to a proprietary right (and is not defined as being caveatable) will not be caveatable. Nor will it be possible to lodge a caveat over a mere contractual right,442 a mere equity,443 or a mere claim to a cause of action, such as a claim ‘to an estate or interest under the Family Law Act [1975 (Cth)]’444 or under the Property (Relationships) Act 1984 (NSW).445 8.143 Despite this guidance, it is sometimes difficult to establish if the interest in question is caveatable.446 A narrow and traditional view was that if a caveatable interest is to exist, that interest must be capable of being recorded in the Register.447 That approach was taken in Classic Heights Pty Ltd v Black Hole Enterprises,448 where, in order for an interest to be caveatable, it was necessary for either the caveator to be able to force the registered proprietor to execute a registrable dealing, or for a registrable dealing to be already executed. However, that view appears not to have gained wide currency in the Australian context. Cases such as Clark v Raymor (Brisbane) Pty Ltd (No 2),449 which involved an equitable charge, [page 397] Avco Financial Services,450 King v AGC (Advances) Ltd451 and Bunning Building Supplies Pty Ltd v Sgro452 all lend support to the view that the existence of an instrument in registrable form is not required in order to lodge a caveat.453

More recently, the Victorian case Schmidt v 28 Myola Street Pty Ltd454 found that the production of a registrable instrument was not necessarily required and that an establishment of an equitable interest recognised under the Torrens system would suffice. 8.144 At times, it may be difficult to tell if a caveatable interest is created or evidenced by an instrument. Nguyen v Kaha and Perpetual Nominees Ltd v Springfield Retail Pty Ltd455 both indicate that it is necessary to examine the instrument as a whole in order to determine whether the parties have demonstrated a clear intention to create a caveatable interest. 8.145 Examples of interests that have been found to amount to caveatable interests include: an easement;456 the interest of a purchaser under an agreement for the sale of land;457 a mortgage by deeds;458 the interest of a lessor in a lessee’s covenant not to assign;459 a claim that an absolute transfer was intended to operate only as a mortgage;460 an interest of a transferee under an unregistered transfer;461 a vendor’s lien;462 the right of a person to set aside a transaction procured through fraud and misrepresentation;463 the interest of a partner in partnership assets;464 [page 398] the interest of a lessee under a lease or an agreement for a lease;465 and a call option to purchase land.466 8.146 Examples of interests that have been found not amount to caveatable interests include: a licence to occupy land;467

a restrictive covenant not running with the land;468 the right to the net profits of a sale of land;469 and a right of first refusal to purchase.470

Removal of caveats 8.147 As explained above (at 8.136), a caveat may be removed by virtue of a lapsing notice pursuant to s 74I(1) of the Real Property Act. Under this provision, the registered proprietor (or another person claiming an interest) is able to require the Registrar-General to serve a lapsing notice, which informs the caveator that a dealing has been lodged but that it cannot be registered because the caveat is in place. The notice also informs the caveator that he or she has a 21-day period in which to seek an order from the Supreme Court extending the caveat. If this is not done, the caveat lapses to the extent that it prevents another interest from being recorded.471 The Registrar-General records the lapsing in the Register. The caveat will continue to remain in place should the party lodging the dealing withdraw the dealing before the 21day period has expired.472 There are two other ways to remove a caveat. First, a caveat may also be removed by way of a lapsing notice that is not dependent on a dealing being lodged. Under this method, the registered proprietor of the land that is mentioned in the caveat may simply require that the Registrar-General serves a lapsing notice on the caveator.473 Once the lapsing notice is served, the caveator is given 21 days to obtain a court order extending the caveat.474 If no order is obtained from the court, the caveat will lapse and the lapsing is recorded in the Register pursuant to s 74J(4) of the Real Property Act. Lapsing via this method is more complete than under s 74I where lapsing is only to the extent that the caveat would prevent a dealing being recorded. [page 399] 8.148 The third method of removing a caveat is pursuant to s 74MA of the Real Property Act. This method is often seen as attractive because it does not involve the serving of a lapsing notice and is, therefore, speedier than using s

74I(1) or s 74J(1). Section 74MA(1) allows any person claiming an interest in the land described in the caveat to apply for an order that the caveat be withdrawn. The order is sought from the Supreme Court.475 The caveator may also remove the caveat himself or herself at any time. 8.149 If an instrument is awaiting registration and there is a caveat in place, the court will remove the caveat should it be demonstrated that the caveator has no interest enforceable against the holder of the instrument to be registered. A caveator should not be able to do more through use of a caveat than he or she would achieve if he or she actually invoked the assistance of the court. Hence, a subsequent equitable interest holder, such as a later mortgagee, would have no right to prevent a proper exercise of the power of sale by the use of a caveat, because, were he or she to seek the assistance of the court in order to achieve the same end, it would not be forthcoming.476 However, the court will not remove the caveat until the litigation is complete if, on the balance of convenience, it is convinced that the caveat should remain until the matter has been fully heard.477

Extending caveats 8.150 The provisions that allow a court to decide if a caveat should be removed or withdrawn also permit it to extend or retain the caveat.478 Where a lapsing notice has been served under ss 74I or 74J of the Real Property Act, the court may, under s 74K(2) of the Act, extend a caveat. However, the court will first need to be satisfied that the caveator’s claim ‘has or may have substance’. 8.151 In deciding if the caveat should be extended (under s 74K(2)),479 the court will have regard to whether there is an arguable case for final relief or, put another way, if there is a serious question to be tried.480 If that is established, the court will go on to consider whether, on the balance of convenience, the caveat should be retained.481 The onus lies on the caveator to demonstrate that his or her interest raises a serious question to be tried. Bryson J observed that the ‘serious question’ test is not ‘very demanding’.482 [page 400]

Re Jorss’ Caveat483 considered in what circumstances a caveat will be extended or removed484 and, in doing so, referred to Eng Mee Yong v Letchumanan485 where the Privy Council pointed out that it was appropriate to liken a caveat to an interlocutory injunction. In deciding whether it should extend or remove the caveat, the court will consider, among other issues, whether the caveator’s interest would still be protected if the caveat were removed.486 The court will also consider if there are other means by which the caveator’s interest could be protected. Other means could include the registered proprietor depositing funds into court as security.487 The caveator bears the onus of establishing that, on the balance of convenience, it is better that the caveat remains in place until a hearing decides the substantive matter itself. Accordingly, it is up to the court to decide if it is ‘just and convenient’488 to keep the caveat in place. In practice, courts commonly do find so and maintain caveats until the matter has been decided.489 Maintaining the caveat is effectively a case of preserving the status quo until such time as a substantive trial determines the dispute between the conflicting interests.490 Aitken, in commenting on the significance of the balance of convenience requirement, and by reliance on Chong v Chanell (No 2),491 noted that there is a key difference between an interlocutory injunction and a caveat.492 The difference is that if a caveatable interest is demonstrated, that may be decisive in and of itself, rendering any question of the ‘balance of convenience’ unnecessary. However, as he also noted, Tadrous v Tadrous commented that: … where there is a seriously arguable or even indisputable caveatable interest, the Court retains a discretion, based on the balance of convenience, as to whether it will maintain the caveat or require its withdrawal. Thus the circumstance that a caveator has a caveatable interest is not so conclusive that the caveat will not be removed, and the Court may order the withdrawal of an indisputably valid caveat where the balance of convenience favours that course.493

8.152 Even if there is a caveatable interest, the balance of convenience may dictate ordering withdrawal of the caveat in favour of a holder of superior security who wishes to exercise its power of sale on terms, for example.494 [page 401] It is usual practice in New South Wales for courts to require that the

caveator give an undertaking as to damages in order for the caveat to remain.495 This is normally given by the caveator personally. If the caveat is lodged without reasonable cause, pursuant to s 74P of the Real Property Act compensation will be payable should pecuniary loss be suffered that is attributable to circumstances referred to in s 74P(1)(a), (b) or (c). Section 74P was amended on 1 February 1997 to remove the word ‘wrongfully’. For caveats lodged after this date, this means the law returns to that contained in Bedford Properties Pty Ltd v Surgo Pty Ltd,496 where the term ‘reasonable cause’ seems to have been interpreted as an honest belief based on reasonable grounds that a caveatable interest exists. For caveats lodged before 1 February 1997, the test is contained in Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd,497 which discusses the more comprehensive term ‘wrongfully and without reasonable cause’ and concludes that ‘wrongfully’ means ‘a deliberate infringement of the rights of’ the caveatee. A caveator must attempt to mitigate loss. Further, undue delay or laches may lead to compensation being withheld.498

Other circumstances where caveats may be used 8.153 As explained above (at 8.136), caveats are usually used to prevent dealings in land, but s 74F of the Real Property Act refers to other circumstances where caveats might also be lodged. These include caveats against possessory applications (s 74F(3)) and delimitation plans (s 74F(4)).

Possessory applications 8.154 An adverse possessor may lodge a possessory application pursuant to s 45D(1) of the Real Property Act. If the Registrar-General grants the application, the adverse possessor will be recorded as the registered proprietor.499 However, before this occurs another party who claims a legal or equitable interest in the same land may lodge a caveat pursuant to s 74F(3) to prevent the granting of the possessory application. The general caveat provisions, discussed above, also apply to caveats against possessory applications.

Delimitation plans 8.155 As noted earlier, where the boundaries of land are insufficiently defined, the Registrar-General cannot create an ordinary folio. However, he or she can create a limited folio, pursuant to ss 28T and 3(1) of the Real Property Act.500 In short, the [page 402] Registrar-General records a ‘limitation’ in the folio that acknowledges that he or she has not investigated the description of the land. It is possible to lift the ‘limitation’ when a plan that properly defines the boundaries is lodged and registered. The plan of survey is known as a ‘delimitation’ plan. Sometimes a party may claim an interest in land that is the subject of a delimitation plan and may seek to prevent the limitation being lifted and an ordinary folio being created. In these circumstances, a caveat may be lodged pursuant to s 74F(4). While the caveat is in force, the RegistrarGeneral cannot register the delimitation plan, pursuant to s 74H(3). Caveats relating to delimitation provisions are subject to the general caveat provisions contained elsewhere in the statute and in other subsections of s 74F itself.

Native title 8.156 Native title is not specifically mentioned in s 74F of the Real Property Act or elsewhere as a circumstance in which it would be possible to lodge a caveat. However, where native title is characterised as an interest in property, it would seem the protection of a caveat would be possible. For example, if a native title holder wished to protect his or her interest from extinguishment brought about by later dealings with the land, it would seem that a caveat would be a useful tool, as long as the land in question had already been brought under the Torrens system and the native title itself had not been previously extinguished by virtue of a grant or surrender, for example.

Priority notices

8.157 The Real Property Amendment (Electronic Conveyancing) Act 2015 (NSW)501 inserted a new Pt 7B into the Real Property Act to establish a priority notice regime. Similar provisions commenced in South Australia and Victoria in 2015.502 Tasmania has had a priority notice regime since 1980.503 The Tasmanian regime is very similar to that in New South Wales, apart from the Tasmanian Act’s definition of ‘dealing’ that appears to extend the operation of notices in that state. Queensland has a system of settlement notices that operates in a similar manner to priority notices.504

Purpose 8.158 With the intended phasing out of paper certificates of title in New South Wales, possession of which generally prevents the registration of any other dealing with the land, a priority notice operates as a mechanism to reserve the priority of a party’s dealing. It is intended to give potential purchasers, and other parties, confidence that no other dealing will be able to be registered with priority over the party who has lodged the [page 403] notice.505 As the priority notice is recorded on the Register, it will also give notice of the lodging party’s interest, which, as discussed below, may be effective in preventing any later unregistered interest gaining priority.506

Effect 8.159 A priority notice prevents the Registrar-General registering a dealing on the relevant land in priority to the dealing described in the notice, other than the exceptions listed in s 74W(2) of the Real Property Act.507 The details of the priority notice are entered on the Register, giving any person searching the Register notice of the intended dealing.508 A priority notice is effective for 60 days from the date of its lodgment,509 or with a one-off extension of up to 90 days,510 at which point it may be removed by the Registrar-General511 and cannot be further extended.

The entitlement to lodge a priority notice is expressed in s 74T of the Real Property Act as extending to parties who ‘intend to lodge a dealing’. A ‘dealing’ is defined in the Act as a transaction that is ‘registrable or capable of being made registrable’.512 The definition of ‘dealing’ expressly excludes a caveat, or priority notice, and so the lodging of a priority notice does not preclude another party lodging a conflicting priority notice, or another (or the same) party lodging a caveat. The requirement that the dealing be ‘registrable or capable of being made registrable’ means that the entitlement to lodge a priority notice may arise at the exchange of contracts. The Registrar-General’s Guidelines513 refer to ‘proposed dealings intended to be lodged’. The effect of ‘capable of being registerable’ would seem to suggest, however, that the intention must be able to be given almost immediate effect, and not at some point in the future. Therefore, the entitlement to lodge a priority notice is unlikely to arise at the point of an offer being made. The exclusion of a caveat from the definition of ‘dealing’ in s 3(1) means that the practice of using a priority notice to secure priority for a party’s caveat, which would [page 404] appear to have been adopted in Tasmania,514 will not be available in New South Wales. The requirement for priority notices to be presented by a person who intends to ‘lodge a dealing’ also means that a caveat will remain the most appropriate method of a current registered proprietor protecting their interests (for example in the case of a registered mortgagor seeking to prevent the improper exercise of the power of sale by a mortgagee).

Lapsing, withdrawal and removal of priority notices 8.160 A priority notice may be withdrawn by the party lodging it,515 or may be removed by the Registrar-General once the dealing protected by the notice has been lodged.516 The Registrar-General may also remove the notice if it has been lodged

over the wrong land517 or the party who has lodged the notice fails to provide any further information under s 74T(5) of the Real Property Act.518 The notice may also be removed once 60 days (or 90 in the case of an extension) has elapsed since lodgment, or if the Registrar-General considers that the dealing protected by the priority notice will not be lodged before that time.519 However, there is no discussion in the amendments, or any of the associated material, about how the Registrar-General will determine whether a dealing is unlikely to be lodged. An order that the notice be withdrawn may also be sought before the Supreme Court.520 Although the section reflects the same provision which operates for proceedings to remove a caveat, the same detailed requirements for service have not been replicated or applied in relation to Pt 7B of the Real Property Act.521 However, given the similar nature of the proceedings, and the consequences of removal of a priority notice, it would seem be prudent to follow the same requirements for service as in Pt 7A. A party lodging a priority notice, or refusing to withdraw it, ‘without reasonable cause’ may be liable to pay compensation to any other person who has suffered loss as a result of the lodgment or refusal.522 The provision mirrors s 74P of the Act, which is applicable to caveats. While the use of the same formulation may suggest that the same approach taken in Bedford Properties Pty Ltd v Surgo Pty Ltd523 should apply, the operation of priority notices [page 405] and caveats is very different. Because of the narrower application of priority notices, the party lodging may instead need to be able to demonstrate an ‘honest belief based on reasonable grounds’524 that their dealing is registrable or capable of being registrable, rather than simply a caveatable interest.

Competition between unregistered interests Which unregistered interest should prevail? 8.161

As we observed above, under the Torrens system some unregistered

interests may be legal interests (such as a lease under s 23D(2) of the Conveyancing Act 1919 (NSW)) while others are more loosely referred to as equitable interests. However, as the recognition of unregistered interests under the Torrens system flows from an entitlement in equity of the holder of an unregistered interest to enforce that interest, traditionally all unregistered interests have been described as ‘equitable’ interests.525 Accordingly, the established method of resolving priority disputes has been to treat the competition as though it were one involving two competing equitable interests, and so applying the maxim qui prior est tempore potior est jure: if the equities are equal, the first time in time prevails. The burden under the test, therefore, lies on the holder of the later interest to demonstrate that the first in time interest should be postponed in favour of the later interest. 8.162 As discussed previously in Chapter 7, in applying the ‘first in time’ rule, the primary emphasis placed on temporal sequence has come to be regarded as a little crude, and there has been a shift in favour of considering the merits (or ‘better equity) of the two competing interests.526 This does not mean that the court’s task is to search for ‘mere unfairness’527 in the outcome. Rather, the inquiry is directed towards a consideration of whether unfairness results from an act or omission of the earlier interest holder that might have had the effect of inducing the later interest holder to act to his or her prejudice.528 The consideration of all the circumstances of the case also means a better equity may also be established by demonstrating that the competing party has a worse equity. To establish this, it is proper to consider both meritorious conduct and disentitling conduct of both parties.529 In the following sections, we will consider some of the factors that may ‘tip the balance’ in the contest to prove a better equity as between two competing unregistered interests.530 [page 406]

Arming conduct 8.163 As discussed in Chapter 7, one well established instance of postponing conduct is a vendor arming a third party with the means of

creating the later instance. The facts of Heid v Reliance Finance Corp Pty Ltd531 are illustrative. In that case, Mr Heid was registered proprietor of the fee simple, and agreed orally to sell the land to Connell Investments. He signed an executed memorandum of transfer, which stated that the purchase price had been paid, and provided the certificate of title to Mr Gibby, an employee of Connell Investments who had been described as the ‘company solicitor’. Gibby utilised those documents to raise money through a memorandum of mortgage with Reliance Finance Corporation Pty Ltd (Reliance). A priority dispute therefore arose between Heid’s unregistered vendor’s lien, and Reliance’s unregistered mortgage. The High Court held that, by arming Connell Investments with the means to create Reliance’s interest, Heid committed postponing conduct. In the course of their reasoning, Mason and Deane JJ emphasised that it was ‘established practice in conveyancing transactions’ for a client to entrust his [or her] solicitor to deal with the documents.532 Accordingly, ‘fairness and justice’ might require that Heid’s conduct could have been excused had he executed the transfer documents and entrusted these to a qualified solicitor, acting on his behalf alone. To find otherwise, Mason and Deane JJ concluded, would ‘entail delay and complexity in the completion of conveyancing transactions [and s]eemingly the vendor would always need to be present’.533 However, the facts in the case were ‘far removed’ from such a ‘usual’ transaction, for in Heid Gibby was acting for both parties, and was an employee of the purchaser, and was not in fact a solicitor. Other illustrations of arming conduct include: giving another party the means to deal with the estate as though that party were the legal and equitable owner;534 giving a receipt but not collecting the purchase price;535 or failing to obtain title deeds at all.536 Establishing arming conduct is, therefore, a means of demonstrating that one unregistered interest holder has a better equity than the other.

Failure to caveat 8.164 Another method of discriminating between two competing unregistered interests for the purposes of a priority dispute is to consider the impact of a failure to caveat. For example, imagine a situation in which a vendor enters into a contract for the sale of land with ‘Purchaser 1’ and then,

before Purchaser 1 has registered his or her interest, the vendor enters into another contract with ‘Purchaser 2’ for the sale of the same land. A search of the Register by Purchaser 2 would not alert him or her to the antecedent interest of Purchaser 1, unless Purchaser 1 has lodged a caveat. By failing to lodge a caveat at the time [page 407] that his or her interest was created, Purchaser 1 may be said to have put the registered proprietor in the position to be able to go out into the world and create another interest in favour of Purchaser 2. Hence, New South Wales courts tend to favour Purchaser 2 over Purchaser 1 in such a scenario.537 It is interesting that this approach prevails even though, in New South Wales, caveats are not routinely lodged as soon as the purchaser acquires an interest in property. Instead, caveats tend to be lodged when circumstances appear to suggest that it would be prudent to do so, for example, when: the purchaser has reason to mistrust the vendor; there is a longer than usual settlement period; or the deposit is released. 8.165 There is no duty to caveat, and a ‘mere failure’538 to caveat does not automatically involve the loss of priority.539 However, in certain circumstances a failure by the prior interest holder to caveat, to fail to caveat in a timely manner, may cause the prior interest holder to lose priority. In Butler v Fairclough,540 for example, the dispute was between a purchaser (prior to registration) and a party who had a charge over the land. Both interests were unregistered. The purchaser searched the Register and found no record of any caveat. However, a few days later, the mortgagee/encumbrancer (party with charge) lodged a caveat to protect his interest. The High Court held in that case that, because the mortgagee had failed to caveat his interest before the purchaser had paid the purchase money and received the transfer, the caveat did not protect the mortgagee/encumbrancer’s interest as against the purchaser’s interest. The mortgagee/encumbrancer’s interest was postponed.541 8.166

The possibility that a failure to caveat will cause postponement is also

explored in Abigail v Lapin.542 In that case, the Lapins executed a transfer to Heavener. Although on its face an absolute transfer of the Lapins’ interest, this instrument was was only ever meant to be as security for a loan, and hence it was supposed to be redeemable on repayment of the loan. Instead, Heavener treated the transfer as though she was genuinely the title holder and mortgaged the land to Abigail, who was not aware of the Lapins’ interest, since [page 408] the Lapins had not lodged a caveat. The mortgage between Heavener and Abigail was not registered; so, when the Lapins sought to claim priority, the dispute was characterised as one between two competing unregistered interests. The court held that Abigail’s interest should prevail because, not only had the Lapins armed Heavener with the indicia of title, but they had also failed to lodge a caveat to protect their equity of redemption. While there was never a suggestion by the court that it is compulsory to lodge a caveat, it was nevertheless the case that lodging a caveat would have had the effect of alerting Abigail to the Lapins’ interest and this was relevant to determining which party had the better equity. 8.167 In J & H Just (Holdings) Pty Ltd v Bank of New South Wales,543 the bank did not register the mortgage it took, but instead took the certificate of title into custody. When another unregistered interest came into existence and a subsequent priority dispute arose, the court held that the bank’s interest would not be postponed, although it had failed to lodge a caveat. The court considered what would be prudent conduct on the part of a person acquiring a later interest, and held that any prudent later purchaser would demand to see the certificate of title. When told that it was at the bank, a prudent purchaser would approach the bank in order to see it because of the possibility of a competing interest.544 The court in J & H Just was aware that its decision did not square easily with Griffith CJ’s words in Butler (which referred to the consequences of failing to caveat), and hence it confined Griffith CJ’s words to circumstances where the later unregistered interest holder could not be put on guard.545

Further, the court in J & H Just revisited the reasoning offered for the decision in Abigail v Lapin and found that Abigail had not been decided on the basis of the effect of the failure to caveat, but rather on the basis of the Lapins’ arming conduct. This same reasoning was applied in Breskvar v Wall.546 8.168 In New South Wales, the law is therefore that a failure to caveat will not, of itself, cause a party to lose priority, but that a failure to caveat will be one of the issues taken into consideration in deciding which party (according to the Rice v Rice test) has the better equity.547 If it can be demonstrated that a failure to caveat led the later interest holder to assume mistakenly that no prior interest existed, postponement will occur.548 Postponement [page 409] will also occur if an already-lodged caveat is withdrawn and the government department responsible for administering land title has no internal procedural mechanism in place to reveal the withdrawal of that caveat.549 Yet, if the earlier unregistered interest holder engaged in some other protective strategy to ensure that persons dealing later with the registered proprietor would be likely to discover the earlier interest, he or she will retain priority.550 Such action may include, for example, remaining in possession of the property. For example, Perpetual Trustee Co Ltd v Smith551 concerned retirees entering into reverse mortgages of their homes, under which they sold their houses to Money for Living Australia Property Holdings Pty Ltd in consideration for a lump sum payment and a lease for life in their former homes. Moore and Stone JJ held that failure to caveat was not priority-losing conduct in that case. This was because the retirees’ continued occupation of the properties, in addition to the name of the company that held the fee simple interest, was sufficient means to alert any future purchaser or mortgagee of the retirees’ interest in the property. Equally, if it can be demonstrated that the later interest holder failed to search the register, failure by the first interest holder to lodge a caveat will not be postponing conduct. This is because the failure to caveat will have had no bearing on the acquisition of the later interests in a mistaken belief of the non-existence of the earlier interest.552

Failure to lodge a priority notice 8.169 While a priority notice has the same practical effect as a caveat in terms of preventing dealings with land, there has yet to be judicial discussion on whether failure to lodge a priority notice, or a settlement notice in Queensland, may postpone the holder of that interest. However, the expectation that lodgment of a priority notice is, or will become, common conveyancing practice has been discussed in both New South Wales and other jurisdictions. For example, in Queensland where there is a similar settlement notice regime in place, ‘[i]t is accepted as prudent conveyancing practice that a settlement notice should be lodged in all cases before settlement’.553 While expressing no view on practice, the Land Title Practice Manual (Queensland) in 2016 emphasised the significance of lodging a settlement notice to the parties where there is no paper certificate of title, in the following terms: Settlement notices are of primary importance in cases where a contract for the sale of a registered interest in a freehold title is imminent and there is no duplicate Certificate of Title issued from the registry.554

[page 410] Given the relatively recent introduction of priority notices in South Australia and Victoria, there are few statements on practice. On the introduction of the amendments in Victoria, the Attorney-General noted in 2014 that priority notices are ‘expected to become a standard part of prudent conveyancing practice in Victoria’.555 No similar statement was made on the introduction of the amendments in South Australia, although the Legal Commission of South Australia noted in 2015 that lodging a priority notice ‘may become a matter of good conveyancing practice’.556 In New South Wales, the Minister for Services and Property for made a similar statement to the Victorian Attorney-General, noting that: While the lodgment of a priority notice will be optional, it is expected that parties buying a property will seek to protect their interests to the full extent possible by lodging a priority notice. Therefore the use of priority notices will become an integral consideration in prudent conveyancing practice.557

In light of these statements, should priority notices become a standard

feature in conveyancing practice, it would seem likely that the effect of failure to lodge a priority notice will be treated according to similar principles that apply with respect to failure to caveat.

Notice of the existence of a prior interest and priority disputes 8.170 Another of the factors to be considered in determining priority between competing unregistered interests is whether the later interest holder had notice of the prior interest at the time he or she acquired his or her equitable interest.558 Normally, a later unregistered interest holder who has actual notice of a prior unregistered interest will not succeed in demonstrating a better equity because the later unregistered interest holder’s conscience is bound by the notice he or she has received. Moffett v Dillon559 illustrates this proposition.560 In Perpetual Trustee Co Ltd v Smith,561 Moore and Stone JJ concluded that, on the facts of that case, it ‘beggar[ed] belief’ that the later interest did not, ‘at the very least’ have constructive notice of the earlier interest, and so drew the ‘inescapable inference’ that Perpetual did have notice.562 However, it appears that their Honours did not treat [page 411] something short of actual notice as operating as a clear and automatic factor that would deprive the later interest of priority. In that case, their Honours also discussed at length the principles regarding failure to caveat, and concluded that, in light of the retirees’ possession, the absence of an obligation to caveat under current New South Wales principles, and Perpetual’s constructive notice of the retirees’ interest, the prior interest of the retirees would prevail.

Section 43A of the Real Property Act 8.171 The general position is that before registration takes place, a contest between competing unregistered interests is resolved by reliance on old system

priorities rules.563 In the period before registration, we have seen that the balance of equities that exist between two component unregistered interests may be altered, for example, by arming or postponing conduct, the lodgment of a caveat, the lodgment of a priority notice, or notice. However, the resolution of priorities between two competing unregistered interests in the period between settlement and registration is more complex because of intervention of s 43A of the Real Property Act. Under the Torrens system, when a purchaser enters into a contract for the sale of land and completes the purchase, but before the purchaser’s interest is registered, that purchaser holds an equitable interest. But for s 43A, a priority dispute between this preregistration interest and another competing equitable interest would be resolved according to the tests in Rice v Rice and Heid v Reliance Finance Corp Pty Ltd, as discussed above. However, under old system title it is the deed of conveyance that transfers the title. Hence, under old system title, if a priority dispute arises after a purchase is completed, the dispute is characterised as one between an earlier equitable interest and a later legal interest. In those circumstances, the later legal interest prevails if the purchaser is a bona fide purchaser who takes for value without notice of the earlier equitable interest.564 8.172 The purpose of s 43A is to align the position of the purchaser on settlement under Torrens title with the purchaser in the same position under old system title. In John Alexander’s Clubs v White City Tennis Club, the High Court observed, however, that ‘[t]he text of s 43A is so drawn as to have given rise to notorious difficulties in construction’.565 The section states: (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.

Thus, according to s 43A, the importation of old system principles is relevant only for the period between settlement and registration, and only so far as the question of notice is concerned. That s 43A is meant to apply during this gap is evident from the court’s [page 412]

words in Courtenay v Austin,566 where it stated that the section affords protection against unregistered estates or interests of which no notice was acquired before settlement but of which notice was or might be received after settlement and before registration of the particular dealing.567 Section 43A protection is significant, because the so-called ‘notice’ provision of the Real Property Act, s 43, has been interpreted so as to apply to provide protection against notice only on registration.568 Section 43A therefore provides the purchaser with protection against notice, if its terms are met. That is, for protection to apply, the purchaser must have a ‘dealing registrable’. These requirements are discussed below. 8.173 Section 43A requires that protection is provided only to a person who takes a ‘dealing registrable’. In New South Wales, this means that the dealing must be accompanied by the certificate of title and it must be registrable straight away without further steps having to be taken.569 The cases tend to suggest that the court will try to find the dealing registrable wherever possible, and so minor errors of form that may be overlooked by the Registrar-General constitute a breach of the ‘registrable dealing’ requirement. For example, in Zisti v Ryde Joinery Pty Ltd,570 Young J (in obiter) stated that a dealing, which was written in red ink and hence contravened the regulations requiring that it be written in black or blue ink, would still constitute a ‘dealing registrable’ for the purposes of s 43A. 8.174 If the dealing is void, the issue of whether s 43A protection is available arises. Jonray (Sydney) v Partridge Bros571 suggested that, if the purchaser does not have notice of a forged dealing (eg, the purchaser does not have notice of the forgery until after completion) the dealing is still to be regarded as registrable — although the court points out that the true proprietor could ‘probably prevent’ registration. In a decision dealing with a similar situation, Street J in Mayer v Coe572 stated that if the registered proprietor had had notice of a forged mortgage in the hiatus after settlement but before registration, there ‘may well have been’ personal equities on which she could have relied to prevent registration. Presumably the same reasoning would apply if the instrument were void for reasons other than forgery.573 [page 413]

8.175 Further, the ‘dealing registrable’ must be taken directly from the registered proprietor. Therefore, if a person is in the process of buying property and immediately on-selling an interest in it before his or her interest has been registered (eg, granting a mortgage to an incoming mortgagee, or on-selling to a second purchaser) anyone dealing with that unregistered purchaser will not directly receive the benefits of s 43A protection. The incoming mortgagee, or second purchaser, would not be dealing directly with the registered proprietor of the fee simple estate. For example: if a registered proprietor, R, were selling to P, a purchaser, who had completed but not yet registered, P would be protected from notice of a prior equitable interest in the gap between completion and registration. If, however, P on-sold to N (the next or second purchaser) in that gap period, N could not obtain the benefits of s 43A because N’s interest would not be registrable until P had registered the interest he or she took from R. 8.176 Jonray Pty Ltd v Partridge Bros Pty Ltd574 discussed how the court may offer protection to a purchaser in N’s position. Jonray’s case was, however, not one that involved on-selling but rather one that involved a prior mortgage followed by a sale. In that case, the purchaser took an interest that was encumbered by a registered mortgage. That mortgage was to be discharged on completion of the purchase. This is not an unfamiliar fact situation, given that most vendors do not own their properties free from encumbrances. In Jonray’s case, the court held that a purchaser could be entitled to protection from defects in the mortgage discharge if an equity or equitable interest were held to have arisen. However, in order to receive protection, the mortgagor/vendor must not have notice of the defect when he or she takes the discharge of mortgage as a registrable instrument. If the mortgagor has no notice of the defect, the court will hold that the protection normally afforded to the mortgagor can be extended to a person claiming under the mortgage, such as the purchaser. 8.177 The application of s 43A in Jonray’s case has been referred to as the ‘successive effect’ doctrine.575 It means that if the mortgagor or first purchaser, who has completed (but not registered) an interest taken from the holder of the registered fee simple, has the benefit of the doctrine that protects a bona fide purchaser for value without notice, then someone who claims under him or her, such as the next or second purchaser (N in our earlier example), will

also receive the benefit of that protection. The successive effect doctrine is an application of the principle in Wilkes v Spooner,576 a principle that allows the second purchaser (N) to shelter under the protection already afforded to the party from whom he or she is taking an interest, even though N has notice of a prior equitable interest.577 If, however, the first purchaser or mortgagor is not entitled to the benefit of [page 414] s 43A protection, there is no protection under which the second purchaser can shelter and, hence, the Wilkes v Spooner doctrine will not apply. 8.178 There is some contention as to how the term ‘legal estate’ should be interpreted in relation to s 43A. The issue was discussed in IAC (Finance) Pty Ltd v Courtenay,578 where a transfer in favour of the Courtenays, the first equitable interest holders, was lodged for registration, but was withdrawn by the mortgagee’s solicitor before it was registered. In the meantime, a second equitable interest was created, and its holder sought to register. While the second equitable interest holder was awaiting registration, the Courtenays lodged a caveat over their interest, which prevented registration of the second equitable interest. The key dispute over the definition of ‘legal estate’ lies in the difference of opinion between Kitto and Taylor JJ. 8.179

Kitto J’s interpretation of ‘legal estate’ in s 43A in Courtenay was that:

The estate or interest “taken” under an unregistered interest must therefore mean the estate or interest which the instrument on its true construction purports to confer, and upon its being registered will confer. That estate or interest is given by s 43A the same immunity from the effect of notice as s 43 provides for registered estates or interests in virtue of their being legal estates or interests.579

On this construction, the unregistered interest is still to be treated as an unregistered interest, but one that, before registration, will receive the type of protection that is afforded by s 43. Thus, if the purchaser received notice of an unregistered interest before settlement but had not yet registered the dealing, under Kitto J’s view s 43A provides the purchaser with s 43-style protection and that would allow him or her to block the registration of an unregistered interest.580

8.180 On the other hand, according to Taylor J in Courtenay, ‘legal estate’ means an old system legal estate. This interpretation would allow the invocation of the ‘bona fide purchaser for value without notice’ doctrine. Hence, the Torrens purchaser who has completed but not registered his or her interest could defeat an earlier equitable interest holder if he or she were a bona fide purchaser for value without notice at the date of completion.581 However, if a purchaser received notice of an unregistered interest before settlement (ie, completion) the priority would be worked out pursuant to the rule in Rice v Rice,582 because the competition would be between two equitable interests.583 8.181 Notice under Taylor J’s approach in Courtenay is ‘general law notice’, that is, actual, constructive or imputed notice of the interest. The question of constructive notice [page 415] is discussed in Stone Leaf Capital v Daley.584 There, the holder of the earlier unregistered interest had caveated their interest, but subsequently withdrew the caveat prior to the creation of the second unregistered interest. The court reasoned that: There was no evidence that the usual practice of conveyancers in such circumstances would be to make inquiries of the caveators to investigate why they had withdrawn the caveats, or to investigate whether the claimed debts had been repaid, or to ask whether the caveators still maintained an interest in the land, notwithstanding the withdrawl of the caveats. Such inquiries would not be reasonable. It would defeat a central tenet of the Torrens system if a purchaser were required to go to such lengths to obtain the protection of s 43A, that tenet being that parties are entitled to rely on the state of the register.585

Accordingly, the purchaser in Stone Leaf could not be said to be fixed with constructive notice of the earlier interest. In Westpac Banking Corporation v Ollis,586 the court also confirmed that ‘purchaser’ in this context means purchaser for value. In New South Wales, cases decided after Courtenay have followed Taylor J’s construction of s 43A.587 This would seem appropriate, as to do otherwise has the effect of devaluing registration and its accompanying benefits, and unnecessarily extends the ambit of protection from unregistered interests.

Priority notices and s 43A 8.182 Priority notices would appear to provide an additional, optional layer of protection to that provided by s 43A of the Real Property Act. Lodging a priority notice provides a practical means of giving effect to the protection provided to unregistered interest holders. At the same time, s 43A will still operate in the event that a party is slow to lodge a priority notice. The introduction of electronic conveyancing may require some reconsideration of what ‘registrable’ means for the purposes of s 43A. Previous approaches have emphasised the requirement for a certificate of title and the transferor’s signature. However, to the extent that the requirement is for the dealing to be ‘registrable’, based on statutory requirements588 and the Registrar-General’s practice,589 the Registrar-General [page 416] has already begun to issue guidelines concerning transactions where there is no paper certificate of Title. These guidelines require instead the consent of the party controlling the right to deal with the land.590 The digital signature of legal practitioners and conveyancers completing transactions online are already deemed to have the same effect as their client.591 As further transactions are permitted to be conducted online, further amendments and directions concerning the Registrar-General’s practice are likely to be issued.

Torrens Assurance Fund — Pt 14 of the Real Property Act 1900 (NSW) 8.183 According to the key author of the Torrens system, Sir Robert Torrens, the purpose of the Torrens compensation scheme was to complement the indefeasibility of title principle.592 This was considered necessary because, while the scheme assured registered proprietors of good title, sometimes proprietors were deprived of their interests when land was

transferred from old system title to Torrens title. Where deprivation occurred, the compensation scheme was supposed to redress loss. Indeed, according to a submission of the then Land Titles Office to the New South Wales Law Reform Commission, ‘the indefeasibility and compensation provisions of the Real Property Act 1900 have a logical and inseparable connection’.593 However, it has also been suggested that an alternative reason for the introduction of the compensation scheme was to redress opposition from early detractors of the Torrens scheme and, hence, provide for the ‘smooth and economic flow of business’.594 There is some merit in this latter view, given that access to the Torrens Assurance Fund was historically quite restricted. The view that the fund was never seriously designed to offer redress remains open, but figures on more recent pay-outs from the fund suggest that this view is increasingly problematic in relation to the fund’s operation today.595 [page 417] 8.184 An assurance fund has been part of New South Wales land law since the introduction of the Torrens system. However, the circumstances in which it has been or is likely to be used have changed somewhat over time. Whereas, initially, it was perhaps envisaged that the Torrens Assurance Fund would largely be accessed by those parties who would not have suffered loss had their land been held under old system title,596 such types of claims are unusual today. These days more claims are brought in other circumstances: … the Torrens Assurance Fund provides monetary compensation … to a person who is deprived of land by the operation of the Torrens System [and] also [provides compensation] to a person who suffers loss through a mistake in the Land Titles Office or through an error, omission or misdescription in the register of titles.597

8.185 That losses will rather than could be suffered as a result of the errors and inadvertent acts of the public officers administering the Torrens system is perhaps evident in the choice of name for the compensatory scheme. It is an ‘assurance’ fund not an ‘insurance’ fund, because ‘assurance’ applies to events that will certainly happen, in contrast to ‘insurance’, which is reserved for events that may or may not happen.598 8.186

The general purpose of the Torrens Assurance Fund has been said to

be ‘compensat[ing] persons who, without any fault of their own, may have been deprived of property’.599 Yet, in practice, many losses occur to people who are not responsible for them, while those losses remain noncompensable. For example, although a person may suffer loss (a) because an overriding statute has caused his or her interest to be defeasible, or (b) because of the operation of the Real Property Act, recompense may not necessarily be available through the fund.600 8.187 Over the years, different assurance funds have existed, although much of the literature and the Real Property Act itself tends to speak as though the Torrens Assurance Fund has been in continuous existence since the Torrens system was introduced into New South Wales. In reality, that is not so. Indeed, the original assurance fund was closed in 1906 and the moneys transferred to the Closer Settlement Fund.601 Later, this fund was also renamed. As for the moneys in the fund, they too have transferred between being held directly by the fund and being part of consolidated revenue. In 1987, fund moneys were transferred to consolidated revenue, but since 1992, the compensation scheme has once again relied on money held in a separate assurance fund (known as the Torrens Assurance Fund), as distinct from consolidated revenue.602 [page 418] However, irrespective of where money has been held, one of the main problems with the pre-2000 legislation covering the assurance scheme was the difficulty of gaining access to the money at all.603 Under the old provisions, an applicant had to embark on costly and ultimately fruitless litigation to prove that one section of the Act was inapplicable to his or her circumstances before he or she could change course and commence proceedings against the Registrar-General for damages. In a sense, the applicant was forced into a dead-end before a better course of action became available. Bryson J in Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd commented that:

… the workings of the previous legislative scheme encountered considerable practical difficulties in the course of public administration with complex and technical litigation in which the assurance fund was zealously defended and appeals were common, so that recourse to the assurance fund, where workings of the Torrens System imposed losses, was not yet readily available.604

Key sections of the Real Property Act — ss 120 and 129 Part 14 s 120 8.188 Section 120(2) of the Real Property Act, which is part of the suite of reforms introduced in 2000605 and operates in conjunction with s 120(1), now states that proceedings may be initiated in the Supreme Court ‘against the person whose acts or omissions have given rise to the loss or damage’ or directly against the Registrar-General.606 Section 120(1) spells out the circumstances in which a person may commence proceedings for compensation. These circumstances are where there is: (a)

fraud, or

(b) any error, misdescription or omission in the Register, or (c) the land being brought under the provisions of this Act, or (d) the registration (otherwise than under section 45E) of some other person as proprietor of the land, estate or interest …

Importantly, this section requires that loss be suffered ‘as a result of’ the operation of the Real Property Act. [page 419] Section 120 takes away the former initial compulsory dead-end approach, but it has become doubtful whether the section acts as it was intended to; that is, by liberating the applicant from unnecessarily complicated and technical requirements that served to both obstruct justice and act as a disincentive in the pursuit of claims. In practice, it seems that the provision may be proving to be redundant because it does not give rise to a cause of action itself.607 According to Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd,608 s 120 simply authorises proceedings that, if successful, will result in

damages. Given that a claim for damages may be brought under the general law, the role of s 120 is therefore somewhat unclear.

Part 14 s 129 8.189 Section 129 of the Real Property Act provides a remedy against the Torrens Assurance Fund by way of an action against the Registrar-General. A claim under s 129 does not preclude a claimant also bringing a claim directly against third parties for the same loss. There also no requirement to pursue a claim under s 129 before suing third parties (ie, there is no requirement to demonstrate a ‘dead end’). Like s 120 of the Real Property Act, the loss pursuant to s 129 must also be loss or damage in respect of an interest in land, suffered as result of the operation of the Act. For the loss to be applicable under s 129 it must, according to s 129(1), arise from: (a)

any act or omission of the Registrar-General in the execution or performance of his or her functions or duties under this Act in relation to the land, or

(b) the registration (otherwise than under section 45E) of some other person as proprietor of the land, or of any estate or interest in the land, or (c) any error, misdescription or omission in the Register in relation to the land, or (d) the land having been brought under the provisions of this Act, or (e) the person having been deprived of the land, or of any estate or interest in the land, as a consequence of fraud, or (f)

an error or omission in an official search in relation to the land, or

(g) any error of the Registrar-General in recording details supplied in the notice referred to in section 39(1B).

8.190 It is notable that an award of costs under s 129(1) is not discretionary.609 8.191 Sections 120 and 129 require a connection between the Act’s operation and the loss suffered. What is the requisite causal connection?610 It would seem from Kirkland [page 420] v Quinross Pty Ltd611 that it is sufficient to demonstrate that the ‘operation of

this Act’ materially contributes to the loss or damage. It would not appear necessary to establish that the Act is the dominant cause of the loss or damage. From a practical perspective, loss by way of the operation of the Act is commonly loss suffered by the registration of another, later interest under the Act. Although s 129 is more broadly drafted than a similar section prior to the 2000 reforms, there remains an extensive list of circumstances in which compensation is not payable. Those circumstances are recorded in s 129(2). They are loss or damage suffered by any person: (a)

to the extent to which the loss or damage is a consequence of any act or omission by that person, or

(b) to the extent to which the loss or damage: (i)

is a consequence of any fraudulent, wilful or negligent act or omission by any solicitor, licensed conveyancer, real estate agent or information broker, and

(ii) is compensable under an indemnity given by a professional indemnity insurer, or (c) to the extent to which that person has failed to mitigate the loss or damage, or (d) to the extent to which the loss or damage has been offset by some other benefit to that person that has arisen from substantially the same circumstances as those from which the loss or damage has arisen, or (e) where the loss or damage arises because of an error or miscalculation in the measurement of land, or (f)

where the loss or damage arises from: (i)

the breach by a registered proprietor of any trust (whether express, implied or constructive), or

(ii) the inclusion of the same land in two or more grants, or (g) where the loss or damage arises from the recording, or the omitting to record, in the Register of an approved determination of native title or other matter relating to native title rights and interests, or (h) where the loss or damage arises from circumstances in respect of which this Act provides that proceedings against the Registrar-General do not lie, or (i)

where the loss or damage arises from an error contained in a plan lodged in accordance with Division 3C of Part 2 of the Conveyancing Act 1919, or

(j)

where the loss or damage arises from the person’s failure, as mortgagee or transferee of a mortgage, to comply with section 56C or from the cancellation of a recording with respect to a mortgage in accordance with section 56C(6), or

(k) where the loss or damage arises from the recording of a Registrar-General’s caveat in the Register under section 12(1)(e) or (f) or the removal of such a caveat by the RegistrarGeneral, or (l)

where the loss or damage arises from the execution of an instrument by an attorney (under

a power of attorney) acting contrary to, or outside of, the authority conferred on him or her by the power of attorney, or

[page 421] (m) where the loss or damage is the result of an easement not being recorded in the Register (except where the easement is not recorded in the Register due to an error of the Registrar-General), or (n) where the loss or damage arises from the improper exercise of a power of sale, or (o) where the loss or damage arises from the operation of section 129 of the Corporations Act 2001 of the Commonwealth, or (p) where the loss or damage arises from the provision by the Registrar-General of information supplied in the notice referred to in section 39(1B) (subject to subsection (1)(g)).

Fraud and the Torrens Assurance Fund 8.192 As fraud is retained as one of the bases for compensation, the amendments may also preserve the relevant case law on fraud. The extent to which this is so will emerge over time, as the amending provisions are judicially interpreted. Until courts provide that interpretation, the case law on the old provisions would seem to offer some guidance. Accordingly, it is discussed below. In Parker v Registrar-General,612 proceedings were brought against the Registrar-General under the pre-2000 s 126, and fraud was found to have a broad meaning, including both legal and equitable fraud. The meaning of fraud, therefore, is broader under ss 120 and 129 of the Real Property Act than it is under s 42 of the Act, for example. Yet, Registrar of Titles (WA) v Franzon613 still required that the fraud be ‘brought home to’ the person who registered as a result of the fraud. If Franzon’s case is applied to the amended legislation, it will also be the position that a partial deprivation of an estate or interest in land will be sufficient to satisfy the requirements of s 129(1)(e).614 Further, as the fraud has to be ‘brought home’ to the party who became registered as a result of it, an innocent party who becomes registered through the fraud of another could not bring an action under s 120(1). The wronged party would have an action

against the party who committed the fraud under s 120,615 or the wronged party could bring an action against the Registrar-General by relying on s 129. 8.193 Pedulla v Panetta616 provides an example of a case where the court found fraud relevant for the purposes of s 129. The plaintiff, Ms Pedulla, resided in cloisters with an order of nuns, in Italy. While she was in cloisters, her brother, Mr Panetta, with the assistance of his solicitor, fraudulently transferred the title of her property to himself. A series of mortgages were then executed by the brother, using the property as security. The brother then travelled to Italy where the plaintiff was nursing their dying father. The brother’s wife, Mrs Panetta, who had become a joint registered proprietor along with [page 422] her husband, Mr Panetta, stayed in Sydney and arranged for the sale of the property, for $3.8 million. Contracts were exchanged. Pembroke J found that ‘the plaintiff knew none of this’.617 Three days later, however, her brother revealed to her that she no longer owned her home. Shortly after this, the position became irretrievable when the transfer to the new owners was registered. Ultimately, the plaintiff brought a claim against the Torrens Assurance Fund. His Honour found that there were three relevant limitations in relation to her s 129(1) claim for loss suffered as a result of the operation of the Act ‘in circumstances where, among other things, the loss arises from her “having been deprived of the land … as a consequence of fraud”’. 618 The relevant limitations were that: (i) the compensation was limited to the market value of the property; (ii) her loss was not occasioned by her own acts or omissions (a limitation that the court chose not to read literally by invoking the analysis in Chandra v Perpetual Trustees Victoria Ltd);619 and (iii) the compensation is not payable in relation to any loss or damage that is compensable under an indemnity given by a professional indemnity insurer.620 On the facts, Pembroke J established the fraud and found that the plaintiff did not fall foul of the relevant restrictions contained in s 129(2). Accordingly,

the plaintiff’s claim for $3.8 million against the Torrens Assurance Fund was successful.621

Interest in land 8.194 As s 129(1)(e) of the Real Property Act maintains the requirement of a deprivation of an estate or interest in land from the earlier provisions, Robinson v Registrar-General622 would appear to remain relevant. It found that an unregistered interest, such as that of a purchaser under a contract for sale, would be sufficient to satisfy the requirement of ‘an interest in land’. In coming to his conclusion in Armour v Penrith Projects,623 Needham J commented that the Real Property Act ‘lacks an essential protection to persons who are defrauded in their interests in registered land being taken from them by forgery’. Fortunately, these concerns were somewhat redressed in New South Wales by the decision in Saade v Registrar-General that, among other things, distinguished Franzon’s interpretation of ‘erroneous registration’ and effectively broadened the group to whom compensation was payable.624 [page 423]

Damages 8.195 A successful claimant is entitled to be put back into the position he or she would have been in had loss not been suffered.625 Accordingly, if a claimant lost the whole of his or her land, he or she would be entitled to damages for the whole of the land.626 If an applicant succeeds in reducing loss by acquiring benefit in regard to the claim, this will be used to offset compensation should it ultimately be found payable. Hence, if a claimant lost the whole of his or her land but recovered it later, damages will only be payable to cover lost rents and profits during the period when the claimant was deprived of his or her land.627 Section 129(2)(a) of the Real Property Act introduced the concept of contributory negligence into the award of damages, as the provision does not permit compensation under the Act where the loss or damage has been

occasioned by an act or omission of the plaintiff.628 That the applicant in addition must do all that is possible to reduce loss and mitigate damages is also encapsulated in s 129(2)(c), a paragraph that precludes compensation in circumstances where this is not done. Further, if a claimant only suffers the possibility that he or she will be deprived of land, his or her claim will fall outside the Act and no cause of action, and consequently no damages, will arise.629

Interrelationship with other sections 8.196 Section 129(2)(h) of the Real Property Act has the effect of confirming that many former exclusions still operate.630 This section operates by way of linkage back to other sections in the Act. For example, it is tied to s 28O, which states: Notwithstanding the provisions of Parts 13 and 14, no proceedings shall be brought, and no action shall lie, against the Registrar-General for any refusal to create a qualified folio of the Register or to cancel a caution.

8.197 Importantly, the operation of s 56C of the Real Property Act also has the effect of closing off access to the Torrens Assurance Fund for mortgagees who carelessly end up with an indefeasible mortgage that secures nothing (as was the case in Yazgi v Permanent Custodians Ltd631). Under the new provisions, mortgagees who fail to comply with the identity checks required under s 56C will have no recourse against either the registered proprietor or the Torrens Assurance Fund.632 [page 424]

Proceedings for recovery 8.198 Some of the key changes to Pt 14 of the Real Property Act brought about by the 2000 amendments reflect recommendations in the Law Reform Commission report.633 For example, s 131 of the Act incorporates the recommendation that claims be made initially and directly against the Registrar-General. Section 131 sets out ‘Administrative procedures for the recovery of compensation’, while s 132 sets out ‘Court proceedings for the

recovery of compensation’ where administrative procedures do not result in a settlement. These provisions effectively encourage settlement by requiring an attempt to settle administratively before a litigious path is embarked on. As such, these sections differentiate(d) the operation of the fund from similar funds in other states. Specifically, s 132(2)(a) and (b) generally prevent court proceedings from being commenced unless ‘administrative proceedings have been commenced and determined in relation to the compensable loss’. Section 132(2A) also acts to place a limitation on commencement of proceedings by requiring that proceedings must be commenced within three months of the date on which the administrative proceedings have been determined. It is possible, however, for the Registrar-General, by way of consent, or the court, by way of leave, to permit a person to initiate proceedings without making an administrative claim. In any court proceedings, the Registrar-General is the nominal defendant, pursuant to s 132(1). 8.199 Section 131(2) sets a limitation period during which administrative proceedings are to be brought. This is set at six years from the date at which the act or omission gave rise to the loss, or six years from the date on which the compensable loss arose. Clearly, this provision takes account of the fact that the loss might not arise at the time when the act or omission is done or made. The Act also includes provisions designed to allow the RegistrarGeneral an extensive understanding of the claimant’s position. So that the claim can be adequately investigated and compensable loss assessed, it is necessary for the claimant to co-operate fully with the Registrar-General: s 131(6). Further, pursuant to s 131(7)(a), the claimant must also supply the Registrar-General with specified information. This is designed to speed up the process and lead to an early settlement.634 If no determination has been made within the 12-month limit for processing pursuant to s 131(9) or, if at the expiration of the 12 months, the claimant has not provided the necessary information to the Registrar-General pursuant to s 131(6), (7) and (7A), the claim is said to have been refused. It is then open to the claimant to seek redress via litigation and the commencement of proceedings according to s 131(10). 8.200

Another positive feature of the provisions is that they provide for the

inclusion of alternative dispute resolution strategies (mediation or neutral evaluation) in order [page 425] to resolve issues and keep matters out of the court.635 This reflects trends that are seen elsewhere within the legal system. In regard to subrogation, s 133(2) (a) of the Act states that the Registrar-General is subrogated to the claimant in respect to the claimant’s right to the loss against any other person against whom the claimant has a cause of action and against any professional indemnity insurer.

Reform Overriding statutes and the Real Property Act 1900 (NSW) 8.201 One of the greatest weaknesses of the Torrens system in its present form is the prevalence of overriding statutes. As was evident in the discussion of Pratten v Warringah Shire Council,636 where a statutory authority relies on an overriding statute, one of the cardinal objectives of the system — the mirror principle — is undermined. Purchasers, vendors and even those who acquire interests under overriding statutes have great difficulty knowing when a registered title is vulnerable to an interest created in an overriding statute. Therefore, it is still possible for the effects of overriding statutes to take others by surprise and, as more and more statutes are passed, this situation will impact on the reliability of the Register to a greater and greater extent, unless appropriate reform is undertaken.637 In practice, this exception to indefeasibility has meant that purchasers must search not only the Torrens Register, but also each of the registers of interests of those statutory bodies that have the benefit of overriding legislation, such as the register of the NSW Department of Education or the State Transit Authority. This process has added to the cost and complexity of

conveyancing. Moreover, the various reforms that have attempted to address this issue, by way of the imposition of a statutory duty on public bodies to register notices of resumption, and a duty on the Registrar-General to register such resumptions of which he or she has notice,638 do not tackle the central problem: the purchaser cannot rely on the Register to get a good title.639 Breach of these respective duties by the NSW Department of Education, for example, or Registrar-General does not give the innocent purchaser a good title.640 Although the insertion of s 42(3) of the Real Property Act 1900 (NSW) attempted to resolve the very serious issue of inconsistent legislation and the Real Property Act, the new [page 426] provision cannot fully achieve its purpose, for two reasons. First, the Real Property Act is not entrenched; s 42(3) cannot bind future parliaments. Until entrenchment occurs, the question of inconsistency remains. Second, when s 42(3) was enacted a range of other Acts, such as Acts that declare ownership of assets on land, were also amended to contain provisions that state explicitly that the provisions of those other Acts prevail over s 42 of the Real Property Act. A specific form of words was used to achieve this outcome, namely that the provisions (in the other Act) are ‘to have effect despite anything contained in s 42 of the Real Property Act 1900’. Examples of Acts that contain this formulation include Sch 4 of the Catchment Management Authorities Act 2003 (NSW); s 37(4) of the Sydney Water Act 1994 (NSW); s 5(4) of the Coal Acquisition Act 1981 (NSW); s 64(2) of the Water Industry Competition Act 2006 (NSW); and s 173(3) of the Water Management Act 2000 (NSW). The following question then arises: How are we to treat Acts that were formerly thought to contain provisions that overrode s 42 of the Real Property Act, if those Acts were not amended to specifically include this form of words (eg, s 89 of the Conveyancing Act 1919 (NSW))?641 It is suggested that perhaps timely legislative clarification of these concerns, and an annual re-enactment of s 42(3) (and the express override of any further

statutes), may be more appropriate than waiting to see how the common law interprets the effects of s 42(3).

Which is preferable — deferred or immediate indefeasibility? 8.202 Case law demonstrates that there has been a tussle over whether the doctrine of deferred or immediate indefeasibility should gain supremacy. Since Frazer v Walker642 and Breskvar v Wall,643 the doctrine of immediate indefeasibility has been triumphant, but there is a striking scarcity of reference to policy reasons in the leading cases on deferred and immediate indefeasibility. Indeed, Hayne J in Vassos v State Bank of South Australia644 claimed that the terms ‘deferred’ and ‘immediate’ indefeasibility are: … no more than convenient shorthand expressions generally describing the effect of the provisions of Torrens Title legislation; they are not in any relevant sense principles from which conclusions can be drawn about the proper construction of the legislation.

However, Mahoney JA in Story v Advance Bank Australia Ltd645 came closest to identifying the dilemma when he suggested that: If a choice is to be made between an innocent registered proprietor who has become such by a forged instrument prepared by a third party, my inclination would be to preserve the rights of the old registered proprietor.

8.203 A number of reasons have been advanced to support immediate indefeasibility. One is that it is the most effective way to encourage reliance on the Register, which is a fundamental principle of the system. Yet it is hard to imagine that those who devised [page 427] the system envisaged that purchasers should be allowed to be indifferent to the identity of the vendor.646 In other words, it seems unlikely that the Register was intended to be seen as a complete reflection of rights over land, absolving anyone proposing to deal with a registered proprietor from any obligation to verify his or her identity. A further reason to support immediate indefeasibility is provided by Hayne J in Vassos v State Bank of South Australia,647 where,

referring to the phrase ‘except in the case of fraud’ in s 43 of the Transfer of Land Act 1958 (Vic), he said: … it is to the position of a party dealing on the faith of the Register that the section is directed both in giving protection by restricting the application of doctrines of notice and providing for an exception to that protection.

Implicit in what Hayne J says is that it is the purchaser who is in most need of protection here. By comparison, registered proprietors can keep their certificates of title in safe custody. Of course, this is a problem in cases of joint ownership, where most frauds of this nature occur. In Westpac Banking Corporation v Sansom,648 Rolfe J modified this rule. An officer of the bank witnessed the fraudulent signing of a transfer. His Honour held that the bank had a legal mortgage over the forger’s half interest, but not over the interest of the innocent party. In circumstances where banks certify that they are witnessing signatures, all registered proprietors must be present. Since s 129(1) of the Real Property Act (with the exception of para (e)) permits persons who have suffered loss or damage ‘in respect of any land’ to take proceedings, rather than requiring all claimants to have been deprived of ‘land or any estate, or interest in land’, there is not the same argument available to promote immediate indefeasibility.649 The argument formerly available was grounded in the interplay between the indefeasibility provisions and the compensation provisions. That interplay revealed crucial differences in the way in which losses were distributed under the immediate and deferred indefeasibility regimes. For example, the defrauded party under the deferred indefeasibility regime was deprived of compensation from the fund because he or she had not been deprived of an interest in land; the void instrument could not be the source of property rights, and the registration of such an instrument did not change this. This gave rise to an argument in favour of immediate indefeasibility. That argument is no longer valid because s 129(1) (with the exception of para (e)) does not require deprivation of an interest in land as a necessary precondition for bringing a claim. Such deprivation is only one of a number of alternative ways that loss may have been suffered. 8.204 Commentators have long disagreed about which doctrine is the most desirable.650 For some, a thoroughgoing immediate indefeasibility doctrine fosters public confidence in

[page 428] the system,651 whereas others see it as having exactly the opposite result.652 The latter view has seen a revival recently.653 Toomey’s argument is notable in this area in that she attempts to make use of empirical evidence to support her claims. In the 1990s, she argued, an increase in the number of forgeries put increasing strain on immediate indefeasibility and, in consequence, the Torrens Assurance Fund finances. Whether her conclusions are correct and relevant today remains open; Appendix C of this book may be useful to interrogate them. The appendix reveals that the sums paid out of the Torrens Assurance Fund have fluctuated considerably over the years. In particular, it demonstrates that expenditure from the fund in 2008–09 was 28 times greater than in 2005–06, and that since 2008–09 there has been a decline in the amount of moneys paid out. It is suggested that consideration of these figures also may need to bear in mind the overall question of scale. It is notable that other, older literature has challenged Toomey’s position by claiming that the numbers claiming compensation have been dwarfed by those who are actually deprived of interests in land.654 How difficult real estate fraud is to engineer has been the subject of continued interest.655 The facts of Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd,656 and Pedulla v Panetta657 suggest that rogues are becoming ever more creative.658 Accordingly, the theses of Toomey and others may deserve further attention. 8.205 A further reason given in favour of deferred indefeasibility is that it is more appropriate to compensate the transferee for the loss than the original proprietor, as the original proprietor may have an emotional attachment to the land. This is particularly so in the case of mortgagees.659 Moreover, forgeries are not immediately cured in other areas of law; for example, in the case of cheques and bills of exchange. Immediate indefeasibility is, therefore, at odds with the general legal principle that forgeries are ineffectual.660 [page 429]

Furthermore, today it may be more difficult to argue that there is anything special about land that would justify its being the subject of a separate rule. As noted above, its special characteristics point more decisively in the other direction. The Victorian Law Commission recommended the adoption of deferred indefeasibility where a forged instrument is involved, on the basis that it would be more appropriate for the old proprietor to get the land back and the innocent third party to be compensated.661 If the application of this principle were to result in undue hardship, the court should be able to reverse this. The concept of ‘discretionary indefeasibility’ has been explored in Canada, again as a way of avoiding what is seen as the undesirable inflexibility of the doctrine.662 Fears about the difficulties facing purchasers in protecting themselves are perhaps exaggerated;663 they could arrange for the vendors to be present when the transfer is signed, or could insist on an affidavit made by a solicitor verifying the validity of the signatures.664 As Stein and Stone suggest, such limited examination of title is considerably less onerous than that required for any search of old system title.665 Yet, the powerful rationale for immediate indefeasibility lies in the aspiration underpinning the Torrens system that ‘no purchaser of Torrens system land should be required to investigate the history of the vendor’s title or make inquiries that are burdensome or difficult’.666 As Mahoney JA noted in Story v Advance Bank Australia Ltd,667 it ‘is not inconsistent with a duty to take proper steps to ensure that the dealing tendered as executed by the registered proprietor has in fact been executed by it’. The introduction of s 56C of the Real Property Act may therefore represent a further step to strengthen the integrity of the processes surrounding registration (of mortgages), consistent with the preference for immediate indefeasibility.

Volunteers 8.206 There would seem to be compelling policy reasons for the interpretation that favours denying priority to a volunteer. In New South Wales, a volunteer is able to defeat the equities of a party who gave valuable consideration. Why should a donor defeat equities created for value by means of a voluntary transfer to a third party? This question becomes particularly

important where the intention behind the transfer is to defeat creditors, as was the case in King v Smail.668 These sorts of considerations lie behind the equitable rules that [page 430] distinguish between volunteers and others. It would not unduly undermine the registration system to have this same principle incorporated into the Torrens system in New South Wales, as it is in Victoria, whereby volunteers are an exception to indefeasibility.669

Torrens Assurance Fund 8.207 Following the amendments introduced by the Real Property Amendment (Compensation) Act 2000 (NSW), s 129(2)(g) of the Real Property Act 1900 (NSW) expressly excludes any loss or damage suffered by any person: … to the extent to which the loss or damage arises from the recording, or the omitting to record, in the Register of an approved determination of native title or other matter relating to native title rights and interests …

Section 129(3)(a) of the Real Property Act extends s 129(2)(g) to either a holder of native title or a claimant for native title. Given that native title is a title that may impact significantly on the use and enjoyment of Torrens title land, it would seem inappropriate not to provide compensation for loss arising from a recording or failure to record an approved determination of native title. However, s 12C of the Real Property Act permits, but does not impose, a duty on the Registrar-General to record native title determinations. It would be unfair to find the Registrar-General liable and require compensation to flow absent such a duty. If the Registrar-General were automatically notified by the body that approved a determination of native title, and the RegistrarGeneral were obliged to record this, the position regarding compensation could legitimately be otherwise. As it currently stands, there is little incentive for a holder of Torrens title property to have recorded that it is burdened by incidents of native title. There is also a lack of familiarity with the Torrens system on the part of many native title claimants, which may deter those

claimants from determinations.

notifying

the

Registrar-General

of

their

successful

Given the computerisation of the courts, and of government departments in New South Wales, it would seem that automatic notification by the relevant bodies may be a realistic alternative to overcome some of these problems. This would need to be followed up so that a failure by the Registrar-General to act on the notice would become actionable.

1.

Dependence on a chain of title (ie, a written record) emerged once feoffment and livery of seisin, discussed in Chapter 3, fell out of favour. The ceremonies associated with feoffment and livery of seisin had been public, effectively providing an oral and visual record of land ownership.

2.

A Castles, Australian Legal History, Law Book Co, Sydney, 1982, p 458, referring to D Pike, ‘Introduction of the Real Property Act in South Australia’ (1960) 1 Adel LR 169.

3.

Pike, ‘Introduction of the Real Property Act in South Australia’, note 2 above, at 172.

4.

The South Australian Register, 13 November 1857, cited in Pike, ‘Introduction of the Real Property Act in South Australia’, note 2 above, at 173.

5.

For a discussion of the historical background to the introduction to the Torrens system and the ideal characteristics of a land registration scheme, see T Stutt, ‘Transition to Torrens: The Six Fold Path to the Ideal Land Administration Scheme’ (2008) 15 APLJ 115. For a discussion of Torrens, the man, see R Croucher, ‘150 Years of Torrens — Too Much, Too Little, Too Soon, Too Late?’ (2009) 31 Australian Bar Review 245.

6.

No less controversial than his father, who, as Henry Reynolds recounts, was instrumental in the denial of native title to land in the development of South Australia: see H Reynolds, The Law of the Land, Penguin, Melbourne, 2003, Ch 2. For further insight into Robert Torrens, see J H Heaton, Australian Dictionary of Dates and Men of the Time: Containing the History of Australians from 1842 to May 1879, G Robertson, Sydney, 1879; D J Whalan, Torrens, Sir Robert Richard (1814–1884) in Australian Dictionary of Biography (accessed 28 March 2017), ; G Jessup, ‘Torrens of the Torrens System’, unpublished paper in the possession of the State Library of South Australia, 1950, p 26.

7.

R Torrens, South Australian Registration of Title, Public Library of South Australia, Adelaide, 1962, p 44.

8.

Torrens is thought by some scholars to have relied on ideas borrowed from Hurtle Fisher and Dr Heinrich Hübbe, both of whom had proposed systems of registration as far back as 1836. Hübbe, in particular, was familiar with the schemes of the Hanseatic League which were based on parcellation. See S Robinson, Transfer of Land in Victoria, LBC, 1979, pp 11–15. For further discussion of Torrens’ contribution as well as influences on him, see G E Loyau, Notable South Australians; or Colonists Past and Present, Carey, Page & Co, Adelaide, 1885, pp 247–8; G Taylor, A Great and Glorious Reformation? Six Early South Australian Legal Innovations, Wakefield Press, Adelaide, 2005; G Taylor, ‘Is the Torrens System German?’ (2008) 29 Journal of Legal History 253; R Croucher,

‘“Delenda Est Carthago!” Sir Robert Richard Torrens and his Attack on the Evils of Conveyancing and Dependent Land Titles: A Reflection of the Sesquicentenary on the Introduction of his Great Law Reforming Initiative’ (2009) 11(2) FJLR 197; A Esposito, ‘A New Look at Anthony Forster’s Contribution to the Development of the Torrens System’ (2006–2007) UWALR 251. Esposito’s article suggests that the British Royal Commission Report of English Royal Commissioners, proposing a system of registration of titles, may have also influenced Torrens. Note that the Torrens legislation of South Australia was varyingly replicated in all other states of Australia. 9.

B Kercher, An Unruly Child: A History of Law in Australia, Allen & Unwin, Sydney, 1995, p 130. Land registration systems based on the Torrens system have sprung up in other countries including New Zealand, Malaysia, Singapore, Israel and some provinces in Canada. See also G Taylor, ‘The Torrens System in Nova Scotia and New Brunswick’ (2009) 16(3) APLJ 175. The land registration scheme operating in England under the Land Registration Act 2002 (UK) cannot be described as a replica of the Torrens system.

10.

D J Whalan, The Torrens System in Australia, Law Book Co, North Ryde, 1982, p 5.

11.

The Act came into operation on 1 January 1863 and the first Torrens title (Vol 1, Folio 1) was issued in the same year for land at Randwick, Sydney. In the financial year 2015–16 more than 900,000 land title transactions were registered. See Department of Finance, Services and Innovation, Annual Report 2015–16.

12.

Although the Torrens system introduced totally different methods of titling and transfer, the system retained elements and concepts of old system title, including the doctrines of tenure and estates, as well as many of the established interests in land. Hence, Torrens title recognises fee simple estates and life estates as well as, for example, leases, easements and profits à prendre, all of which were known under old system title.

13.

It should be noted, however, that extensive amendments have taken place despite the retention of key features, including the introduction of e-conveyancing platforms. Unfortunately, however, despite the implementation of the Electronic Conveyancing National Law (see further, 8.17) to impose national standards for electronically based conveyancing transactions, there is not a uniform Torrens system throughout the country. See M Neave, ‘Towards a Uniform Torrens System: Principles and Pragmatism’ (1993) 1 APLJ 114; S MacCallum, ‘Uniformity of Torrens Legislation’ (1993) 1 APLJ 135; T Hunter, ‘Uniform Torrens Title Legislation — Is there a Will and a Way?’ (2010) APLJ 18.

14.

Land not falling into these categories was held under ‘Crown Lands titles’. That form of title was rather akin to old system title with a firm statutory overlay. For an example of a recent Land and Property Information (LPI) primary application notice, see Wentworth Courier (accessed 27 July 2017), click on the calendar (‘Back issues’) icon, click on ‘8 March 2017’, scroll through to p 152. This advertisement pertains to the bringing of old system title land in Woollahra, Sydney, under the Torrens system. The land was also subject to an adverse possession claim. It is an extremely rare type of advertisement.

15.

Primary applications are dealt with in Pt 4 of the Real Property Act 1900 (NSW), while qualified title is covered in Pt 4A and limited title in Pt 4B of the Act. Part 4A commenced in 1967. On the conversion of old system to Torrens title, see 8.9–8.10 below.

16.

See Real Property Act 1900 (NSW) ss 12(1), (1A) and 17(1), (3).

17.

Real Property Act 1900 (NSW) s 23(2).

18.

Personal communication between Leanne Hughes, Senior Legal Officer, Department of Lands, and

Janice Gray, 3 October 2006. 19.

Personal communication between Leanne Hughes, Senior Legal Officer, Department of Lands, and Janice Gray, 3 October 2006. Note that s 23G(1b) of the Conveyancing Act 1919 (NSW) redefines Crown land that is brought under the Real Property Act.

20.

See discussion of caveats at 8.131.

21.

Real Property Act 1900 (NSW) ss 28A, 28P(1)(d).

22.

Real Property Act 1900 (NSW) s 28T.

23.

The relevant entity is the former Department of Lands and its sub-departments, the names of which have changed over the years. In April 2011, the Land and Property Management Authority was abolished under a government re-structure and its former business divisions were transferred to new departments. At the date of publication, the relevant functions are carried out as the Land and Property Information Division of the NSW Department of Finance and Services.

24.

Further, by 1999, 46,500 conversion matters had been raised, which resulted in approximately 62,000 qualified folios: personal communication between Peter McSorley, New South Wales Land Titles Office, and Janice Gray, 19 May 1999.

25.

Artis Report 1975 (‘Suggestion Designed to Simplify Conveyancing in New South Wales’) Appendix A, as cited in P Butt, Land Law, 6th ed, Thomson Reuters/Lawbook Co, 2010, p 747, fn 33.

26.

New South Wales Law Reform Commission, Unilateral Severance of a Joint Tenancy, Report 73, 1994, [8.47]. At the time, this figure represented approximately 3% of land titles in New South Wales. (Evidence provided by the New South Wales Lands Office to the NSW Law Reform Commission.) See also Land and Property Management Authority, 2010 Annual Report, p 58.

27.

Personal communication between Lyn Thomson, Administration and Policy Officer, Office of the General Manager, Land and Property Information, Department of Lands, and Janice Gray, 22 September 2006. Presumably some old system titles that were converted to Torrens title were not also converted to computerised title and remained manual, at least for a time. Between 2011 and 2011, a further 9500 were added: Department of Finance and Services, Annual Report 2010–12, p 157.

28.

Land and Property Management Authority, Annual Report 2010, p 58.

29.

Personal communication between Lyn Thomson, Manager of Policy and Administration, Land and Property Information, and Brendan Edgeworth, August 2015; personal communication between Robert Doherty, Team Leader Old System, Title and Plan Services, Land and Property Information, Department of Lands, New South Wales Government, and Heather Roberts, 8 June 2017.

30.

See Real Property (Computer Register) Amendment Act 1979 (NSW). These amendments are discussed in A G Lang, ‘Computerised Land Title and Land Registration’ (1984) 10 Mon ULR 196.

31.

Land and Property Information, Torrens Title Information and Search Guide, New South Wales Government, March 2013, p 12.

32.

Department of Finance and Services, Annual Report 2014–15, p 69.

33.

The ‘registered proprietor’ is the person whose interest in land has been registered. See s 3(1) of the Real Property Act 1900 (NSW).

34.

Real Property Act 1900 (NSW) ss 31B, 32(1).

35.

Real Property Act 1900 (NSW) s 32(1).

36.

Real Property Act 1900 (NSW) s 100(2).

37.

Real Property Act 1900 (NSW) s 14(2). This is achieved by way of an application to bring the land under the Torrens system.

38.

Real Property Act 1900 (NSW) s 32(3).

39.

The certificate of title recites the details recorded in the folio.

40.

The Registrar-General cannot be compelled to issue a new certificate of title unless the old certificate of title is produced to him or her. See s 33(4) and (6) of the Real Property Act. However, if the certificate of title is lost, the Registrar-General has the power to issue a new one: Real Property Act 1900 (NSW) s 111.

41.

For a case demonstrating the difficulty of providing the certificate of title, see Hypec Electronics Pty Ltd (in liq) v Registrar-General (2005) 64 NSWLR 679.

42.

A dealing consists of the instrument or instruments (other than a Crown grant or a caveat) that are registrable under the Real Property Act 1900 (NSW).

43.

See the Real Property (Amendment) Act 1970 (NSW).

44.

Note that cases pre-1970 rely on the old terminology.

45.

Note that a mortgage by way of deposit of the certificate of title may give rise to an equitable mortgage: Theodore v Mistford Ltd (2005) 221 CLR 612.

46.

Real Property Act 1900 (NSW) s 38.

47.

Real Property Act 1900 (NSW) s 100(2).

48.

Communique, Council of Australian Governments, 3 July 2008.

49.

National Partnership Agreement to Deliver a Seamless National Economy, Council of Australian Governments, December 2008, [21].

50.

Intergovernmental Agreement for an Electronic Conveyancing National Law, New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, Northern Territory, 1 November 2011.

51.

The Appendix to the Electronic Conveyancing (Adoption of National Law) Act 2012 (NSW) contains the Electronic Conveyancing National Law (NSW).

52.

Electronic Conveyancing National Law (Queensland) Act 2013 (Qld); Electronic Conveyancing (Adoption of National Law) Act 2013 (Vic). In the ACT, all land is held on leasehold, and it appears that, for this reason, the new electronic conveyancing protocols were not given effect in that jurisdiction.

53.

Electronic Conveyancing (National Uniform Legislation) Act 2013 (NT); Electronic Conveyancing National Law (South Australia) Act 2013 (SA); Electronic Conveyancing (Adoption of National Law) Act 2013 (Tas); Electronic Conveyancing Act 2014 (WA).

54.

Electronic Conveyancing National Law (NSW) ss 22, 23.

55.

NSW Registrar-General, NSW Operating Requirements for Electronic Conveyancing, Version 3, 9 November 2015.

56.

NSW Registrar-General, NSW Participation Rules for Electronic Conveyancing, Version 3, 9 November 2015.

57.

Land and Property Information, Certificate of Title Solution for Concurrent Electronic & Paper Conveyancing, NEC in NSW Consultation Paper No 5, New South Wales Government, 2012, [2.2].

58.

Real Property Act 1900 (NSW) s 34(1).

59.

Eg, see Conveyancing Act 1919 (NSW) s 96; Hypec Electronics Pty Ltd (in liq) v Registrar-General (2005) 64 NSWLR 679.

60.

Real Property Amendment (Electronic Conveyancing) Act 2015 (NSW) Sch 1.6, which commenced 1 March 2016.

61.

Real Property Act 1900 (NSW) s 33AAA(1), (2).

62.

Real Property Amendment (Electronic Conveyancing) Act 2014 (NSW).

63.

Real Property Act 1900 (NSW) s 33AAA(3)(c).

64.

Real Property Act 1900 (NSW) s 33AA(3).

65.

Real Property Act 1900 (NSW) ss 33AAA(3)(b), 33AA(2)(b).

66.

Real Property Act 1900 (NSW) ss 33AAA(3)(d), 33AB(1).

67.

Land and Property Information, Registrar-General’s Guidelines, e-Dealings, New South Wales Government (accessed 2 May 2017), .

68.

Land and Property Information, ‘Optional no Certificate of Title’: Practice Changes for Settlement and Lodgment of Dealings and Plans’, Circular No 2014/03, New South Wales Government, March 2014.

69.

Land and Property Information, Certificate of Title Solution for Concurrent Electronic & Paper Conveyancing, note 57 above, [3.2].

70.

New South Wales, Parliamentary Debates, Legislative Assembly, 14 November 2013, p 25798 (A Constance, Minister for Finance and Services); New South Wales, Parliamentary Debates, Legislative Assembly, 6 August 2015, p 2170 (D Perrottet, Minister for Services and Property); Land and Property Information, Certificate of Title Solution for Concurrent Electronic & Paper Conveyancing, note 57 above, pp 12–13; Land and Property Information, Conveyancing Reform — Concurrent Electronic and Paper Conveyancing, NEC in NSW Consultation Paper No 6, New South Wales Government, 2014, p 21.

71.

Watt v Lord (2005) 62 NSWLR 495 held that a memorandum of transfer remained an effective document for registration, although it had been signed some 43 years previously, and that the Registrar-General was not precluded from registering the transfer by reason of the deaths of the registered proprietors.

72.

Dealings may be refused if there is no notice in approved form. See Real Property Act 1900 (NSW) ss 39(1B), 117(1A), (1B).

73.

A trust is not registrable in New South Wales except in limited circumstances, although a trust may be created over Torrens land (or land outside the Torrens system) and the instrument lodged with the Registrar-General for safe-keeping pursuant to s 82(1) of the Real Property Act 1900 (NSW).

74.

Real Property Act 1900 (NSW) s 82(2).

75.

Real Property Act 1900 (NSW) s 82(3).

76.

Real Property Act 1900 (NSW) s 39(2).

77.

Real Property Act 1900 (NSW) s 39(3).

78.

Real Property Act 1900 (NSW) s 36(C).

79.

Real Property Act 1900 (NSW) s 36(11).

80.

Manually updated registers, folios and certificates of title had the advantage that they provided helpful historical information to historians and urban geographers, for example. For a time, there was concern that computer-generated folios and certificates of title deleted this information. Nowadays, the relevant government department offers a ‘historical search’ that provides the history of dealings since the title became computerised. For details preceding that time, a manual search needs to be undertaken. Searches of the manual records are time-consuming and involve additional cost.

81.

Real Property Act 1900 (NSW) s 40(1) and (1A)(a), (b). See also ss 40(1B)–(3), 96. It should be noted that although s 40 refers to dealings, interests may pass, not by way of dealings, but also by way of transmission. A transmission may occur on the death of a joint tenant or on bankruptcy, for example.

82.

Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425; 316 ALR 11 at [16] per French CJ, Hayne, Bell and Gageler JJ.

83.

Breskvar v Wall (1971) 126 CLR 376 at 381, 386 per Barwick CJ (emphasis added).

84.

Old system title was really only as strong as the weakest link in the chain of title.

85.

Clements v Ellis (1934) 51 CLR 217 at 232 per Rich J.

86.

This sets the Torrens system apart from the deeds registration schemes discussed in Chapter 7 at 7.36. Under the latter schemes, defects were not cured on registration. However, as can be seen in this chapter, the Register is not a complete record of estates and interests in land. Possessory title may still exist outside the Register, as do many equitable interests, for example.

87.

W N Harrison, ‘The Transformation of Torrens’ System into the Torrens System’ (1962) 4 UQLJ 125 at 129.

88.

T Ruoff, An Englishman Looks at the Torrens System, Law Book Co, Sydney, 1957.

89.

Waimiha Sawmilling Co v Waione Timber Co [1926] AC 101 at 106.

90.

See further discussion at 8.107–8.114.

91.

Gibbs v Messer [1891] AC 248 at 254.

92.

Ex parte Gallagher (1908) 8 SR (NSW) 230.

93.

Regarding a refusal to register, see Williams v Marac Australia Ltd (1985) 5 NSWLR 529 at 535. For a case where the court found that s 122 was not applicable, see Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149. Sahab’s attempt to reopen the case was dismissed: Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (No 2) (2013) 303 ALR 84.

94.

Real Property Act 1900 (NSW) s 36(9).

95.

Real Property Act 1900 (NSW) s 36(5). The issue of priorities is discussed at 8.161.

96.

On the Torrens Assurance Fund, see further 8.183–8.200. For an analysis of the Torrens system, see P White, ‘It Doesn’t Seem to Register … Is the Torrens System for Real Property Dealings Effective 150 years After Its Enactment?’ (2008) 19 APLJ 130.

97.

For a discussion of ‘good’ and ‘not good’ titles in another context, see Scottish Law Commission, Land Registration: Void and Voidable Titles [2004] SLC 125 (DP), discussion paper, February 2004 (accessed 22 March 2017), . 98.

The term ‘unimpeachable’ is used in Assets Co Ltd v Mere Roihi [1905] AC 176 at 182. See discussion of notice below at 8.66.

99.

See Barry v Heider (1914) 19 CLR 197.

100. Section 45 also covers the case where the purchaser or mortgagor’s vendor may have procured the registration of the transfer or mortgage through fraud or error, or derived the right of registration through a person who was registered through fraud or error or, alternatively, may have derived the right through a person who became registered through fraud or error. 101. See P N Wikrama-Nayake, ‘Immediate and Deferred Indefeasibility: The Story Continues’ (1993) 8 LIJ 733. 102. The instrument might be void as the result of forgery, but could also be void for breach of a statutory prohibition, as in Boyd v Mayor of Wellington [1924] NZLR 1174 (void proclamation) and Breskvar v Wall (1971) 126 CLR 376 (transfer void for non-compliance with stamp duty legislation). 103. Gibbs v Messer [1891] AC 248. 104. Clements v Ellis (1934) 51 CLR 217. In this judgment, the court was split 2:2 on the issue of indefeasibility and followed the deferred indefeasibility approach of the trial judge. 105. Caldwell v Rural Bank of New South Wales (1951) 69 WN (NSW) 246 at 250–252; Davies v Ryan [1951] VLR 283 at 289. 106. Clements v Ellis (1934) 51 CLR 217 at 237. 107. Gibbs v Messer [1891] AC 248 at 255. 108. Gibbs v Messer [1891] AC 248. 109. The McIntyres had no claim against the Assurance Fund either. 110. Regarding forgeries and indefeasibility see L Aiken, ‘Indefeasibility and the Forged Mortgage’ (2009) 32 Australian Bar Review 25; L Aiken, ‘Forged Mortgages in the Court of Appeal’ (2010) 24 (1) Commercial Law Quarterly 11. 111. Gibbs v Messer [1891] AC 248. 112. The more modern view is that s 42, and not s 43, is the key indefeasibility section. See Frazer v Walker [1967] 1 AC 569; Breskvar v Wall (1971) 126 CLR 376; Bogdanovic v Koteff (1988) NSWLR 472. 113. This point is explored by A Bradbrook, S MacCallum, A Moore and S Grattan, Australian Real Property Law, 5th ed, Thomson Reuters/Lawbook Co, 2011, pp 9–23. 114. See 7.41. 115. Assets Co Ltd v Mere Roihi [1905] AC 176. See also Boyd v Mayor of Wellington [1924] NZLR 1124, another New Zealand case which treated Assets Co as having affirmed immediate indefeasibility. 116. Clements v Ellis (1934) 51 CLR 217. 117. Frazer v Walker [1967] 1 AC 569. 118. Breskvar v Wall (1971) 126 CLR 376. 119. Breskvar v Wall (1971) 126 CLR 376 at 387. 120. Breskvar v Wall (1971) 126 CLR 376 at 385–6.

121. The following cases are examples where Breskvar v Wall has been followed: Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537; Palais Parking Ltd v Shea (1980) 23 SASR 425; State Bank of NSW v Berowra Waters Holdings Ltd (1986) 4 NSWLR 398. See also Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407; 106 ALR 595. 122. Gibbs v Messer [1891] AC 248. 123. Gibbs v Messer [1891] AC 248 discussed above at 8.27. 124. Frazer v Walker [1967] 1 AC 569. 125. Garofano v Reliance Finance Corp Ltd (1992) NSW ConvR ¶55-640 at 59,662. In Victoria, note Gray J in Chasfild Pty Ltd v Taranto [1991] VR 225. 126. In Victoria, Gray J in Chasfild Pty Ltd v Taranto [1991] VR 225 favoured the deferred indefeasibility doctrine in regard to fraud. He adopted a wide interpretation of ‘fraud’ as used in s 44(1) of the Transfer of Land Act 1958 (Vic) and found that it was not limited to fraud on the part of the person whose interest was registered. (Part of the reason for the Victorian courts’ dalliance with deferred indefeasibility is attributable to the different wording of the legislation in that state as compared with, eg, New South Wales.) 127. Rogers v Resi-Statewide Corp Ltd (1991) 101 ALR 377. 128. Gray J’s approach was rejected in Vassos v State Bank of South Australia [1993] 2 VR 316; Eade v Vogiazopoulos [1993] 3 VR 889; Beatty v Australia and New Zealand Banking Group Ltd [1995] 2 VR 301; Public Trustee v Paradiso (1995) 64 SASR 387. 129. Bradbrook et al, Australian Real Property Law, note 113 above, p 208, citing K Low, ‘The Nature of Torrens Indefeasibility: Understanding the Limits of Personal Equities’ (2009) 33 MULR 205; L Griggs, ‘Resolving the Debate Surrounding Indefeasibility through the Eyes of the Consumer’ (2009) 17 APLJ 260; K Low and L Griggs, ‘Immediate Indefeasibility — Is It Under Threat?’ (2011) 19 APLJ 222. 130. Wu Tang Hang and Chung Loh Khian, ‘A Law Which Favours Forgers?: Land Fraud in Two Torrens Jurisdictions’ (2011) 19 APLJ 130. See also discussion in P O’Connor, ‘Deferred and Immediate Indefeasibility: Bijural Ambiguity in Registered Land Title Systems’ (2009) 13 Edin LR 194. 131. Butt, Land Law, note 25 above, p 754, commenting on s 3(1) of the Real Property Act, which provides that fraud ‘includes fraud involving a fictitious person’. Butt observes that if s 3(1) is read in conjunction with s 188(1)(d), the intent seems to be to curb the operation of Gibbs v Messer [1891] AC 248. 132. G Taylor, ‘Scotching Frazer v Walker’ (1970) 44 ALJ 248; A Mason, ‘Indefeasibility: Logic or Legend’ in D Grinlinton, Torrens in the Twenty First Century, LexisNexis, Wellington, 2003, pp 3– 26; P O’Connor, ‘Registration of Invalid Dispositions: Who Gets the Property?’ in Cooke (ed), Modern Studies in Property Law, Vol 3, Hart, Oxford, 2005, Ch 3, pp 45–64; P O’Connor, ‘Immediate Indefeasibility for Mortgagees: A Moral Hazard?’ (2009) 21 Bond LR 133. 133. M Backstrom and S Christensen, ‘Qualified Indefeasibility and the Careless Mortgagee’ (2011) 19 APLJ 109. 134. National Land Code 1965 (Malaysia) s 340. 135. PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643 at 677–679; Duncan v McDonald [1997] 2 NZLR 669 at 681. As a result of this reasoning, registration of a mortgage protects the mortgage itself but it also protects additional rights that are intimately connected to the mortgage including

the mortgagee’s right to sell, for example. See Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423 at 434. 136. Hahndorf Golf Club Inc v John Nitschke Nominees Pty Ltd (2003) 86 SASR 221. See also Re Lehrer and the Real Property Act 1900 (1960) 61 SR (NSW) 365 regarding interests that are unknown to the law, including leases with uncertain terms. 137. Re Lehrer and the Real Property Act 1900 (1960) 61 SR (NSW) 365. 138. For further discussion of leases, see Chapter 11. 139. Travinto Nominees v Vlattas (1973) 129 CLR 1. 140. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326. See also Tenstat Pty Ltd v Permanent Trustee Australia Ltd (1992) 28 NSWLR 625. 141. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326 at 342. 142. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326. 143. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326 at 345 per Gibbs J. 144. Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1. 145. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326. 146. C Rossiter, ‘Options to Acquire Interests in Land — Freehold and Leasehold’ (1982) 56 ALJ 576 at 626. On this line of cases, see further, P Carruthers and N Skead, ‘Rights to Renew and to Purchase in Registered Leases: Part I — A Case of Bad Timing for Rights to Renew’ (2016) 25(1) APLJ 1; P Carruthers and N Skead, ‘Rights to Renew and to Purchase in Registered Leases: Part II — A Real or Imagined Distinction?’ (2016) 25(2) APLJ 115. 147. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326. 148. Gibbs J in Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326 at 346, quoting from Woodall v Clifton [1905] 2 Ch 257 at 279. Gibbs J observes (at 346) that ‘a covenant giving a right to purchase is essentially different in character from a covenant to renew’. 149. See Real Property Act 1900 (NSW) s 56C. See also Chapter 14 on mortgages. 150. Eg, Grundy v Ley [1984] NSWLR 467 where a forged discharge of mortgage attracted indefeasibility. For the more general proposition that a void instrument acquires indefeasibility on registration, see Frazer v Walker [1967] 1 AC 569; 1 All ER 649. It is immaterial what has caused the instrument to be void: Breskvar v Wall (1971) 126 CLR 376 at 386 per Barwick CJ; at 406–7 per Walsh J. 151. L Griggs, ‘Resolving the Debate Around Indefeasibility Through the Eyes of the Consumer’ (2009) 17 APLJ 17. 152. Perpetual Trustees Victoria Ltd v Van den Heuvel [2010] NSWCA 171. 153. On forgeries and the Torrens system, see further R Croucher, ‘Inspired Reform or Quick Fix? Or, “Well Mr Torrens, What Do You Reckon Now?” A Reflection on Voluntary Transactions and Forgeries in the Torrens System’ (2009) 30(2) Adel LR 291. 154. See Torrens Assurance Fund at 8.184. 155. Hilton v Gray [2007] QSC 401. 156. Hilton v Gray [2007] QSC 401 at [1]. This case is discussed further in L Aitken, ‘Indefeasibility and the Forged Mortgage’ (2009) 32 Australian Bar Review 25.

157. S Grattan, ‘Recent Developments Regarding Forged Mortgages: The Inter-relationship Between Indefeasibility and the Personal Covenant to Pay’ (2009) 21 Bond LR 43. 158. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326. See also Pyramid Building Society v Scorpion Hotels Pty Ltd [1998] 1 VR 188 at 196; Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235. 159. Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202; Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675. 160. Cases involving all moneys clauses include: Perpetual Trustees Victoria v Tsai (2004) 1 BPR 22,811; Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675; Yazgi v Permanent Custodians Ltd (2007) NSWCA 240; Provident Capital Pty Ltd v Printy (2008) 13 BPR 25,199 (NSWCA); Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343. For jurisdictional comparisons on all moneys clauses, see P J Lewis and S B Schroeder, ‘Less Power to Them: A Note on the Mortgagee’s Diminishing Expectations of Indefeasibility’ (2011) 83 ALJ 655 at 658. 161. S Schroeder and P Lewis, ‘Indefeasibility of Title and Invalid All Moneys Mortgages: Determining Whether Invalid Personal Covenants to Pay Are Protected Under the Indefeasibility Umbrella’ (2010) 18 APLJ 185. 162. P Butt, ‘How Extensive Is an All Moneys Clause Mortgage?’ (2009) 83 (11) ALJ 11. 163. Yazgi v Permanent Custodians Ltd (2007) NSWCA 240; Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675; Perpetual Trustees Victoria Ltd v English [2010] NSWCA 32; Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171. 164. See J Stoljar, ‘Mortgagors, Indefeasibility and Personal Covenants to Pay’ (2008) 82 ALJ 28. 165. PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643. 166. A loan agreement is not a proprietary interest capable of being registered in itself. 167. Bradbrook et al, Australian Real Property Law, note 113 above, p 218, n 235, suggest by reliance on Perpetual Trustees Australia v Richards [2008] NSWSC 658 that it may be possible to show indebtedness from mortgagor to mortgagee ‘even in the absence of an advance of money from the mortgagee, if the moneys are used to discharge an existing mortgage binding on the mortgagor’. 168. Beazley JA in Yazgi v Permanent Custodians Ltd [2007] NSWCA 240 at [24], referring to Perpetual Trustees Victoria Ltd v Tsai [2004] NSWSC 745 (Young CJ in Eq). 169. See Schroeder and Lewis, ‘Indefeasibility of Title and Invalid All Moneys Mortgages: Determining Whether Invalid Personal Covenants to Pay Are Protected Under the Indefeasibility Umbrella’, note 161 above. 170. Provident Capital Pty Ltd v Printy (2008) 13 BPR 25,199 (NSWCA). 171. Chandra v Perpetual Trustees Victoria (2007) 13 BPR 24,675 at [19]; Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343 at [262]–[263]. Compare Solak v Bank of Western Australia Ltd [2009] VSC 82. 172. Arguably, husbands and wives are commonly involved because a level of trust exists between them and therefore the certificate of title is not necessarily guarded in the same way as it would be against strangers. Further, familiarity with each other’s signatures and patterns of behaviour may also contribute to the incidence of ‘marital’ forgeries. 173. Yazgi v Permanent Custodians Ltd (2007) NSWCA 240. 174. On the facts, her equity was subject to liabilities under an earlier mortgage.

175. Perpetual Trustees of Victoria v Tsai [2004] NSWSC 754; Chandra v Perpetual Trustees of Victoria (2007) 13 BPR 24,675; Provident Capital Ltd v Printy [2008] NSWCA 131. 176. Yazgi v Permanent Custodians Ltd (2007) NSWCA 240. Note that cases such as Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675 and Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 245,343 suggest that even if the loan agreement is incorporated into the mortgage, its language may be such that the mortgagee may not acquire indefeasibility, particularly where terms such as ‘I’ and ‘me’ pertain to someone whose signature was forged. 177. Perpetual Trustees Victoria Ltd v English [2009] NSWSC 478. 178. Perpetual Trustees Victoria Ltd v English [2010] NSWCA 32 found that the mortgage did not provide security to Perpetual in respect of any ‘Secured Money’, but it did find that the mortgage that Mr English executed could take effect as an equitable mortgage: see [103]. 179. Perpetual Trustees Victoria Ltd v English [2009] NSWSC 478 at [123]–[127]. 180. Perpetual Trustees Victoria Ltd v English [2009] NSWSC 478 at [125]. For further discussion, see Aitken, ‘Indefeasibility and the Forged Mortgage’, note 156 above, at 254. 181. Perpetual Trustee v English [2009] NSWSC 478 at [126], referring to Provident Capital Proprietary Ltd v Printy [2008] NSWCA 131. 182. Perpetual Trustees Victoria Ltd v English [2010] NSWCA 32 at [13]. 183. Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171.

184. Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171. 185. Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171 at [4]. 186. Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171 at [5]. 187. Perpetual Trustees Victoria Ltd v English [2010] NSWCA 32 at [100]. 188. Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171. Basten JA was in dissent. 189. L Aitken, ‘The Forged Mortgage: Further Developments in Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171’ (2010) Sept–Nov Commercial Law Quarterly 28 at 30. 190. Aitken, ‘The Forged Mortgage: Further Developments in Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171’, note 189 above. 191. Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171 at [78]–[80] per Basten JA. 192. Note that the Property Law Committee of the New South Wales Law Society recommended holding off on the introduction of s 56C because it anticipated even more stringent requirements would come into force under the National Electronic Conveyancing Scheme. See ‘Wider Approaches Needed for New Regime on Confirmation of Identity’ (2010) 48(1) LSJ 7. 193. Karacominakis v Big Country Developments (2000) 10 BPR 18,235. 194. The rule in Pigot’s Case (1614) 11 Coke 26b; 77 ER 1177 stated that if a deed or written contract were, after its execution, materially altered by the obligor without the consent of the obligee, it would become void. The Conveyancing Amendment (Rule in Pigot’s Case) Act 2001 (NSW) gave effect to the recommendations of the New South Wales Law Reform Commission (Report 97, January 2001) by abolishing that rule. 195. Travinto Nominees Pty Ltd v Vlattas [1972] 1 NSWLR 24 at 48. 196. It was also argued that the last assignee under the lease, Chadlace, held by virtue of a tenancy at will determinable on one month’s notice, pursuant to s 127 of the Conveyancing Act 1919 (NSW). Accordingly, it was suggested that Big Country was not entitled either to rent under the lease or to damages for its repudiation. This argument was not accepted by the court, which found that registration made the lease indefeasible. See 11.16 for a discussion of tenancies at will. 197. For a discussion of the limited rights created by registration of a void mortgage, see Duncan v McDonald [1997] 3 NZLR 669. 198. Karacominakis v Big Country Developments (2000) 10 BPR 18,235 at [59]–[60]. 199. Travinto Nominees Pty Ltd v Vlattas [1972] 1 NSWLR 24 at 48. Note that, on appeal, the case confirmed the view that registration of the lease had not given the lessee an indefeasible right to renew. 200. J Stoljar, ‘Mortgages, Indefeasibility and Personal Covenants to Pay’ (2008) 82 ALJ 28 at 32. 201. See, eg, Travinto Nominees Pty Ltd v Vlattas [1972] 1 NSWLR 24. 202. See 8.25 for the full text of s 42(1). 203. Assets Co Ltd v Mere Roihi [1905] AC 176 at 210. 204. Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425; 316 ALR 111. 205. Section 118(1)(d)(ii) of the Real Property Act is discussed further at 8.127. 206. See Real Property Act 1900 (NSW) s 45(2). 207. The kinds of behaviour that would constitute Torrens fraud are discussed below at 8.64.

208. On the agency principles in this case, see further, D Thampapillai, ‘The Vexed Question of Agency and Torrens Fraud: The High Court in Cassegrain’ (2016) 35(1) UTasLR 43. 209. Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1926] AC 101. 210. Assets Co Ltd v Mere Roihi [1905] AC 176; Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 630; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 169 [192]. 211. Assets Co Ltd v Mere Roihi [1905] AC 175; Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1926] AC 101. 212. Assets Co Ltd v Mere Roihi [1905] AC 175 at 210. 213. Butler v Fairclough (1917) 23 CLR 78 at 90. 214. Loke Yew v Port Swettenham Rubber Co [1913] AC 491. 215. Mere notice of a prior interest would not amount to notice for the purpose of provisions such as s 43(1) of the Real Property Act and its equivalents. 216. Loke Yew v Port Swettenham Rubber Co [1913] AC 491 at 504 per Lord Moulton. 217. Munro v Stuart (1924) 41 SR (NSW) 203 at 206. 218. Todd v Jingalong Pty Ltd [2014] NSWSC 362 at [88]. 219. See 8.66. See also Todd v Jingalong Pty Ltd [2014] NSW 362, where the court found that the registered proprietor’s conduct displayed the requisite dishonesty or moral turpitude when it took the transfer of an entire parcel of land, knowing that it was not entitled to the full parcel, and had previously acknowledged the plaintiffs’ rights to the parcel. 220. Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd (2007) 13 BPR 24,969 at [114]. 221. Assets Co Ltd v Mere Roihi [1905] AC 175 at 210. 222. Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1923] NZLR 1137. 223. Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1923] NZLR 1137 at 1175. 224. Young v Hoger (2002) Q ConvR 54-557 at [11]. 225. Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1923] NZLR 1137 at 1175. 226. Pyramid Building Society (in liq) v Scorpion Hotels Pty Ltd [1998] 1 VR 188. 227. Similarly, in Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133, the court found that mere negligence is not sufficient to constitute fraud; rather, wilful blindness must exist if a failure to make relevant inquiries is to constitute statutory fraud. 228. Assets Co Ltd v Mere Roihi [1905] AC 175 at 210–12; Haji Abdul Rahman v Mahomed Hassan [1917] AC 209 at 216; Abigail v Lapin [1934] AC 491 at 505. Point made by Butt, Land Law, note 25 above, p 798. 229. Stuart v Kingston (1923) 32 CLR 309 at 359 per Starke J. 230. Stuart v Kingston (1923) 32 CLR 309 at 359 per Starke J. 231. Bahr v Nicolay (No 2) (1988) 164 CLR 604; 78 ALR 1 at 6. 232. Bahr v Nicolay (No 2) (1988) 164 CLR 604; 78 ALR 1 at 7. The facts of Bahr v Nicolay are discussed below at 8.97. While Mason CJ and Dawson J held that the Thompsons’ post-registration repudiation of their undertaking constituted Torrens fraud, their view was in the minority on this

point. In contrast, eg, Wilson and Toohey JJ observed that although the Thompsons ‘agreed to buy in the hope, even expectation, that the Bahrs would not be able to buy back the property’, this was not Torrens fraud, as it was not their intention to ensure to ensure that the Bahrs did not do so. Thus, the requisite intention was not dishonest at the relevant time, ie, at the time, or in the process of, obtaining their registered interest. 233. Bank of South Australia v Ferguson (1998) 192 CLR 248; 151 ALR 729. 234. Bank of South Australia v Ferguson (1998) 192 CLR 248 at 255; 151 ALR 729 at 732. 235. Butt, Land Law, note 25 above, p 798, makes this point. 236. Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 221. 237. Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 514. 238. See also Russo v Bendigo Bank Ltd [1999] 3 VR 376. In regard to the agency issue, Owen J in Conlan v Registrar of Titles (2001) 24 WAR 299 found that the agent’s knowledge of fraud became the principal’s knowledge only if the agent’s knowledge could be imputed to the principal. Note that an example of a case which involved ‘equitable fraud’ and dishonesty is Latec Investments Pty Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265. 239. Australian Guarantee Corporation Ltd v De Jager [1984] VR 483. 240. Ratcliffe v Watters (1969) WN (NSW) (Pt 1) 497. 241. For a discussion of fraud by an agent, see Critchley v Collins [2004] SASC 10. 242. Russo v Bendigo Bank Ltd [1999] 3 VR 376. 243. Russo v Bendigo Bank Ltd [1999] 3 VR 376 at [42]. 244. Hickey v Powershift Tractors Pty Ltd (1999) NSW ConvR ¶55-889. 245. Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 221. 246. Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73. See also P Butt, ‘When is an Interest “Recorded” in the Torrens Title Register?’ (2013) 87 ALJ 230. 247. Before the introduction of a computerised Register, records were kept in a register book. See 8.12. 248. Siemenski v Brooks Nominees Pty Ltd 1990 Tas R 236. It is necessary to give the dealing number because this allows a party to investigate properly and find out, for example, what terms are contained in an interest, such as a covenant referred to in a certificate of title. It is not enough for the recording merely to name the interest without providing a dealing number that can be followed up to reveal more about the interest or estate. 249. Toohey v Gunther (1928) 41 CLR 181 demonstrates that a purchaser does not have to examine a discharged mortgage for fear of being bound by notice of restrictive covenants. Again, this is an example of the ‘curtain principle’ at work. 250. Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73. 251. Real Property Act 1900 (NSW) s 42(1)(a). 252. P Carruthers and N Skead, ‘The Prior Certificate of Title and Wrongful Description of Land Exceptions to Indefeasibility: Resolving the Overlap’ (2009) 17 APLJ 240. 253. There is no evidence of this issue having been litigated in New South Wales. The issue has been litigated in the Victorian jurisdiction: see Hassett v Colonial Bank of Australasia (1881) 7 VLR 380; Stevens v Williams (1886) 12 VLR 152. See also R A Woodman, K Nettle, F Ticehurst, P Butt, L Hughes and J Stuckey-Clarke, Torrens System in New South Wales, looseleaf, Lawbook Co, [42.180].

254. See M McGuire, ‘A New South Wales Perspective on Implied and Prescriptive Easements and the Rights in personam Exception to Indefeasibility of Title’ (2006) 12(3) APLJ 228. For a discussion of whether an equitable Wheeldon v Burrows easement (see Wheeldon v Burrows (1879) 12 Ch D 31, discussed at 12.26) survives transfer to the vendor’s successor in title and the effect of registration under the Real Property Act, see McGrath v Campbell (2006) NSW ConvR 56–159. 255. James v Stevenson [1893] AC 162. See also Dobbie v Davidson (1991) 23 NSWLR 625. 256. A ‘servient tenement’ is the name given to the land over which an easement is exercised. 257. Australian Hi-Fi Publications Pty Ltd v Gehl [1979] 2 NSWLR 618 at 623–4. 258. Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286. 259. See Hamilton v Iredale (1903) 3 SR (NSW) 535 at 550; Michael v Onisforou (1977) 1 BPR 9356; Gardener v Lewis [1998] 1 WLR 1535 at 1538. 260. See Wilson v Registrar-General of New South Wales (2004) 12 BPR 22,667. 261. Marsden v McAlister (1887) NSWLR (L) 300. 262. See McGuinness v Registrar-General (1998) 44 NSWLR 61 at 69. For discussion of this exception, see Carruthers and Skead, ‘The Prior Certificate of Title and Wrong Description of Land Exceptions to Indefeasibility: Resolving the Overlap’, note 252 above. 263. See 8.25 for the text of the provision. 264. See Real Property Act 1990 (NSW) s 53; Parkinson v Braham [1962] SR (NSW) 663. 265. Hammond v Farrow [1904] 2 KB 332; United Star Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331 at 347. See also Chapter 11 for a discussion of these types of tenancies. 266. Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53 at 58–9. 267. Austin Construction Co (Australia) Ltd v Becketts Holdings Pty Ltd (1958) 75 WN (NSW) 444. 268. This includes notice pursuant to Hunt v Luck [1902] 1 Ch 428. If a purchaser has notice that someone other than the vendor is in possession, the purchaser is deemed to have constructive notice of the occupant’s rights. See Marsden v Campbell (1897) 18 LR (NSW) Eq 33; Clyne v Lowe (1968) 69 SR (NSW) 433 at 436. 269. The term ‘settlement’ means ‘completion’ in this context. 270. For an appreciation of this interconnectedness, see Taylor J’s judgment in IAC (Finance) v Courtenay (1963) 110 CLR 550. For discussion of s 43A of the Real Property Act, see 8.171–8.181. 271. See R Stein and M Stone, Torrens Title, Butterworths, Sydney, 1991, p 108; Woodman et al, Torrens System in New South Wales, note 253 above, [42.350]. 272. This question was raised in Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53 at 63. Of course, the unregistered lease might be enforceable as an equitable interest, under other exceptions to indefeasibility. See 8.128. Note that Butt has raised the possibility (and benefits) of treating a lease for less than three years separately from an accompanying option where the option would cause the ‘joint package’ of lease and option to extend beyond three years. One justification for such a view is to permit alignment between s 42(1)(d) and s 53 of the Real Property Act. Section 53 requires that leases beyond three years be registered but s 53 does not require leases for less than three years to be registered. Hence, a lease for less than three years may be left unregistered but may not gain the protection of s 42(1)(d). See Butt, Land Law, note 25 above, p 817.

273. An in personam right may also arise out of the conduct of the registered proprietor’s agent or employee. However, for simplicity, the following discussion refers only to the registered proprietor’s conduct. 274. See Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 563 for pre-registration conduct giving rise to a right in personam. See also Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 638; 78 ALR 1 at 24; Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32 at 42; Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222–3. 275. For further discussion of the in personam exception, see L Moses and B Edgeworth, ‘Taking it Personally: Ebb and Flow in the Torrens Systems in Personam Exception to Indefeasibility’ (2013) 35 Sydney LR 107; K Low, ‘The Nature of Torrens Indefeasibility: Understanding the Limits of Personal Equities’, note 129 above; S Hepburn, ‘Concepts of Equity and Indefeasibility in the Torrens System of Land Registration’ (1993) 3(1) APLJ 44; L Aitken, ‘What is a Personal Equity and Can it Dislodge a Registered Proprietor?’ (1994) 7 LSJ 36; S Robinson, ‘Claims In Personam in the Torrens System: Some General Principles’ (1993) 67 ALJ 355; L McCrimmon, ‘Protection of Equitable Interests Under the Torrens System: Polishing the Mirror of Title’ (1994) 20 Mon ULR 649. 276. Frazer v Walker [1967] 1 AC 569. 277. Frazer v Walker [1967] 1 AC 569 at 585. See also Barry v Heider (1914) 19 CLR 197 at 213. See also Phillips v Martin (1890) 11 LR (NSW) 153. 278. The term ‘personal equity’ is used in Breskvar v Wall (1971) 126 CLR 376 at 385. 279. Note that in some Australian jurisdictions, the exception is also statutorily enshrined: see, eg, Land Title Act 1994 (Qld) s 185(1)(a). 280. As noted, the cause of action can be either legal or equitable: Barry v Heider (1914) 19 CLR 197 at 213; Vassos v State Bank of South Australia [1993] 2 VR 316. White v Tomasel [2004] 2 Qd R 438 takes a different position on this point but that view is not well supported in other case law. For examples of unconscionability, see Tutt v Doyle (1997) 42 NSWLR 10 at 12; Minister for Education and Training v Canham [2004] NSWSC 274. 281. Grosvenor Mortgage Management Pty Ltd v Younan (NSWSC, Young J, 23 August 1990, unreported, BC9002094); Horvath v Commonwealth Bank of Australia [1999] 1 VR 643, where a minor executed a dealing, provides an example where there was no known cause of action to support the in personam exception. 282. Garofano v Reliance Finance Corp Pty Ltd (1992) NSW ConvR ¶55-640 at 59,661; Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202; Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722; Vassos v State Bank of South Australia [1993] 2 VR 316. 283. Vassos v State Bank of South Australia [1993] 2 VR 316; Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133. 284. Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222–3 per Powell JA. This view was reaffirmed in Ceedive Pty Ltd v May [2005] NSWSC 222 at [81]. 285. Barry v Heider (1914) 19 CLR 197; Vassos v State Bank of South Australia [1993] 2 VR 316. 286. Barry v Heider (1914) 19 CLR 197 at 213 per Isaacs J; Vassos v State Bank of South Australia [1993] 2 VR 316 at 333 per Hayne J. See also the discussion in McGrath v Campbell (2006) NSW ConvR 56-159. 287. White v Tomasel [2004] 2 Qd R 438 per Davies JA. See S Christensen and W Duncan, ‘Is

Indefeasibility of Title a Bar to Restitution after Reversal of a Judgment on Appeal?’ (2005) 11 APLJ 81; L Griggs, ‘In Personam, Garcia v NAB and the Torrens System — Are they Reconcilable?’ (2001) 1 QUTLJ 76. 288. White v Tomasel [2004] 2 Qd R 438 per Williams JA and McMurdo J; Harris v Smith (2008) 14 BPR 26,223 at [67]. 289. On the merits of unconscionability as a superadded requirement for an in personam action, see further, L Moses and B Edgeworth, ‘Taking it Personally: Ebb and Flow in the Torrens Systems in Personam Exception to Indefeasibility’, note 275 above. 290. Oh Hiam v Tham Kong (1980) 2 BPR 9451. 291. Mercantile Mutual Life Insurance v Gosper (1991) 25 NSWLR 32 at 48. This case is discussed further below at 8.98. 292. Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 where land was registered without having been resumed according to statutory requirements. 293. Lukacs v Wood (1978) 19 SASR 520; Majestic Homes Pty Ltd v Wise [1978] Qd R 225. 294. Tataurangi v Tairuakena v Maua Carr [1927] NZLR 688 at 702; Corozo Pty Ltd v Total Australia Ltd [1988] 2 Qd R 266. 295. Smilevska v Smilevska (No 2) [2016] NSWSC 397. 296. Spina v Conran Associates Pty Ltd (2008) 13 BPR 25,435. 297. Bahr v Nicolay (No 2) (1988) 164 CLR 604; 78 ALR 1. 298. Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 653; 78 ALR 1 at 35. 299. See Hinds v Uellendahl (No 2) (1992) 112 FLR 222. 300. Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd (2003) 59 NSWLR 312 at [103]–[104] per Austin J. See also, Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405 at [73] per Gleeson JA. 301. See, eg, Wicks v Bennett (1921) 30 CLR 80; RM Hosking v Barnes [1971] SASA 100. Note that both cases were decided before Bahr v Nicolay (No 2) (1988) 164 CLR 604. 302. While the High Court was unanimous in finding a trust in favour of the Bahrs, which gave rise to an in personam action, the court was divided on the question of whether this constituted an express trust (Mason CJ and Dawson J in Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 618) or a constructive trust (Wilson and Toohey JJ at 638). 303. Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32. 304. The decision was distinguished in Ginelle Finance Pty Ltd v Diakakis (2002) 12 BPR 22,137. 305. Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32 at 52. 306. D Sonter, ‘Case Note’ (1992) 15 UNSWLJ 546; S Robinson, ‘Claims In Personam in the Torrens System: Some General Principles’ note 275 above; E Toomey, ‘Certainty of Title in the Torrens System’ (2000) 4 FJLR 235; D Skapinker, ‘Equitable Interests, Mere Equities, “Personal” Equities and “Personal Equities” — Distinctions with a Difference’ (1994) 68 ALJ 593; L Griggs, ‘In Personam, Garcia v NAB and the Torrens System — Are They Reconcilable?’, note 287 above. 307. P Butt, ‘Indefeasibility and Sleights of Hand’ (1992) 66 ALJ 596 at 597. 308. See Butt, ‘Indefeasibility and Sleights of Hand’, note 307 above; F Cooke and P O’Connor, ‘Purchaser Liability to Third Parties in the English Land Registration System: A Comparative

Perspective’ (2004) 120 LQR 640 at 650. 309. Vassos v State Bank of South Australia [1993] 2 VR 316. 310. Vassos v State Bank of South Australia [1993] 2 VR 316 at 333. 311. Garofano v Reliance Finance Corporation Pty Ltd (1992) NSW ConvR ¶55-640. 312. Garofano v Reliance Finance Corporation Pty Ltd (1992) NSW ConvR ¶55-640 at 59,659. 313. Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722 at 739. 314. Lissa v Cianci (1993) NSW ConvR ¶55-667. 315. Lissa v Cianci (1993) NSW ConvR ¶55-667 at 59,815. 316. D Skapinker, ‘Equitable Interests, Mere Equities, “Personal” Equities and “Personal Equities” — Distinctions with a Difference’, note 306 above; Mr Justice P W Young, ‘Indefeasibility Affected by “Equities” — What is an Equity? Case Note: White v Tomasel’ (2005) 79(1) ALJ 30. 317. D Skapinker, ‘Equitable Interests, Mere Equities, “Personal” Equities and “Personal Equities” — Distinctions with a Difference’ (1994), note 306 above. 318. Grgic v Australia and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222–3. The following cases have relied on the in personam exception: Lukacs v Wood (1978) 19 SASR 520 (voidable or rectification for mistake); Lissa v Cianci (1993) NSW ConvR ¶55-667 (non est factum); Tataurangi Tairuakena v Mua Carr [1927] NZLR 688 (breach of fiduciary obligation); Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 (breach of statutory requirements as a condition precedent to the acquisition of title); Bahr v Nicolay (No 2) (1988) 164 CLR 604; 78 ALR 1 (breach of an express or implied term to be bound by interest of third party). By contrast, in Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722, the court found that there was no personal equity to deregister a dealing just because an irregular document had been registered. 319. Barnes v Addy (1873) LR 9 Ch App 244. For a detailed analysis of the rule, see J Dietrich and P Ridge, Accessories in Private Law, Cambridge University Press, Cambridge, UK, 2015, particularly Ch 8. 320. Barnes v Addy (1873) LR 9 Ch App 244. 321. Accessory liability triggers compensation. See Koorootang Nominees Pty Ltd v ANZ Banking Group Ltd [1998] 3 VR 16 at 101; Equiticorp Industries Group Ltd v R [1996] 3 NZLR 586 at 604. 322. Tara Shire Council v Garner [2003] 1 Qd R 556. Note that this case involved only interlocutory proceedings. 323. Say-Dee Pty Ltd v Farah Constructions Pty Ltd [2005] NSWCA 309. 324. See the following, discussing restitution and equity: B Strahorn, ‘The End of Knowing Receipt? A Riposte to Unjust Enrichment’ (2006) 80 ALJ 765. 325. Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 per Tadgell J. 326. LHK Nominees v Kenworthy (2002) 26 WAR 517. The different Torrens legislation in different states may account for some of the variation between decisions in this area. 327. Farah Constructions Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89. 328. Say-Dee Pty Ltd v Farah Constructions Ltd [2005] NSWCA 309. 329. Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133. 330. Breskvar v Wall (1971) 126 CLR 376.

331. L Aitken, ‘“Knowing Receipt” Following Farah Constructions Pty Ltd’ (2007) 29 Syd LR 713; K Low, ‘The Nature of Torrens Indefeasibility: Understanding the Limits of Personal Equities’, note 129 above. For a more detailed discussion of Say-Dee’s case in the High Court, see Bradbrook, MacCallum, Moore and Grattan, Australian Real Property Law, note 113 above, p 256. 332. M Bryan, ‘Recipient Liability under the Torrens System: Some Category Errors’ (2006) UQLJ 83; L Griggs, ‘In Personam, Barnes v Addy and the High Court’s Deliberations in Farah Constructions Pty Ltd v Say-Dee Pty Ltd’ (2008) 15 APLJ 268. 333. See, eg, Super 1000 v Pacific General Securities [2008] NSWSC 1222; (2008) 221 FLR 427; Break Fast Investments Pty Ltd v Giannopoulos (also known as Giannopoulos) (No 5) [2011] NSWSC 1508; Sze Tu v Lowe [2014] NSWCA 462 (special leave to appeal to the High Court refused); Owners Corporation of Strata Plan 71623 v Waldorf Apartments Hotel, The Entrance Pty Ltd [2015] NSWSC 1658. 334. Jin v Yang [2008] NSWSC 754. Note that while the court did not find that a personal equity existed, it did ultimately find actual fraud on the part of the son due to his ‘collusive and mala fide’ conduct, bringing his conduct under the fraud exception in the Real Property Act. See Jin v Yang [2008] NSWSC 754 at [79]–[81]. 335. Jin v Yang [2008] NSWSC 754 at [59]. 336. Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1 at 35. On the operation of s 109 of the Commonwealth Constitution, as the mechanism to resolve inconsistency between Commonwealth law and a state law (such as the Real Property Act 1900 (NSW)), see, generally, D Meagher, A Simpson, J Stellios and F Wheeler, Hanks Constitutional Law: Materials and Commentary, 10th ed, LexisNexis Butterworths, Sydney, 2016, pp 567–615. 337. At other times, the authorisation of an interest, which is not proprietary in nature itself, but which still impacts on and affects a registered interest, may also be of concern. 338. For a discussion of overriding statutes, see, generally, D Pearce and R Geddes, Statutory Interpretation in Australia, 8th ed, LexisNexis Butterworths, Sydney, 2014, Ch 7. For specific discussion of the consequences of inconsistent legislation in the Torrens context, see P O’Connor, ‘Public Rights and Overriding Statutes as Exceptions to Indefeasibility of Title’ (1994) 19 MULJ 649; S Hepburn, ‘Interpretive Strategies in the Overriding Legislation Exception to Indefeasibility’ (2009) 21 Bond LR 86. 339. See, eg, South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603, where the High Court held that a statute containing the term ‘first charge’ meant exactly that — first — so that the charge could not be defeated by registration of a charge pursuant to the Real Property Act 1886 (SA). The 23 Acts listed in the Real Property and Conveyancing Amendment Act 2009 (NSW) Sch 3 provide other illustrations. 340. Miller v Minister of Mines [1963] AC 484. 341. Pratten v Warringah Shire Council (1969) 90 WN (Pt 1) (NSW) 134. 342. Pratten v Warringah Shire Council (1969) 90 WN (Pt 1) (NSW) 134 at 134. 343. Pratten v Warringah Shire Council (1969) 90 WN (Pt 1) (NSW) 134 at 135. 344. Pratten v Warringah Shire Council (1969) 90 WN (Pt 1) (NSW) 134 at 135. See further discussion in P O’Connor, ‘Public Rights and Overriding Statutes as Exceptions to Indefeasibility of Title’, note 338 above. For another illustration of inconsistency, see Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1, where Gibbs J (with Menzies J agreeing on this point), found that s 88B of the Industrial Arbitration Act (1940) (NSW), which rendered a lease void, overrode the Real Property

Act. 345. Kogarah Municipal Council v Golden Paradise Corp [2005] NSWCA 230. 346. Miller v Minister for Mines [1963] AC 484. 347. See, eg, City of Canada Bay v Bonaccorso Pty Ltd (2007) 71 NSWLR 424. See further discussion in B Edgeworth, ‘“Very High Bar to Clear”: Implied Repeal of Torrens Legislation after City of Canada Bay Council v Bonaccorso Pty Ltd’ (2008) 82 ALJ 436. 348. Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472 at [100] per Kirby J (although noting that that principle was not of assistance in that case because of the two conflicting public interests at stake). 349. City of Canada Bay v Bonaccorso Pty Ltd (2007) 71 NSWLR 424. 350. For discussion, see B Edgeworth, ‘Planning Law v Property Law: Overriding Statutes and the Torrens System after Hillpalm v Heaven’s Door and Kogarah v Golden Paradise’ (2008) 25 EPLJ 82. 351. Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472. See further, P Radan, ‘Indefeasibility and Overriding Statutes’ (2003) 41(6) LSJ 66; P Butt, ‘Indefeasibility and Council Consent Conditions’ (2005) 79(3) ALJ 143. 352. Kirby and Callinan JJ dissented. They held that the council had imposed the condition and that the title of the appellant was defeasible in favour of the condition: Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472 at 502 and 514–5 respectively. 353. However, the majority noted that there would have been a ‘real and lively question’ about inconsistency and implied repeal had the condition been imposed as a continuing condition on the use of the land: see Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472 at 491. 354. Kogarah Municipal Council v Golden Paradise Corp [2005] NSWCA 230. See S Hepburn, ‘Interpretative Strategies in the Over-riding Legislation Exception to Indefeasibility’ (2009) 21 Bond LR 86 at 91 for commentary on how this case applied Hillpalm. 355. Kogarah Municipal Council v Golden Paradise Corp [2005] NSWCA 230 at [99]. 356. Quach v Marrickville Municipal Council (1990) 22 NSWLR 55. 357. See Real Property and Conveyancing Amendment Act 2009 (NSW) Sch 3. 358. The provision has been criticised, see, eg, B Edgeworth ‘Indefeasibility and Overriding Statutes: An Attempted Solution’ (2009) 83 ALJ 655. 359. Re Sundara Ptd Ltd [2015] NSWSC 1694. 360. Re Sundara Pty Ltd [2015] NSWSC 1694 at [59]. Black J also found that the relevant provisions could be given successive effect with the Real Property Act and so no inconsistency would arise. 361. South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603. Section 6 of the Real Property Act 1886 (SA) provided that ‘[n]o law, so far as inconsistent with this Act, shall apply to land subject to the provisions of this Act, nor shall any future law, so far as inconsistent with this Act, so apply unless it shall be expressly enacted that it shall so apply notwithstanding the provisions of The Real Property Act 1886’. 362. The operation of s 12(1)(d) was considered in the context of correcting lot numbers (in a strata plan) in Kirkland v Quinross Pty Ltd [2008] NSWSC 286. That case found that s 12(1)(d) could not be used to correct lot numbers without ‘having regard to whether the proprietors and mortgagees of the affected lots consented to the change’.

363. Eg, Registrar of Titles (WA) v Franzon (1975) 132 CLR 611; Sahade v Owners Corporation SP 62022 [2013] NSWSC 1791. 364. Registrar of Titles (WA) v Franzon (1975) 132 CLR 611. 365. See further, discussion in N Skead and P Carruthers, ‘The Registrar’s Powers of Correction: “Alive and Well”, Though Perhaps “Unwelcome”? Part I: The Slip provision’ (2010) 18 APLJ 32; ‘Part II: The Substantive Provision’ (2010) 18 APLJ 132. 366. State Bank of New South Wales v Berowra Waters Holdings Pty Ltd (1986) 4 NSWLR 398. 367. Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395 at 183. While the Court of Appeal decision was reversed in the High Court, it was not reversed on this point: see Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149. 368. Real Property Act 1900 (NSW) s 12(3)(d). 369. Real Property Act 1900 (NSW) s 12(3)(b). 370. See Frazer v Walker [1967] 1 AC 569 at 585–6. 371. Real Property Act 1900 (NSW) s 12(3). 372. James v Registrar-General (1967) 69 SR (NSW) 361 per Walsh J. For a discussion of how a mistaken measurement on a registered plan did not lead to an augmentation of the registered proprietor’s indefeasible title in the Queensland context, see Beames v Queensland [2002] QSC 83. 373. Real Property Act 1900 (NSW) s 138(3). 374. Mogo Local Aboriginal Land Council v Eurobodalla Shire Council [2002] NSWCA 12. 375. See further, 14.28. 376. R Atherton, ‘Donees, Devisees and Torrens Title: The Problem of Volunteers under the Real Property Act’ (1998) 4(2) Australian Journal of Legal History 121; P Radan, ‘Volunteers and Indefeasibility’ (1999) 7 APLJ 197. Note that a volunteer is someone who takes with no or minimal consideration. 377. See, eg, Real Property Act 1900 (NSW) ss 42(1)(b), 135. 378. King v Smail [1958] VR 273. 379. See also the Victorian cases of Rasmussen v Rasmussen [1995] 1 VR 613 and Valoutin Pty Ltd v Furst (1998) 154 ALR 119, which took the same approach. 380. Bogdanovic v Koteff (1988) 12 NSWLR 472. See Croucher, ‘Inspired Reform or Quick Fix? Or, “Well Mr Torrens, What Do You Reckon Now?” A Reflection on Voluntary Transactions and Forgeries in the Torrens System’, note 153 above; Atherton, ‘Donees, Devisees and Torrens Title: The Problem of the Volunteer under the Real Property Act’, note 376 above. 381. Frazer v Walker [1967] 1 AC 569. 382. Breskvar v Wall (1971) 126 CLR 376. 383. Bogdanovic v Koteff (1988) 12 NSWLR 472 was applied in Milutinovic v Milutinovic [2004] NSWSC 1110. 384. Arambasic v Veza (No 4) [2014] NSWSC 1109. See further discussion in P Butt, ‘Volunteer Gets Indefeasibility’ (2015) 89 ALJ 81. 385. Arambasic v Veza (No 4) [2014] NSWSC 1109 at [164]. 386. See discussion at 8.202.

387. The specific application of Real Property Act 1900 (NSW) s 118(1)(d)(ii) and its impact on volunteers’ indefeasible title is discussed at 8.127. Note that in the High Court case of Farah Constructions v Say-Dee Ltd (2007) 230 CLR 89, the High Court noted the volunteers issue but simply proceeded on the basis that volunteers, once registered, gained indefeasibility pursuant to s 42 of the Real Property Act in the way that Breskvar v Wall (1971) 126 CLR 376 had enunciated: at [188], [189]. 388. Rasmussen v Rasmussen [1995] 1 VR 613 at 634. 389. Lowe v Sze Tu [2015] HCATrans 179. This case concerned an attempt to reopen Farah Constructions Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 in a situation where a registered volunteer had knowing receipt of trust property. In this regard, the facts that case did not raise the ‘typical’ volunteer scenario of Bogdanovic v Koteff (1988) 12 NSWLR 472 or King v Smail [1958] VR 273. 390. Bogdanovic v Koteff (1988) 12 NSWLR 472. 391. This test was first expounded in Milroy v Lord (1862) 4 De GF & J 264, but not refined and settled in Australia until Corin v Patton (1990) 169 CLR 540; 92 ALR 1 was decided. See also T Choithram International SA v Pagarani [2001] 1 WLR 1 (PC). 392. Corin v Patton (1990) 169 CLR 540; 92 ALR 1. See also Stefanovic v Petrovic (NSWCA, Gleeson CJ, Meagher JA, Hope AJA, 30 October 1989, unreported, BC8901527). Compare Costin v Costin (1997) ANZ ConvR 401. 393. Costin v Costin (1997) ANZ ConvR 401. 394. Corin v Patton (1990) 169 CLR 540 at 557, 583 per Mason CJ and McHugh J. Compare Brennan J at 568 and Toohey J at 593. See also Costin v Costin (1997) ANZ ConvR 401. 395. Watts v Public Trustee (1949) 50 SR (NSW) 130; Bayliss v Public Trustee (1988) 12 NSWLR 214. 396. Strong v Bird (1874) LR 18 Eq 315. 397. Cope v Keen (1968) 118 CLR 1 at 8; I J Hardingham, M A Neave and H A J Ford, Wills and Intestacy in Australia and New Zealand, 2nd ed, Law Book Co, Sydney, 1989, p 508. 398. Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425. 399. For consideration of the role of equity as it affects the Torrens system in another jurisdiction, see Yong Chui Mei, ‘The Role of English Equity in the Peninsular Malaysian Torrens System of Land Law: A Review of Salient Statutory Provisions’ (Pt 1) [2005] 1 MLJ lxvii; Yong Chui Mei, ‘The Role of English Equity in the Peninsular Malaysian Torrens System of Land Law: A Review of Salient Statutory Provisions’ (Pt 2) [2005] 2 MLJ cvii. 400. See discussion at 8.19. 401. Barry v Heider (1914) 19 CLR 197 at 219; Brunker v Perpetual Trustee Co Ltd (1937) 57 CLR 555 at 580 and 581. 402. Cresdon v Chan Pty Ltd (1989) 64 ALJR 111 at 117. 403. Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407. 404. S Robinson, ‘Caveatable Interests — Their Nature and Priority’ (1970) 44 ALJ 351 criticises this approach. For application of the ‘first in time’ rule in relation to two competing unregistered interests, see Pelenoy Pty Ltd v Donovan Oates Hannaford Mortgage Corp [2004] NSWSC 4. 405. Barry v Heider (1914) 19 CLR 197 at 219. 406. See Chapter 7 for a discussion of old system priorities.

407. See Re Hitchcock (1900) 17 WN (NSW) 62 at 63; Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222. 408. L Aitken, ‘“Many Shabby Manoeuvres” — The Use and Abuse of Caveats in Theory and Practice’ (2005) 26 Australian Bar Review 205. For a discussion on caveats and indefeasibility in the context of mining legislation, see A Gardner and M Jorek, ‘Dealings with Mining Titles Under the Mining Act 1978 (WA): Part 2 — The Effect of Registration and Caveats’ (2006) 25 ARELJ 41. 409. Leros Pty Ltd v Terara Pty Ltd (1991) 174 CLR 407 at 422 per Mason CJ, McHugh and Dawson JJ. 410. Butler v Fairclough (1917) 23 CLR 78 at 91. Note that, although the word ‘temporary’ is used here, the court refers to ‘permanent protection’ (at 85). The position is this: until the caveat lapses as a result of the proprietor’s application, the caveator is at liberty to think of the caveat as remaining in force indefinitely. 411. Abigail v Lapin [1934] AC 491 at 500. 412. Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd (2007) 35 WAR 27 at [42]–[45] discusses the distinction between different types of caveats. 413. This form of caveat is rarely used today. 414. Real Property Act 1900 (NSW) ss 74F, 74G, 74I, 74K, 74MA, 74O, 74P, 74Q and 74R. 415. Black v Garnock (2007) 230 CLR 438 at 469 [78] per Callinan J. 416. Jessica Holdings Pty Ltd v Anglican Property Trust Diocese of Sydney (1992) 27 NSWLR 140; Locke v Yogoat Pty Ltd (1992) 5 BPR 11,687. 417. Section 74F(5) of the Real Property Act sets out the necessary formal requirements. A caveat must specify ‘the prescribed particulars’ so that the registered proprietor can respond to the caveat. These include the name and address of the caveator, usually the name and address of the registered proprietor, the prescribed particulars of the legal or equitable estate or interest or the right arising out of a restrictive covenant, etc. The caveat must also be verified by a statutory declaration. Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260 stated that whether the interest is adequately described is ‘to be decided from the point of view of a person examining the caveat, who need not necessarily be the registered proprietor’: at [7] per White J, citing Hanson Construction Materials Pty Ltd v Vimwise Civil Engineering Pty Ltd [2005] NSWSC 880. 418. Butt, Land Law, note 25 above, p 770, argues that the relevant regulations have the effect of imposing detailed requirements ‘that reflect the substance of the earlier judicial gloss’. Hence, a more liberal approach is not, in reality, encouraged. 419. Butt, Land Law, note 25 above, p 770. 420. Jones v Baker (2002) 10 BPR 19,115 at [31]–[34]. 421. Note that, until s 97(1A) was passed in 1979, the Registrar-General was under no duty to record caveats in the Register. He or she did not even have to disclose them in official searches. Section s 97(1A) has now been replaced by s 74G, which requires the Registrar-General to record the caveat in the Register if he or she is satisfied that the caveator has complied with the Act. It is, however, not necessary for the Registrar-General to establish as a question of law whether or not an interest in land exists. Section 74Q merely requires that it complies ‘on its face’. Although a Queensland case, McMurdo P in Allen’s Asphalt Pty Ltd v SPM Group Pty Ltd [2010] 1 Qd R 202; [2009] QCA 134 summarised the steps of the legislative template for caveats, which is fairly uniform across jurisdictions. 422. Real Property Act 1900 (NSW) s 74F(6).

423. Real Property Act 1900 (NSW) s 74I(1). 424. Real Property Act 1900 (NSW) s 74J(1). 425. Real Property Act 1900 (NSW) s 74MA. 426. The practical effect of a caveat may also be to give notice of the caveator’s interest. 427. Barry v Heider (1914) 19 CLR 197 at 219. 428. Section 74F(2) of the Real Property Act permits a registered proprietor to lodge a caveat against his or her own registered interest. This practice was held to be acceptable in Barry v Heider (1914) 19 CLR 197 at 219. See L Aitken, ‘Does a Registered Proprietor Have the Power to Caveat?’ (2010) 84(1) ALJ 22. 429. See Jensen v Guigni (1994) 6 BPR 13,667. 430. Australian Security Estates Pty Ltd v Bluecrest Holdings Pty Ltd (1999) 9 BPR 17,533. 431. See Real Property Act 1900 (NSW) s 36(1B); Ginger Development Enterprises Pty Ltd v Crown Developments Australia Pty Ltd [2003] NSWCA 296 at [35]. 432. Butler v Fairclough (1917) 23 CLR 78 at 91 per Griffith CJ. See also Abigail v Lapin (1934) AC 491 at 502 per Lord Wright. 433. J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546 at 556. The word ‘caveat’ is Latin for ‘let a person beware’. 434. Black v Garnock (2007) 230 CLR 438. 435. Black v Garnock (2007) 230 CLR 438 at 463 [76]. 436. In cases such as these, the would-be caveator should seek an injunction but an injunction will be granted only if it can be shown that the would-be caveator’s interest had priority over the person who was seeking to deal with the registered interest. 437. Oertel v Hordern (1902) 2 SR (NSW) Eq 37 at 38. However, a failure to lodge a caveat is not necessarily fatal. See later discussion under the heading of ‘Arming Conduct’ at 8.163; but for the present, see Capital Finance Australia v Struthers (2008) 14 BPR 98,328 at [12]; [2008] NSWSC 440 per Hamilton J. For excellent discussion of the law of caveats, see L Aitken, ‘Current Issues with Caveats: A Pan-Australian Conspectus’ (2010) 84 ALJ 22. For a summary of the case law on caveats, see Elderly Citizens Homes of SA Inc v Balnaves (1998) 72 SASR 210 per Debelle J. 438. See 8.164. 439. Real Property Act 1900 (NSW) s 74R. 440. Real Property Act 1900 (NSW) s 74F. For a discussion of whether a registered proprietor has a caveatable interest in the Victorian jurisdiction, and a comparison with New South Wales and the operation of s 74F(2), see D Wright, ‘Does a Registered Proprietor Have a Caveatable Interest?’ (1995) 69(12) ALJ 935. 441. Eg, an interest in a second mortgage is not an interest in land, but was held to be caveatable under the Transfer of Land Act 1958 (Vic): see Re Victorian Farmers’ Loan and Agency Co Ltd (1897) 22 VLR 629. 442. However, if a contract expressly (or impliedly) grants a proprietary interest, that proprietary interest can be caveated, for example, a mortgage over a guarantor’s land where the mortgage is created to secure the guarantor’s obligations under the guarantee. See Capital Finance Australia Ltd v Karabassis (2003) 11 BPR 21,123. See also Betlehem v Keytown Constructions Pty Ltd [2007] WASC 38, which

affirms the accepted rule that a contractually binding agreement by a person possessing a caveatable interest not to lodge a caveat does not deprive that person of the statutory right to lodge, although doing so will involve a breach of contract. 443. Re Piles Caveats [1981] Qd R 81. 444. Bethian Pty Ltd v Green (1977) 3 Fam LR 11,579. 445. Ryan v Kalocsay [2009] NSWSC 1009. 446. Tierney v Loxton (1891) 12 LR (NSW) 308 at 314–15; P O’Connor, ‘Happy Partners or Strange Bedfellows: The Blending of Remedial and Institutional Features in the Evolving Constructive Trust’ (1996) 20 MULR 735 at 750–3; J Levine, ‘Does Equity Treat as Done that Which Ought to be Done? The Consequences Flowing from the Timing of the Imposition of a Constructive Trust’ (1997) 5(1) APLJ 74. 447. See J Robinson, ‘The Nature of Cautionable Interests’ (1971) 35 Conv (NS) 21 at 24; Miller v Minister of Mines [1963] AC 484; Bacon v O’Dea (1989) 88 ALR 486. 448. Classic Heights Pty Ltd v Black Hole Enterprises (1994) V Conv R ¶54-506. For a brief discussion of this case and of the way in which changes in unregistered interests constitute a caveatable interest, see P Butt, ‘Caveats: No More Black Holes’ (1996) 70(9) ALJ 683. 449. Clark v Raymor (Brisbane) Pty Ltd (No 2) [1982] Qd R 790. 450. Avco Financial Services v White [1977] VR 561. 451. King v AGC (Advances) Ltd [1983] 2 Qd R 75. 452. Bunning Building Supplies v Sgro (1995) V Conv R ¶54-535. 453. See also Troncone v Aliperti (1994) 6 BPR 13,291; Composite Buyers Ltd v Soong (1995) 38 NSWLR 286. These examples are taken from Woodman et al, Torrens System in New South Wales, note 253 above, [74F.100], which draws heavily on J Baalman, The Torrens System in New South Wales, Law Book Co, Sydney, 1951. Note also the following articles: P Wikrama, ‘Do Caveats Need Supporting by Registrable Instruments?’ [1995] LIJ 101; M Redfern, ‘Caveats and Unregistrable Leases Under the Victorian Transfer of Land Act’ (1995) 3(1) APLJ 83; P Butt, ‘Bootstrap Caveats’ (1994) 68 ALJ 752. 454. Schmidt v 28 Myola Street Pty Ltd (2006) 14 VR 447. 455. Nguyen v Kaha [2008] NSWCA 794; Perpetual Nominees Pty Ltd v Springfield Retail Pty Ltd [2009] NSWSC 188. 456. Re Paul (1902) 19 WN (NSW) 114. 457. Fernandes v Houstein (1963) 4 FLR 355. 458. Re Elliot (1886) 7 LR (NSW) 271. 459. Re Martin [1900] SASR 69. 460. Elwin v Monash (1879) 2 SCR (NSW) Eq 57. 461. Re a Caveat by Wadham (1879) 13 SALR 70. 462. Mihalic v Mihalic (1987) 73 ALR 304. 463. Re McKean’s Caveat [1988] 1 Qd R 524. 464. Connell v Bond Corp Pty Ltd (1992) 8 WAR 352. 465. Coles Supermarkets Australia Pty Ltd v Stateland Developments Pty Ltd [2008] NSWSC 1425 at [10];

Antar v Fairchild Developments Pty Ltd [2008] NSWSC 638. 466. Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57; 4 ALR 482. If the call option is subject to conditions that are not fulfilled, that may prevent a caveat from being lodged. It is probably the case that a ‘put’ option (forcing the holder of the option to purchase) is also caveatable: see Allam Homes Pty Ltd v Vocata [2003] NSWSC 628. 467. La Martina v Penney [1968] SASR 411. 468. Woodbury v Gilbert (1907) 3 Tas LR 7. 469. Shepherd v Houston [1927] SASR 144. 470. Eudunda Farmers’ Co-operative Society Ltd v Mattiske [1920] SASR 309. Further examples are listed in Woodman et al, Torrens System in New South Wales, note 253 above, [74F.120], from which these are taken. 471. Real Property Act (NSW) 1900 s 74I(5). 472. Butler v Fairclough (1917) 23 CLR 78 at 85. 473. Real Property Act (NSW) 1900 s 74J(1). 474. Real Property Act (NSW) 1900 s 74J(1). 475. Caveat removal pursuant to s 74MA(1) of the Real Property Act is particularly attractive where the caveat has been lodged vexatiously or frivolously. See Hastie v National Australia Bank Ltd (1994) 7 BPR 15,116. 476. Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 at 228. 477. McMahon v McMahon [1979] VR 239. 478. See Real Property Act 1900 (NSW) ss 74K(2) and 74MA. 479. Or if it should remain as opposed to being withdrawn (Real Property Act 1900 (NSW) s 74MA). 480. This is the same test as that used for interlocutory injunctions. See Re Jorss’ Caveat [1982] Qd R 458; Re Burman’s Caveat [1994] 1 Qd R 123. A caveat can also be extended pursuant to s 74; for an example of a case on this issue, see Queanbeyan Leagues Club v Poldune Pty Ltd (1996) 7 BPR 15,078. For a discussion of various judicial approaches to removing caveats, see W Caldwell, ‘Caveat Caveator’ (1990) 15 APLB 25; P Butt, ‘Removing Caveats’ (1994) 68(7) ALJ 524. Section 74MA(2) of the Real Property Act states that the court ‘may’ order withdrawal of a caveat. This leaves open the possibility that it ‘may not’ and, hence, the caveat would be extended. 481. Eng Mee Yong v Letchumanan [1980] AC 331. 482. Dowdle v Inverell Shire Council (1998) 9 BPR 17,349 at 17,350. 483. Re Jorss’ Caveat [1982] Qd R 458. 484. Re Jorss’ Caveat [1982] Qd R 458 at 465. Because the caveat (being described as a statuory injunction) is similar to an interlocutory injunction, the court examined what is necessary to succeed in an application for an interlocutory injunction. In that regard, it discussed the discretionary nature of the remedy, the ‘just and convenient’ test and the ‘balance of convenience’ as guiding principles. It also referred to the fact that it is unnecessary to demonstrate a ‘prima facie case’, but that the court will not tolerate a frivolous or vexatious claim. 485. Eng Mee Yong v Letchumanan [1980] AC 331 at 335. 486. Kerrabee Park v Daley [1978] 2 NSWLR 222.

487. Gibson v Co-ordinated Building Services Pty Ltd (1989) 4 BPR 9630 at 9631. 488. Eng Mee Yong v Letchumanan [1980] AC 331 at 337–8. 489. Pua Hor Ong v Wu You Yang Pty Ltd (2008) 103 SASR 9 at [66]. 490. Note that some commentators argue that this should not be seen as the only purpose of a caveat. See Aitken, ‘Many “Shabby Manoeuvres” — The Use and Abuse of Caveats in Theory and Practice’, note 408 above, at 213. 491. Chong v Chanell (No 2) [2009] NSWSC 1066. 492. L Aitken, ‘Current Issues with Caveats: A Pan-Australian Conspectus’, note 437 above, citing Chong v Chanell (No 2) [2009] NSWSC 1066 at [4] per Brereton J. 493. Tadrous v Tadrous [2009] NSWSC 407 at [6] per Brereton J. 494. Ross Cook & Brett Cook Pty Ltd v Bli Bli 1 Pty Ltd [2009] QSC 300. 495. Martyn v Glennan [1979] 2 NSWLR 234; Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459. 496. Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] 1 NSWLR 106 at 108. 497. Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459 at 474 per Clarke JA and 462 per Kirby P. 498. Nelson v Kimberley Homes Pty Ltd (1988) NSW ConvR ¶55-394; National Australia Bank Ltd v Bridge Wholesale Acceptance Corp (Aust) Ltd (1990) 21 NSWLR 96. 499. See Chapter 5. 500. See also Real Property Act 1900 (NSW) Pt 3 and ss 28C–28EA. 501. The Real Property Amendment (Electronic Conveyancing) Act 2015 (NSW) commenced on 1 October 2016. 502. Transfer of Land Act 1958 (Vic) Pt V Div 1B; Real Property Act 1886 (SA) Pt 13A. 503. Land Titles Act 1980 (Tas) s 52. 504. Land Title Act 1994 (Qld) Pt 7A. 505. New South Wales, Parliamentary Debates, Legislative Assembly, 6 August 2015, p 2169 (D Perrottet, Minister for Finance, Services and Property); Land and Property Information, Land and Property Information, Conveyancing Reform — Concurrent Electronic and Paper Conveyancing, note 70 above, p 16. Similar statements have been made concerning the operation of priority notices in Victoria (Department of Transport, Planning and Local Infrastucture, Aligning Paper and Electronic Conveyancing Requirements, Introductory Paper, October 2013, p 7). 506. See 8.159. 507. Real Property Act 1900 (NSW) s 74W(1). 508. Real Property Act 1900 (NSW) s 74U. 509. Real Property Act 1900 (NSW) s 74V(1)(a). 510. Real Property Act 1900 (NSW) s 74V(1)(b), (3) and (4). 511. Real Property Act 1900 (NSW) s 74X(2)(a). 512. Real Property Act 1900 (NSW) s 74T(1) and s 3 definition of ‘dealing’. See also, in the context of s 43A, 8.173–8.174.

513. Land and Property Information, Registrar General’s Guidelines, Priority Notices, New South Wales Government (accessed 1 June 2017), . 514. See Land Titles Act 1980 (Tas) s 3(1) definition of ‘dealing’; Four Oaks Enterprises Pty Ltd v Clark [2002] ANZ ConvR 440; Damdounis v Recorder of Titles (Tas) 2002 11 Tas R 185. 515. Real Property Act 1990 (NSW) s 74X(1). The notice may also be withdrawn by an Australian legal practitioner or a licensed conveyancer representing that party. 516. Real Property Act 1900 (NSW) ss 74V(2)(b), 74W(3). 517. Real Property Act 1900 (NSW) s 74X(2)(b). 518. Real Property Act 1900 (NSW) s 74X(2)(d). 519. Real Property Act 1900 (NSW) s 74V(2)(a), (c). 520. Real Property Act 1900 (NSW) s 74Y. 521. See Real Property Act 1900 (NSW) s 74N concerning service of notice of proceedings under Pt 7A. 522. Real Property Act 1900 (NSW) s 74Z. 523. Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] 1 NSWLR 106. 524. Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] 1 NSWLR 106 at 108 per Wootten J. 525. See Barry v Heider (1914) 19 CLR 197 at 208 and 216. 526. See further, 7.26–7.29. 527. Circuit Finance Australia Limited (recs and mgrs apptd) (in liq) v Panella [2011] NSWSC 311 at [13] per Pembroke J. 528. Butler v Fairclough (1917) 23 CLR 78 at 91 per Griffith CJ. 529. See, eg, Taleb v National Australia Bank Ltd (2011) 82 NSWLR 489. This case is discussed in L Aitken ‘Priority in Equity: Failure to Caveat and “Postponing Conduct”?’ (2012) 86 ALJ 291. See also AG(CQ) Pty Ltd as Trustee for AG(CQ) Family Trust v A & T Promotions Pty Ltd as Trustee for Toowoomba Unit Trust [2011] 1 Qd R 306; [2010] QCA 083; Allen’s Asphalt Pty Ltd v SPM Group Pty Ltd [2010] 1 Qd R 202; [2009] QCA 134. 530. In the rest of the discussion in this section, reference to two competing unregistered interests means unregistered non-legal interests. 531. Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326. 532. Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 at 344. 533. Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 at 344. 534. Abigail v Lapin [1934] AC 491; (1934) 51 CLR 58. 535. Lloyds Bank Ltd v Bullock [1896] 2 Ch 192. 536. Walker v Linom [1907] 2 Ch 104. 537. See, eg, Person-to-Person Financial Services Pty Ltd v Sharari [1984] 1 NSWLR 745; Double Bay Newspapers Pty Ltd v A W Holdings Pty Ltd (1996) 42 NSWLR 409. 538. For a discussion of the divergent state authorities on the ‘mere failure to caveat’, see T D Castle, ‘Caveats and Priorities’ (1994) 68(2) ALJ 143.

539. See further, J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546. 540. Butler v Fairclough (1917) 23 CLR 78. 541. Person-to-Person Finances Pty Ltd v Sharari [1984] 1 NSWLR 745 demonstrates how a party, although earlier in time, might still lose his or her priority by engaging in an act or omission which had or might have the effect of inducing a later, unregistered interest holder to act to his or her detriment. For an example of a case where failure to lodge a caveat did not have an influence on a competitor’s conduct or affect its claim for priority, see Double Bay Newspapers Pty Ltd v A W Holdings Pty Ltd (1996) 42 NSWLR 409. 542. Abigail v Lapin [1934] AC 491; (1934) 51 CLR 58. See also Taleb v National Australia Bank Ltd (2011) 82 NSWLR 489 where the court found that although both parties acted imprudently, the second caveator (NAB) was found to have the better equity. This was because the first caveator failed to lodge a caveat at the relevant time (ie, before the second caveator checked the Register), and so this led the second caveator to acquire its interest on the basis that the earlier interest did not exist. This, together with evidence that it was always the intention of the second caveator to become the first registered mortgagee, led the court to find that the second caveator had the better equity. For further discussion of Taleb, see Aitken, ‘Priority in Equity: Failure to Caveat and “Postponing Conduct”?’, note 529 above. 543. J & H Just (Holdings) Pty Ltd v Bank of New South (1969) 90 WN (Pt 1) (NSW) 571. Note that the findings at first instance were confirmed on appeal in J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546. 544. This case also serves to highlight that mechanisms other than caveats (such as taking in the title documents) may serve to provide alternative forms of protection. See further, discussion at 8.168 below. 545. J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546 per Barwick CJ; Butler v Fairclough (1917) 23 CLR 78. 546. Breskvar v Wall (1971) 126 CLR 376. 547. Rice v Rice (1853) 2 Drew 73; 61 ER 646; Butler v Fairclough (1917) 23 CLR 78; J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1970) 92 WN (NSW) 803; Australian Guarantee Corp (NZ) Ltd v CFF Commercial Finance Ltd [1995] 1 NZLR 129. 548. Lapin v Abigail (1930) 44 CLR 166. See also Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326; FAI Insurance Ltd v Pioneer Concrete Services Ltd (1987) 15 NSWLR 552. Note that some of these cases invoke a reasonable foreseeability component. For example, if it is reasonably foreseeable that a later interest will be created and the later interest holder will not be aware of the earlier interest, then a failure to caveat will result in postponement. 549. See Perpetual Trustee Co Ltd (original plaintiff); Performance Capital Mortgage Pty Ltd v Motive Finance & Leasing Pty Ltd [2010] NSWSC 429 at [35] per Windeyer AJ, referring to Elderly Citizens Home of SA Inc v Balnaves (1998) 72 SASR 210. 550. See Taddeo v Catalano (1975) 11 SASR 492; Kerabee Park v Daley [1978] 2 NSWLR 222; Osmanoski v Rose [1974] VR 523; Jacobs v Platt Nominees Pty Ltd [1990] VR 146. 551. Perpetual Trustee Co Ltd v Smith (2010) 273 ALR 469. 552. See, eg, Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd [2014] NSWSC 952 at [98]. 553. S Christensen et al, Land Contracts in Queensland, The Federation Press, Sydney, 2016, p 336. 554. Registrar of Titles and Registrar of Water Allocations (Qld), Land Title Practice Manual (Queensland),

Department of Natural Resource and Mines, State of Queensland, 2016, [23-0000]. 555. Victoria, Parliamentary Debates, Legislative Assembly, 6 August 2014, p 2561 (R Clark, AttorneyGeneral). 556. Legal Services Commission of South Australia, Priority Notices (accessed 31 May 2017), . 557. New South Wales, Parliamentary Debates, Legislative Assembly, 6 August 2015, p 2171 (D Perrottet, Minister for Services and Property). 558. In Midland Brick Co Pty Ltd v Welsh [2006] WASC 122, the court observed how a caveat could have been used to give notice of a restrictive covenant. 559. Moffett v Dillon (1999) 2 VR 480. 560. Note that earlier (at 8.130 and 8.162) we discussed better equities. Notice (at the time of acquiring the interest) then goes towards establishing that the later equitable interest holder does not have the better equity. 561. Perpetual Trustee Co Ltd v Smith (2010) 273 ALR 469. 562. Perpetual Trustee Co Ltd v Smith (2010) 273 ALR 469 at 489 [72] per Moore and Stone JJ. 563. Qui prior est tempore potior est jure (‘the first in time prevails’); Rice v Rice (1853) 2 Drew 73; 61 ER 646; Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 (a Torrens case). 564. Pilcher v Rawlins (1872) LR 7 Ch App 259. See further discussion 7.9–7.25. 565. John Alexander’s Clubs v White City Tennis Club (2010) 241 CLR 1 at 42 [114]. 566. Courtenay v Austin (1961) 78 WN (NSW) 1082 at 1093. Section 43A applies to actual and constructive notice. See Drulroad Pty Ltd v Gibson (1992) NSW ConvR ¶55-637. 567. See also Black v Garnock (2007) 230 CLR 438 at 450 [33]. 568. Templeton (Registrar of Titles (Vic)) v Leviathan Pty Ltd (1921) 30 CLR 34 at 55. 569. IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550. 570. Zisti v Ryde Joinery Pty Ltd (1996) 7 BPR 15,217. See also Taleb v National Australia Bank Ltd (2011) 82 NSWLR 489 where a dealing was found not to be in registrable form because the plaintiff’s caveat prevented its registration. In addition, the dealing was not registrable until it had been stamped pursuant to the relevant stamp duty legislation. Taleb is discussed further at Aitken, ‘Priority in Equity: Failure to Caveat and “Postponing Conduct”?’, note 529 above. 571. Jonray (Sydney) v Partridge Bros (1969) 89 WN (Pt 1) (NSW) 568 at 574. 572. Mayer v Coe (1968) 88 WN (Pt 1) (NSW) 549 at 558. 573. This reasoning is also that of Kitto J in IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550 and is consistent with old system title and the legal estate. 574. Jonray (Sydney) v Partridge Bros Pty Ltd (1969) 89 WN (Pt 1) (NSW) 568. 575. The term was used in Jonray (Sydney) Pty Ltd v Partridge Bros Pty Ltd (1969) 89 WN (Pt 1) (NSW) 568 at 477. See Barlin Investments Pty Ltd v Westpac Banking Corporation (2012) 16 BPR 30,671 at [39]–[41]. 576. Wilkes v Spooner [1911] 2 KB 473. 577. Eg, Barlin Investments Pty Ltd v Westpac Banking Corporation (2012) 16 BPR 30,671 at [39]–[41]. In this case, the subsequent purchaser, and their mortgagee, had notice of the earlier unregistered

interest. However, they could claim the successive effect of s 43A as they derived their interests through a purchaser who was a ‘bona fide purchaser for value of the legal interest without notice’. See further, P Butt, ‘Statutory Provision Turns Priorities on their Head’ (2013) 87 ALJ 87. 578. IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550. 579. IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550 at 573. 580. For a more detailed explanation of the operation of s 43A, see Woodman et al, Torrens System in New South Wales, note 253 above, [43A.80]. The issue of an unregistered transfer of land is taken up in Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 8 BPR 15,565. 581. IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550 at 584 per Taylor J. 582. Rice v Rice (1853) 2 Drew 73; 61 ER 646. 583. IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550 at 585. 584. Stone Leaf Capital v Daley [2014] NSWSC 477. 585. Stone Leaf Capital v Daley [2014] NSWSC 477 at [38]–[39]. 586. Westpac Banking Corporation v Ollis [2008] NSWSC 824. In that case, the court found that the claimant had not proven that it had paid anything to the vendor. Thus, it was unable to demonstrate that it was a ‘purchaser for value’ and so did not gain the protection of s 43A. 587. See Drulroad Pty Ltd v Gibson (1992) 5 BPR 11,878 at 11,882; Finlay v R & I Bank of Western Australia Ltd (1993) NSW ConvR ¶55-686; Jonray (Sydney) v Partridge Bros (1969) 89 WN (Pt 1) (NSW) 568; United Star-Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331; J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546; Meriton Apartments Pty Ltd v McLaurin & Tait (1976) 133 CLR 671; 50 ALJR 743; Weller v Williams [2010] NSWSC 716; Barlin Investments Pty Ltd v Westpac Banking Corporation (2012) 16 BPR 30; Stone Leaf Capital v Daley [2014] NSWSC 477. 588. Real Property Act 1900 (NSW) s 36. See also Taleb v National Australia Bank Ltd (2011) 82 NSWLR 489 concerning the application of requirements under other statutes. 589. J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546 at 555 per Barwick CJ. 590. Land and Property Information, Registrar-General’s Guidelines, CoRD Holder Consent Requirements, New South Wales Government (accessed 31 May 2017), . 591. Electronic Conveyancing National Law (NSW) ss 9,10 (Appendix to Electronic Conveyancing (Adoption of National Law) Act 2012 (NSW)). See also New South Wales Registrar-General, NSW Participation Rules for Electronic Conveyancing, note 56 above. 592. R R Torrens, The South Australian System of Conveyancing by Registration of Title, Register and Observer General Printing Offices, Adelaide, 1859, p 9. 593. New South Wales Law Reform Commission, Torrens Title: Compensation for Loss, Report No 76, June 1996, p 6. 594. New South Wales Law Reform Commission, Torrens Title: Compensation for Loss, note 593 above, p 6. 595. This issue is discussed in L McCrimmon, ‘Compensation Provisions in Torrens Statutes: The Existing Structure and Proposals for Change’ (1993) 67(12) ALJ 904. There has been some debate around whether the amendments brought about by the Real Property Amendment

(Compensation) Act 2000 (NSW) have assisted in increasing access to the fund. The AuditorGeneral’s Report to Parliament 2006, Vol 5, p 225, states that ‘the Registrar-General paid a total of $164,000 during the [2005–2006 Financial] Year from the [Assurance] Fund in claims’. The report also states that the balance of the Torrens Assurance Fund as at 30 June 2006 totalled $14.8 million. In 2011, one single successful claim against the Torrens Assurance Fund amounted to $3.8 million: see Pedulla v Panetta [2011] NSWSC 1386 at [68a(i)]. Figures on Torrens Assurance Fund payments are contained in Appendix C. 596. See Finucane v Registrar of Titles [1902] St R Qd 75 at 94. 597. Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452 at [65]. 598. See Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452 at [67]. 599. Williams v Papworth [1900] AC 563 at 568. 600. Trieste Investments Pty Ltd v Watson (1963) 64 SR (NSW) 98. 601. Closer Settlement and Public Reserve Funds Act 1906 (NSW). 602. Note that while the Torrens Assurance Fund has gained and continues to gain revenue from a levy imposed on each registration since 1992 (set at $4 since 2004: see Real Property Act 1900 (NSW) s 134), the State Revenue Legislation Amendment Act 2010 (NSW) introduced an additional ad valorem levy on properties where the purchase price was $500,000. This levy applied from 1 July 2010 until 1 July 2011, when the Real Property Amendment (Torrens Assurance Levy Repeal) Bill 2011 (NSW) came into effect, abolishing it. That abolition was part of a state government election promise. For further details on the introduction of the levy, see Land and Property Management Authority, Land Property Information Torrens Assurance Levy — Ad Valorem Provisions (accessed 3 December 2011), . For further details on the provisions’ repeal, Arthur Allens Robinson, Client Update: NSW to Abolish Ad Valorem Land Transfer Tax, 11 May 2011 (accessed 3 December 2011), . 603. The reforms were introduced by the Real Property Amendment (Compensation) Act 2000 (NSW). See further, 8.188–8.191. 604. Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452 at [64]. 605. See Real Property Amendment (Compensation) Act 2000 (NSW). 606. Real Property Act 1900 (NSW) s 120(2)(a), (b). 607. For a discussion of early comparative elements between the old and new Acts, see A Mitchell, ‘Torrens Title Compensation for Loss — The Real Property Amendment (Compensation) Act 2000 (NSW)’ (2001) 9 APLJ 40. 608. Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452 at [69]. 609. Chandra v Perpetual Trustees Victoria Ltd [2008] NSWSC 178; applied in Perpetual Trustees Victoria Ltd v Cipri [2009] NSWSC 335. 610. The case law on ‘causal connection’ is summarised in Chandra v Perpetual Trustees Victoria Ltd [2008] NSWSC 78 per Bryson J. 611. Kirkland v Quinross Pty Ltd [2008] NSWSC 286 at [71]. See also the discussion in Butt, Land Law, note 25 above, pp 835–6; Elfar v Registrar General of New South Wales [2010] NSWSC 539 at [260]. 612. Parker v Registrar-General [1977] 1 NSWLR 22 at 25 and 30.

613. Registrar of Titles (WA) v Franzon (1975) 132 CLR 611. 614. Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618. 615. Saade v Registrar-General (1993) 179 CLR 58. 616. Pedulla v Panetta [2011] NSWSC 1386. For a continuation of this dispute (with the RegistrarGeneral attempting to recover moneys from the fraudulent solicitor following this case), see Registrar-General of New South Wales v LawCover [2013] NSWSC 1471. 617. Pedulla v Panetta [2011] NSWSC 1386 at [9]. 618. Pedulla v Panetta [2011] NSWSC 1386 at [15]. 619. Chandra v Perpetual Trustees Victoria Ltd [2008] NSWSC 178 at [11]. 620. Chandra v Perpetual Trustees Victoria Ltd [2008] NSWSC 178 at [16]–[18]. See also discussion in Elfar v Registrar General of New South Wales [2010] NSWSC 539 at [228]–[235]. 621. For further discussion on this case, see, L Griggs and R Low, ‘Going Through the Obstruction, the Torrens System Assurance Fund and Contemporary Solutions: A Tale Weaved from a Story of a Nun, a Romantic Triangle and Sibling Corruption’ (2014) 23 APLJ 17. 622. Robinson v Registrar-General (1983) NSW ConvR ¶55-138. 623. Armour v Penrith Projects Pty Ltd [1979] 1 NSWLR 98 at 102. 624. Saade v Registrar-General (1993) 179 CLR 58. Saade has thus affirmed important policy considerations relating to the purpose of compensation. Indeed, the court stated that a failure to interpret the section liberally would result in ‘a lack of essential protection to persons who are defrauded’: Saade at 68. 625. Registrar of Titles (WA) v Spencer (1909) 9 CLR 641. 626. Registrar of Titles (WA) v Spencer (1909) 9 CLR 641. 627. Parker v Registrar-General [1977] 1 NSWLR 22. 628. See the discussion in Pedulla v Panetta [2011] NSWSC 1386. 629. Registrar-General v Cleaver (1996) 41 NSWLR 713. 630. Section 12A of the Real Property Act provides an example of another exception to liability. 631. Yazgi v Permanent Custodians Ltd (2007) NSWCA 240. 632. P Lane, ‘Indefeasibility for What? Interpretative Choices in the Torrens System’ in L Bennett Moses, B Edgeworth and C Sherry (eds), Property and Security — Selected Essays, Thomson Reuters/Lawbook Co, Sydney, 2010. Lane notes (in fn 89) that ‘the removal of [the words] “to the extent to which” and the substitution of “where” in paragraphs (e)–(i) of s 129(2)’, has the effect of ‘removing the possibility of a partial recovery from the fund’. 633. New South Wales Law Reform Commission, Torrens Title: Compensation for Loss, Report No 76, June 1996. See Real Property Amendment (Compensation) Act 2000 (NSW). 634. According to Land and Property Information (formerly Land Information Services), New South Wales, inclusion of this section is invaluable in allowing it to assess the situation quickly and effectively: personal communication from Greg Channel, Deputy Manager — Litigation, Land and Property Information, New South Wales, 15 August 2001. 635. Real Property Act 1900 (NSW) s 135(2). 636. Pratten v Warringah Shire Council (1969) 90 WN (Pt 1) NSW 134. See 8.107–8.108.

637. See Law Reform Commission of Victoria, The Torrens Register Book, Discussion Paper No 3, October 1986, pp 8–9; Law Reform Commission of Victoria, The Torrens Register Book, Report No 12, November 1987, pp 3–7 and 12–15. See also B McEniery, ‘Could the Land Title Act 1994 (Qld) Be Further Amended to Better Protect Unregistered Interests?’ (2006) 26(5) Queensland Lawyer 240. 638. See Real Property Act 1900 (NSW) s 33A. 639. This is not to say that an absolutist approach should be taken to the Register. In some circumstances, recognition of unrecorded interests will be important to provide justice and fairness, but the ever-increasing volume of statutes containing provisions that potentially override interests recorded on the Register is cause for concern. 640. See the discussion and recommendations in New South Wales Law Reform Commission, Torrens Title: Compensation for Loss, Report No 76, June 1996. 641. See Butt, Land Law, note 25 above; B Edgeworth, ‘Indefeasibility and Overriding Statutes: An Attempted Solution’ (2009) ALJ 655. 642. Frazer v Walker [1967] 1 AC 569. 643. Breskvar v Wall (1971) 126 CLR 376. 644. Vassos v State Bank of South Australia [1993] 2 VR 316 at 322. 645. Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722 at 740. 646. On obligations on mortgagees to confirm the identity of mortgagors under s 56C, see further, 14.28. 647. Vassos v State Bank of South Australia [1993] 2 VR 316 at 326–7. 648. Westpac Banking Corporation v Sansom (1995) NSW ConvR ¶55-733. 649. See further, 8.189. 650. For further discussion, see J Schultz, ‘Judicial Acceptance of Immediate Indefeasibility in Victoria’ (1993) 19(2) Mon ULR 326; P N Wikrama-Nayake, ‘Immediate and Deferred Indefeasibility: The Story Continues’ (1993) 8 LIJ 733; P O’Connor, ‘Registration of Invalid Dispositions: Who Gets the Property?’ in E Cooke (ed), Modern Studies in Property Law, Hart Publishing, Oxford, 2005, Vol 3, p 45. 651. See, eg, Butt, ‘Indefeasibility and Sleights of Hand’, note 307 above. 652. E Toomey, ‘Fraud and Forgery in the 1990s: Can Our Adherence to Frazer v Walker Survive the Strain?’ (1994) Canterbury Law Journal 424 at 427 (and see particularly the comments of Warrington-Taylor of the Victorian Law Reform Commission at 436). 653. See 8.26 on immediate and deferred indefeasibility. 654. R Stein in ‘The “Principles, Aims and Hopes” of Title by Registration’ (1983) 9 Adel LR 267 at 274. For some older Victorian figures, see Law Reform Commission of Victoria, The Torrens Register Book, Report No 12, November 1987, p 12. 655. See newspaper coverage, eg, L Lamont, ‘Hot Property and Dirty Deeds’, Sydney Morning Herald, 3 April 2006. (This article deals with Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452.) 656. Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd (2003) 59 NSWLR 452. 657. Pedulla v Panetta [2011] NSWSC 1386.

658. In Challenger, several individuals and the companies with which they were associated defrauded Kevin Friel and others by fraudulently applying for replacement certificates of title (on the basis that the certificates were lost). The fraudsters then used those certificates of title as security to raise $14 million from investors. Note that the facts of this case spawned criminal proceedings in the form of Alcorn v R [2006] NSWCCA 209. 659. R Edwards, ‘Immediate Indefeasibility and Forgery; Is it Really What We Want?’ (1993) 67 LIJ 730; S Robinson, ‘Claims In Personam in the Torrens System: Some General Principles’, note 275 above. 660. Edwards, ‘Immediate Indefeasibility and Forgery; Is it Really What We Want?’ note 659 above, points to s 29 of the Bills of Exchange Act 1909 (Cth), and s 32 of the Cheques and Payment Orders Act 1986 (Cth). 661. Law Reform Commission of Victoria, The Torrens Register Book, Report No 12, November 1987. 662. See E Toomey, ‘Fraud and Forgery in the 1990s: Can Our Adherence to Frazer v Walker Survive the Strain?’ (1994) Canterbury Law Journal 424 at 437. 663. Gim Teh, eg, suggests that ‘it would make transactions precarious’ and be ‘likely to cause transferees to be more hesitant in parting with their money in exchange for a transfer that may turn out to be a forgery or other fraud’: Gim Teh, ‘Deferred Indefeasibility in Victoria?’ (1991) 17 Mon ULR 81 at 82. 664. Edwards, ‘Immediate Indefeasibility and Forgery’, note 659 above, at 730; C Croft, ‘The Torrens System — Deferred Indefeasibility’ (1990) 4 LIJ 238. 665. Stein and Stone, Torrens Title, note 271 above, p 88. 666. Stein, ‘The “Principles, Aims and Hopes” of Title by Registration’, note 654 above, at 273. 667. Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722 at 741. 668. King v Smail [1958] VR 273. 669. See Rasmussen v Rasmussen [1995] 1 VR 613.

[page 431]

Chapter 9

Common Property Introduction 9.1 Previous chapters have examined the different types of interests that a person may hold over property. This chapter explores some of the many ways that interests in land and, to a lesser degree, chattels and other personal property may be held in common with other owners. As in other areas of property law, the prototype of common ownership can be seen in the common law rules governing ‘co-ownership’ or ‘concurrent ownership’. These rules, with their fundamental concepts of joint tenancy and tenancy in common, continue to be of central importance in this area of property law. An examination of these concepts forms the first of the two distinct sections into which this chapter is divided. In the latter half of the 20th century, patterns of communal living developed for which the common law rules proved unsuitable. For instance, the proliferation of multiple-unit developments in the 1950s induced lawyers to resort to corporations law to formulate and regulate the rights and duties of owners. As we will see later, this ‘company title’ model was also too unwieldy to address satisfactorily all the individual and collective needs of unit-holders. In consequence, the strata titles regime was introduced.1 This area of law will be the focus of the second part of the chapter.

Co-ownership General 9.2 At common law, there were two principal ways to own property in common with other owners: joint tenancy and tenancy in common.2 Use of the term ‘tenancy’ in this context has nothing to do with leases; it embraces all forms of proprietary rights. It is, [page 432] therefore, possible to be a joint tenant of a fee simple, a lease or an easement in the case of land, as well as being a joint tenant of personal property. Where owners are entitled to possess separate parts of the whole there is no genuine co-ownership at all, for the reason that co-ownership entitles each co-owner, in the absence of agreement, to possess the whole of the property. Despite this common feature of joint tenancy and tenancy in common, they exhibit different sets of rights, so it is necessary to examine them separately.

Joint tenancy 9.3 The central feature of joint tenancy is that each joint tenant owns the entire interest, subject only to the rights of all other joint tenants. (By way of example, it is fairly common for a married couple to be ‘joint tenants’ of the matrimonial home.) A joint tenant is not considered to own any distinct share in the property. This is reflected in the common law rule that a tenant who wished to transfer his or her entitlement to a co-tenant should do so, not by means of a conveyance, but by means of a ‘release’; that is, the joint tenant would release the other joint tenants from the rights which he or she might otherwise exercise.3 The ambiguous nature of the joint tenancy is captured in the idea that a joint tenant holds nothing on his or her own part, but rather holds the whole interest jointly. This level of intimacy of co-ownership is reflected in two distinct features of the joint tenancy: (i) the four unities; and (ii) the right of survivorship, or jus accrescendi.4

Four unities 9.4 Unity of possession For a joint tenancy to exist, each joint tenant must be entitled to unity of possession. ‘Unity of possession’ refers to the right of each tenant to enjoy possession of the entire interest. Indeed, unity of possession is a requirement for all co-ownership. Thus, it is the only requirement which of necessity is shared with tenancies in common. If one co-owner occupies the entire property, the other cannot sue in trespass in the absence of ‘ouster’.5 No co-owner can lawfully exclude the other co-owner or co-owners from occupation of the entire property. 9.5 Unity of interest A joint tenancy cannot exist unless all joint tenants hold the same interest in the property. For example, if A is given the fee simple of Top Paddock and B is given a life estate over the same land, there can be no joint tenancy. A and B will hold a tenancy in common while B is alive. It is possible, however, for two joint tenants to be given a joint leasehold even if one is also entitled to the reversion on the expiry of the lease. For example, a grant ‘to A and B as joint lessees for 10 years, thereafter in fee simple to B’ will result in a joint tenancy of the lease for 10 years, because there is unity of interest in respect of the particular interest they share. 9.6 Unity of title Each joint tenant must acquire his or her right to possess and his or her unity of interest by virtue of the same instrument or act of adverse possession. If one [page 433] of two joint tenants purports to transfer his or her rights as a joint tenant to a third party, a tenancy in common in respect of that share will arise, because unity of title has been fractured. In this instance, the transaction will amount to a severance of the joint tenancy.6 9.7 Unity of time This requirement specifies that even where the coowners receive their interests at the same time and in the same instrument, if the time of vesting of the respective interests is different, a tenancy in common, not a joint tenancy, will result. Thus, a transfer ‘to A and B in fee

simple when they reach 18’ will result in a tenancy in common if A and B do not share the same date of birth.7

Right of survivorship 9.8 The right of survivorship, or the jus accrescendi, is the right of all joint tenants to have their rights enlarged on the death of a co-joint tenant simply by being freed from the rights of the deceased.8 One consequence of the right of survivorship is that it prevents the deceased co-owner leaving his or her interest by will, as the interest of a joint tenant is extinguished on death, and hence does not survive for the benefit of the estate.9 Apart from this limitation, a joint tenant has an unrestricted freedom to dispose of an interest inter vivos by severance.10 Where there is doubt as to the time of death of joint tenants — for example, in the case of a car crash in which both joint tenants were killed, apparently simultaneously — the younger joint tenant is presumed to have survived the older, so that the right of survivorship works to the advantage of the younger’s estate.11 Where, however, the court is otherwise able to come to a view on the balance of probabilities as to the actual order of death, it is not obliged to apply the statutory presumption.12 9.9 One decision, at first, seems to raise some difficulties for the view that the interests of a joint tenant immediately cease on death. In Re Franklin13 a brother and sister were joint tenants, although for more than 15 years the sister had not had anything to do with the property. On the brother’s death, his son claimed that his father had effectively dispossessed his aunt, and hence that he, rather than his aunt, should be able to inherit the property. Kaye J in the Supreme Court of Victoria agreed. The decision involves a number of complexities, including how one joint tenant can dispossess another when [page 434] the other always retains an equal right to possession.14 Here, Kaye J acknowledged that there was no property right flowing from the deceased’s joint tenancy once he had died, but concluded that the rights arising from the actual possession still existed and could be bequeathed to an heir.15 A specific

Victorian statutory provision, s 14(4) of the Limitation of Actions Act 1958 (Vic), also supported this result.16

Tenancy in common 9.10 A tenancy in common requires only one of the four unities above — unity of possession. Two separate grants of Top Paddock to A and B that give A a one-quarter share and B a three-quarter share would confer on each a right to occupy the whole property. As we have seen above, in the absence of this particular shared right there is no co-ownership of any sort. Tenancies in common may have more of the unities, or indeed all of them. Even when all the unities are present, however, there is no right of survivorship in the case of a tenancy in common: the size of each tenant’s share is fixed from the time of creation of the interest or by subsequent dealings.17 It follows that, on the death of a tenant in common, his or her share passes by will or, if there is no valid will, by intestacy. A measure of the lesser degree of intimacy of holding by tenants in common is that they are said to hold in ‘undivided shares’; that is, they each hold an identifiable fraction of the interest which has not yet been formally divided up between them.

Creation of co-ownership — joint tenancy or tenancy in common? General 9.11 One consequence of the operation of trusts on proprietary interests is that the legal interest may be held separately from the equitable interest.18 This principle applies equally to joint tenancies and tenancies in common, so that joint tenancies and tenancies in common can exist at law or in equity. The simplest case of co-ownership is where A and B are the legal co-owners of property and are entitled to it beneficially in the same way. The equitable interest and the legal interest in the property may, however, be held in different ways. Thus, A and B might hold the legal interest as joint tenants on trust for C and D as tenants in common; or they might hold the legal interest as joint tenants on trust for themselves as tenants in common.19 Equally, A

might hold the legal interest on trust for B and C as joint tenants or tenants in common. Trusts in relation to co-owned property will [page 435] commonly be created expressly; but they may also be implied in certain circumstances in the form of ‘resulting trusts’ or ‘constructive trusts’. Before examining how tenancies in common and joint tenancies arise in equity, it is necessary to look at how they come into effect at law. Finally, the statutory amendment of these rules will be considered.

At law 9.12 A joint tenancy or a tenancy in common can be created at common law by special, express words. In order to create a joint tenancy expressly, words such as ‘to A and B jointly’ or ‘to A and B as joint tenants’ could be used. However, in the absence of words demonstrating an express intention to create either a joint tenancy or a tenancy in common, the common law presumed a joint tenancy. The joint tenancy was, therefore, the default position. There are two reasons frequently advanced to explain this historical preference. First, the joint tenancy was more compatible with the efficient collection of feudal revenues: on the death of a joint tenant, services would simply be due from the survivors, rather than from the survivors in addition to the deceased’s (possibly many) heirs. Second, conveyancing was made simpler by the joint tenancy: a transfer of co-owned land could be effected by survivors, rather than the potentially much larger number of survivors and heirs. 9.13 There were three situations under the common law in which creation of co-ownership would create a tenancy in common at law: 1.

where one of the four unities was not present;20

2.

by using ‘words of severance’; or

3.

by otherwise evincing an intention to create a tenancy in common. Words of severance are express words that indicate that each co-owner is to

take a distinct share in the property, as opposed to owning the entire interest jointly. Expressions such as ‘to A and B in equal shares’,21 ‘to share and share alike’,22 ‘to be divided between’23 and ‘equally’24 have all been held to be words of severance. Also, even if no words of severance are used, a consideration of the gift as a whole might indicate that a tenancy in common was intended. In Surtees v Surtees,25 a testator left property to his sons for life and provided that, on their separate deaths, any rents to which they were entitled should pass to their respective male heirs. The court held that the general intention was that the sons should take as tenants in common.

In equity 9.14 Equity took a different approach to that taken by the common law. It leant in favour of a tenancy in common. In particular, equity would presume a tenancy in common in three situations. [page 436] 9.15 Where co-owners contribute different amounts to the purchase price If co-owners have contributed different amounts to the purchase price of a property, they will usually hold shares as tenants in common in equity in proportion to their respective contributions. For instance, if land is conveyed to A and B ‘as joint tenants’, they take at law as joint tenants; but if their respective contributions are one-quarter and three-quarters of the purchase price, equity will presume that they hold the legal estate on trust for themselves beneficially as tenants in common, with A entitled to one-quarter and B to three-quarters.26 This principle applies regardless of how the legal estate is held, so that if B’s name was not on the conveyance or certificate of title and, therefore, A was the sole proprietor of the legal estate, A would still hold on trust for them both in proportion to their respective contributions. By contrast, if they contributed equal amounts, equity would follow the law. They would be presumed to be joint tenants in equity.27 In each of these cases, a resulting trust is imposed by equity.28 9.16

The presumptions outlined above are rebuttable. For example, if it is

clear that the parties who made different contributions wished to hold beneficially as joint tenants, as in a conveyance to A and B ‘as joint tenants both in law and in equity’, no presumption will arise. This was the situation in Pink v Lawrence,29 where the fact that one transferee had paid nothing towards the purchase price, and had her name on the contract merely to satisfy the mortgagee, did not activate the equitable presumption because the contract contained an express declaration of trust. 9.17 In Trustees of the Property of John Daniel Cummins (a bankrupt) v Cummins,30 the High Court held that where the parties to a marriage contribute different shares to the purchase of the matrimonial home, and are expressed to take as joint tenants, it can usually be assumed that they intend to take equal shares, rather than the proportionate shares that would be required between other parties. There is no occasion for equity to fasten upon the registered interest held by the joint tenants a trust obligation representing differently proportionate interests as tenants in common. The subsistence of the matrimonial relationship, as Mason and Brennan JJ emphasised in Calverley v Green,31 supports the choice of joint tenancy with the prospect of survivorship.32

(Of course, whatever the shares in matrimonial property that married parties hold, those shares may be adjusted by virtue of an order of a court exercising jurisdiction under the Family Law Act 1975 (Cth) in proceedings under that Act.) [page 437] 9.18 Where co-owners advance money on mortgage Equity will presume a tenancy in common where two or more co-owners advance money on mortgage, whether in equal or unequal shares. The reason for the presumption is that, in normal circumstances, co-owners in such an arrangement would wish to get back their own investment.33 This presumption is also rebuttable. By ss 96A and 99 of the Conveyancing Act 1919 (NSW), a joint account clause is implied in mortgages. These provisions have the effect of making mortgagees joint tenants for the purposes of repayment of the loan by the mortgagor. Accordingly, a receipt from one mortgagee will bind all of them, thereby obviating a practical problem facing the mortgagor on the death of a

mortgagee: if the mortgagees hold as tenants in common, the personal representative of the deceased mortgagee has to sign the discharge. However, the mortgagees remain tenants in common as between themselves, so there is no right of survivorship. 9.19 Partnership assets Property acquired by a partnership, or as part of a joint business venture, is deemed to be held in equity under a tenancy in common.34 Again, this presumption is based on the normal expectation of parties engaged in a commercial enterprise that the right of survivorship should not apply. In Roda v Roda,35 a gift of a commercial property had been made by Mr Roda senior to his wife and their son as ‘joint tenants’. Later, after a marriage breakup, it was argued by the son that in fact this amounted to an equitable tenancy in common. The Family Court Full Court accepted that the arrangement, while not a formal ‘partnership’ between mother and son, was in effect a commercial arrangement, and hence analogous to the old partnership cases where a deemed tenancy in common would be created.36 Equity would also presume a tenancy in common where circumstances indicate a general intention to hold as tenants in common. So, where holders of a joint tenancy at law agreed to occupy separate, differently sized parts of business premises, and agreed to be separately invoiced for rent, they were deemed to be tenants in common in equity in shares proportionate to their respective interests.37 It follows that the above three categories (unequal contributions, mortgagees and partnership assets) are not ‘rigidly circumscribed’ for the purposes of the equitable presumption.38

Statutory reform 9.20 A set of presumptions that may have seemed appropriate under feudalism has more recently come to look quite inappropriate. Accordingly, by s 26(1) of the Conveyancing Act, a statutory presumption in favour of a tenancy in common has replaced the common law’s preference for joint tenancies. Section 26(1) provides: [page 438]

In the construction of any instrument coming into operation after the commencement of this Act 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 them as tenants in common, and not as joint tenants.

It follows that, since the enactment of this amendment, if an instrument fails to provide expressly for a joint tenancy, a tenancy in common will be presumed. The Act preserves the policy of fostering conveyancing efficiency by creating an exception in favour of executors, administrators, trustees or mortgagees, as well as providing for the creation of express joint tenancies.39 Where a person holds an interest both in the capacity of executor of a will and also as a beneficiary under the will, the statutory presumption of a joint tenancy will apply to the legal estate, and the statutory presumption of a tenancy in common will apply to the beneficial interest.40 9.21 Section 26(2) provides that the default rule provided by s 26(1) does not apply where the instrument creating co-ownership ‘expressly provides that persons are to take as joint tenants’. In Minter v Minter,41 the question arose whether this meant that an express provision for ‘joint tenancy’ would override the established rules that had developed as to where equity would deem that a tenancy in common had been created. Santow J ruled that it did not; where a document described the parties as ‘joint tenants’ but they took unequal shares (and hence one of the four unities was not present), equity would still deem them to be tenants in common.42 Three further questions arise in relation to the operation of s 26. First, does it apply to legal and equitable interests, given that primary emphasis is given to ‘a disposition of the beneficial interest’ in the section? Second, does it extend to Torrens title land? And third, is the term ‘any property’ broad enough to cover chattels as well as land? 9.22 Legal and equitable interests In Delehunt v Carmody,43 s 26(1) was held to apply to legal and equitable interests, so that a disposition in favour of A and B will give rise to a tenancy in common at law and in equity. Further, the High Court held that the provision was broad enough, in light of the legislative preference for tenancies in common, to cover a disposition to A alone where A and B contributed equally to the purchase price, so that they hold beneficially as tenants in common. Even though the section is expressed to apply only to ‘a disposition … to or for two or more persons …’ (emphasis

added) and is, therefore, not directly applicable to this fact situation, it operates indirectly. By overturning the general common law presumption in favour of joint tenancies, it affects the equitable presumption that, when parties contribute equal sums to the purchase price of property, they hold as joint tenants. The reason for such an interpretation is that [page 439] ‘If equity follows the law, it will follow the rules of law in their present state’;44 that is, their state under the Conveyancing Act. 9.23 Torrens title land Section 100(1) of the Real Property Act 1900 (NSW) provides: Two or more persons who may be registered as joint proprietors of an estate or interest in land … shall be deemed to be entitled to the same as joint tenants. [Emphasis added]

One reading of this provision suggests that under the Torrens system, the old common law presumption overrides the statutory presumption of a tenancy in common from s 26 of the Conveyancing Act. In Hircock v Windsor Homes (Development No 3) Pty Ltd,45 the Court of Appeal had to decide whether s 26 applied to leases of Torrens title land. Also relevant to this question was how s 26 related to s 100(1) of the Real Property Act. The court resolved the difficulty by referring to an implausible consequence of this interpretation: the parties would be deemed to hold as tenants in common prior to registration, and joint tenants afterwards. Instead, the court concluded that the term ‘joint proprietor’ was used as ‘a new statutory expression’ to import the law relating to joint tenancies into the Torrens system. It followed that parties registered as ‘joint proprietors’, or joint tenants, would have the same rights as joint tenants at common law.46 It follows that s 100(1) does not mean that all registered co-owners would be deemed to be joint tenants. So it would not apply where no express provision was present in the registered instrument. In these circumstances, s 26(1) of the Conveyancing Act would operate to imply a tenancy in common. In Hircock, the court went on to hold that s 26(1) provides a rebuttable presumption in favour of a tenancy in common; where the intention of the

parties was otherwise, a joint tenancy would arise. Where two elderly tenants were granted a lease with an option to renew, but which would expire on the death of the survivor, though it was not described as a joint tenancy, the circumstances indicated a clear intention to create one in relation to the lease and option.47 This intention rebutted the presumption within s 26(1) so as to allow the survivor alone to exercise the option.48 Note that the High Court, in its decision in Cassegrain v Gerard Cassegrain & Co Pty Ltd,49 has recently stressed that not all features of the common law of joint tenancy will [page 440] necessarily be reflected in property held as ‘joint proprietors’ under the Real Property Act. In particular, while at common law it was arguable that one joint tenant, to some extent, may have had their title ‘infected’ by fraud committed by their other co-owner,50 such a result did not necessarily follow where a Torrens transfer was made to a husband and wife as joint proprietors. In that case, while the husband was guilty of fraud, the wife’s title was not affected.51 9.24 Application to chattels Section 26 of the Conveyancing Act also applies to chattels.52

Severance of joint tenancy 9.25 A joint tenant has complete freedom to dispose of his or her interest inter vivos (ie, to another living person). This form of transfer is referred to as ‘severance’ because it has the effect of fracturing the joint tenancy once and for all in relation to the share that is sundered from the other interests.53 Because there is still co-ownership, the severed share is held in common with the other co-owners. So, where A, B and C are joint tenants, and C transfers her share to D, A and B remain joint tenants — there is nothing that C can do unilaterally to change their relationship — but D will hold a one-third undivided share as tenant in common. In a mathematical vein, Deane J in Corin v Patton54 described this process as follows: where the number of joint

tenants is n, in the event of the severance by one of them, the non-severing n – 1 co-owners each hold (n – 1)/n of the original interest as joint tenants. The effect of the transaction in this example is that C will have deprived them of their right of survivorship to her share, and vice versa.55 It is for this reason that the common law freely allowed severance: the severing joint tenant confers exactly the same rights on the other joint tenants as he or she gains by that act. No unfairness or hardship can flow from the right of survivorship if it can be readily avoided by severance.56 [page 441] 9.26 To use the above example again, if C sells her interest to B, rather than D, B will hold two different interests. First, B will remain a joint tenant with A as to the remaining unsevered part of the property. Second, B will also hold C’s one-third share with A as tenant in common. It follows that, on B’s death, A would become entitled to a two-thirds share by survivorship, and would hold C’s former share as tenant in common with B’s estate. 9.27

Severance can be effected in six ways:

1.

by a unilateral act by a joint tenant acting on his or her own share;

2.

by a mutual agreement among the joint tenants;

3.

by a course of dealing among the joint tenants;57

4.

by court order;

5.

in cases of unlawful killing; and

6.

on bankruptcy.58

Unilateral act by one joint tenant 9.28 Consistent with the freedom of alienation that each joint tenant has, a unilateral act by one joint tenant acting on his or her own share will sever the joint tenancy. A joint tenant may effect a severance in the following three separate ways by unilateral action: 1.

alienation to a third party — which may involve either the alienation of

the joint tenant’s entire interest, or the alienation of only a part of the joint tenant’s interest; 2.

alienation to self; and

3.

declaration of trust. Severance may operate at law or in equity.59

9.29 Alienation to a third party An alienation of the joint tenant’s entire interest will be effective at law where the legal estate is transferred. In the case of old system title land, this will be achieved where a deed has been used to transfer the legal estate.60 If A, B and C are joint tenants at law, and A executes a deed in favour of D, D will become a tenant in common with B and C. Alternatively, as noted above,61 if A transfers his or her share to B, B will have two different interests: a one-third share as tenant in common with C; [page 442] and a joint tenancy in respect of the unsevered two-thirds share with C.62 In the case of Torrens title land, the legal estate will pass on registration of the transfer.63 9.30 In equity, a severance will occur where a joint tenant has entered into a specifically enforceable contract to transfer his or her share to a third party, because this transaction will give the purchaser an equitable interest in the joint tenant’s share.64 The severance in equity will not affect the legal estate; it will remain a joint tenancy, but held on trust for the purchaser as a tenant in common. 9.31 A more difficult question arises in the case of severance by means of a gift in equity. In accordance with the maxim that ‘equity will not perfect an imperfect gift’, mere execution of an instrument in favour of the donee will not be enough to confer an equitable interest.65 The maxim does not, however, mean that equity will never recognise an effective gift. To be effective in equity, the donor must have done all that is necessary to be done on his or her part to put the donee in a position to acquire the legal title. For

Torrens title land, this requires the donor not only to execute validly a transfer in favour of the donee, but also to hand over the certificate of title, or give irrevocable authority for its production if it is held by someone else. In Corin v Patton,66 the terminally ill joint tenant of Torrens title land purported to sever the joint tenancy by making a gift of her interest in the land in favour of her brother, who was to hold the land on trust. She executed a memorandum of transfer and an instrument of trust, but failed to give him the certificate of title, or arrange for its production for the purposes of registration (it remained in the custody of the mortgagee of the land). She died before either of these steps was taken. As there was no registration, there could be no severance at law. The High Court held that there was no severance in equity either, because she had not done everything that it was necessary for her to do to put the vesting of the legal estate within the control of her brother, and beyond the recall of herself. The gift was therefore imperfect. 9.32 Equally, where a joint tenant executed a transfer, and gave written and signed authority to the solicitor who had custody of the certificate of title to produce it for the purposes of registration, but died before this happened, the gift was held not to be severed in equity where the solicitor declined to do so on the grounds that the other joint tenant had not consented to its production. The donor had not done all that was necessary to arm or equip the donee with the means of securing registration of the transfer by [page 443] himself.67 The refusal to produce the certificate by the person who has custody of it (the bailee), whether in the capacity of co-joint tenant, mortgagee or solicitor, will prevent perfection of the gift in equity.68 9.33 This difficulty has been partly remedied by an amendment to s 97 of the Real Property Act. It is now possible for a joint tenant to register a transfer to himself or herself in order to sever the joint tenancy without the need for production of the certificate of title. The section provides that the RegistrarGeneral may require, before recording the instrument executed by the joint

tenant, the names and addresses of the other joint tenants, and a statement that the severing joint tenant is not aware of any limitation on his or her capacity to sever, for instance, ‘from the capacity in which the person holds an estate or interest in the land concerned or from a private agreement’.69 The RegistrarGeneral must then notify the other joint tenants.70 The purpose of this obligation is to give the non-severing joint tenants the opportunity to raise any legal objection they might have to the severance. Such a notice is governed by s 12A(2) and (3) of the Real Property Act, which provides that the Registrar-General may refuse to register the dealing until the expiration of the notice period for the severance. Once the notice period has expired, the person who receives notice has no remedies against the Registrar-General in respect of registration of the dealing which severs the joint tenancy.71 In preliminary proceedings in McCoy v Estate of Peter Anthony Caelli,72 the deceased son (who was a joint tenant with his mother) had signed a registrable transfer to himself, but it had not been registered under s 97 before his death. The court held that, as the transfer had not been lodged before death, the joint tenancy remained on foot, and ordered that the Registrar-General not register the severance document.73 In final proceedings in McCoy v Caelli,74 White J confirmed that the mother succeeded to the whole of the property by survivorship. His Honour held that the question in cases of unilateral severance was different to those situations where there was a purported severance by gift or transfer to a third party. In cases involving attempted use of s 97, the severance is not achieved (even if the registered proprietor has done all that they can do) until actual registration.75 In Anderson v Anderson,76 the daughter of one joint tenant served a s 97 notice severing the joint tenancy between her father and his former wife. Her father was at the time [page 444] incapable of acting for himself. While Hallen J ruled that in the circumstances the daughter did not have proper authority under a power of attorney to file the application, once the document had been registered and the joint tenancy severed by operation of registration, it was held that the doctrine of

indefeasibility under the Torrens system cured the defects of the document, and the tenancy had been validly severed.77 9.34 In the case of both Torrens title and old system title land, a gift will be perfect in equity where the donor has executed a document that satisfies s 23C(1)(a) of the Conveyancing Act 1919 (NSW); that is, a signed document in writing. At this point, the donor will hold his or her legal or equitable interest on trust for the donee. The question arises whether an agreement among joint tenants that none of them will sever the joint tenancy is effective to prevent such severance. In Anderson v O’Donnell,78 a mother and daughter held a home unit as joint tenants. The mother filed a document under s 97 of the Real Property Act severing the joint tenancy. The daughter tried to resist the severance on the basis that there was an implied agreement that the tenancy not be severed, but Windeyer J ruled that on the evidence there was no such agreement. His Honour seemed to assume, however, that if there had been such an agreement it might have prevented the severance.79 9.35 The issue arose for direct consideration in Goyal v Chandra.80 Brereton J held that an agreement by one joint tenant with another not to sever would be enforceable. His Honour also held that a course of conduct by one joint tenant that led to the creation of an assumption by the other that no severance would take place (relied on by the other to their detriment) may create by estoppel an equitable right not to have the joint tenancy severed. His Honour said that this would not amount to a ‘restraint on alienation’,81 simply being a personal obligation as to how the land would be dealt with, analogous to that which arises whenever a landowner agrees for consideration to dispose of an interest in his or her land to another, such as by way of selling it.82 In a later application for an interlocutory injunction against severance, Barham v Barham,83 the court assumed that such an injunction may have been possible, but ruled that the ‘balance of convenience’ in the situation lay with the defendant, and declined to continue the operation of an interim [page 445]

injunction against severance.84 In Anderson v Anderson85 (noted at 9.33 above), the court examined the question of whether there had been a prior agreement between the joint tenants not to sever, and concluded that there was insufficient evidence to make out such an agreement. 9.36 A joint tenant is also free to alienate part of his or her interest, rather than the entire interest.86 In order to see what effect, if any, such transactions have on the joint tenancy, it will be necessary to look at different transactions, such as a mortgage and lease. Mortgage 9.37 As we will see in Chapter 14, there is an essential difference between mortgages of old system title land and those involving Torrens title land. A mortgage of old system title land involves a conveyance of the legal title to the mortgagee. The mortgagor retains a right to reconveyance on repayment of the loan (known as the equity of redemption). It follows that, at the moment of execution of a mortgage of land held by joint tenants, by one of the tenants, unity of title as between the mortgagors is broken, and there is a severance at law. The mortgagee becomes tenant in common at law, so that, if the mortgagor defaults, the mortgagee can exercise the power of sale and other available remedies. On reconveyance after the loan has been repaid, the mortgagor steps into the mortgagee’s shoes to become tenant in common. 9.38 The position under Torrens title is different. A mortgage operates as a charge over the mortgagor’s land, not a transfer.87 Accordingly, the four unities of the joint tenancy remain intact, so that the joint tenancy is undisturbed on the execution of a Torrens title mortgage. If the joint tenant mortgagor dies before the mortgage is discharged, the right of survivorship will take precedence over the mortgagee’s right and the property will cease to be encumbered by the mortgage.88 In this instance, the mortgagee, like all joint tenants, has taken on the gamble of survivorship.89 The same measure of vulnerability attaches to an easement granted by a joint tenant.90 [page 446]

Lease 9.39 A lease granted by a joint tenant does not sever the joint tenancy.91 The grant of the lease confers on the tenant a right to possession of the whole premises for the duration of the lease. It has been held, however, that this grant does not so much sever the joint tenancy as suspend it.92 The grant of a lease does not fracture any of the four unities. The effect of the suspension is to defer the right of survivorship to the time the lease terminates if the joint tenant landlord dies during the currency of the lease. The right to enforce the covenants under the lease, including the rental covenant, for the balance of the term will pass to the joint tenant’s heirs.93 Presumably, if another joint tenant dies, not being a landlord, his or her right to possession will pass to his or her estate until the lease comes to an end. If a joint tenant landlord survives the tenancy, the joint tenancy revives. Where the co-owned property is a lease, the grant of a sublease by one co-owner will sever the joint tenancy for the entire lease.94 9.40 Alienation to self By ss 24 and 44(2) of the Conveyancing Act, a person may transfer or ‘assure’ land to himself or herself. A transfer of his or her interest in the joint tenancy by the joint tenant in this way will sever it, because unity of title will be broken, with the result that he or she will become a tenant in common of that share. By contrast with alienation to others, it is not possible for an alienation to oneself to be effective in equity for the reason that it is impossible to hold on trust for oneself.95 Accordingly, a transfer will be effective at law or not at all. In the case of old system land, a transfer of this nature is effective only once a deed is validly executed.96 9.41 One consequence of such a transaction is that the severing joint tenant might secretly sever by retaining the deed. The new tenancy in common would then devolve by will to the beneficiary of his or her choice, in the event the severing joint tenant predeceases the other co-owners. If the other co-owners died first, however, the deed could be disposed of, and the right of survivorship be retained. In consequence, the mutuality that is at the root of a joint tenancy would be seriously compromised. To obviate this difficulty, it was held in Re Sammon97 that the general requirement at common law that a deed be delivered meant that the party executing the deed must show an intention to be presently bound by it. Execution of the deed before an

attesting witness gives rise to a rebuttable presumption of being presently bound. If there is evidence to suggest that the party executing the deed did not intend to be presently bound, however, the deed will be ineffective to transfer the legal estate. In Re Sammon, the transferor executed the deed, it was witnessed and duly attested. On delivery to his solicitor, however, he requested that it not be registered until his death. The court held that the facts suggested that he did not [page 447] wish to be presently bound by the instrument but, rather, would have recalled the deed if his wife predeceased him. Accordingly, it was not deemed to be delivered, and was therefore ineffective.98 In the case of Torrens title land, the transfer is effective only on registration.99 This rule would appear to be unaffected by the right to lodge a transfer to oneself under s 97 as noted above. 9.42 Declaration of trust By s 23C(1)(b) of the Conveyancing Act, a person entitled to an interest in land may by writing signed by him or her make a declaration of trust of any interest in that land. This provision applies to both old system and Torrens title land. A declaration of trust may have been an effective way to surmount the practical obstacles confronted by Mrs Patton in Corin v Patton, noted above.100 If she had declared a trust of her interest in favour of her brother (or other intended beneficiaries) in writing signed by her, the joint tenancy would have been effectively severed in equity.101

Mutual agreement among the joint tenants 9.43 A joint tenancy will be severed if all the joint tenants mutually agree to hold as tenants in common. Once this occurs, the joint tenancy is severed in equity.102 The co-owners will continue to hold the legal estate as a joint tenancy on trust for themselves as tenants in common. On one view, such an agreement must meet the general requirement of s 54A of the Conveyancing Act, which requires contracts for the sale of land to be in writing and signed by the party to be charged, or supported by sufficient acts of part

performance.103 On another view, all that is necessary is that the parties are unanimously agreed that the joint tenancy is at an end from the time of the agreement.104 For instance, even an oral agreement without acts of part performance will suffice.105 Severance, once effected, is irrevocable, even if the agreement is subsequently repudiated. 9.44 In a case where parties agreed to sell the matrimonial home, but deferred distribution of the proceeds of sale until they agreed on (or, in default, the Family Court ordered) how they were to be divided, the joint tenancy was held to have been severed once the agreement to sell was concluded. It followed that the right of survivorship did not arise on the death of one joint tenant prior to the final determination of shares of the [page 448] proceeds.106 However, if the effect of the parties’ agreement is to make the order of the Family Court the sole mechanism for effecting severance, the right of survivorship will be available until the order is made.107 For other cases illustrating the need to determine whether the parties have reached agreement, see Sprott v Harper108 and Lennon v Bell.109 An agreement to make mutual wills will sever a joint tenancy.110

Course of dealing among the joint tenants 9.45 If there is a course of dealing among all of the joint tenants ‘sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common’ a severance will occur.111 The course of dealing need not amount to an implied contract, but all must participate.112 Some indication as to what will constitute a course of dealing sufficient to meet this test can be gained from Magill v Magill.113 In that case, correspondence between two brothers exploring ways of severing their joint tenancy, including the offer to purchase one share by the other joint tenant, was held not to sever in the absence of any consensus about the sale. In Hycenko v Hrycenko,114 a verbal promise by a father that a house he held as joint tenant

with his wife would be left to two of his sons, was perfectly consistent with the joint tenancy remaining on foot, and did not amount to severance. In On v On,115 however, two brothers who had previously been joint tenants of some land effectively severed the joint tenancy by a ‘course of action’ following the resolution of a dispute between them, when they agreed to take separate shares in the land. In Scott v Scott,116 the treatment of joint assets by a husband and wife as if they were separate assets was held to amount to a course of conduct severing a joint tenancy.117 9.46 Mere physical subdivision of the property so that each joint tenant can occupy different parts will not sever the joint tenancy.118 Payment of the proceeds of sale of a joint [page 449] tenancy into separate bank accounts is, however, conduct sufficient to indicate mutual treatment of the interest as a tenancy in common.119 In Roda v Roda,120 the Family Court held that where a co-owning mother and son had executed an agreement that started by acknowledging that they held ‘equal shares’ in a property as joint tenants, and then specified what would happen should either desire to sell, this was, in the circumstances, a sufficient ‘course of conduct’ to amount to a severance of the joint tenancy.121 The course of dealing need not be evidenced in writing, and so does not need to conform with the general requirement imposed by s 54A of the Conveyancing Act that contracts for the sale of land must be in writing.

Court order 9.47 An order of the court may bring about a severance. Thus, under the Family Law Act 1975 (Cth), the court has power to make orders in relation to property. These orders may include an order for the severance of a joint tenancy. A mere application to the Family Court for a division of property under s 79 of the Family Law Act does not, of itself, bring about a severance, for the reason that an applicant may withdraw it at any time.122 If, however, a

court orders the transfer of one joint tenant’s interest to another under ss 79 or 87 (to give effect to a maintenance agreement), or orders a sale of the property, severance will occur, even if one joint tenant dies before the sale is completed. In Public Trustee v Grivas,123 the former joint tenant had remarried but died before the ordered sale was completed. The court held that the joint tenancy had been severed and that his share of the property had passed to his estate.

Cases of unlawful killing 9.48 Where a joint tenant would otherwise unconscionably benefit from the right of survivorship, equity will impose a constructive trust to prevent this. Where A unlawfully kills a co-joint tenant, B, A will hold the legal estate by survivorship on trust for himself or herself and B’s estate as tenants in common in equal shares. In Rasmanis v Jurewitsch,124 A, B and C were joint tenants. A was convicted of the manslaughter of B. By survivorship, he and the other joint tenant became jointly entitled to the property at law. It was held, however, that in equity there would be a constructive trust imposed on public policy grounds to prevent A from holding the benefit which would otherwise flow to him because of the crime. Thus, A and C held B’s onethird share on trust for C as tenant in [page 450] common. As between themselves, A and C remained joint tenants of a twothirds share; so that if C predeceased A, A would hold as tenant in common with C’s estate in the proportion of two-thirds to one-third.125 The principle, known as the ‘forfeiture rule’, applies to all cases where the joint tenant dies as a result of the felonious acts of a co-joint tenant. Technically, the unlawful killing does not effect a severance. Rather, a severance arises indirectly as a result of the imposition of a constructive trust. 9.49 In Troja v Troja,126 a majority of the Court of Appeal held that the forfeiture rule covered the case of a wife who killed her husband, but was convicted of manslaughter on grounds of diminished responsibility. This case

overturned the earlier authority of Public Trustee v Evans,127 which decided that the rule did not apply to homicide where self-defence or provocation was established. In rejecting this line of authority, Meagher JA concluded: ‘There is something a trifle comic in the spectacle of Equity judges sorting felonious killings into conscionable and unconscionable piles’.128 9.50 At common law, however, the forfeiture rule did not apply where the person who killed another was found not guilty by reason of mental illness.129 9.51 Statute has modified the forfeiture rule as stated by the Court of Appeal in Troja. By ss 4 and 5 of the Forfeiture Act 1995 (NSW), in cases of unlawful killings, with the exception of murder, the Supreme Court is given power to vary the forfeiture rule if ‘it is satisfied that justice requires the effect of the rule to be modified’.130 To do justice, the court is given a wide discretion by the requirement to consider the conduct of the offender, the conduct of the deceased, the consequences of the application of the forfeiture rule on the offender or any other person, and any other matter the court considers material.131 A more recent amendment to the legislation provides that, even where a person has been found not guilty of murder by reason of mental illness, the court may in its discretion apply the forfeiture rule if justice requires it.132 The court applied these provisions in Public [page 451] Trustee (NSW) v Fitter.133 See also Guler v NSW Trustee and Guardian,134 Hill v Hill,135 and Re Estate of Novosadek.136

Bankruptcy 9.52 Bankruptcy of a joint tenant entails the vesting of his or her property in the trustee in bankruptcy.137 This process is known as involuntary alienation. Its effect is to sever the joint tenancy in favour of the trustee. Under s 58(2) of the Bankruptcy Act 1966 (Cth), the property does not vest in the trustee until the statutory registration requirements have been met. However, severance occurs in equity from the moment the joint tenant is

declared bankrupt.138 In the case of Torrens system land, if a bankrupt dies before registration of the bankruptcy, and the surviving joint tenant becomes registered as sole proprietor of the property, he or she will take subject to the equity.139 Even though the survivor did not create the equitable interest, he or she will be subject to it because of the in personam exception to indefeasibility: on declaration of bankruptcy, all joint tenants hold the legal estate on trust for the trustee in bankruptcy as tenant in common. This equitable interest cannot be defeated by registration because of the fiduciary duty owed to the trustee in bankruptcy. 9.53 The law of bankruptcy includes provisions designed to prevent a person who is about to become bankrupt from depriving potential creditors of assets by transferring his or her property with such an aim.140 If a potential bankrupt who is a joint tenant of property severs the joint tenancy with the aim of defeating creditors,141 is such a transaction a ‘transfer’ and, hence, caught by s 121(1) of the Bankruptcy Act? As noted previously, at common law, mere severance of a joint tenancy does not amount to ‘transfer’, as all coowners already have the right to exclusive possession of the whole property. Section 121(9)(b), however, deems a ‘transfer’ to have taken place where a person ‘does something that results in another person becoming the owner of property that did not previously exist’, and it could be said that the rights of the other joint tenant as tenant [page 452] in common would fall into that category.142 Despite this, in Peldan v Anderson,143 the High Court held that the statutory provisions, while obscure,144 operated only where property that did not previously exist was ‘carved out’ of the property of the person who later becomes bankrupt (such as, for example, by the granting of a lease).145 But they did not operate in a situation where, as in that case, one joint tenant had severed the joint tenancy. In that situation, it could not be said that the bankrupt’s undivided interest as joint tenant ‘would probably have become’ available to creditors, since if bankruptcy had occurred while the joint tenancy was on foot then the

bankruptcy itself, as noted previously, would have worked a severance of the joint tenancy.146

Rights and obligations of co-owners Right to possession 9.54 The unity of possession that all co-owners enjoy entitles each of them to occupy the whole of the property.147 This right can be freely transferred to a third party, but the transferee cannot be given a right that the co-owner does not have, such as a right to exclude other co-owners.148 For instance, a coowner may grant a lease, but the lessee, though he or she may have a general right of exclusive possession, cannot prevent the other co-owners from entering the premises; nor can they prevent the lessee from enjoying the unity of possession for the duration of the lease.149 Equally, an easement granted by one co-owner (such as the right to use a toilet as a normal right of an owner) is enforceable by the transferee, but only to the extent that it does not cause interference with the rights of those co-owners who were not party to the grant.150 A co-owner who has been excluded from possession, or ‘ousted’, may sue the ousting co-owner in trespass. This right extends to acts of destruction of the property, as where one co-owner removed large amounts of soil and turf from the land without the consent of the other co-owners.151 The excluded co-owner will be entitled to an ‘occupation fee’, [page 453] which is in the nature of mesne profits.152 Where one co-owner leaves the property in consequence of domestic violence from another co-owner, this will amount to ouster;153 but obtaining an apprehended violence order that prevents a co-owner going near the property will not be an ouster for the reason that obtaining such an order is not a legal wrong and, therefore, gives no right to sue in ejectment.154 Mere failure to respond to a non-occupier’s request to sell the premises is not ouster; however, the subsequent denial of the legitimate title of the non-occupying co-owner in legal proceedings is.155

There is no ouster where one co-owner upgrades and slightly enlarges a common access strip causing disturbance during construction work.156 In Paroz v Paroz,157 it was held that one co-owner of a rural property had effectively ousted the others by grazing his own cattle so as to exclude any use of the land for grazing by the others, by slashing an area of land without permission of the others, and generally in behaving aggressively towards the others when they attempted to come onto the land.158

Improvements and repairs 9.55 A co-owner who improves the property has no right at common law to a contribution to the costs of improvement in the absence of agreement.159 In equity, by contrast, the improving co-owner would, in certain circumstances, have a right of contribution from co-owners who would otherwise unfairly benefit from the improvements.160 This includes circumstances where there is a suit for termination of the co-ownership, such as a suit for partition or sale, or a suit for administration of proceeds of sale of the property. This means that the claim is a defensive or passive equity.161 The claim can be enforced against successors in title, since it is in the nature of an equitable charge on the land, so that a co-owner who built houses on land, significantly increasing its value, could claim against successors in title of the non-improving co-owners.162 9.56 There are limits to what the improving co-owner can claim. In Boulter v Boulter163 it was held that a co-owner is entitled to either the actual amount spent on improvements or the increase in value of the land, whichever is the less. So, where a co-owner spent [page 454] $100,000 on improvements, but the property increased in value only by $15,000, he was only entitled to $15,000.164 9.57 Improvements are more than mere repairs and maintenance.165 So, costs of general maintenance of the property, such as pest control or insurance premiums, will not qualify.166 In addition to any physical improvement to the

property, mortgage repayments will qualify as improvements,167 as will payment of water and council rates.168

Right to an occupation fee 9.58 As each co-owner is entitled to possession of the whole premises, it is not permissible for one to charge another an occupation fee or rent. If one coowner chooses not to exercise his or her rights to possession, the corresponding benefit conferred on the remaining co-owners does not give rise to an obligation to pay a fee or rent to the non-resident co-owner; occupation of the whole property is merely an exercise of every co-owner’s rights.169 Historically, there were three exceptions to this general rule:170 1.

Where one co-owner ousts another. As we have seen above, ouster of one co-owner by another gives rise to an action in trespass for an occupation fee for the duration of the ouster.171

2.

Where there is an agreement to pay an occupation rent. Coowners may vary rights by agreement, so as to give rise to an occupation rent, as where one vacates to allow the other exclusive occupation in consideration for rent.172

3.

Where the occupying co-owner is claiming an allowance for improvements to the property. If the occupying co-owner has carried out improvements to the property, and they have increased its value, equity would allow him or her to claim some contribution because it would be otherwise unjust for the non-occupying co-owner to benefit.173 In accordance with the principle that ‘he who seeks equity must do equity’, however, the improving co-owner is under a duty to pay an occupation fee.174 More recently, however, it has been established that there is a fourth category of cases where an occupation fee is appropriate between coowners: [page 455]

4.

Where the co-owners have been in a domestic relationship and, the relationship having broken down, it is no longer reasonable for them to live in the same premises. This additional category is clearly established by the decision of the New South Wales Court of Appeal in Callow v Rupchev.175 The court commented there that it was no longer appropriate to treat these cases as involving a fictional ‘ouster’. In Callow, the party who had left the premises after the breakdown was entitled to charge an occupation rent to the party who remained in occupation, although not in relation to one period of time where the premises remained vacant.176

Quantum of occupation fee 9.59 The amount of the occupation fee is calculated by reference to the proportionate increase in enjoyment of the property by the resident co-owner, so that one of two equal co-owners will have to pay an occupation fee equivalent to half the market rent.177 In Biviano v Natoli,178 the New South Wales Court of Appeal held that it was inequitable for an excluded co-owner to claim the full rental value for the premises where another co-owner remained in occupation. The quantum of the fee is computed by reference to a reduced market rent in light of the other co-owner’s continuing occupation. In this case, the court allowed the ousted co-owner 50% of the market rent for the whole property as an occupation fee from the time of ouster. The onus of proof in establishing the quantum of the occupation fee lies with the party claiming it. To the extent that a right to an occupation fee in the case of a claim for improvements is a set-off, the amount allowable cannot exceed the sum allowed for improvements.179

Rents and profits 9.60 The enactment of s 8 of the Imperial Acts Application Act 1969 (NSW) has had the effect of removing the former availability of an account for rent or profits received by one co-owner from a third party in occupation of the property.180 It follows that neither rents and profits received by one coowner while out of possession (as where the premises

[page 456] are rented to a third party), nor profits and income earned by one co-owner working the property, can be the subject of an account.181

Termination of co-ownership 9.61

Co-ownership can be brought to an end in two ways:

1.

by action of the parties; or

2.

by an order of sale or partition by the court.

By action of the parties 9.62 Co-ownership will come to an end in the case of a tenancy in common when one of the co-owners acquires the shares of all the other coowners or, in the case of a sole survivor in a joint tenancy, when one of the co-owners succeeds to the shares of the others. Co-ownership will also come to an end when all co-owners jointly transfer their several interests to a third party. Co-ownership may also terminate by acts of adverse possession by one co-owner against another.182 Finally, co-ownership may come to an end when the co-owners partition the property to reflect their respective shares, each becoming entitled to sole proprietorship of a fraction of the original property.

By order of sale or partition by the court 9.63 Land Any one or more co-owners of property may apply to the court to appoint trustees to hold the property on a statutory trust for sale or partition.183 The court has a discretion whether to order sale or partition.184 Partition is physical subdivision of the land.185 Factors that may induce the court not to exercise its discretion are where the parties have agreed to accept a gift subject to another’s continuing right of residence;186 whether they are under a contractual obligation to deal with the property in a particular way;187 and whether the parties have agreed not to apply to the court before offering

[page 457] other co-owners a right of pre-emption.188 However, the court does not have a general discretion to consider questions of hardship caused to the parties by sale or partition.189 9.64 A sale is the primary remedy under s 66G of the Conveyancing Act, and partition is allowed only in special circumstances.190 If a co-owner satisfies the court that partition of the property would be more beneficial than a sale for co-owners who own more than one-half of the property, the court may appoint trustees for partition rather than sale.191 An order under s 66G does not sever a joint tenancy, which continues to apply to the proceeds of sale.192 As noted above, in a suit for partition and sale, the court has power to direct an account of improvements and occupation fees.193 In Segal v Barel194 a number of issues arose from an application for partition. In particular, the Court of Appeal there noted that the question as to whether it would be ‘more beneficial’ to physically divide the land, rather than order a sale, had to be decided based on financial, rather than emotional or social, criteria.195 The court also ruled that an order for partition could not be made that led to the land being subdivided under strata title legislation, as the partition provisions assumed the whole land was disposed of to the former coowners, and any strata title scheme would involve ‘common property’ not held solely by any one of those former co-owners.196 9.65 Chattels By s 36A of the Conveyancing Act, the court has power to order a division of chattels belonging to persons jointly or in undivided shares on the application of ‘persons interested to the extent of a moiety [half] or upwards’. Even though some chattels, such as cars, cannot be physically divided, the section has been held to apply to them.197 The court also has power to order the property to be sold.198 In Naziridis v Rimis,199 it was held that registration of ownership of a car in joint names is only one factor in establishing an interest to the extent of a moiety or upwards. Where the plaintiff was unable to prove that he had made any significant loan repayments, but the defendant had repaid the bulk of them and the loan was in her name, he was not entitled to an order under s 36A.

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Strata Schemes Introduction 9.66 The common law of co-ownership is too blunt an instrument to deal effectively with the complexities of high-rise, multi-occupancy living. Certainly, by the use of easements and ‘horizontal’ subdivision into designated cubic airspace, such forms of ownership and fragmentation of rights are possible.200 As noted above,201 however, in the absence of agreement, rights to contributions for repairs, improvements and sole occupancy are generally only possible on termination of co-ownership. This framework of rights is quite inadequate in the context of clusters of units with large areas of common property. Further, the co-owner’s right of possession, which embraces the entire interest, is quite inappropriate where individual unit-holders want exclusive ownership rights over a designated part of the development. To meet these and many other objections, a system of ‘company title’ was deployed in the 1950s.202 9.67 The general framework of company title is that a property company is the legal owner of a multi-unit building. Ownership of shares in the company entitles owners to a right of permanent occupation; and the articles of association specify the precise rights and obligations which attach to shareholders. Yet this, too, was beset with weaknesses. Lenders tended to be no less reluctant to lend on the security of these interests than the interests of individual co-owners, so that it proved to be difficult for purchasers to buy with the assistance of a mortgage. One reason for this — a general problem with company title — is that freedom of alienation was made more cumbersome because of the rights of the directors to consent to the sale or lease of a unit. 9.68 Accordingly, in 1961 strata title legislation appeared in New South Wales for the first time.203 It used a number of traditional legal forms in a unique way to attempt to resolve the above problems. Its key elements included:

absolute ownership rights were given to the holders of units in a strata scheme; an owners corporation, constituted by all the owners of units, owned the public areas of the scheme under a separate title; statutory obligations to contribute to the upkeep of the property were imposed on the owners; and a set of by-laws, which could be changed generally by special resolution of the owners corporation, regulated the internal affairs of the scheme.204 [page 459] 9.69 This novel system worked satisfactorily, but was encumbered by the requirement that disputes, often minor, could be dealt with only by the ordinary courts. The Act was overhauled by the Strata Titles Act 1973 (NSW). The major innovation of this Act was a system of informal dispute resolution mechanisms: the Strata Titles Commissioner and the Strata Schemes Board. The Strata Schemes Management Act 1996 (NSW) introduced a more streamlined process of dispute resolution. Later, the Strata Titles Act 1973 (NSW) was renamed the Strata Schemes (Freehold Development) Act 1973 (NSW), and other legislation introduced to deal with strata schemes established over leasehold land. Most recently, after a substantial review of the legislation, there are now two new Acts that govern the area, both of which mostly commenced on 1 November 2016: Strata Schemes Development Act 2015 (NSW) (SSDA); and Strata Schemes Management Act 2015 (NSW) (SSMA).205 As the current legislation has only recently commenced, comments here will refer both to it and the former law, which will, of course, continue to be referred to by the courts in interpreting the new legislation. 9.70 The legislation surveyed here represents only a part of the wave of statutory reforms in relation to common ownership of land. The former Strata Schemes (Leasehold Development) Act 1986 (NSW) (which dealt with leasehold strata schemes); amendments to the legislation allowing ‘part strata’

schemes that apply to part only of a building and facilitate ‘staged development’ of strata schemes;206 the Community Land Development Act 1989 (NSW) (which provides for staged strata development in conjunction with conventional subdivision of land);207 and the retirement villages legislation, are beyond the scope of this text. (Note that the SSDA now incorporates provisions relating to: leasehold strata schemes in Pt 3; staged development in Pt 5; and part strata parcels in Pt 6.) Nevertheless, all these developments are important in that they may shift the burden for paying for various types of infrastructure (eg, common areas for playgrounds, swimming pools, or even, in some cases, road maintenance) from the public purse to the private owners, and full disclosure of the possible costs is important when these arrangements are entered into. [page 460]

Basic structure of strata schemes Key elements208 9.71 A strata scheme is defined in the SSDA as having three components. First, a scheme is marked by the manner of division of a parcel into lots, or lots and common property. Second, it deals with the the allocation of unit entitlements among the lots. Third, a scheme is made up of the rights and obligations of proprietors, occupiers, the body corporate and other interest holders among themselves as provided by the Act.209 A ‘lot’ is 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. ‘Surface’ has been held to mean the internal skin of the wall, ceiling or floor.210 It follows that the owner of the lot is responsible for the internal painting and wallpapering of the party walls of the lot, as well as floor coverings such as carpets and tiles. Light fittings and curtains are also included in the lot owner’s responsibility. By contrast, floor boards and bathroom floor tiles are not.211 The effect of the legislation (which requires that material in the ‘cubic space’ occupied by the lot is part of the lot) is that where a fixture is

attached to a boundary wall (the inner substance of which, as noted, is part of common property) the fixture is nevertheless part of the lot.212 9.72 A lot does not include ‘common infrastructure’ (formerly called ‘structural cubic space’) — that is, features such as support columns and pillars for the building as a whole; nor does it include pipes, wires, cables and ducts and their casings, unless they are for the exclusive use of a lot.213 These features will form part of the common property of the scheme.214 9.73 Strata schemes legislation applies only to land held under the Torrens system.215 It follows that the nature of strata schemes is reflected in the number of special registration requirements imposed by the legislation for it to come into existence. In the first place, [page 461] a strata scheme must be expressed in a strata plan. A strata plan is made up of three instruments: a location plan, a floor plan and an administration sheet216 (formerly, the ‘schedule of unit entitlement’ was the third component217 — this is still required but now forms part of the wider ‘administration sheet’.) The location plan depicts the border of the land on which the strata scheme is located, and the location of any building on the land.218 The floor plan must depict the base of the vertical boundary of each lot, and show the floor area of each part of the lot and the total of all the composite floor areas.219 If an area that is open, such as a balcony, is to be included in the lot, a mark (called a ‘vinculum’) is usually used on the floor plan to indicate this. Responsibility for maintenance of this area will then rest with the lot proprietor, not the owners corporation. A schedule of unit entitlement is a document that, in general terms, shows as whole numbers the aggregate unit entitlement of all lots and the proposed unit entitlement of each lot.220 The term ‘unit entitlement’ refers to the proportionate entitlements and liabilities of each owner in relation to the scheme as a whole. The entitlements include the owner’s voting rights on a poll at an annual general meeting (AGM), and a proportionate beneficial interest in the common property. This interest is held as a tenancy in

common.221 The liabilities include the proportional share in the total contributions payable to the administrative and capital works funds.222 In addition to registration of the above documents, SSDA s 10(1)(b) requires a plan that is intended to be registered as a strata plan to be accompanied by a copy of the proposed by-laws for the strata scheme. The by-laws are the internal rules of the scheme, which regulate the behaviour of occupiers of lots and the use of the common property.223

Initial period 9.74 When many strata schemes commence, individual lots, or units, are sold piecemeal. Therefore, it is possible that the original owner of the entire property or, later, the owners corporation,224 when composed of only a fraction of the number of total possible members, might take action (such as modifying the common property or passing by-laws) to the disadvantage of later owners. To prevent this problem arising, the SSMA [page 462] limits the powers of owners in what is called the ‘initial period’. The initial period is defined as the period between registration of the strata plan and the time when there are persons, other than the original owner, whose unit entitlements amount in total to at least one-third of the aggregate unit entitlement for the scheme.225 Among these restrictions are the following: The owners corporation has no power to make, amend or repeal a by-law affecting one or more lots, or one or more owners, unless all the lots or all the owners are equally affected.226 This restriction does not, however, affect the right of the original owner when the strata plan is registered, to register a by-law that confers unequal benefits on different lots.227 The owners corporation cannot alter common property or erect any structure on the common property, incur a debt for an amount that exceeds the amount available for repayment in the scheme’s administrative or capital fund, or borrow money and give securities.228 A contract entered into in contravention of these prohibitions, however, may still be valid (under the

general principle that not every breach of the law will invalidate a contract the result of such breach).229 9.75 The SSMA allows the owners corporation and individual proprietors to challenge decisions made during the initial period by conferring a right to sue for any loss caused by breach of these statutory duties.230 Furthermore, the SSDA prohibits: subdivisions of lots or common property in the initial period involving the original owner; conversion of lots into common property involving the original owner; and certain dealings with the common property, unless additional specific requirements are met.231 The owners corporation may not in the initial period enter into a contract with a strata managing agent, or a building manager (previously called a ‘caretaker’), the term of which extends beyond the initial period.232 [page 463]

Common property 9.76 Common property is so much of a strata scheme as is not comprised in any lot.233 Once the strata plan is registered, the common property is vested in the owners corporation.234 On registration, the Registrar-General must create a separate certificate of title in favour of the owners corporation in relation to the common property in the strata plan.235 The common property is held by the owners corporation as agent of the proprietors in the strata scheme.236 The common property is held ‘as agent for the owners as tenants in common in shares proportional to the unit entitlement of the owners’ lots’.237 The owners corporation has power to acquire additional property (by means of transfer or lease), as long as it is not a lot within the scheme and (if being transferred) is contiguous to the scheme.238 The owners corporation is prohibited from dealing with the common property except as provided for in the Act.239 Even where the procedures provided for under the Act are followed, however, an owners corporation will not be permitted to use those procedures to commit a ‘fraud on the minority’ by selling common property below market value to only some of the lot proprietors.240 9.77

Section 33 SSDA authorises the owners corporation to sell or lease

common property, but only pursuant to a special resolution.241 The owners corporation may also create easements and restrictive covenants which confer benefits or burdens over the common property.242 9.78 The owners corporation is under a duty to maintain the common property and any personal property vested in the owners corporation, and keep it ‘in a state of good and serviceable repair’.243 In The Proprietors — Strata Plan No 6522 v Furney,244 the word ‘repair’ was held to include replacement and renewal. On the facts of the case, this duty required the owners corporation to add necessary fittings to the buildings, such as door draughtresistors and waterproof flashing, where these items were missing as a result of poor workmanship when the buildings were originally constructed. In The Owners — Strata [page 464] Plan 21702 v Krimbogiannis,245 the maintenance obligation extended to replacing a panel of the common property that had been removed. An exception to this duty is where an exclusive use or special privilege by-law has been registered, which may shift the duty on to the owners concerned.246 The owners corporation may be absolved from the duty if it determines by special resolution that, first, it is inappropriate to maintain, renew, replace or repair a particular item of property; and, second, its decision will not affect the safety, or detract from the appearance of any property in the strata scheme.247 It cannot under the general power to repair make substantial additions to common property, such as installing a swimming pool, in the exercise of this duty.248 However, s 108 of the SSMA allows the owners corporation by special resolution to add to, alter, or erect a new structure on, the common property.249 The duty to repair has been held not to extend to replacing a faulty air conditioner.250 A dealing or caveat relating to an owner’s lot affects the owner’s interest in the common property even if the common property is not expressly referred to in the dealing or caveat.251

Owners corporation 9.79 The owners corporation is constituted by all the owners of lots from time to time in the strata scheme.252 Even though other parties may hold proprietary interests in the scheme (eg, lessees or mortgagees), they are not members of the owners corporation. In addition to being the legal owner of the common property, the owners corporation has the principal responsibility for the management of the scheme.253 It may employ such persons as it sees fit to assist in the exercise of any of its functions.254 The owners corporation must appoint a strata committee (formerly called an ‘executive committee’) at the first AGM of the corporation, at the latest. If a strata committee is not appointed, the strata scheme must be administered by the owners corporation as a whole.255 At its first meeting, the strata committee must appoint a chairperson, secretary and treasurer, who are also to act as chairperson, secretary and treasurer of the owners corporation.256 [page 465] A decision of the strata committee is taken to be the decision of the owners corporation, unless the Act requires the decision to be made by unanimous or special resolution, or in general meeting.257 Though a strata committee holds office, an owners corporation may exercise all of its functions in general meeting.258 In the event of a disagreement between the owners corporation and the strata committee, the decision of the owners corporation prevails.259 9.80 The owners corporation may appoint a strata managing agent by an instrument in writing authorised by a resolution at a general meeting. The managing agent must hold a strata managing agent’s licence under the Property, Stock and Business Agents Act 2002 (NSW).260 All or some of the corporation’s functions can be delegated to the managing agent, except: its power of delegation; a decision on a matter that is required to be decided by the owners corporation; or a determination relating to the levying or payment of contributions.261

Any valid resolution or decision of the strata committee or the managing agent becomes a decision of the owners corporation.262 9.81 The Act also provides specifically for the appointment by the owners corporation of a building manager (previously called a ‘caretaker’).263 9.82 The owners corporation has a general power to borrow money and secure the repayment of principal and interest in any manner agreed on by the owners corporation and the lender; but it has no power to use the common property as security.264 Also, the owners corporation may enter into an agreement with an owner or occupier of a lot for the provision of amenities and services by it to the lot, or to the owner or occupier of a lot.265

Management 9.83 Responsibility for the management of a strata scheme lies with the owners corporation. Chapter 3 of the former Strata Schemes Management Act 1996 (NSW) (former Act) identified four key management areas. These were: 1.

maintenance and repair of the common property;

2.

managing the finances of the strata scheme; [page 466]

3.

taking out insurance for the strata scheme; and

4.

keeping records and accounts for the strata scheme.266

The new Strata Schemes Management Act 2015 (SSMA) does not explicitly use the language of ‘key management areas’, but still covers these areas: Pt 5 deals with financial management; Pt 6 with property management; Pt 9 with insurance; and Pt 10 with records. A change from the former Act is seen in Pt 11, which provides a new scheme for dealing with building defects.

Maintenance and repair of the common property 9.84 As noted above, s 106 of the SSMA requires the owners corporation to maintain the common property and keep it ‘in a state of good and

serviceable repair’.267 The Act confers further rights to allow the corporation to fulfil this duty more effectively. Thus, an owners corporation may itself carry out work that a public authority has required an owner of a lot to carry out, or that a by-law or order requires; and in these cases the owners corporation may recover the cost from the owner, or any person who becomes the owner after the work has been carried out.268 The owners corporation may also carry out work at its own expense (ie, where the cost of the work cannot be recovered from some other person), if a structural defect in a lot affects or could affect the support or shelter of any other lot or common property.269 A feature of s 106 of the SSMA, which now appears on the face of the legislation in s 106(5), is that it creates not only an obligation that may be enforced as prescribed under the Act, but also a civil liability that may be enforced through the tort action for ‘breach of statutory duty’ by an owner suffering ‘reasonably foreseeable loss’ as a result of a breach of the provision by the owners corporation. Former s 62 of the Strata Schemes Management Act had been interpreted to create a private action by a series of first instance decisions.270 However, the later decision of the Court of Appeal in The Owners Strata Plan 50276 v Thoo271 overruled this earlier line of decisions and held that the former s 62 did not create a right of private civil action. So new SSMA s 106(5) should now be seen as restoring this civil action previously thought to exist, although conditioned (unlike the previous obligation) by ‘foreseeability’. [page 467] 9.85 Section 120 of the new SSMA confers a power on the owners corporation to enter any part of the parcel, which includes individual lots, to carry out work that the owners corporation is required to do by the Act, by a public authority or by an order made under the Act. The owners corporation may also enter any part of a parcel for the purpose of ascertaining whether work needs to be done to fulfil its duties under the Act.272 An owners corporation can enter a lot at any time in an emergency, or with the consent of the occupier.273 If a person obstructs or hinders an owners corporation in the exercise of any of its functions of entering to repair or determine whether

repair work is required, he or she will be liable to a maximum penalty of five penalty units.274

Building defects bond scheme 9.86 Part 11 of the SSMA sets up a new ‘building defects bond scheme’. The aim of these provisions is to provide a means of dealing with the perennial issue of latent defects in buildings subject to strata schemes, which may not emerge until a year or so after the building is first occupied. In summary, the scheme requires developers who construct buildings to be the subject of strata schemes to appoint an independent building inspector, who is to prepare an interim report identifying any defective building work present in the development within a period of 15–18 months after completion of the building.275 A final report is then to be provided within 21–24 months of completion of the building work.276 The owners corporation may then require defects be rectified, and, in doing so, they will be able to draw on a ‘bond’ that was paid by the developer, set at 2% of the contract price.277 Part 11 of the SSMA commenced on 1 July 2017. Its provisions only apply to building work for which a contract was entered into after that date, or where actual work commenced after that date.278

Managing the finances of the strata scheme 9.87 Administrative and capital works funds The owners corporation is under a duty to establish two funds. These funds are designed to meet two different types of expenditure: expenses of a recurrent nature, and expenses of a capital nature. The two funds are known as the ‘administrative fund’ and ‘capital works fund’ (under the former legislation, a ‘sinking fund’) respectively. The administrative fund is to be made up of the following amounts: [page 468] contributions levied from owners;

proceeds of disposal of any personal property of the owners corporation; fees paid to the owners corporation, such as fees for inspection of its records; any monetary penalty paid to the owners corporation; and the proceeds of any investment of the fund.279 9.88 The money in the administrative fund can be paid out, for instance: to meet estimates of expenditure to maintain in good condition the common property and any personal property vested in the owners corporation; to meet other recurrent expenses; where there is a distribution of a surplus in the fund; or to meet obligations under the Act or the by-laws.280 9.89 Section 74(1) of the SSMA requires the establishment of a capital works fund for strata schemes. There is one exception to this requirement. If a strata scheme comprises two lots, all the buildings in the scheme are within one or other of the two lots, and all the buildings in one lot are physically detached from buildings in the other lot, the owners corporation may by unanimous agreement not establish a sinking fund.281 Apart from that rare situation, the capital works fund is to be made up of: amounts levied on owners; amounts paid to the owners corporation ‘by way of discharge of insurance claims’, unless they have already been paid into the administrative fund; amounts paid to the owners corporation under Pt 11 of the SSMA (dealing with building defects); any amount received by the owners corporation ‘not required or permitted to be paid into the administrative fund’; and ‘proceeds of any investment of the fund’.282 9.90 Money can be paid out of the capital works fund for three major purposes: first, for major repairs, such as repair and renewal of fixtures, repainting the common property, and acquisition or replacement of personal property; second, as a distribution of surplus; and third, any amount payable under Pt 11 dealing with major building repairs.283 A surplus may be distributed pursuant to a unanimous resolution of the owners corporation if it is of the opinion that it is not required for the purposes of either fund. The amount paid to each owner must be in proportion to his or her unit entitlement.284

[page 469] 9.91 There is a requirement for all owners corporations to have a 10-year capital works fund plan, designed to ensure forward planning in relation to the condition of the premises.285 9.92 Levy of contributions The SSMA provides mechanisms to ensure that owners’ lots contribute a fair share towards the maintenance of the strata scheme. By s 79 of the SSMA, the owners corporation must prepare estimates of how much money it will need to credit to its administrative and capital funds. The estimates must be prepared within 14 days of the constitution of the owners corporation, and for each AGM thereafter. At the same meeting that the estimates are determined, the owners corporation must determine the amounts to be levied as a contribution to the funds.286 In cases of a shortfall of funds to cover expenses, the owners corporation may determine an additional levy at a general meeting.287 The owners corporation levies contributions required to be paid by serving a written notice on the owners of the lots.288 Contributions are payable by each lot in shares proportionate to the owner’s unit entitlement.289 On transfer of a lot, if the transferor is liable in respect of a contribution then the transferor and the transferee are jointly and severally liable for it.290 Interest is payable on unpaid contributions at an annual rate of 10% per annum, unless the owners corporation by special resolution decides otherwise.291 It is, therefore, vital for a prospective purchaser of a lot in a strata scheme to verify if all contributions have been paid by the vendor. The owners corporation can recover as a debt any unpaid contributions one month after they become due, any interest payable, and any expenses incurred in the recovery.292

Insurance for the strata scheme 9.93 The owners corporation is subject to stringent requirements to insure buildings in a strata scheme. By s 160 of the SSMA (see s 83 of the former Act), the owners corporation of a strata scheme for the whole of a building must insure the building, and keep it insured, under a damage policy with an approved insurer. (The former Act, in s 81, separately defined the term ‘building’ for the purposes of the insurance provisions, but the SSMA simply

relies on the general meaning of the term as defined in s 4(1) of the Act. See now, however, s 161(3) and (4) of the SSMA, which delimit which parts of the building are to be covered, and which are not to be covered.) A ‘damage policy’ is [page 470] a contract of insurance that, in the event of the building being destroyed or damaged by fire, lightning, explosion or any other occurrence specified in the policy, provides for the following: rebuilding or replacement of a building in the event of its destruction, so as to be in a condition no worse than before; repair of damage or restoration of a damaged portion so as to be in a condition no worse than before; reimbursement for the payment of removal of debris; and remuneration of those employed to carry out the replacement or repair.293 There is an exemption from this requirement for two-lot strata schemes if they meet the same conditions as those set for an exemption from the requirement to establish a capital works fund.294 9.94 The previous requirement that, for the purposes of insurance, the building must be valued at least once every five years by the owners corporation,295 seems not to be applicable under the current SSMA. 9.95 Other forms of insurance that the owners corporation must take out include workers’ compensation insurance and insurance in respect of potential liability on the part of the owners corporation for damage to property, death and personal injury.296 In the case of liability for damage to property, death and personal injury, insurance must be taken out with an approved insurer and must be for a cover of not less than $10 million for each claimable event.297 The former provision of a list of approved insurers298 is not replicated under the current SSMA, which provides a general definition of the term in s 4(1). The duties imposed on the owners corporation to insure do not limit the right of any owner to take out insurance.299

Keeping records and accounts for the strata scheme 9.96 The owners corporation must keep certain records and accounts for the strata scheme, and must allow certain persons to inspect those records. By s 177 of the SSMA (see s 96 of the former Act), the owners corporation must keep a strata roll. It must be kept in a form that contains entries for each lot and entries for the common property and strata scheme as a whole.300 The strata roll contains some of the most important information about the strata scheme. In relation to each lot, it must include: [page 471] the owner’s name and Australian postal address for the service of notices, or the same details for any agent of the owner; any information provided in a ‘strata interest notice’ given under s 22 (see s 118 of the former Act) (a notice given to the owners corporation of a right to cast a vote at a meeting) or obtained from the Register; and information given in a ‘tenancy notice’ given under s 258 (see s 119 of the former Act) (a notice of the grant of a lease, sublease or assignment of lease).301 9.97 In the case of the common property, the strata roll should include the following information: the strata plan number and address of the strata scheme building; the name of the original owner, and of any strata managing agent of the owners corporation, together with their Australian addresses for service of notices; the total unit entitlement and the unit entitlement of each lot; details of the insurance taken out; by-laws in force for the time being; and if the scheme was registered before the commencement of Pt 10 of the Strata Schemes Development Act 2015 (NSW) (SSDA), dealing with ‘strata renewal schemes’, whether that Part applies to the scheme or not.302

9.98

Additional records that the owners corporation must keep are:

particulars of notices served on it;303 minutes of meetings and particulars of motions;304 and financial statements on an annual basis relating to income and expenditure for the administrative and capital works funds.305 9.99 Each of these records and accounts must be available for inspection by owners and mortgagees or covenant chargees of a lot, or by a person authorised to inspect the records on their behalf. The owners corporation must allow an inspection if it is presented with a written request and the prescribed fee.306 [page 472]

Additional requirements to be observed by the owners corporation of a ‘large strata scheme’ 9.100 Additional obligations are imposed on the owners corporation of a ‘large strata scheme’. These are defined as schemes with over 100 lots (excluding parking or other utility lots).307 Some of these additional requirements include more stringent auditing of accounts;308 specific estimates of major items of expenditure to be completed in the next year, which cannot then be exceeded by more than 10%;309 and written notice of strata committee meetings to be provided to each lot proprietor at least 72 hours before the meeting.310

Responsibilities of owners and occupiers 9.101 Part 8 of the SSMA (see Ch 4 of the former Strata Schemes Management Act) confers a number of responsibilities on owners and occupiers of lots. These duties operate independently of the by-laws. An owner, mortgagee or covenant chargee in possession, lessee or occupier of a lot must not do anything, or permit anything to be done, which interferes with any support or shelter provided by that lot for another lot or for the common property, or which interferes with the passage of water, sewage,

drainage, gas, electricity and other services.311 If the owner of a lot wishes to alter the structure of the lot, he or she must give the owners corporation a written notice describing the alteration not less than 14 days before commencement.312 9.102 An owner, mortgagee or covenant chargee in possession, lessee or occupier of a lot must not use the lot, or permit the lot to be used, so as to cause a nuisance or hazard to an occupier of any other lot.313 Also, the common property must not be used in a way that either interferes unreasonably with the use and enjoyment of it by anyone entitled to use and enjoy it, or interferes unreasonably with the use and enjoyment of any other lot.314 9.103 The Act imposes obligations in relation to the giving of notices on the occurrence of certain events. A person who has an interest in a lot that gives a right to vote at general meetings of the owners corporation must give notice in writing to the owners corporation of that interest.315 The owner of a lot who grants a lease of the lot, or lessee who assigns [page 473] the lease or grants a sublease, must give notice of the lease, assignment or sublease within 14 days after the grant.316 Failure to do so attracts a maximum penalty of five penalty units. If a mortgagee takes possession of a lot, notice of the fact must be given to the owners corporation within 14 days.317

By-laws General 9.104 The by-laws of a strata scheme regulate the activities that interest holders may conduct in a lot or on the common property. They may also regulate what the owners corporation may do. Section 43 of the former Strata Schemes Management Act set out a list of matters that the by-laws might provide for. Under the current SSMA, this specific list has been removed; s 136 of the SSMA simply provides in general terms that 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’.318 In determining whether an initial by-law governing a strata scheme fell within the various categories set out in s 43 of the former Act, the courts adopted a fairly generous attitude to validity. In Casuarina Rec Club Pty Ltd v The Owners — Strata Plan 77971,319 the Court of Appeal said that, in relation to a by-law authorising use of certain amenities (there, membership of a nearby gymnasium), the by-law would be valid if the amenities were ‘capable of enhancing the occupiers’ use or enjoyment of the premises’. The fact that the by-law was present at the commencement of the strata scheme, however, was also significant, as purchasers would be aware of it when entering in.320 Now that there is no specific list of factors to be considered, it is likely that the very broad connecting factor ‘in relation to’ the specified matters will see few challenges to the validity of by-laws on the basis that their purpose goes beyond that set out in s 136 of the SSMA. 9.105 There are specific negative prohibitions, however, limiting the sort of by-laws that may be made, some of which are mentioned below (at 9.108–9.109). By-laws may not be passed to override specific obligations and rights conferred by the Act, nor will they be effective if they conflict with any other Act or law.321 Strata schemes coming into existence after 30 November 2016 are governed by the by-laws registered with the strata [page 474] plan adopted under the SSMA and may be altered under that Act.322 Strata schemes that came into effect before that date and after 1 July 1997 are governed by those by-laws that were registered with the Registrar-General under the former Strata Schemes Management Act Act.323 The by-laws governing strata schemes that came into effect before 1 July 1997 are those contained in Sch 1 of the former Strata Schemes Management Act, including any additions and amendments registered for the strata scheme.324 9.106 The by-laws for a strata scheme bind the owners corporation, the owners, mortgagees and chargees in possession, lessees and occupiers of lots as

if they had been signed and sealed by each party, and contained mutual covenants to observe and perform them.325 There is also an implied covenant in every lease of a lot that the lessee will comply with the by-laws in the strata scheme.326 When a lease is granted, the landlord must provide the lessee with a copy of the by-laws and any strata management statement affecting the lot or common property within seven days, and with a copy of any amendment to the by-laws within seven days of the passing of the amendment.327

New by-laws, and amendment or repeal of existing bylaws 9.107 By s 10(1)(b) of the SSDA (s 8(4B) of the former Strata Schemes (Freehold Development) Act 1973 (NSW)), a plan intended to be registered as a strata plan must be accompanied by a copy of the proposed by-laws for the strata scheme. By-laws may be added to, amended or repealed by a special resolution of the owners corporation.328 Any new by-law, or an amendment or repeal of an existing by-law, has no effect until the owners corporation has lodged an approved form of notification with the Registrar-General, and the Registrar-General has made an appropriate recording of the notification in the folio of the Register comprising the common property.329 A notification cannot be lodged with the Registrar-General more than six months after the passing of the resolution creating, amending or repealing the by-law.330 9.108 As noted previously, the SSMA places some general restrictions on the capacity of the owners corporation to pass by-laws in respect of certain matters. These are set out in s 139 of the SSMA. In particular, there is a broad prohibition in s 139(1) on a by-law being ‘harsh, unconscionable or oppressive’. (Jurisdiction to determine this question is given to the NSW Civil and Administrative Tribunal (NCAT) in SSMA s 150.) Other restrictions relate to specific policies under the legislation. In keeping with the general objective of ensuring freedom of alienation for each owner, s 139(2) of the SSMA (formerly s 49(1) [page 475]

of the former Act) provides that 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. However, decisions under former s 49 establish that this prohibition does not prevent by-laws being made that will have an impact on the use that may be made of a particular lot, so long as the restrictions on use do not amount to a substantial interference with the rights of the registered proprietor. In Salerno v Proprietors of Strata Plan No 42724,331 a bylaw was approved by a majority prohibiting smoking in any lots. The Salernos complained because they wanted to sell their lot to a club, which in turn wanted to allow smoking. Windeyer J held that the by-law did not restrict the legal transfer of the lot and was not invalidated by the predecessor of s 49(1), even though it had the effect of making the purchase of the lot less attractive to some buyers. In White v Betalli332 a by-law allowing one lot proprietor to use a portion of another lot for storing a boat was held not to breach former s 49, despite the fact that this effectively meant that part of the other lot was not available to the lot-owner.333 This decision, and the decision in The Owners of Strata Plan No 3397 v Tate,334 are presented in an article by Sherry as providing examples of how there is a danger that strata scheme by-laws may undermine the indefeasibility title under the Torrens system, by creating proprietary interests that are not readily discoverable on the Register.335 Note, however, that in The Owners Strata Plan No 60919 v Consumer Trader and Tenancy Tribunal336 the court held that a by-law that was beyond power would not be validated by being registered by the Registrar-General. 9.109 Other specific restrictions under s 139 of the SSMA include that any by-law for a residential scheme (not being a retirement village or housing for aged persons) that purports to prohibit children under 18 from occupying a lot is of no effect.337 Also, the owners corporation cannot prohibit, by means of a by-law, an occupier from keeping an ‘assistance animal’ such as a guide dog or hearing dog.338 [page 476]

Section 137 of the SSMA now clarifies that a by-law may be passed, if desired, limiting the number of adults who may reside in a lot by reference to the number of bedrooms of the residence. But the lower limit is two adults per bedroom, and such a by-law may only be passed where it is not inconsistent with local planning laws. This section is also subject to further limits imposed by the Regulations; it should be noted that cl 36 of the Strata Schemes Management Regulation 2016 (SSMR) provides that such a by-law is ineffective if all the persons who reside in the lot are related to each other. 9.110 Lot holders may sometimes wish to make use of common property for their own special use; for example, where the owner of a lot on the top floor of a block of units wants to put in a skylight, or where lot-holders want designated parking spaces. (For another example of a proposed exclusive use by-law, see Gazebo Penthouse Pty Ltd v Owners Corporation SP 73943,339 where the question was whether one of three lifts in a tower could be devoted to service only the top three floors.) In these circumstances, it is possible for the owners corporation to grant a right of exclusive use and enjoyment of, or special privileges in respect of, the whole or part of the common property.340 The by-law must be passed by a special resolution, and must have the written consent of the owner or owners of the lots on whom the by-law confers rights or special privileges.341 The by-law may also impose conditions such as payment of money.342 While a by-law of this nature remains in force, it operates for the benefit of, and is binding on, the owner of the lot for the time being.343 In many circumstances, however, and especially as by-laws may be amended and repealed by special resolution, it may be preferable for the owner of a lot to seek a transfer of a portion of the common property from the owners corporation.344 [page 477]

Enforcement of by-laws 9.111 A by-law may be enforced in a number of ways. First, it may be enforced by means of voluntary mediation. Second, enforcement can occur by the issue of a notice from the owners corporation requiring the owner to

comply, if the corporation is satisfied that an owner or occupier has breached a by-law.345 The issuing of such a notice requires a specific resolution of the owners corporation or the strata committee, except where the notice is issued by a strata managing agent to whom the power to issue such notices has been delegated.346 The use of this ‘warning notice’ procedure gives rise to a right to apply to NCAT to impose a pecuniary penalty if the owner or occupier later contravenes the by-law.347 Finally, the complainant may seek a remedy through the ordinary courts for breach. These remedies, as well as those sought in relation to other breaches of duty under the SSMA, are the subject of the next section of this chapter. Note, however, that legal action that requires expenditure of funds may not be initiated to enforce the rights of the owners corporation unless authorised by a resolution of a general meeting.348

Disputes 9.112 Disputes that arise in relation to strata schemes are dealt with according to the provisions of the SSMA and the Civil and Administrative Tribunal Act 2013 (NSW). The latter Act provides that disputes under the SSMA will be dealt with by the Consumer and Commercial Division of NCAT (the Tribunal).349 The Department of Fair Trading suggests that there are four possible steps to dispute resolution of issues arising under the SSMA:350 1.

discussion between the disputing parties; [page 478]

2.

an order made by the owners corporation;

3.

mediation, either through the Department of Fair Trading or by an approved mediation service; or

4.

an order made by the Tribunal.

As noted below, in some cases there may also be a residual jurisdiction in a relevant court, either the District Court or Supreme Court, which might be invoked (particularly in cases involving the validity of by-laws.) The SSMA

also allows strata schemes to have their own internal dispute resolution policy in place, under s 216 of the Act (although failure to engage with that policy is said not to have any adverse impact on formal mediation or other processes.)

Mediation 9.113 Since the first Strata Titles Act was enacted in 1961, various legislative reforms have given ever greater prominence to informal disputeresolution mechanisms. There are two basic reasons for the changes. The first is the need for inexpensive justice. Often disputes involve relatively minor matters, which are too costly to prosecute in the ordinary courts. Informality generally reduces costs. The second reason is the need to ensure the longerterm effectiveness of dispute resolution. Where, as in a strata scheme, parties will continue to live in close and regular contact after the dispute has been resolved, a process which leads to a ‘winner’ and a ‘loser’ may have the effect of creating the conditions for further acrimonious disputation. By contrast, if parties can be induced to resolve their differences in ways that avoid this, they may be less inclined to have, or pursue, grievances later. 9.114 The SSMA has continued this policy by setting out requirements for parties to a dispute to attempt mediation before applying for an order from the Tribunal. Mediation is defined as: … a structured negotiation process in which the mediator, as a neutral and independent party, assists the parties to a dispute to achieve their own resolution of the dispute.351

Thus, the Registrar of the Tribunal will not usually accept an application for an order unless he or she is satisfied that mediation has been attempted but was unsuccessful.352 The Registrar is, however, given a discretion to proceed if of the view that mediation is unnecessary or inappropriate.353 If the matter has not been mediated, the applicant will be notified by the Registrar that it should be.354 [page 479] 9.115 The process of mediation is commenced by an application to the ‘Secretary’ (currently defined in SSMA s 4(1) as the Commissioner for Fair

Trading, Department of Finance, Services and Innovation) for mediation of any matter for which an order may be sought from the Tribunal under the Act.355 The Secretary may dismiss an application if he or she believes that it is ‘frivolous, vexatious, misconceived or lacking in substance’.356 Evidence given and documents prepared for mediation sessions are inadmissible in proceedings before any court, tribunal or body without the consent of the parties, or unless there are reasonable grounds to believe that the disclosure is necessary to avoid the danger of personal injury or property damage.357 9.116 Under the former legislation, provision was made for a Strata Schemes Adjudicator to play an ‘intermediate’ role in dispute resolution between the process of mediation and any necessary action in the Tribunal. As this office has now been removed from the SSMA, its former operation will not be discussed here.358

Civil and Administrative Tribunal 9.117 General The Tribunal, established by the Civil and Administrative Tribunal Act 2013 (NSW), operates as the other main external dispute resolution mechanism for strata schemes. Its jurisdiction now includes matters formerly dealt by adjudicators under the previous legislation. Part 12 of the SSMA deals with the Tribunal’s general powers, and an important legislative note to Pt 12 describes the specific areas in which it may make ‘orders to settle disputes about certain matters relating to the operation and management of a strata scheme’. In broad terms (the details can be found in the note and the various provisions of the Act granting jurisdiction), the Tribunal may make orders in relation to the running of meetings, restrictions on the use of various types of lots, arrangements with strata managing agents or building managers, financial matters, disputes over maintenance or repairs, unit entitlements, bylaws, the presence or otherwise of animals in lots, insurance premiums, and other matters. 9.118 Procedure The procedure of dealing with applications to the Tribunal under the SSMA is generally the same as that for other applications to the Tribunal, having noted already that most applications will need to have at least attempted mediation first. The Registrar is to give notice of an application for an order to the interested parties, and where an owners

corporation receives such a notice, it must display it on its regular local notice board.359 9.119 The Tribunal may dismiss an application if the ground for the application is the absence of a quorum at a meeting or ‘a defect, irregularity or deficiency of notice or time’, and it ‘believes no substantial injustice has resulted’.360 [page 480] 9.120 The Tribunal’s procedures are informal. Under its head legislation, the Tribunal is ‘to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms’.361 Importantly, there is no general right to representation by counsel, solicitor or agent before the Tribunal.362 As there are no special rules governing the matter in the SSMA, the normal rule as to costs of proceedings before the Tribunal is that the parties must pay their own costs except in ‘special circumstances’.363 The circumstances regarded as ‘special’ for this purpose will include that the proceedings were ‘frivolous, vexatious, misconceived or lacking in substance’.364 9.121 Orders As noted above, the Tribunal has jurisdiction in a wide range of matters under the SSMA. Here, some of the more common orders made under the previous legislation will be commented on: first, applications authorising certain matters in the initial period; and second, applications to reallocate unit entitlements. Under s 27 of the SSMA (see s 182(1) of the former Act), the Tribunal may make an order to waive, vary or extinguish a restriction relating to the initial period, or to authorise any matter to be done in relation to the waiving, varying or extinguishing of such a restriction. The applicant, owners corporation, owner, mortgagee, covenant chargee and any other affected person must be given notice of the application, and have the right to appear and be heard on the hearing of the application.365 9.122

Another area of the Tribunal’s jurisdiction is the allocation of unit

entitlements. Given that unit entitlements determine such matters as voting rights, obligations to make contributions to the sinking and administrative funds, and rights to distribution on a termination of the strata scheme,366 the question of allocation of these entitlements — made by the original owner or developer — goes to the heart of the fairness of the scheme. Section 236 of the SSMA (see s 183 of the former Act) details the requirements for an order for reallocation. The Tribunal may make an order only if it considers that the allocation of unit entitlements among the lots was either unreasonable when the strata plan was registered (or when a revised schedule of unit entitlements was lodged at the conclusion of a development scheme), or became unreasonable because of a change in the permitted land use; for example, because of rezoning.367 In making a determination, the Tribunal is under a duty to have regard to the respective values of the lots, and to this end an application must be accompanied by a certificate [page 481] of valuation for the relevant time (ie, either on registration or on a change of permitted use) prepared by a qualified valuer.368 The value of a lot is assessed by reference to its market value,369 commonly referred to as the ‘willing vendor/willing purchaser’ test.370 The Tribunal may make ancillary orders on a finding that the original valuation was unsatisfactory, requiring the developer to reimburse the applicant for costs associated with the valuation, the giving of evidence by the valuer, and payments to those owners and the owners corporation in the amount of any overpayments incurred as a result of the unreasonable allocation in the six years prior to the date of the order.371 9.123 An application under s 236 of the SSMA may be made by an owner of a lot, the owners corporation, the local council, or any other body representing the Crown with the power to impose rates, taxes or charges by reference to the valuation of land.372 9.124 The Tribunal also exercises jurisdiction in relation to building manager agreements and the appointment of a strata managing agent.373

9.125 Appeals from orders of the Tribunal will be dealt with under the Civil and Administrative Tribunal Act 2013 (NSW) (CATA). That Act provides for ‘internal appeals’ (where the Tribunal at first instance has been exercising its general jurisdiction) to be brought to the Internal Appeal Panel of the Tribunal.374 It should be noted that, while appeals on a question of law are available ‘as of right’,375 leave to appeal other matters dealt with in the Consumer and Commercial Division (including matters arising under the strata scheme laws)376 may only be granted where the Internal Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a)

the decision of the Tribunal under appeal was not fair and equitable, or

(b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).377

It should also be noted, however, that decisions of the Tribunal imposing a civil penalty are not able to be internally appealed. Appeals on a question of law following the imposition of a penalty may be taken to the ‘appropriate appeal court’ under CATA s 83. This will be either the Supreme Court (if the Tribunal making the order had been constituted by one or more senior judicial officers), or otherwise the District Court.378 [page 482] 9.126 Imposition of civil penalties The Tribunal may, on an application by an owners corporation, order a person to pay a fine of up to ten penalty units if it is satisfied that the owners corporation served an SSMA s 146 (former s 45) notice on the person, and that he or she has since breached the by-law.379 This penalty may be doubled for a second failure to comply within 12 months.380 A higher penalty will apply if the contravention concerns a by-law made under s 137, concerning occupancy limits.381 An owner or occupier cannot seek this ‘warning notice’ procedure. An unpaid fine is a charge on the lot, until paid to or recovered by the owners corporation.382

District Court and Supreme Court

9.127 Avenues of appeal from orders of the Tribunal were noted above.383 The effect of this scheme is that generally an appeal is available only on a point of law. Appeals to the District Court or the Supreme Court are possible where civil penalties have been imposed, depending on the constitution of the Tribunal that made the order.384 The Supreme Court may also retain, however, its inherent jurisdiction to provide judicial review of orders made under the strata schemes legislation.385 Accordingly, it may still be open to a complainant to bypass the specific strata schemes dispute-settlement mechanisms entirely.386 However, note that s 253(2) of the SSMA provides that where rights are enforced in a court, the plaintiff must pay the defendant’s costs if the court is of the opinion that, having regard to the subject-matter of the proceedings, the taking of the proceedings was not justified because the Act itself makes adequate provision for the enforcement of those rights or remedies. The Supreme Court or other relevant court also retains jurisdiction where title to land is in question.387 [page 483]

Termination of strata schemes 9.128 A strata scheme can be terminated pursuant to an order of the Supreme Court on the application of the owner of a lot, the owners corporation, or a mortgagee or covenant chargee of a lot.388 Such an order must contain directions for, among other things, the: sale or disposition of any property of the owners corporation; discharge of liabilities of the owners corporation; persons liable to contribute moneys required for the discharge of the liabilities of the owners corporation and their proportionate liability; and distribution of the assets of the owners corporation and the proportionate entitlement of each person under that distribution.389 Similar powers and rights arise where a strata scheme is terminated by the Registrar-General.390 This procedure will usually be invoked only where all proprietors and any others having a legal interest in the lots agree.391

Strata renewal process 9.129 What if all the owners do not agree in the need to terminate the scheme? Until recently, it was not possible to end a strata scheme without unanimous agreement of all lot owners. But the SSDA has now introduced a new Pt 10, dealing with what is called the ‘strata renewal process’. SSDA s 153(2) says that the purpose of the Part is ‘to facilitate the collective sale or redevelopment of freehold strata schemes’. The details of the strata renewal process are, of course, set out in Pt 10.392 But, in general terms, it allows the termination of a strata scheme where only 75% of lot owners may be in favour.393 The Act provides a detailed process where a proposal must be approved by the strata committee and owners corporation in general meeting,394 and then considered by a specially established ‘strata renewal committee’.395 Once the required level of support from lot owners has been reached, the Registrar then records that the strata scheme is the subject of a ‘strata renewal plan’.396 Of course, compensation is to be paid to lot owners who did not agree with the proposal but will lose their property.397 The Land and Environment Court is given jurisdiction to make orders implementing the strata renewal plan. In doing so, it must ensure that all appropriate procedures leading up to the action were followed. The court is also required [page 484] to order compensation to a ‘dissenting owner’, whose lot is being taken away contrary to their wishes, of an amount that is not less than the amount that owner could have obtained for their lot if they had approved the renewal scheme.398

Reform Unilateral severance of Torrens title land 9.130

One important reform suggested by the New South Wales Law

Reform Commission in 1994 was to simplify the process of severance of joint tenancies of Torrens title land.399 As Corin v Patton400 and Costin v Costin401 have shown, a joint tenant without possession of the certificate of title can face serious difficulties if he or she wishes to make a gift of the interest. Either registering a severance (for which the certificate is needed) or severing in equity (for which the certificate is also necessary for the purposes of ‘perfecting’ a gift) in practice become impossible if a co-joint tenant in possession of the certificate refuses to produce it. Such a person may have a vested interest in survivorship in cases where a joint tenant is terminally ill. 9.131 The New South Wales Law Reform Commission recommended adoption of a provision from s 63 of the Land Titles Act 1980 (Tas), which allows for a ‘declaration of severance’ to be recorded on the Register.402 The advantage of this procedure is that there is no need to produce the certificate of title for registration. Section 97 of the Real Property Act 1900 (NSW) is aimed at achieving this object by providing for registration of a transfer to self without production of the certificate of title. However, given that this provision allows a co-joint tenant to stall the process by objecting to severance (see ss 97(5) and 12A(2) of the of the Real Property Act) the position, while an advance, does not resolve all of the problems of the previous law. For instance, mere lodgment of an objection might buy time for the non-severing joint tenant, so that the same result as in Corin and Costin could theoretically result under the reformed law. Arguably, enactment of a provision that reflects the simpler English position (severance by notice in writing)403 to the Torrens system would go some way to solving this problem. A joint tenant could be allowed to sever merely by a notice given to co-joint tenants. An instrument recording this notice could be immediately registrable. Co-joint tenants disadvantaged by such a process (eg, where the severance was in breach of a contractual agreement not to sever for a specific period) would retain in personam rights to have the Register amended. The requirement of notice, coupled with the caveat provisions, would afford the holder of in personam rights adequate means to protect them. [page 485]

Occupation rents and profits 9.132 The rules governing accounting for improvements and occupation rents, devised in a very different social and historical context to the present day, are unduly cumbersome. This is especially evident when set alongside the rules which govern the distribution of property on divorce, or on separation of de facto partners under the Property (Relationships) Act 1984 (NSW). In particular, the law of co-ownership — unlike other areas of property law examined in this work — has until recently seemed peculiarly blind to the differences that exist between domestic and intimate personal relationships, on the one hand, and forms of commercial relationships, on the other. Certainly, the Family Law Act 1975 (Cth) overrides s 66G of the Conveyancing Act 1919 (NSW), but only to the extent of the jurisdiction of the Family Court. Thus, in relation to suits for partition or sale initiated by parties who are not covered by either the Family Law Act or Property (Relationships) Act, there is no consideration of responsibility for children. It is encouraging to see that the decision in Callow v Rupchev404 recognises the relationship status of parties as a relevant issue in determining the entitlement to occupation rent — a matter that, for all their other disagreements, forms the shared substratum of concerns of Kirby P and Meagher JA in Forgeard v Shanahan.405 9.133 This issue was pursued in Kirby P’s strong dissenting judgment in Forgeard v Shanahan, where he argued that a generous reading of the partition provision (s 66G of the Conveyancing Act) would confer on the courts an analogous discretion to that contained in the property distribution provisions of the Family Law Act and the Property (Relationships) Act. The Queensland legislation, which offers a general right to account in relation to rents and profits received other than as a result of the co-owners’ own exertions on the land, such as rent from a tenant, appears a much fairer solution.406 Moreover, the reasoning in Carmody v Delehunt407 in the New South Wales Court of Appeal, which made use of general legislative intent to interpret s 26 of the Conveyancing Act, might have yielded a similar result for s 66G. A further advantage of a reform of this nature would be to resolve the general legal uncertainty surrounding liability to account for rents, profits and income.408 There seems no good reason why these should not be dealt with in the same way as other costs and expenses.

[page 486]

Strata scheme by-laws and property rights 9.134 With the increasing density of city living, more and more property owners are becoming registered proprietors of lots as part of strata schemes or other forms of statute-regulated systems where the law regulates not only property boundaries but relationships between owners in close geographical proximity. One of the major challenges facing courts and legislators in this area, as indicated by a number of recent decisions and the comment by Sherry noted above,409 is the protection of those lot-holders in the minority: there is real potential for ad hoc arrangements created by by-laws, which have been approved by a majority of lot-holders, to undermine the traditional strength of property rights enjoyed by those who may be in the minority. In particular, the introduction into the SSDA of new Pt 10 allows a lot owner to be deprived of their interest in a lot where 75% of other lot owners agree. Whether the compensation and other procedures are adequate to protect the interests of individual ‘dissenting owners’ in these circumstances remains to be seen. It seems that this is an important area that warrants careful monitoring if the integrity of the Torrens system, and the strength of property rights, is to be maintained.

1.

For an overview of the historical context of the emergence of strata titles legislation, see A Kondos, ‘The Hidden Faces of Power: A Sociological Analysis of Housing Legislation in Australia’ in Legislation and Society in Australia, R Tomasic (ed), Allen & Unwin, Sydney, 1980, Ch 15.

2.

Two other forms of co-ownership, coparcenary and tenancy by entireties, are now obsolete. See, generally, A Moore, S Grattan and L Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, 6th ed, Lawbook Co, Sydney, 2016, [12.15]–[12.20]. See the helpful overview of the law of co-ownership in the judgment of Murphy JA in Singh v Kaur Bal (No 2) [2014] WASCA 88 at [30]–[44].

3.

Wright v Gibbons (1949) 78 CLR 313.

4.

See support for this analysis in the comments of Kirby and Crennan JJ in Director of Public Prosecutions for Victoria v Le (2007) 232 CLR 562 at [99].

5.

For ‘ouster’, see 9.54.

6.

For severance, see 9.25–9.53.

7.

P Butt, Land Law, 6th ed, Thomson Reuters/Lawbook Co, Sydney, 2010, p 226, suggests that the

effect of s 44(2) of the Conveyancing Act 1919 (NSW) may be that the unity of time requirement no longer applies in NSW. However, there seems to be no authority on the point so far. 8.

The rights of the joint tenant were graphically described as the ‘gamble of the tontine’ by Deane J in Corin v Patton (1990) 169 CLR 540 at 573; cited in Trustees of the Property of John Daniel Cummins (a bankrupt) v Cummins (2006) 224 ALR 280 at [60].

9.

Gould v Kemp (1834) 2 My & K 304 at 309–10; 39 ER 959 at 962.

10.

As to severance, see 9.25–9.53.

11.

Conveyancing Act 1919 (NSW) s 35. This provision was originally found in UK legislation, the operation of which is discussed (and criticised) in J Brown and M Pawlowski, ‘Joint Tenancies and English Commorientes: A Question of Survivorship or Severance?’ (2011) 1 Property Law Review 122–34.

12.

See NSW Trustee and Guardian v State of New South Wales [2015] NSWSC 1121. See also Re Kumar [2017] VSC 81 at [59]–[61], applying a similar Victorian provision.

13.

Re Franklin [2009] VSC 496.

14.

See 9.62 below, where adverse possession by one co-owner against another is discussed.

15.

For discussion of adverse possession, see Chapter 5.

16.

For further comment, see N Skead, ‘Giveth with One Hand, Taketh Away with Possession?’ (2010) 19 APLJ 103. It is worth noting that the aunt, who may have claimed the property, played no part in the litigation, and hence no real opposition was presented to the plaintiff’s application to be registered.

17.

That is, a tenancy in common may exist even if all ‘four unities’ are present. In addition to the four unities, a joint tenancy will only come into existence when it has actually been created, by, for example, a disposition using the appropriate terminology.

18.

See, generally, Chapter 6.

19.

An example of such a situation would be where there has been a severance of the joint tenancy that would be recognised by principles of equity, but the severance has not yet been formalised through a procedure required to create a legal severance, such as registration.

20.

See 9.4–9.7.

21.

Payne v Webb (1874) LR 19 Eq 26.

22.

Heathe v Heathe (1740) 2 Atk 121.

23.

Peat v Chapman (1750) 1 Ves Sen 542.

24.

Lewen v Dodd (1595) Cro Eli 443.

25.

Surtees v Surtees (1871) LR 12 Eq 400.

26.

Bull v Bull [1955] 1 QB 234.

27.

Jackson v Jackson (1804) 9 Ves Jun 591. But see now s 26 of the Conveyancing Act and 9.20.

28.

Delehunt v Carmody (1986) 161 CLR 464. See, generally, Chapter 6. It should be noted that the presumption of advancement will apply in cases of property put in the name of a wife, fiancée or child, except where this presumption is clearly rebutted. See 6.30.

29.

Pink v Lawrence (1978) 36 P & CR 98.

30.

Trustees of the Property of John Daniel Cummins (a bankrupt) v Cummins (2006) 224 ALR 280.

31.

Calverley v Green (1984) 155 CLR 242 at 259.

32.

Trustees of the Property of John Daniel Cummins (a bankrupt) v Cummins (2006) 224 ALR 280 at [72].

33.

Morley v Bird (1798) 3 Ves 628.

34.

Lake v Craddock (1732) P Wms 158.

35.

Roda v Roda [2013] FamCAFC 27.

36.

Roda v Roda [2013] FamCAFC 27 at [65]–[66].

37.

Malayan Credit v Jack Chia-MPH Ltd [1986] 1 WLR 590. Affirmed by the High Court in Trustees of the Property of John Daniel Cummins (a bankrupt) v Cummins (2006) 224 ALR 280 at [61]–[62].

38.

Malayan Credit v Jack Chia-MPH Ltd [1986] 1 WLR 590 at 596 per Lord Brightman.

39.

Conveyancing Act 1919 (NSW) s 26(2). For a case where the exception in relation to mortgagees operated, see Equititrust Ltd v Franks (2009) 258 ALR 388 at [55] and [85].

40.

Mitchell v Arblaster [1964–65] NSWR 119.

41.

Minter v Minter (2000) 10 BPR 18,133.

42.

Minter v Minter (2000) 10 BPR 18,133 at [59].

43.

Delehunt v Carmody (1986) 161 CLR 464 at 472–3 per Gibbs CJ.

44.

Delehunt v Carmody (1986) 161 CLR 464 at 473 per Gibbs CJ. For a more recent case holding that parties who contributed equally to a property when de facto partners held as tenants in common, not joint tenants, due to the impact of s 26 of the Conveyancing Act, see Falloon v Madden; Madden v Madden [2012] NSWSC 652 at [161].

45.

Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1 NSWLR 501 at 506 per Hutley JA.

46.

Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1 NSWLR 501 at 506 per Hutley JA.

47.

See Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1 NSWLR 501 at 503 where Hope JA notes that ‘express’ as used in s 26(2) of the Conveyancing Act does not require the use of any particular form of words.

48.

In practice, as Butt notes, the requirement to state in the registrable instrument whether parties hold either as joint tenants or tenants in common renders the meaning of ‘joint proprietors’ something of an irrelevance: Butt, Land Law, note 7 above, p 223.

49.

Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 495.

50.

See Diemasters Pty Ltd v Meadowcorp Pty Ltd (2001) 52 NSWLR 572 at 579–80 at [17].

51.

See Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 495 at [44]–[55] per the majority (French CJ, Hayne, Bell and Gageler JJ); compare Keane J, dissenting, at [111]–[117]. For comment on the decision, see R Acland, ‘Joint Tenancy, Fraud, Agency and Volunteers under the Torrens System: Cassegrain v Gerard Cassegrain & Co Pty Ltd’ (2015) 4 Property Law Review 186–96.

52.

Registrar-General of New South Wales v Wood (1926) 39 CLR 46.

53.

Although, as Kevin Gray and Susan Gray point out, there is a ‘logical difficulty’ with the idea of severance, for the reason that the joint tenant does not have a pre-existing ‘share’ to sever. Consequently, ‘[i]n some curious dislocation of time and causation, the completed act of transfer brings into being the very “interest” which purported to be subject matter of the transfer in the first place’: K Gray and S Gray, Elements of Land Law, 5th ed, Oxford University Press, Oxford, 2009, p 946. However, in Peldan v Anderson (2006) 229 ALR 432 at [19], the court referred to the

comments of Dixon J in Wright v Gibbons (1949) 78 CLR 313 at 333 that, in fact, the law had always been prepared to recognise ‘the aliquot share of each [joint tenant] … as a distinct and ascertained proprietary interest’ for the purposes of alienation. Hence, while slightly misleading, the language of ‘share’ will continue to be used here. 54.

Corin v Patton (1990) 169 CLR 540 at 575.

55.

Wright v Gibbons (1949) 78 CLR 313.

56.

Cray v Willis (1729) 2 P Wms 528. See also Singh v Kaur Bal (No 2) [2014] WASCA 88 at [37], quoting Professor Butt: ‘Severability is the “escape hatch” available to each joint tenant’.

57.

Williams v Hensman (1861) 1 J & H 546 at 557–8 per Page-Wood VC describes each of the first three elements of this list.

58.

For a helpful overview of the law relating to the severance of joint tenancies, see Mischel Holdings Pty Ltd (in liq) v Mischel [2013] VSCA 375 at [56]–[72].

59.

For a general overview of the area around various Commonwealth jurisdictions, see H Conway, ‘“Leaving Nothing to Chance?”: Joint Tenancies, The “Right” of Survivorship, and Unilateral Severance’ (2008) 8 Oxford Uni Commonwealth L Jnl 45.

60.

Conveyancing Act 1919 (NSW) s 23B(1).

61.

See 9.25.

62.

Wright v Gibbons (1949) 78 CLR 313.

63.

Real Property Act 1900 (NSW) s 42. See, generally, Chapter 8.

64.

Lysaght v Edwards (1876) 2 Ch D 499.

65.

Australian courts have never adopted the view put forward by Lord Denning MR in Burgess v Rawnsley [1975] Ch 429 at 439, that an effective severance of a joint tenancy occurs when there is proof of a mere intention to sever. In Hulme v Schaecken [1999] NSWSC 1291, for example, it was held that even the filing of an application to sever the tenancy did not of itself sever the tenancy unless and until some order was made.

66.

Corin v Patton (1990) 169 CLR 540.

67.

Costin v Costin (1997) NSW ConvR ¶55-811 (CA). It is perhaps worth asking what more the donor could have done in these circumstances. But the case illustrates the firm principle that a gift is not complete until custody of the certificate of title has been transferred.

68.

For another example of a case where a severance did not succeed because the certificate of title could not be produced, see Craigie & Harley v Kemp [2016] WASC 243.

69.

Real Property Act 1900 (NSW) s 97(2)(b).

70.

Real Property Act 1900 (NSW) s 97(5).

71.

For criticism of this reform, see 9.131.

72.

McCoy v Estate of Peter Anthony Caelli [2008] NSWSC 986.

73.

For comment on the case, see H Conway, ‘When is a Severance Not Actually a Severance?’ (2009) 16 APLJ 278–88 (though note that the case citation used in the article is in error).

74.

McCoy v Caelli [2010] NSWSC 1233.

75.

See the discussion in [2010] NSWSC 1233 at [45]–[50].

76.

Anderson v Anderson [2016] NSWSC 1204.

77.

See the lengthy discussion in Anderson v Anderson [2016] NSWSC 1204 at [356]–[400], which concluded that while the daughter had been careless, she had not committed ‘fraud’ and, hence, that this exception to indefeasibility had not been established. For discussion of ‘fraud’ as an exception to indefeasibility under the Torrens system see 8.61ff.

78.

Anderson v O’Donnell (2000) 10 BPR 18,501.

79.

Anderson v O’Donnell (2000) 10 BPR 18,501 at [10].

80.

Goyal v Chandra [2006] NSWSC 239.

81.

Goyal v Chandra [2006] NSWSC 239 at [23].

82.

In so holding, his Honour in Goyal v Chandra [2006] NSWSC 239 at [27]–[28] cited, but respectfully disagreed with, the view expressed in Butt, Land Law, note 7 above, p 238, [1461], that such an agreement might create an obligation to pay damages for breach of contract, but would not prevent severance.

83.

Barham v Barham [2010] NSWSC 503.

84.

Ball J held that there was some doubt on the facts as to whether the plaintiff daughter could establish a firm commitment by the defendant mother not to sever, as she claimed. If the injunction were granted and the mother happened to pass away before the matter came to trial, the mother’s desire to transfer part of the land to another child would have been totally defeated by default. However, if on a final trial the plaintiff could make out her case, then a constructive trust over the estate in her favour would resolve the matter. For comment on the decision, see N Zerial, ‘Restraining Severance of Joint Tenancy’ (2010) 84(11) ALJ 743.

85.

Anderson v Anderson [2016] NSWSC 1204, at [251]–[276].

86.

See 9.25.

87.

Re Forrest Trust; Trustees, Executors and Agency Co Ltd v Anson [1953] VLR 246 at 250.

88.

Lyons v Lyons [1967] VR 169. Affirmed in Van den Heuvel v Perpetual Trustees Victoria Ltd; Registrar General of NSW v Van den Heuvel [2010] NSWCA 171 at [150].

89.

For this reason, a mortgagee will not usually take a mortgage from one joint tenant alone, without the other or others also being party to the mortgage. See also Butt, Land Law, note 7 above, p 241.

90.

Mansfield v Mansfield (1890) 16 VLR 569.

91.

Frieze v Unger [1960] VR 230.

92.

Frieze v Unger [1960] VR 230.

93.

Frieze v Unger [1960] VR 230 at 242–3.

94.

Frieze v Unger [1960] VR 230 at 243.

95.

DKLR Holding Co (No 2) Pty Ltd v Comr of Stamp Duties (NSW) (1982) 149 CLR 431.

96.

Conveyancing Act 1919 (NSW) ss 23B(1), 38.

97.

Re Sammon (1979) 94 DLR (3d) 594. The formal requirements for deeds are examined at 6.5.

98.

For a discussion of this issue, see New South Wales Law Reform Commission, Unilateral Severance of Joint Tenancies, Report No 73, 1994.

99.

Freed v Taffel [1984] 2 NSWLR 322.

100. Corin v Patton (1990) 169 CLR 540. See 9.31. 101. It may be that this option was not adopted because the intention was to allow her share to be

passed in accordance with her will, and not to actually transfer it beneficially to her brother. The documents signed included a declaration that Mr Corin held his interest on trust for Mrs Patton. See the discussion by Deane J in Corin v Patton (1990) 169 CLR 540 at 577. 102. Lysaght v Edwards (1876) 2 Ch D 499. 103. Lyons v Lyons [1967] VR 169. 104. Burgess v Rawnsley [1975] Ch 429. 105. Calabrese v Miuccio (No 2) [1985] 1 Qd R 17. 106. Abela v Public Trustee [1983] 1 NSWLR 308. 107. Slater v Slater (1987) 12 Fam LR 1. 108. Sprott v Harper [2000] QCA 391, where a husband and wife had signed a document agreeing to a division of marital assets, this was regarded as a sufficient statement of ‘mutual agreement’ under criterion (ii) from Williams v Hensman (1861) 1 J & H 546. 109. Lennon v Bell [2005] QSC 286. Negotiations between husband and wife had not proceeded beyond the preliminary stages, and hence the course of dealing was not sufficient to sever the joint tenancy before the wife’s death. 110. Re Wilford’s Estate; Taylor v Taylor [1934] VLR 129. 111. Williams v Hensman (1861) 1 J & H 546 at 557–8 per Page-Wood VC. 112. The authorities are not at one on this point. For the various positions, see Butt, Land Law, note 7 above, p 248. 113. Magill v Magill (1997) NSW ConvR ¶55-795. 114. Hycenko v Hrycenko [2016] VSC 247 at [54]. 115. On v On [2002] NTSC 18. 116. Scott v Scott [2009] NSWSC 567. 117. See also Perpetual Trustees Company Ltd; Application of Chen [2010] NSWSC 808 at [36]: ‘Each of the parties, by conduct, treated himself and herself as if he and she were separate owners of their interests’. 118. Greenfield v Greenfield (1979) 38 P & CR 570. 119. Abela v Public Trustee [1983] 1 NSWLR 308. 120. Roda v Roda [2013] FamCAFC 27. 121. In Roda v Roda [2013] FamCAFC 27 at [79], the court cited the comments of Chesterman J in Saleeba v Wilkie (2007) ANZ ConvR 664 at [19] in support of this approach. 122. In the Marriage of Pertsoulis (1980) 6 Fam LR 39. 123. Public Trustee v Grivas [1974] 2 NSWLR 316. 124. Rasmanis v Jurewitsch (1969) 70 SR (NSW) 407. On one analysis, this form of equitable intervention demonstrates the essential role that principles, as opposed to rules, play in law: R Dworkin, Taking Rights Seriously, Duckworth, London, 1978. 125. The result is that A, the felon, was in the same situation that he would have been in if he had not killed B. Prior to B’s death, he had a one in three chance of getting the full estate after the natural death of the others; after B’s death, he had a one in two chance of getting two-thirds of the estate.

126. Troja v Troja (1994) 33 NSWLR 269. 127. Public Trustee v Evans (1985) 2 NSWLR 188. 128. Public Trustee v Evans (1985) 2 NSWLR 188 at 299. 129. Re Plaister, Perpetual Trustee Co v Crawshaw (1934) 34 SR (NSW) 547. Affirmed in Batey v Potts (2004) 61 NSWLR 274 at [14] per Gzell J. In Batey, the defendant had been found guilty of manslaughter but, while there was some evidence of mental illness, the evidence did not establish that he was suffering under such a ‘defect of reason’ that he should be acquitted: see [16]. 130. Forfeiture Act 1995 (NSW) s 5(2). 131. Forfeiture Act 1995 (NSW) s 5(3). 132. Part 3 (ss 10–14) of the Forfeiture Act was added with effect from 28 October 2005 by the Confiscation of Proceeds of Crime Amendment Act 2005 (NSW). 133. Public Trustee (NSW) v Fitter [2005] NSWSC 1188. Indeed, it was noted in the judgment (at [53]) that the applicant in those proceedings, Ms Robb, sister of the deceased, had apparently been one of the ‘driving forces’ behind the amendments being made to allow such actions. 134. Guler v NSW Trustee and Guardian [2012] NSWSC 1369. 135. Hill v Hill (2013) 11 ASTLR 121. 136. Re Estate of Novosadek [2016] NSWSC 554. 137. Bankruptcy Act 1966 (Cth) s 58(1). 138. Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165. 139. Sistrom v Urh (1993) 117 ALR 528. 140. See, especially, Bankruptcy Act 1966 (Cth) s 121. 141. Note that the ‘defeat’ of creditors would only take place following severance of the joint tenancy in circumstances where the other former joint tenant then dies before the bankruptcy. In those circumstances, it could be said that but for the prior severance the value of the whole property would have vested in the bankrupt and, hence, been available for distribution to creditors. Where there has been no severance and the other party has not died before the bankruptcy then, by reason of the provisions noted above at 9.52, there will be a statutory severance, the non-bankrupt joint tenant will become a tenant in common, and his or her share will not be subject to distribution in the bankruptcy. See the comment on this point in Peldan v Anderson (2006) 229 ALR 432 at [48]. 142. See also Trustees of the Property of John Daniel Cummins (a bankrupt) v Cummins (2006) 224 ALR 280 at [24] n 19, where it was assumed that transfer by one joint tenant of their interest to the other was caught by s 121. 143. Peldan v Anderson (2006) 229 ALR 432. 144. See Peldan v Anderson (2006) 229 ALR 432 at [24]. In fact, the relevant paragraphs were described as ‘in conceptual and linguistic contrariety’: at [35]. 145. Peldan v Anderson (2006) 229 ALR 432 at [26], where other examples are given. Even in such cases, the court recognises that the wording of the provisions as they stand is not workable (at [37]), but the proposed addition by the court of other words (at [45]–[47]) at least allows the provisions to operate in relation to the ‘carved out’ situations. 146. See the conclusion of the court in Peldan v Anderson (2006) 229 ALR 432 at [48]. This conclusion must be taken to assume that what was ‘probable’ did not involve what actually occurred, which

was the unexpected death of the other former joint tenant prior to the bankruptcy. 147. Thrift v Thrift (1975) 10 ALR 332. 148. Frieze v Unger [1960] VR 230. 149. Frieze v Unger [1960] VR 230. 150. Hedley v Roberts [1977] VR 282. 151. Wilkinson v Haygarth (1847) 12 QB 837; 116 ER 1085. 152. Biviano v Natoli (1998) 43 NSWLR 695. For mesne profits, see 2.35. 153. Dennis v McDonald [1982] 1 All ER 590. 154. Biviano v Natoli (1998) 43 NSWLR 695 at 703. 155. Biviano v Natoli (1998) 43 NSWLR 695 at 703. 156. Ferguson v Miller [1978] 1 NZLR 819. 157. Paroz v Paroz [2010] QSC 203. 158. See comment on the case in K McCrossin, ‘What Conduct Constitutes an Infringement of a CoOwner’s Rights?’ (2010) 84 ALJ 473. Other litigation involving the same parties dealt with issues arising from the partnership arrangements rather than the ouster point. See Paroz v Paroz [2010] QCA 362; special leave to appeal refused in Paroz v Paroz [2011] HCATrans 205. 159. Leigh v Dickeson (1884) 15 QBD 60. 160. Leigh v Dickeson (1884) 15 QBD 60. 161. Brickwood v Young (1905) 2 CLR 387. 162. Brickwood v Young (1905) 2 CLR 387. 163. Boulter v Boulter (1898) 19 LR (NSW) Eq 135. 164. Squire v Rogers (1979) 39 FLR 106. 165. Leigh v Dickeson (1884) 15 QBD 60. 166. Forgeard v Shanahan (1994) 35 NSWLR 206. 167. Re Gorman [1990] 1 All ER 717; Ryan v Dries (2002) 10 BPR 19,497 at [6] per Sheller JA; at [71] per Hodgson JA, Giles JA dissenting on this point at [15]. In Loibner v Owens [2006] NSWSC 410 at [31], Young CJ in Eq regarded himself as bound by the majority judgment on ‘the mortgage point’. The alternative view, presented by Giles JA in Ryan, is that mortgage payments are not to be considered ‘improvements’ to the property, as they simply represent the discharge of a debt already owed by both parties. 168. Forgeard v Shanahan (1994) 35 NSWLR 206. 169. Forgeard v Shanahan (1994) 35 NSWLR 206. 170. Luke v Luke (1936) 36 SR (NSW) 310. 171. Dennis v McDonald [1982] 1 All ER 590. 172. Leigh v Dickeson (1884) 15 QBD 60. 173. See 9.55. 174. Teasdale v Sanderson (1864) 33 Beav 534; 55 ER 476; Ryan v Dries (2002) 10 BPR 19,497. 175. Callow v Rupchev (2009) 14 BPR 27,533, especially at [46].

176. Callow has been accepted as the current state of the law in the later decision of Ducker v Smith [2011] NSWCA 212 at [63], noting that the UK decision of French v Barcham [2009] 1 All ER 145 takes a similar view (as to which see the comment by P Butt, ‘Ouster of Co-Owner: A Sequel’ (2010) 84 ALJ 14). See also D v W [2011] SADC 151 at [95]. For comment on Callow, see K Galloway, ‘Liability for Occupation Rent: “No Fault Ouster” of a Co-tenant’ (2010) 19 APLJ 23. Callow was also applied in applied in Payne v Rowe [2012] NSWSC 685; Murtagh v Murtagh [2013] NSWSC 926 at [201]. However, in W v D (2012) 115 SASR 61, Kourakis CJ seemed to express some doubts as to whether ‘relationship breakdown’ should be adopted as a separate category giving rise to a right to an occupation fee: at [70]. For comment, see A Nobis, ‘Controversies of Land Coownership: The Common Law Rules Applied in the Division of Interests in Land Following Breakdown of a Domestic Relationship’ (2013) 27/5 Aust Prop Law Bull 88–91. 177. Re Gorman [1990] 1 All ER 717. 178. Biviano v Natoli (1998) 43 NSWLR 695 at 704. 179. Forgeard v Shanahan (1994) 35 NSWLR 206. 180. Forgeard v Shanahan (1994) 35 NSWLR 206 at 222 per Meagher JA, Mahoney JA concurring generally at 219. 181. See generally, on this point, Butt, Land Law, note 7 above, p 242, for the position in New South Wales; Moore, Scott and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 2 above, [12.255]–[12.260], for the position in other jurisdictions. 182. Limitation Act 1969 (NSW) s 38(5). 183. Conveyancing Act 1919 (NSW) s 66G(1). 184. Forgeard v Shanahan (1994) 35 NSWLR 206. 185. Such subdivision is tightly regulated these days by local government planning procedures. See Pt 4 of the Environmental Planning and Assessment Act 1979 (NSW), the effect of which is that ‘development’ of land must receive prior approval. Section 4(1) includes ‘subdivision of land’ within the definition of ‘development’, and s 4B(1)(a) defines ‘subdivision’ to include a division effected by ‘partition’. It may be possible, however, to seek an order for partition which is expressed to be subject to the relevant approvals subsequently being obtained. See De Campo Holdings Pty Ltd v Cianciullo [1977] WAR 56 and Francis v Francis [2009] SASC 363, noted in Moore, Scott and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 2 above, [12.440]. 186. Williams v Legg (1993) 29 NSWLR 687. 187. Re Buchanan-Wollaston’s Conveyance [1939] Ch 738. 188. Nullagine Investments Pty Ltd v Western Australia Club Inc (1993) 67 ALJR 739. 189. Re McNamara and the Conveyancing Act (1961) 78 WN (NSW) 1068. 190. Re Cordingley (1948) 48 SR (NSW) 248. 191. Conveyancing Act 1919 (NSW) s 66G(4). 192. Re Debney (1959) 60 SR (NSW) 471. 193. Leigh v Dickeson (1884) 15 QBD 60. See 9.54–9.59. 194. Segal v Barel (2013) 84 NSWLR 193. 195. Segal v Barel (2013) 84 NSWLR 193 at [68].

196. See Segal v Barel (2013) 84 NSWLR 193 at [89]. For the ownership of common property under strata title by an owners’ corporation, see below at 9.76. 197. Tillack v Tillack [1941] VLR 151. 198. Ferrari v Beccaris [1979] 2 NSWLR 181. See Blundell v Curvers [2002] NSWSC 436, where the provision was used to allow the division and sale of a collection of artworks; Big Top Hereford Pty Ltd v Thomas (2006) 12 BPR 23,843, where it was used to divide a herd of cattle. 199. Naziridis v Rimis (1999) 9 BPR 16,201. 200. See Bursill Enterprises Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73. 201. See 9.54–9.58. 202. For a general discussion, see Butt, Land Law, note 7 above, pp 856–7. 203. For a critical analysis of the emergence of this legislation, see Kondos, ‘The Hidden Faces of Power: A Sociological Analysis of Housing Legislation in Australia’, note 1 above, Ch 15. For an overview of strata title in other Australian jurisdictions, see K Everton-Moore, A Ardill, C Guilding and J Warnken, ‘The Law of Strata Title in Australia: A Jurisdictional Stocktake’ (2006) 13 APLJ 1. 204. For a concise and helpful overview of the nature of strata title, see Segal v Barel (2013) 84 NSWLR 193 at [77]–[79]. While the court refers to the previous legislation, the broad outlines of the scheme are still accurate. 205. Part 11 of the SSMA, which provides for a new scheme to identify and deal with defective building work involving strata schemes, commenced on 1 July 2017. However, as the Act only applies to work carried out after its commencement, it will be some time before the effectiveness of its operation becomes clear. See 9.86 for a brief overview of these provisions. 206. See Strata Titles (Part Strata) Amendment Act 1992 (NSW); Strata Titles (Staged Development) Amendment Act 1993 (NSW). 207. A detailed discussion of the legislation can be found in A Ilkin, NSW Strata and Community Schemes Management and the Law, 4th ed, Lawbook Co, Sydney, 2007. 208. For a general overview of the New South Wales legislation on strata schemes, see the summary provided by French CJ in the High Court decision of Brookfield Multiplex Ltd v Owners — Strata Plan No 61288 (2014) 254 CLR 185 at [9]–[11]. 209. SSDA s 4(1), definition of ‘strata scheme’, paras (a), (b) and (c). See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 5(1). 210. The Proprietors — Strata Plan No 6522 v Furney [1976] 1 NSWLR 412. See SSDA s 6. 211. See generally, Ilkin, NSW Strata and Community Schemes Management and the Law, note 207 above, pp 46–51. In The Owners SP 35042 v Seiwa Australia Pty Ltd (2007) 13 BPR 24,789, the Court of Appeal ruled that, where floor tiles had been laid before the relevant plan was registered, the inner boundary of the lot included the upper surface of tiles on the floor, but did not extend below those tiles to the concrete underneath. This meant that a defective membrane between the concrete and the tiles was part of common property and, hence, the responsibility of the owners corporation to repair. 212. Le v Williams [2004] NSWSC 645 at [55] per Campbell J: ‘It is unusual, in real property law, for a fixture to be owned by someone different to the owner of the real estate to which it is affixed, but that unusual consequence follows, so far as owners’ fixtures are concerned, from the structure of the Strata Schemes (Freehold Development) Act 1973’.

213. SSDA s 4(1) definition of ‘common infrastructure’. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 5(1). 214. For common property, see 9.76. 215. SSDA s 9(4). See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 7. 216. SSDA s 10(1)(a). 217. Strata Schemes (Freehold Development) Act 1978 (NSW) s 8(1). 218. SSDA s 4(1) definition of ‘location plan’. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 8(1)(a); s 5(1) definition of ‘location plan’. 219. SSDA s 4(1) definition of ‘floor plan’. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 8(1); s 5(1) definition of ‘floor plan’ para (a). 220. SSDA Sch 2 cl 2 now contains detailed requirements for what the ‘schedule of unit entitlements’ must contain for different types of lots. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 8(4). 221. SSDA s 28. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 20. 222. SSMA s 83(2). See former Strata Schemes Management Act 1973 (NSW) s 78(2). The capital works fund was sometimes formerly called the ‘sinking’ fund. 223. For by-laws, see 9.104–9.110. 224. The title used for this entity in the former Strata Schemes (Freehold Development) Act was ‘body corporate’, but in the current legislation (the SSDA and SSMA) it is called the ‘owners corporation’. 225. SSMA s 4(1) definition of ‘initial period’; formerly, Strata Schemes Management Act 1973 (NSW) s 6 and Dictionary. 226. SSMA s 140(1); formerly, Strata Schemes Management Act 1973 (NSW) s 50. 227. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 8(4B). Indeed, the presence of the restriction in the former s 50 of the Strata Schemes Management Act applying to the ‘initial period’ led to the court in White v Betalli [2006] NSWSC 537 (concluding that after this period it must be possible for a by-law to be passed allowing the use of one lot by another lot proprietor: at [48]. This decision was later affirmed on appeal in White v Betalli (2007) 71 NSWLR 381. 228. SSMA s 26. See former Strata Schemes Management Act 1973 (NSW) s 113(1). For administrative and capital funds, see 9.87. 229. Bondlake Pty Ltd v Owners — Strata Plan No 60285 (2005) 62 NSWLR 158, discussed in D Skapinker, ‘Restrictions on Owners Corporations During Initial Period’ (2005) 43(7) LSJ 32. 230. SSMA ss 26, 140. See former Strata Schemes Management Act 1973 (NSW) ss 50(2) and (3), 113(2) and (3). 231. SSDA ss 13(4), 17(3) and 36(2). See former Strata Schemes (Freehold Development) Act 1973 (NSW) ss 9(3A), 13(3A) and 28(4). 232. SSMA s 26. See former Strata Schemes Management Act 1996 (NSW) s 113(1)(c). Section 26 limits the powers of the owners corporation, and s 68(1) (formerly, s 40B(2)(a)) goes further by specifically providing that a contract with a building manager made in the initial period comes to an end at the first AGM. This provision avoids the problem that arose in the Bondlake case, noted at note 229 above.

233. SSDA s 4(1) definition of ‘common property’. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 5. 234. SSDA s 24(2)(a). See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 18(1). 235. SSDA s 24(3). See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 18(2). 236. SSDA s 28(1). See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 20. For a case in an unusual context where the nature of this tenancy in common was relevant, see New South Wales v Koumdjiev (2005) 63 NSWLR 353. 237. SSDA s 28(1). See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 20(b). The fact that the owners corporation is agent for the lot proprietors does not prevent it from suing in its own right in relation to damage to the common property: see Vero Insurance Ltd v Owners of Strata Plan No 69352 (2011) 81 NSWLR 227. 238. SSDA s 25. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 19. 239. SSDA s 23. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 21. 240. Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46. 241. A special resolution is defined as one against which no more than one-quarter of the votes have been cast. See the definition of ‘special resolution’ in SSMA s 5(1). 242. SSDA s 34. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 26. 243. SSMA s 106. See former Strata Schemes Management Act 1973 (NSW) ss 61(2)(a), 62(1). 244. The Proprietors — Strata Plan No 6522 v Furney [1976] 1 NSWLR 412. 245. The Owners — Strata Plan 21702 v Krimbogiannis [2014] NSWCA 411. 246. SSMA s 108. See former Strata Schemes Management Act1973 (NSW) s 54. 247. SSMA s 106(3). See former Strata Schemes Management Act 1973 (NSW) s 62(3). 248. Travis v Proprietors — Strata Plan No 3740 (1969) 90 WN (Pt 1) (NSW) 711. 249. See former Strata Schemes Management Act 1973 (NSW) s 65A. For a decision in which that provision was referred to, see Grime v Owners Corporation SP 52011 (Strata & Community Schemes) [2005] NSWCTTT 202. 250. Proprietors Strata Plan No 30234 v Margiz Pty Ltd (1993) 32 NSWLR 294. 251. SSDA s 28. For a similar provision, see former Strata Schemes (Freehold Development) Act 1973 (NSW) s 24. 252. SSMA s 8. See former Strata Schemes Management Act 1996 (NSW) s 11. 253. SSMA s 9. See former Strata Schemes Management Act 1996 (NSW) s 8(2). On common property, see 9.76. 254. SSMA s 13. See former Strata Schemes Management Act 1996 (NSW) s 13. 255. SSMA s 29. See former Strata Schemes Management Act 1996 (NSW) s 16(4). 256. SSMA s 41. See former Strata Schemes Management Act 1996 (NSW) s 18. 257. SSMA s 36. See former Strata Schemes Management Act 1996 (NSW) s 21(1), (2). 258. SSMA s 36(4). See former Strata Schemes Management Act 1996 (NSW) s 21(3). 259. SSMA s 36(2). See former Strata Schemes Management Act 1996 (NSW) s 21(4). 260. SSMA s 49. See former Strata Schemes Management Act 1996 (NSW) ss 26, 27.

261. SSMA s 52. See former Strata Schemes Management Act 1996 (NSW) s 28(3). 262. SSMA ss 36(2), 53(3). See former Strata Schemes Management Act 1996 (NSW) s 28(7). 263. SSMA s 66. See former Strata Schemes Management Act 1996 (NSW) Ch 2 Pt 4A. 264. SSMA s 100. See former Strata Schemes Management Act 1996 (NSW) s 110. 265. SSMA s 117. See former Strata Schemes Management Act 1996 (NSW) s 111. 266. Former Strata Schemes Management Act 1996 (NSW) s 61(2). 267. See 9.78. 268. SSMA s 120. See former Strata Schemes Management Act 1996 (NSW) s 63. 269. SSMA s 119. See former Strata Schemes Management Act 1996 (NSW) s 64. 270. See Lubrano v Proprietors of Strata Plan No 4038 (1993) 6 BPR 13,308; Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157, affirmed in The Owners SP 35042 v Seiwa Australia Pty Ltd [2007] NSWCA 272; Trevallyn-Jones v Owners Strata Plan No 50358 [2009] NSWSC 694 at [128]– [155]. For detailed discussion of the common law action for breach of statutory duty, see N Foster, ‘The Merits of the Civil Action for Breach of Statutory Duty’ (2011) 33 Syd LR 67. 271. The Owners Strata Plan 50276 v Thoo (2013) 17 BPR 33,789. In an application for special leave the High Court declined to grant leave, but relied on a separate issue in the case, stating that it was not to be taken to be expressing a view about the breach of statutory duty issue. See Thoo v Owners — Strata Plan No 50276 [2014] HCASL 79 at [9]. 272. SSMA s 122(2). See former Strata Schemes Management Act 1996 (NSW) s 65(2). 273. SSMA s 122(3). See former Strata Schemes Management Act 1996 (NSW) s 65(3). 274. SSMA s 122(5). See former Strata Schemes Management Act 1996 (NSW) s 65(5). Section 17 of the Crimes (Sentencing Procedure) Act 1999 (NSW) defines penalty unit. The current value of a penalty unit is $110. 275. SSMA s 199. 276. SSMA s 201. 277. SSMA s 207. See s 209 of the SSMA, which authorises the bond to be used to defray the costs of repairs. 278. SSMA Sch 3 cl 16. 279. SSMA s 73. See former Strata Schemes Management Act 1996 (NSW) ss 66, 67. 280. SSMA s 74(4). See former Strata Schemes Management Act 1996 (NSW) ss 68(1)(a), 75(1). 281. SSMA s 74(5). See former Strata Schemes Management Act 1996 (NSW) s 69(2). 282. SSMA s 74(2). See former Strata Schemes Management Act 1996 (NSW) s 70. 283. SSMA s 74(4). See former Strata Schemes Management Act 1996 (NSW) s 71. 284. SSMA s 77. See former Strata Schemes Management Act 1996 (NSW) s 72(1), (2). 285. SSMA s 80. See former Strata Schemes Management Act 1996 (NSW) s 75A(1). Comment on the former provisions, and other amendments made at the same time in 2005, can be found in C Gabriel, ‘Brave New World of Large Strata Schemes’ (2005) 43(3) LSJ 60; F Andreone, I McKnight and G Newton, Strata Title Update 2005, Legalwise Seminars, 2005. 286. SSMA s 81. See former Strata Schemes Management Act 1996 (NSW) s 76(1), (2).

287. SSMA s 81(4). See former Strata Schemes Management Act 1996 (NSW) s 76(4). 288. SSMA s 83(1). See former Strata Schemes Management Act 1996 (NSW) s 78(1). 289. SSMA s 83(2). See former Strata Schemes Management Act 1996 (NSW) s 78(2). 290. SSMA s 84(1). See former Strata Schemes Management Act 1996 (NSW) s 78(3). 291. SSMA s 85. See former Strata Schemes Management Act 1996 (NSW) s 79(2), (3). 292. SSMA s 86. See former Strata Schemes Management Act 1996 (NSW) s 80. 293. SSMA s 161(1). See former Strata Schemes Management Act 1996 (NSW) s 82. 294. SSMA s 160(4). See 9.89. 295. See former Strata Schemes Management Act 1996 (NSW) s 85. 296. SSMA s 164. See former Strata Schemes Management Act 1996 (NSW) s 87(1)(a), (b). 297. SSMA s 164(2). See former Strata Schemes Management Act 1996 (NSW) s 87(2). 298. See former Strata Schemes Management Act 1996 (NSW) s 95(2). 299. SSMA s 167. See former Strata Schemes Management Act 1996 (NSW) s 89(1). 300. SSMA s 178. See former Strata Schemes Management Act 1996 (NSW) s 97(1). 301. For details of these obligations, see 9.103. 302. SSMA s 178(2). See former Strata Schemes Management Act 1996 (NSW) s 98(2). The reference in the current Act to the application of Pt 10 of the SSDA is important: see 9.129 below for discussion on Pt 10, which, in effect, allows sale and demolition of a strata-titled building in certain circumstances without the consent of all of the lot owners. While it is not apparent from Pt 10 itself, the transitional provisions in Sch 8 to the SSDA, at item 8, provide that ‘Part 10 applies to a freehold strata scheme in existence immediately before the commencement of that Part only if the owners corporation has, by resolution, decided the Part applies to the scheme’. This presumably is designed to protect the interests of those who went into a strata scheme relying on the fact that their property would not be destroyed without their consent. 303. SSMA s 179. See former Strata Schemes Management Act 1996 (NSW) s 101. 304. SSMA s 180(1)(b). See former Strata Schemes Management Act 1996 (NSW) s 102. 305. SSMA s 180(1)(c). The phrase ‘financial statements’ is defined in s 4(1) to mean those statements required under SSMA Pt 5 Div 3. See former Strata Schemes Management Act 1996 (NSW) s 106. 306. SSMA s 182. See former Strata Schemes Management Act 1996 (NSW) s 108(2); former Strata Schemes Management Regulation 2010 (NSW) Sch 1 item 9. 307. SSMA s 6. See former Strata Schemes Management Act 1996 (NSW) Dictionary Pt 2 cl 5. 308. SSMA s 95. See former Strata Schemes Management Act 1996 (NSW) s 107(2). 309. SSMA ss 79(6), 102. See former Strata Schemes Management Act 1996 (NSW) ss 75(5), 80A. There is an exception for emergency expenditure in SSMA s 102(4). See former s 80C. 310. SSMA Sch 2 cl 4(1). See former Strata Schemes Management Act 1996 (NSW) Sch 3 cl 6(1). For ordinary strata schemes, notice of such meetings may usually be given by the placement of a notice on a noticeboard: see SSMA Sch 2 cl 4(2). 311. SSMA s 151. See former Strata Schemes Management Act 1996 (NSW) s 116(1). 312. SSMA s 152. See former Strata Schemes Management Act 1996 (NSW) s 116(2).

313. SSMA s 153. See former Strata Schemes Management Act 1996 (NSW) s 117(1)(a). Note that SSMA s 153(1) contains a ‘Note’ that ‘the penetration of smoke from smoking into a lot or common property may cause a nuisance or hazard and may interfere unreasonably with the use or enjoyment of the common property or another lot’. 314. SSMA s 153(1)(b), (c). See former Strata Schemes Management Act 1996 (NSW) s 117(1)(b), (c). 315. SSMA s 22. See former Strata Schemes Management Act 1996 (NSW) s 118(1). 316. SSMA s 258. See former Strata Schemes Management Act 1996 (NSW) s 119. 317. SSMA s 259. See former Strata Schemes Management Act 1996 (NSW) s 120. 318. For a decision on what was properly the subject of by-laws under the former Act, see White v Betalli [2006] NSWSC 537 at [38], for comment on what matters might be considered ‘appropriate to the type of strata scheme’ (emphasis in original). There, a by-law allowing one lot owner use of part of another lot for access to the water was held to be appropriate. See the later discussion on the appeal in White v Betalli below, at note 333. 319. Casuarina Rec Club Pty Ltd v The Owners — Strata Plan 77971 (2011) 80 NSWLR 711 at [2]. 320. This decision was taken on appeal from the decision of McDougall J in the differently titled Santai v The Owners — Strata Plan No 77971 [2010] NSWSC 628. That decision dealt with other by-laws that were not in issue on the appeal, and also contains an interesting discussion of the implied limits on the subject matter of by-laws under former s 43. For comment, see S Chambers and D Russell, ‘Supreme Court Reconsiders Key Aspects of Strata Title Law’ (2010) 48(8) LSJ 38. 321. SSMA s 136(2). See former Strata Schemes Management Act 1996 (NSW) s 43(4). 322. SSMA s 134(1). 323. SSMA s 134(2). See former Strata Schemes Management Act 1996 (NSW) s 41. 324. SSMA s 134(3). See former Strata Schemes Management Act 1996 (NSW) s 42. 325. SSMA s 135(1). See former Strata Schemes Management Act 1996 (NSW) s 44(1). 326. SSMA s 135(2). See former Strata Schemes Management Act 1996 (NSW) s 44(2). 327. SSMA s 186. See former Strata Schemes Management Act 1996 (NSW) s 46. 328. SSMA s 141(1). See former Strata Schemes Management Act 1996 (NSW) s 47. 329. SSMA s 141(2). See former Strata Schemes Management Act 1996 (NSW) s 48(1). 330. SSMA s 141(4). Compare former Strata Schemes Management Act 1996 (NSW) s 48(2), which previously allowed two years for lodgment. 331. Salerno v Proprietors of Strata Plan No 42724 (1997) 8 BPR 15,457. 332. White v Betalli [2006] NSWSC 537. 333. The Court of Appeal upheld the trial judge’s decision on appeal in White v Betalli (2007) 71 NSWLR 381, although it should be noted that McColl JA dissented. Her Honour reasoned, in part from the fact that the Strata Schemes (Freehold Development) Act 1973 (NSW) dealt with ownership while the Strata Schemes Management Act 1996 (NSW) dealt with relationships between lot holders, that it was inappropriate to interpret the general words of former s 49 as allowing what was effectively ‘expropriation’ of part of another lot. 334. The Owners of Strata Plan No 3397 v Tate (2007) 70 NSWLR 344. 335. See C Sherry, ‘How Indefeasible Is Your Strata Title? Unresolved Problems in Strata and

Community Title’ (2009) 21 Bond LR 159. 336. The Owners Strata Plan No 60919 v Consumer Trader and Tenancy Tribunal (2009) 16 BPR 31,673 at [21]. It should be noted, however, that a later decision of a different judge in Italian Forum Limited v Owners — Strata Plan 60919 [2012] NSWSC 895 cast some doubt on the correctness of the ruling in the 2009 decision as to the validity of the specific by-law. 337. SSMA s 139(4). See former Strata Schemes Management Act 1996 (NSW) s 49(3). 338. SSMA s 139(5). See former Strata Schemes Management Act 1996 (NSW) s 49(4). Note, however, that SSMA s 139(6) allows the owners corporation to request suitable evidence that an animal claimed to be an ‘assistance animal’ does, indeed, meet the description of an ‘assistance animal’ under disability legislation. 339. Gazebo Penthouse Pty Ltd v Owners Corporation SP 73943 [2015] NSWCATCD 93. 340. SSMA Pt 7 Div 3. See former Strata Schemes Management Act 1996 (NSW) s 51(1). But note that equitable principles relating to ‘fraud on a minority’ may apply where the majority of lot proprietors may be making a profit out of dealing with common property and not sharing that with other proprietors: see Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46, noted at 9.76. See also Young v Owners Strata Plan No 3529 (2001) 54 NSWLR 60; [2001] NSWSC 1135, where it was held that the majority of proprietors could not exclude other proprietors from using a swimming pool that was common property. For discussion of decisions on this issue in NSW and Queensland, see L Alford and J Sommer, ‘Protection of Minority Owners in a Body Corporate’ (2005) 11 APLJ 141. For detailed comment on the interpretation of ‘exclusive use’ by-laws under the previous legislation, see The Owners of Strata Plan No 3397 v Tate (2007) 70 NSWLR 344. In The Owners — Strata Plan No 73943 v Gazebo Penthouse Pty Ltd [2014] NSWSC 1536, the Tate decision was applied to rule that an ambiguous exclusive use by-law had to be interpreted narrowly, given the need for third parties interested in a lot to determine the rights and obligations attached to the lot. 341. SSMA s 143(1). Former Strata Schemes Management Act 1996 (NSW) s 52 used slightly more ambiguous language, referring to need for consent from ‘owners of the lots concerned’. In Young v Owners Strata Plan No 3529 (2001) 54 NSWLR 60, Santow J held that the ‘owners of lots concerned’ included the owners of lots who would be excluded from use of part of the common property, under a resolution giving exclusive use to other owners. Such an interpretation would not seem possible under the current provision, which only seems to require the consent of the lots given a benefit by the by-law, not those who may suffer a detriment. 342. SSMA s 143(2). See former Strata Schemes Management Act 1996 (NSW) ss 53, 54. 343. SSMA s 145. See former Strata Schemes Management Act 1996 (NSW) s 55. 344. See 9.77. 345. SSMA s 146. See former Strata Schemes Management Act 1996 (NSW) s 45(1). 346. SSMA s 146(3), (4). See former Strata Schemes Management Act 1996 (NSW) s 45(2), (3). 347. SSMA s 147. See former Strata Schemes Management Act 1996 (NSW) s 203. Note that under the former Act, a Strata Schemes Adjudicator may have been involved in some enforcement of bylaws, but this office does not exist under the current SSMA. 348. SSMA s 103. See former Strata Schemes Management Act 1996 (NSW) s 80D. There is an exception prescribed by SSMA s 103(2) where the matter is urgent or expenditure will be less than $10,000 or other limit set by the Regulations. Currently the Strata Schemes Management

Regulation 2016 (NSW) (SSMR) cl 26(1) sets a higher limit of $15,000. Clause 26(2) of the Regulation allows the obtaining of legal services in relation to a matter that is not urgent if the cost of the legal services does not exceed $3000. Note that, previously, cl 15 of the former Strata Schemes Management Regulation 2010 (NSW) allowed legal expenditure where the estimated costs of the legal advice or action would not be greater than $1000 per lot, or $12,500, whichever was the lesser amount. In The Owners — Strata Plan No 70798 v Bakkante Constructions Pty Ltd (2014) 88 NSWLR 513, the effect of the prohibition in former s 80D on subsequent litigation was held to be not an automatic invalidation of the litigation (though, in the circumstances of that case, the proceedings were struck out). See also 2 Elizabeth Bay Road Pty Ltd v The Owners — Strata Plan No 73943 (2014) 88 NSWLR 488. Current SSMA s 103(4) confirms that the validity of proceedings will not be affected by a failure to comply with s 103. 349. See Civil and Administrative Tribunal Act 2013 (NSW) Sch 4 cl 3(1). 350. NSW Fair Trading, Strata and community disputes (accessed 17 April 2017), , click on ‘Tenants & Home Owners’, ‘Strata schemes’, ‘Resolving disputes’, ‘strata schemes’ then ‘Strata and community disputes’. 351. SSMA s 217, definition of ‘mediation’. See former Strata Schemes Management Act 1996 (NSW) s 127. 352. SSMA s 227(1). See former Strata Schemes Management Act 1996 (NSW) s 125(1)(a). 353. SSMA s 227(1)(c). See former Strata Schemes Management Act 1996 (NSW) s 125(1)(b). Nor will mediation be required in the case of applications for various formal orders listed in SSMA s 227(4) — see former s 125(1)(c). 354. SSMA s 227(2). See former Strata Schemes Management Act 1996 (NSW) s 125(3). 355. SSMA s 218(1). See former Strata Schemes Management Act 1996 (NSW) s 128. 356. SSMA s 218(3). See former Strata Schemes Management Act 1996 (NSW) s 130. 357. SSMA ss 223, 224(c). See former Strata Schemes Management Act 1996 (NSW) ss 132, 133(c). 358. The third edition of this work may be consulted for more detail on the role and functions of former adjudicators. 359. SSMA s 228. 360. SSMA s 242. 361. Civil and Administrative Tribunal Act 2013 (NSW) (CATA) s 38(4). See, in relation to the operation of the former Consumer, Trader and Tenancy Tribunal (CTTT) under the earlier legislation, Strata Schemes Management Act 1996 (NSW) s 186(2). 362. CATA s 45. Compare the right of representation under former Strata Schemes Management Act 1996 (NSW) s 193(2). 363. CATA s 60. 364. CATA s 60(3)(e). Compare former Strata Schemes Management Act 1996 (NSW) s 192. 365. SSMA s 27(3), (4). See former Strata Schemes Management Act 1996 (NSW) s 182(2), (4). 366. As to termination of strata schemes, see 9.128. 367. SSMA s 236(1). See former Strata Schemes Management Act 1996 (NSW) s 183(2). 368. SSMA s 236(4), (5). See former Strata Schemes Management Act 1996 (NSW) s 183(3)–(5). The question whether issues other than the monetary value of the respective lots may be taken into

account, under former s 183, was discussed in Sahade v The Owners — Strata Plan 62022 (2014) 87 NSWLR 261. 369. Brisbane Water County Council v Commissioner of Stamp Duties [1979] 1 NSWLR 320. 370. Spencer v Commonwealth (1907) 5 CLR 418. 371. SSMA s 236(6). See former Strata Schemes Management Act 1996 (NSW) s 183(6). 372. SSMA s 236(3). See former Strata Schemes Management Act 1996 (NSW) s 183(8). 373. SSMA ss 72, 237. See former Strata Schemes Management Act 1996 (NSW) ss 183A, 183B. 374. CATA s 32. 375. CATA s 80(2)(b). 376. CATA Sch 4 cl 3(1). 377. CATA Sch 4 cl 12. 378. CATA s 82(3). 379. SSMA s 147. See former Strata Schemes Management Act 1996 (NSW) s 203(1). For details of the enforceability of by-laws, see 9.111. For penalty units, see note 274. 380. SSMA s 147(2). 381. SSMA s 147(3), imposing a limit of 50 penalty units for a first failure to comply, and 100 penalty units for a repeat failure within 12 months. 382. SSMA s 248. See former Strata Schemes Management Act 1996 (NSW) s 206. 383. See 9.125. The previous legislation allowed appeals to the District Court in relation to some orders. See former Strata Schemes Management Act 1996 (NSW) s 200(1), (2). 384. CATA s 82(3). 385. Regis Towers Real Estate Pty Ltd v Kin Fung (2001) NSW ConvR ¶55-960. 386. For a discussion of the changing judicial approach to this question, see Butt, Land Law, note 7 above, [2148]; Ilkin, NSW Strata and Community Schemes Management and the Law, note 207 above. For a case where the Supreme Court proceeded to hear issues relating to the validity of by-laws, see Santai v The Owners — Strata Plan No 77971 [2010] NSWSC 628. (While the decision in that case as to the validity of the by-law was overturned on appeal in Casuarina Rec Club Pty Ltd v The Owners — Strata Plan No 77971 (2011) 80 NSWLR 711, no challenge was made to the jurisdiction of the Supreme Court to consider the question.) 387. SSMA s 239, which provides that determination of questions of title to land by the Tribunal are effective only for the purposes of the Act. See former Strata Schemes Management Act 1996 (NSW) ss 176, 199. 388. SSDA s 135. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 51(1), (4). 389. SSDA s 136. See former Strata Schemes (Freehold Development) Act 1973 (NSW) s 51(6). 390. SSDA s 142. See Strata Schemes (Freehold Development) Act 1973 (NSW) s 51A. 391. See SSDA s 142(3); former Strata Schemes (Freehold Development) Act 1973 (NSW) s 51A(3). 392. For an overview, see A Benson, ‘The Nuts and Bolts of the Latest Strata Reforms’ (2016) 19 Law Society of NSW Journal 78–9 at 79. 393. See the definition of ‘required level of support’ in SSDA s 154.

394. SSDA s 158. 395. SSDA s 160. 396. SSDA s 176(3). 397. SSDA s 171(2). 398. SSDA s 182(1)(e). 399. New South Wales Law Reform Commission, Unilateral Severance of Joint Tenancies, Report No 73, 1994. 400. Corin v Patton (1990) 169 CLR 540. 401. Costin v Costin (1997) NSW ConvR ¶55-811 (CA). 402. See C Sherry, ‘Unilateral Severance of Joint Tenancies’ (1995) 3 APLJ 1. 403. See Law of Property Act 1925 (UK) s 36. 404. Callow v Rupchev (2009) 14 BPR 27,533. 405. Forgeard v Shanahan (1994) 35 NSWLR 206. 406. Section 43(1) of the Property Law Act 1974 (Qld) provides: A co-owner shall, in respect of the receipt by the co-owner of more than the co-owner’s just or proportionate share according to the co-owner’s interest in the property, be liable to account to any other co-owner of the property. 407. Carmody v Delehunt [1984] 1 NSWLR 667. 408. The unsatisfactory position in relation to rents and profits in New South Wales is a consequence of the repeal of the Administration of Justice Act 1705 (Imp) by the Imperial Acts Application Act 1969 (NSW), as held in Forgeard v Shanahan (1994) 35 NSWLR 206. The repeal followed a recommendation of the New South Wales Law Reform Commission — ‘a neat illustration of the havoc which can be wrought by high-minded but ignorant people’: Forgeard v Shanahan (1994) 35 NSWLR 206 at 222 per Meagher JA. The more satisfactory Queensland reform updated the old, much-criticised and cumbersome English provision, as recommended by the Law Reform Commission in that state. See Queensland Law Reform Commission, A Bill to Consolidate, Amend, and Reform the Law Relating to Conveyancing, Property, and Contract to Terminate the Application of Certain Imperial Statutes, Report No QLRC 16, 1973, pp 29–30; and generally, Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 2 above, pp 571–80. 409. See White v Betalli [2006] NSWSC 537; White v Betalli (2007) 71 NSWLR 381; The Owners of Strata Plan No 3397 v Tate (2007) 70 NSWLR 344; Casuarina Rec Club Casuarina Rec Club Pty Ltd v The Owners — Strata Plan 77971 (2011) 80 NSWLR 711; Sherry, ‘How Indefeasible Is Your Strata Title? Unresolved Problems in Strata and Community Title’, note 335 above.

[page 487]

Chapter 10

Perpetuities Introduction 10.1 The concept of free alienability has become one of the key and enduring principles of land law.1 However, as noted in Chapter 3, property owners in England with dynastic aspirations were eager to rule from the grave and ensure that interests in land remained in the hands of established families, land being associated with power and kudos. Property owners sought to achieve this end by a variety of methods, including: the use of fee tail estates, whereby the testator sought to pass an interest down a line of lineal descendants; and contingent remainders, whereby a party took an interest only if he or she complied with certain preconditions. Such restrictions were in conflict with the freedom to alienate and, perhaps not surprisingly, several attempts were made to restore that freedom.2 Historically, the two competing principles (free alienability and restricted alienability) vied with each other for supremacy, but eventually equivocation concerning the control of land ownership was resolved by restoring the balance in favour of free alienability.3 Today, one of the main tools ensuring relatively free alienability is the ‘rule against perpetuities’, a rule that [page 488]

prohibits attempts to ‘tie up’ (or restrict the vesting of) property for unreasonably long periods of time.4 10.2

The rule against perpetuities has been assisted by:

another rule that makes clauses in wills or other instruments void for public policy reasons if those clauses prevent the free alienation of property;5 and the state settled land legislation.6 This chapter will examine the rule against perpetuities.

History of the Rule against Perpetuities 10.3 Historically, the principle of free alienation has had to survive the oscillation and vacillation of various legislators. For example, the Statute De Donis Conditionalibus 1285 had the effect of limiting freedom of alienation by creating the fee tail estate and giving the grantor the ability to direct the course of alienation down specific lines of descent,7 while the Statute of Quia Emptores 1290 bolstered the concept of free alienability by ensuring that the holder of a fee simple estate had a right to alienate his or her estate either wholly or partially.8 Such ambivalence about whether land should be ‘tied up’ for long periods of time is probably partially explained by reference to polar objectives. On the one hand, landowners approved of freedom of alienation because it gave them the opportunity to acquire more land; on the other hand, however, once acquired they wished to prevent their holdings from passing in a manner contrary to their wishes.9 10.4 It took the formulation of a rule against the perpetual restriction of land to reaffirm the principle of (fairly) free alienability.10 This rule altered over time and its earlier manifestations are quite different from the rule we know today. It was a rule formulated at common law, legislation not playing a direct role in the issue of the perpetual restriction of land until the 20th century. [page 489]

The 19th-century case of Whitby v Mitchell11 affirmed the validity of the ‘old rule’ — that after a limitation for life to an unborn person, any further limitation to his or her issue was void — despite the later development of the ‘modern’ rule (referred to in 10.5 below). The old rule resolved the contest regarding perpetual freeholds.12 This formulation of the rule was not to last, and in New South Wales it was abolished by s 23A of the Conveyancing Act 1919 (NSW).13 Section 23A does, however, preserve the ‘modern’ rule against perpetuities. 10.5 The ‘modern’ rule against perpetuities (which was part of the received law of New South Wales) dates from Lord Nottingham’s decision in the Duke of Norfolk’s Case;14 a case that allowed the vesting of interests to be delayed for one generation. Hence, the modern rule did not prevent a future interest in property from being ‘tied up’ per se.15 It merely prevented it from being ‘tied up’ in perpetuity. That same principle was retained in later manifestations of the modern common law rule against perpetuities, which altered the perpetuity period from one generation (effectively ‘a life in being’) to ‘a life in being’ plus 21 years.16 Hence, the modern rule against perpetuities is perhaps better described as a rule against the remoteness of vesting. Its main aim is to prevent grantors or testators restricting the vesting of property for an excessive period of time.17 10.6 In New South Wales, the common law position as outlined in the ‘modern’ rule against perpetuities has been amended by the Perpetuities Act 1984 (NSW). Section 7 of that Act alters the perpetuity period to a statutory period of 80 years. As the Act neither codifies the common law position nor provides a complete new code, it is necessary to be familiar with both the common law and the statute. It has been observed that ‘pre-Act dispositions continue to be tested by the rule against perpetuities in its pre-Act [page 490] form’.18 However, given the effluxion of time, there are fewer and fewer cases where the common law position is applicable. Accordingly, the importance of the common law rule is becoming increasingly historic.

Modern Rule Against Perpetuities 10.7 Today, the modern rule against perpetuities consists of the relevant common law and the Perpetuities Act 1984 (NSW).

Shared principles 10.8 Certain principles are shared between the common law and the Perpetuities Act. They are: the formulation of the rule against perpetuities; the kinds of interests to which the rule applies; whether the interest is vested or contingent; a perpetuity period; class gifts; and class-closing rules. These shared principles are discussed below.

Formulation of the rule 10.9 The rule against perpetuities may be expressed broadly in the following terms: For an interest in property to be valid, it must vest, if it vests at all, not later than the expiration of the perpetuity period.19

Under the common law this formulation also incorporated a certainty component, leading to the rule’s expression in the following terms: For an interest in property to be valid, it must be certain to vest, if it vests at all, not later than the expiration of the perpetuity period.20

Figure 10.1 represents diagrammatically when the interest must vest to avoid falling foul of the rule against perpetuities.21 [page 491]

Figure 10.1:

Estimating the perpetuities period

Kinds of interests in property to which the rule applies 10.10 The rule against perpetuities applies to many contingent interests in realty or personalty, whether they are legal or equitable. Included in the interests to which the rule applies are: executory interests (by conveyance or devise), except those subject to the rule in Purefoy v Rogers;22 legal interests that rely on s 44(2) of the Conveyancing Act 1919 (NSW); equitable interests arising from limitations inter vivos behind a trust; beneficial interests under a will that came into operation after the Probate Act 1890 (NSW); equitable contingent remainders; rights of re-entry for conditions broken; options to purchase land; and directions for accumulations of income.23 10.11 There remains uncertainty as to whether the rule against perpetuities applies to legal contingent remainders. Statutory reforms to the legal contingent remainder rules saved legal contingent remainders that had not vested before the determination of the prior particular estate, but the reforms had the effect of creating an interest with a propensity for perpetuity. As

Rossiter points out, whether legal contingent remainders are now to be treated as equitable from the beginning or only after the remainder fails, or whether they are to be treated as executory limitations in the event of ex post facto failure [page 492] or as having been abolished altogether is difficult and complex.24 It would seem, however, that where a legal contingent remainder is to be treated as either an equitable or executory interest, it will be subject to the rule against perpetuities. If the interest infringes that rule at common law, it will be void. The rule against perpetuities has no application if the interest is already vested at the outset, because clearly there is no issue concerning whether the interest will vest outside the perpetuity period. Vesting has already occurred.

Vested or contingent? 10.12 When considering whether the rule against perpetuities operates, the necessary starting point is to ask, of any interest, whether it is vested or contingent. If the interest is vested, as stated above, it will not be affected by the rule.25 There are three requirements for an interest to vest: 1.

it must be possible to identify who is to take;

2.

the interest must be capable of taking effect in possession — that is, without the need to fulfil any conditions precedent;26 and

3.

in the case of class gifts, all members of the class must be known so that the size of each member’s share can be calculated.

The only exception to the second requirement above is where a prior interest, such as a prior particular estate (a life estate), prevents the (other) interest taking effect in possession. Hence, an interest that vests ‘in interest’, but does not vest in possession because the prior particular estate has not yet determined (the life estate holder still being alive), presents no perpetuity problems.27 The rule against perpetuities is concerned only with when the interest vests in interest.28

10.13

Examples of contingent gifts include:

A gift by T in a will ‘To my first granddaughter’. Such a gift would be contingent if T’s children were childless at T’s death, because the identity of the granddaughter is unknown. The gift is contingent on the granddaughter being born. A gift subject to a condition precedent. For example, a grant ‘To B at 21 years’ would be contingent if B were not yet 21 years, because the attainment of 21 years is a condition precedent to B taking the gift. A class gift by T in a will ‘To my grandchildren’. Such a gift would be contingent if T’s children were alive at T’s death. It is not possible at that time to know how many [page 493] grandchildren there will be. It is also possible to have class gifts subject to a condition precedent. Thus, an inter vivos gift ‘To all of my children who attain 21 years’ is also contingent. The children who reach 21 years will be admitted to the class. As the children turn 21 years, the class will expand to admit them. If the gift is to a class, the interests of all of the class must vest within the perpetuity period or the gift will fail. 10.14 Wherever possible, the court will lean in favour of finding the interest vested rather than contingent. Hence, a grant ‘To B at 25 years’ is contingent, but a grant ‘To B payable at 25 years’ is vested, subject to a postponement of enjoyment.29 The gift is said to be owed at the present time but payable (or to be performed) in the future (in this case when B is 25 years old). The inclusion of interest in a gift has tended to allow the gift to be characterised as vested rather than contingent. Hence, a bequest ‘To T on trust for B for life, then on trust for M’s children at 25 years, but after the death of M the trustees shall pay the income in equal shares to M’s children until they attain 25 years’ resulted in the gift of the corpus being vested at birth, while the age of 25 years was held to be the time to which the payment of the corpus was postponed.30 The same presumption of vesting has been applied in

circumstances where the trustees were directed to apply the income for the maintenance of the beneficiaries instead of paying it directly to them.31 If, however, the provision assumes the form of a mere power and not an actual trust, then this presumption will not apply.32 A grant that is subject to a condition subsequent will be vested subject to divesting. For example, in a bequest ‘To T, on trust for M for life, then on trust to M’s first child, but if M’s first child becomes a lawyer, then to K’, M’s first child has a vested interest, but that vested interest is subject to divesting if he or she becomes a lawyer. As the devise in favour of M’s first child is vested, it cannot breach the rule against perpetuities. The question to be resolved in such cases is whether the event that could cause divesting is too remote, causing the divesting contingency to fail. Sometimes a gift to a beneficiary is not only tied to an age requirement but also specifies that if the beneficiary fails to meet that requirement, there is ‘a limitation over’. In such cases, where the beneficiary fails to reach the specified age, the attainment of that age is treated as a condition subsequent rather than a condition precedent. Hence, the [page 494] beneficiary takes a vested interest that is subject to divesting on death under the age that was specified in the limitation.33 Finally, to reiterate, in deciding if an interest is vested or contingent for the purpose of perpetuities, the time at which the interest vests in interest is what is important, not the duration of the interest. Therefore, it does not matter that a vested interest continues to be vested well beyond the perpetuity period.

Perpetuity period 10.15 The perpetuity period is the period by the end of which the interest must vest so as to prevent the vesting from being regarded as occurring at too remote a time. Under the common law and the Perpetuity Act, there is a perpetuity period. In both cases, it begins to run from the date the instrument

containing the disposition comes into operation. In the case of a will, this is the date of the testator’s death;34 and in the case of a disposition inter vivos (by deed), it is the date on which the relevant deed is executed and delivered. At common law, the perpetuity period is a ‘life in being’ plus 21 years. Under the Perpetuities Act, it is 80 years.35

Class gifts 10.16 A class gift is a gift to a group of people where the number in the group is uncertain at the time the limitation is created. Clearly, it is impossible to calculate the quantum due to each member of the class until the class has closed, because only then can the total amount available be divided by the number of members of the class. It would be most unwise to distribute a gift among donees before the exact number of donees entitled to take was ascertained. Not to wait until this time may mean that: portions already allocated would have to be given back; new sums would have to be calculated, taking into account the changed number of donees; and another distribution would have to be made. To avoid offending the rule against perpetuities, the interest of each member or potential member of the class must vest within the perpetuity period. As the common law does not apply the ‘wait and see’ rule,36 it is necessary to ask whether it is possible that any member’s interest could vest outside the perpetuity period. If it is possible that the [page 495] interest of any one member of the class could vest outside the perpetuity period, then the whole gift will fail. This is known as the ‘all or nothing’ rule. 10.17

Some examples of class gifts are:

‘To my grandchildren’; ‘To all my grandchildren who graduate in law’;

‘To my brothers and sisters who marry’; and ‘To those children of mine who matriculate to the University of New South Wales’. By contrast, a gift ‘To my grandchildren, A, B and C’ is not a class gift because each child’s share is certain. Nor is a gift of ‘$1000 to each of my grandchildren’ a class gift even when the number of grandchildren is capable of increase, as the quantum of each grandchild’s share is not dependent on the number of grandchildren. A gift ‘To those of my grandchildren who marry’ is a class gift. At common law, where the testator’s only child, C, is still alive, the whole gift will fail and none of the class will take because C, as is explained later in this chapter, is the life in being and it is possible for the grandchildren to marry more than 21 years after C’s death. Although some of the class of grandchildren might marry within the perpetuity period, it remains possible for others to marry beyond the perpetuity period. That is enough to cause the whole gift to fail. This example involves an application of the ‘all or nothing’ rule. Under the Perpetuities Act, the ‘all or nothing’ rule is not applicable to class gifts because the Act operates to exclude those members of a class whose interest does not vest until the perpetuity period has expired.37 The gift to the remaining members of the class continues to take effect. A gift may be to a sub-class of a class. The grant to the sub-class will be either per stirpes or per capita. A grant per stirpes is a grant ‘through the stocks or families of descent’, while a grant per capita is a grant based on one share per head.38 The validity of each individual grant may be determined by whether the grant is per stirpes or per capita.

Class-closing rules 10.18 The class-closing rules artificially close the class.39 Although the rules were developed for the administrative convenience of trustees and executors, they have had an [page 496]

impact on gifts that might otherwise offend the rule against perpetuities.40 The class-closing rules have the effect of closing the class as soon as the first person is entitled to take his or her share. Everyone who is born at this time will be included in the class. All those born afterwards will be excluded. As the rules are rules of construction and not rules of law, it is possible to exclude them; however, the intention to do so must be made very clear.41 If the class is incapable of increase, the class-closing rules will have no application. Hence, in the example ‘To A’s children’, where A has predeceased the testator, there will be no role for the class-closing rules. The class of A’s children cannot increase once A has died. The class-closing rules make it possible to identify who will be a member of the relevant class and, consequently, to what share each member will be entitled. Of course, it is still possible that once members of the class have been identified one or more of the gifts to them may vest outside the perpetuity period, causing a breach of the rule against perpetuities. In regard to the class-closing rules there are four sets of circumstances to consider: (i) no prior life estate and no contingency; (ii) contingency, but no prior estate; (iii) prior particular estate, but no contingency; and (iv) prior life estate and contingency. These circumstances are discussed below, and represented diagrammatically in Figure 10.2 (at 10.22). 10.19 No prior life estate and no contingency A gift to a class where there is no prior life estate and no contingency to be satisfied is sometimes referred to as an ‘immediate class gift’. Here, the class closes when the instrument creating the interest comes into effect. Hence, those already born at the time the interest is created are included in the class. If there are no class members in existence at the time the interest is created, the class will stay open to include all members whenever they are born. For example, consider a bequest in the will of Tom ‘To Mary’s children’. The rule is that if Mary has one or more children alive at the time the instrument comes into effect (ie, when Tom, the testator, dies), that child or children will take the property and share it as joint donees, if applicable. Any children who are born after the testator dies will be excluded from the class and will take nothing. If Mary has no children when the testator dies, all the children of Mary, whenever born, will take a share.42

10.20 Contingency, but no prior particular estate Here, there is no prior particular estate, such as a life estate, but there is a subsequent class gift that requires the satisfaction of a contingency before the gift can be distributed. In these circumstances, the class closes when the first member of the class satisfies the contingency.43 [page 497] An example might be a bequest in the will of Tom ‘To the children of Mary who graduate in medicine’. If Mary does not have a child who has graduated in medicine when the instrument comes into effect (ie, on the date of the testator’s death), the class closes when the first of Mary’s children graduates in medicine. Children already born at that time are included in the class and they have the chance to satisfy the contingency and subsequently take a share. Children who are born after the date when the first child satisfies the contingency (ie, graduates in medicine) are excluded altogether. 10.21 Prior particular estate, but no contingency A gift to a class that is preceded by a prior particular estate or other interest but is not subject to any contingency is sometimes referred to as a ‘future class gift without a contingency’. Here, the class closes when the preceding interest or estate determines, but only if one or more members of the class exist.44 Those who come into existence after this time are excluded. Consider, for example, a bequest in the will of Tom ‘To Mary for life, remainder to the children of Anna’. If Anna already has a child when Mary dies, the class closes on Mary’s death. If, however, Anna has not had a child before Mary dies, then all of Anna’s children will take a share; that is, the class remains open until Anna dies. If Mary died before the testator died, this would be an example of a gift where there was no prior life estate and no contingency attached.45 10.22 Prior life estate and contingency A gift to a class preceded by a life estate and subject to a contingency is a future class gift with a contingency. In these circumstances, the class closes either when the life estate determines or when the first member of the class satisfies the contingency, whichever is the

later. Those born after this time are excluded from the class. Those born before this time will take if they also satisfy the contingency. Suppose, for example, that the will of Tom includes a bequest ‘To Mary for life, remainder to the children of Mary as attain the age of 21 years’. If Mary has a child who has reached 21 years at the time of her (Mary’s) death, then the class closes. All the children born already are included in the class. If Mary does not have a child who has reached 21 years when she dies, the class closes when the first child of Mary attains 21 years. Alternatively, imagine that Tom’s will includes a bequest ‘To Mary for life, remainder to the children of Anna who attain 21 years’. If Mary survived Tom and Anna was still alive on Mary’s death, the class of Anna’s children would not have closed naturally. Anna could have more children. Yet, by application of the class-closing rules, if a child of Anna reached 21 years before Mary died, then the class of Anna’s children would be closed. That closed class would include all of Anna’s children already born at Mary’s death. Those children of Anna would take when they reached 21 years. Any children born after Mary’s death would be excluded from the class. [page 498] If, however, none of Anna’s children was 21 years old when Mary died, the class would stay open until the first of Anna’s children reached 21 years. Then it would close, excluding any later-born children of Anna. If Mary died before Tom, the gift would be construed as one of an immediate class gift (to Anna’s children) subject to a contingency (of reaching 21 years).

Figure 10.2:

Applying the class-closing rules

[page 499]

Impact of the class-closing rules on the rule against perpetuities 10.23 It is useful to restate these two rules and then examine how one has an impact on the other. The common law rule against perpetuities invalidates any interest that might possibly vest outside the perpetuity period. The classclosing rules artificially close a class earlier than it might close naturally. Hence, it is possible that the operation of the class-closing rules means that someone could be excluded from a class even though he or she met the description of a class member and satisfied the contingency. These two rules interact as follows: if it is possible for the interest of any member of the closed class to vest outside the perpetuity period, then that interest will be void. It is important to apply the class-closing rules first and then apply the rule against perpetuities to this closed class. It is also important to bear in mind that the limitation itself may exclude the operation of the class-closing rules. If this is so, the rule against perpetuities must be applied in the context of the class closing naturally. The class-closing rules cannot do more than close the class. They cannot be used for other purposes, such as validating a gift so that a member of a closed class can take outside the perpetuity period. 10.24 Consider a bequest in the will of Tom ‘To the nieces of Mary’. Assume that Mary’s brothers and sisters are still alive and that two nieces have already been born. To determine whether the gift is invalidated by the rule against perpetuities, we take the following two steps: 1.

Apply the class-closing rules to close the class artificially. Otherwise, we would have to wait until Mary’s brothers and sisters were dead in order to ensure that the class is not capable of increase and was therefore closed. The first class-closing rule is applicable because we are dealing with a gift to a class where there is no preceding interest or estate and no contingency. At the time the instrument comes into effect (ie, when the testator, Tom, dies), there are already nieces born. Hence, the class is closed and later-born nieces will be excluded.

2.

Apply the rule against perpetuities to the closed class. Hence, the

question becomes: Is it possible for the interests of the nieces already born to vest outside the perpetuity period? The answer is negative. They have already vested, so the gift is valid.46 Even without the benefit of the operation of the class-closing rules, the gift to Mary’s nieces would be presumed to be valid pursuant to s 8 of the Perpetuities Act. Nevertheless, some of Mary’s nieces may not be born until after the 80-year perpetuity period imposed [page 500] by the Act has elapsed. The Act allows us to ‘wait and see’ if some nieces will take their gift outside the perpetuity period. Where they would, s 9(4) of the Perpetuities Act may be used to exclude any nieces who are born after the 80year period has elapsed. As a niece of Mary is alive when Tom dies, however, the class-closing rules may be applied to close the class at that time. Consequently, all after-born nieces will be excluded from the class. Accordingly, it would not then be necessary to apply the class-reduction provision in s 9(4) of the Act.47

Common law position 10.25 Having outlined above some of the shared features of the common law position and the Perpetuities Act, we now turn to a more detailed discussion of the common law position. As noted above (at 10.6), the common law remains relevant to pre-Act dispositions that must comply with pre-Act law on the rule against perpetuities. Further, the Perpetuities Act proceeds on the basis that those using it have a knowledge of the preceding common law position.

Perpetuity period 10.26 At common law, the perpetuity period is the period of time that starts at the date the instrument containing the disposition/interest comes into operation and ends 21 years after the death of the life in being.48 The date the interest becomes operational varies according to the instrument containing the

grant. For example, under a will, the interest becomes operational on the death of the testator;49 whereas, under a deed, the interest becomes operational when the deed is executed and delivered.50 In the case of a revocable gift, the perpetuity period runs from the date on which the right to revoke is terminated.51 Hence, limitations in exactly the same language, but contained in different kinds of instruments, may well yield different results regarding the validity of the gift.52 Where it is necessary, a gestation period may also be added to the perpetuity period.53 A child in the womb (or en ventre sa mère as it is often called) may be a life in being, and hence the perpetuity period will be made up of the usual perpetuity period; that is, the [page 501] period from the date the interest is created to the date 21 years after the death of the life in being, plus the gestation period.54

Lives in being 10.27 A life in being is a life in existence at the time the interest comes into operation or effect and it is implied from the instrument or, alternatively, designated expressly as a measuring life. Twenty-one years is added to the date of the death of the life in being to mark the end of the perpetuity period. For example, a gift by Tom in a will ‘To my grandchildren’ implies that Tom’s children’s lives are the lives in being. Tom’s children’s lives are causally connected to the vesting (put another way, they affect the vesting). In practice, most problems with lives in being arise when the lives are not specified but rather implied. A life in being that is specifically designated does not have to be otherwise related to the gift. Therefore, an instrument could name a particular person as the life in being or, alternatively, a means for ascertaining the identity of a life in being could be spelled out in the instrument. An example of the latter method is the ‘royal lives clause’. Historically, these clauses were a popular method of designating the life in being. Hence, a gift might have said ‘To my

grandchildren living on the death of the last survivor of all the lineal descendants of the present monarch of England, who shall be living at the time of my death’. As this class is not capable of increase and is certain, it is a valid measuring facility. Clauses of this nature had to strike a balance between, on the one hand, casting the net of lives in being wide enough to attract a large pool of lives from which one person might live for a long time, and hence extend the perpetuity period; and, on the other hand, not casting the net so widely that it was impossible to ascertain the lives in being in the pool.55 In Re Villar,56 the court found the gift valid where the vesting was postponed until 21 years after the death of the last survivor of Queen Victoria’s lineal descendants living at the death of the testator — a period of approximately 120 years. In New South Wales, with the enactment of the Perpetuities Act, lawyers cannot include royal lives clauses because the perpetuity period is now determined by the Act. [page 502] 10.28 A life in being must be a human life.57 According to Re Kelly,58 ‘“Lives” means lives of human beings, not of animals or trees in California’. It certainly did not mean the lives of dogs. Indeed, Meredith J stated that: The Court does not enter into the question of a dog’s expectation of life. In point of fact neighbour’s dogs and cats are unpleasantly long-lived … Anyway the maximum period is exceeded by the lives even of specified butterflies and twenty one years afterwards. And even, according to my decision — and I confess, it displays this weakness on being pressed to logical conclusion — the expiration of the life of a single butterfly, even without the twenty one years, would be too remote, despite all the world of poetry that may be thereby destroyed.59

10.29 It is only necessary to find one life in being for the purposes of the rule against perpetuities. In the example ‘To Ted in fee simple on trust for Zoe for life, remainder on trust for Ken’s first child to attain 21 years’, the measuring lives are those of Ken, Zoe and Ted.60 They were all alive at the time the interest was created. If it can be demonstrated, as it can, that Ken’s first child will attain 21 years within 21 years of Ken’s death, then it can be demonstrated that the interest contained in the limitation ‘To Ken’s first child to reach 21 years’ cannot possibly vest outside the perpetuity period. It is not

necessary to check the limitation against the other possible measuring lives. Ken’s life alone is enough. At other times, it is difficult to decide who is the life in being because a class of lives, rather than a single life, fits the relevant description. A class of lives in being could be used for measurement only if that class were no longer capable of increase.61 Hence, in a grant ‘To Ted on trust for the grandchildren of Susan’, the grandchildren themselves could not be the lives in being if Susan’s children were alive, because the class of grandchildren could still increase. Further, Susan’s children could not be the lives in being if Susan were still alive, because Susan could have more children. If there is no life in being at the creation of the interest, the perpetuity period is simply 21 years.62

Possibilities not probabilities 10.30 At common law, the rule against perpetuities was concerned with whether it was possible for an interest to vest outside the perpetuity period. For example, if a will devised a gift, ‘To Chee for life, remainder to the first of Chee’s children to graduate in law’, the gift to Chee’s child would fail if the testator were alive at the time of Chee’s death and none of Chee’s children had graduated in law. This is because Chee would be the life in [page 503] being and it would be possible for the first of Chee’s children to graduate in law more than 21 years after Chee’s death. It follows from this that, even if an interest did vest inside the perpetuity period, it would fail if, at the time the instrument came into effect, the interest could have possibly vested outside the perpetuity period. To explain, if one of Chee’s children did, in fact, graduate in law during the perpetuity period, the gift would still fail because it was possible, at the time the testator died, that the interest could vest beyond the perpetuity period although on the facts that possibility did not actually eventuate. Hence, the fact that it was unlikely or improbable for the interest to vest outside the perpetuity period was irrelevant.

10.31 Perhaps not surprisingly such a requirement led to some extreme results, which were captured in the principles known as ‘the fertile octogenarian’, ‘the precocious toddler’, ‘the unborn widower’ and ‘the magic gravel pits’ principles. Jee v Audley63 is usually regarded as an example of the fertile octogenarian principle. That case involved a bequest ‘To Mary and the issue of her body, and in default of such issue for the daughters then living of Elizabeth Jee’. When the testator died, Elizabeth Jee was 70 years old and had four daughters. In an era before in vitro fertilisation she was probably factually infertile at this time, but as the common law considered people of all ages fertile, the court held, per Lord Kenyon, that it was possible for the number of Elizabeth’s daughters to increase, and the gift to ‘daughters then living’ would not necessarily vest in the perpetuity period.64 Re Gaite’s Will Trusts65 raises the converse situation and considers the minimum age at which a person can have a child. The term ‘precocious toddler’ is simply a euphemism for ‘the fertile and sexually active toddler’. There is a presumption at common law that there is no minimum age to have a child. Harris v King66 raised the issue of an unborn widower. In that case, Wilhelmina, the testator’s daughter, was left property on trust for life with the remainder to be taken by those issue of Wilhelmina living at the death of the survivor of Wilhelmina and her husband. The court found that the will required Wilhelmina’s children to be alive at the death of the survivor of Wilhelmina and her husband. However, it was possible that Wilhelmina’s husband may not even have been born at the time of the testator’s death. Accordingly, the lives after which the children’s interests were designed to vest ‘are not necessarily lives of persons in being at the death of the testator’.67 In actual fact, Wilhelmina’s husband [page 504] predeceased her and her children’s interest would have vested within the 21 years of her own death (she being the life in being for the purposes of the

rule), but the court could not take this into account because it was bound to consider possibilities and not what actually occurred. Re Wood; Tullett v Colville68 again concerns the issue of possibilities and not probabilities. It is sometimes called the ‘magic gravel pits’ case. Here, the testator left his freehold interest in gravel pits on trust for his children, instructing that they carry on the business until the gravel supplies were exhausted. The pits were then to be sold, and the proceeds were to be divided among the children who were still living. Although the pits in fact had been exhausted within the perpetuity period, it was possible that they could have failed to have been exhausted within the perpetuity period. Hence, the gift was held to offend the rule against perpetuities.

Alternative contingencies 10.32 As we have observed, the requirement of certainty is linked to the need to establish whether there was a possibility, rather than a probability, that an interest would vest beyond the perpetuity period. However, an exception to the requirement of certainty existed in the form of the ‘alternative contingencies’ principle. The principle applied when a gift depended on one of two contingencies occurring. Where one contingency was valid because it would certainly vest, if at all, in the perpetuity period, but the other contingency was not valid (because it might vest beyond the perpetuity period), the alternative contingency principle applied. The principle allowed one to ‘wait and see’ which contingency actually occurred.69 If the contingency that actually occurred was the one that breached the rule against perpetuities, the gift was void. However, if the contingency that actually occurred was the one that must vest, if at all, within the perpetuity period, the gift was valid.70 Where a settlor or testator wished to create alternative contingencies, he or she needed to ensure that the contingencies were clearly expressed in the instrument because a court could not imply them.71 In Curryer’s Will Trusts,72 the instrument passed an interest to T’s issue then living at the death of T’s last surviving child, or of the last surviving widow or widower of T’s children. The contingency involving the surviving widow or widower of T’s children normally would have caused the gift to fail because it

involved an ‘unborn widow’ type of situation.73 However, the gift could be split, and if the death of T’s last child occurred [page 505] after the death of the last surviving widow or widower of T’s children, then the gift would be valid.74

Series of gifts 10.33 Sometimes, limitations involve a series of gifts. For example, ‘To Mary for life, remainder to the first child of Mary to marry but, if he or she marries a dentist, then to Roberto’. If all the seriatim (‘in a series’) gifts are valid, clearly there is no problem. However, if some of the gifts in the series are valid and others are not, potential problems exist. Gifts in series generally fall into three categories: a valid gift followed by an invalid gift; an invalid gift followed by a dependent but otherwise valid gift; and an invalid gift followed by a valid gift with its own independent date of vesting. 10.34 Valid gift followed by void gift If a valid gift is followed by a void gift, then the preceding gift is unaffected by the lack of validity of the subsequent gift.75 For example, if a will bequeathed property ‘To Mary for life, remainder to the first child of Mary to graduate in law’, and Mary was alive at the time the testator died, but no child of Mary’s had graduated in law at the testator’s death, the subsequent gift to Mary’s child would be void. It would be possible for Mary’s child to graduate in law more than 21 years after Mary’s death. However, the preceding gift to Mary is not invalidated by the subsequent void gift to Mary’s child. 10.35 Void gift followed by dependent but otherwise valid gift By contrast, a gift that follows a void gift will be void itself if it is dependent on the preceding void gift.76 For example, if a will bequeathed property ‘To the first daughter of Mary to qualify as a paediatrician and then to her issue, but if she

has no issue, to Ted’s niece, Nina, and her issue’, the original gift to the first daughter of Mary to qualify as a paediatrician is void, because it is possible for it to vest more than 21 years after the death of Mary, the life in being. Hence, the dependent gifts to Mary’s issue, Nina and Nina’s issue, will also fail. Put another way, the gifts to Mary’s issue, Nina, and to Nina’s issue have no independent date on which they could vest. 10.36 Void gift followed by a gift with its own vesting date If a gift follows a void gift, but has a vesting date of its own that is within the perpetuity period, the subsequent gift will not be void.77 Hence, in the example ‘For life to the first daughter of Mary to qualify [page 506] as a paediatrician, and then in remainder to Nina and her issue’, if Nina is alive then the gift to her will vest within the perpetuity period and will not be void.

Age reduction 10.37 It is not uncommon to find that gifts are contingent on a person attaining a certain age. Without the assistance of statutory age reduction provisions, these gifts would fail if the age contingency was not met. Section 36 (now repealed) of the Conveyancing Act provided that where a gift would fail because the donee had not reached the specified age in the limitation, and that age was itself in excess of 21 years, the age in the limitation could be read down to 21 years if reading it down saved the gift.78 The section operated as a substitution provision and allowed the age of 21 years to be substituted to save a gift that otherwise would have been void for perpetuity, because it contained an age greater than 21 years. Despite the repealing provision, s 36 remains operational in some specific circumstances. These are: where the instruments came into effect before 31 October 1984;79 and for some wills made before 31 October 1984.80 Without the operation of s 36, a limitation in a will such as ‘To Mary’s first

child to attain the age of 27 years’ would fail if Mary survived the testator and had no 27-year-old child. It would be possible for Mary’s child to reach 27 years of age more than 21 years after Mary’s death. For example, if Mary’s child were three years old when Mary died, it would take 24 years after Mary’s death for that child to reach 27 years of age. However, if 21 years were substituted for 27 years, it would be impossible for Mary’s child to turn 21 more than 21 years after Mary’s death. Hence, the gift would be saved. Note that if Mary had predeceased the testator, Mary’s children would become the lives in being and it would be impossible for any of them to turn 27 more than 21 years after their own deaths. In those circumstances, there would have been no need to rely on s 36. Note that s 36 could only substitute the age of 21 years where the instrument postponed the vesting of the interest to an age greater than 21 years. Hence, s 36 would have been no assistance if the gift was in the following form, ‘To Mary’s children living 30 years after my death’.81 Section 36 was not applicable if the class-closing rules would have saved the limitation.82 All other methods, such as the class-closing rules, had to be applied before turning to s 36 for assistance. [page 507]

Determinable interests and conditions subsequent 10.38 At common law, the grantor’s possibility of reverter after a determinable interest was not subject to the rule against perpetuities, even though it was possible that the determining event could occur outside the perpetuity period. One possible explanation for this is that the right of reverter was already vested, so there was no question of dealing with a contingent interest.83 By contrast, the right of re-entry that arose when a condition subsequent was broken was subject to the rule against perpetuities. Hence, if it were possible that the right of re-entry might arise beyond the perpetuity period, it was void.84 The effect was to free the interest from the condition subsequent.85

Determining whether a gift breaches the common law rule 10.39 The following list of questions may be helpful when ascertaining if an interest will breach the rule against perpetuities at common law:86 Is the interest vested or contingent? If the interest is vested, the rule against perpetuities will not be applicable. If the interest is contingent, the rule may apply.87 When does the perpetuity period (in which the interest must vest) commence? The answer depends on the nature of the instrument containing the gift. If it is a will, the date will be the date of the testator’s death; but if the gift is contained in a deed, the date will be the date that the deed comes into effect — that is, when it is executed and delivered. Who is the life in being? The life or lives in being can either be nominated in the instrument or implied from it. When ascertaining who is the life in being, remember the following: –

the life in being must be human;

–

the life in being must have commenced at the date the disposition in the instrument becomes operational;

–

if there is more than one life in being, the group of lives must not be capable of increase; and

– the members of a group of lives in being must be ascertainable. When does the perpetuity period end? Once we know who is the life in being, we add 21 years to the date of his or her death to determine the end point of the perpetuity period. Does the class need to be closed artificially? Apply the relevant classclosing rule. [page 508] Is it possible that the interest could vest outside the perpetuity period? The common law is concerned with possibilities, not probabilities. If it is possible that the interest will vest outside the perpetuity period, then

it will offend the rule and the interest will be invalid under the common law. Simply ask the following question: Is it possible that the interest could vest beyond 21 years after the date on which the life in being ends? 10.40 The application of the common law rule is illustrated by the following examples: The following bequest is made in a will: ‘To A for life, remainder to A’s eldest daughter when she graduates in law’. If A’s eldest daughter has not graduated in law at the time the testator dies, then the gift is contingent. It will not have vested in interest.88 The gift is, therefore, subject to the rule against perpetuities. The perpetuity period will commence at the date of the testator’s death. It will end 21 years after the death of the life in being. Who is the life in being? A is the life in being. A was alive at the date the interest was created; that is, on the date of the death of the testator. A is not a member of a group that is capable of increase, and A is a person. The question then becomes: Is it possible for A’s daughter to graduate in law more than 21 years after A’s death? As the answer is affirmative, the gift to A’s eldest daughter is void pursuant to the common law rule against perpetuities. The following gift is made inter vivos in a deed: ‘To A for life, remainder to the first son of S to marry’. If S has a married son who is alive, the gift will be vested. If, however, S has a son who is not married, then the gift is contingent. The interest will have not vested in interest. Hence, it will be necessary to determine whether it is possible for the interest to vest outside the perpetuity period. When does the perpetuity period commence? It will begin at the date the deed comes into effect; that is, when the deed is executed and delivered. The perpetuity period will conclude 21 years after the life in being dies. Who is the life in being? No person is specifically designated as the life in being. A life in being must be implied. A person will be the relevant life in being if his or her death has some effect on the vesting of the gift. The life in being must be that of someone whose existence is causally related to the vesting of the interest. In this case, S is the life in being — if S is a person, not an animal, and was alive at the date the deed was delivered. The

question then becomes: Is it possible that the first son of S to marry could do so later than 21 years after S’s death? The answer is affirmative. Hence, this gift offends the rule against perpetuities. [page 509] The following inter vivos gift is contained in a deed: ‘To T (the trustee) on trust for S’s grandchildren who attain 21 years’. Assume that, at the date of the settlement, S has two grandchildren aged five years and one year respectively. The limitation is contingent because the number of grandchildren who could take is not yet known, and hence the share that each would receive cannot be calculated. When does the perpetuity period commence? It commences on the date that the deed of settlement comes into effect, which is the date the deed is executed and delivered. The perpetuity period will end 21 years after the death of the life in being. Who is the life in being? The grandchildren cannot themselves be lives in being, because they are part of a group subject to increase in size. The child of S also cannot be the life in being because, while S is alive and the fertile octogenarian rule prevails, S could have more children, making S’s child a member of a group subject to increase. Hence, only S can be the life in being. Is it possible that S’s grandchildren could turn 21 more than 21 years after S’s death? Yes, it is. At common law, S could have children into his or her eighties, for example, in which case the grandchildren would turn 21 years outside the perpetuity period. The gift is void.

Perpetuities Act 1984 (NSW) 10.41 The Perpetuities Act came into effect on 31 October 1984. It does not operate retrospectively, nor, as noted above, does it simply codify the common law position. Subject to a small class of exceptions, interests that were subject to the common law rule against perpetuities are subject to the Act.89 It is impossible to apply the Act without a knowledge of the common law position on the rule against perpetuities.

In some instances, an understanding of the common law position is necessary to make sense of the older cases as a whole, although only some (and not all) of those older cases remain relevant to the present statutory position. All settlements (which, according to s 3(1) of the Perpetuities Act, include a will, an instrument exercising a power of appointment, and any other instrument, transaction or dealing pursuant to which a person makes a disposition) of property that come into operation after the commencement of the Act are subject to it. Further, a disposition includes a power of appointment90 and any other power to dispose of property as well as any alienation of property. Dispositions made before the commencement of the Act are tested for remoteness of vesting by the common law. The position is less clear in regard to some wills. Section 3(2), read in conjunction with s 4(3), of the Perpetuities Act seems to be designed to preserve wills executed before the Act came into force. Section 4(3) provides that the Act will not invalidate a will executed before the Act’s commencement, but taking effect after the Act’s commencement, if the interest would not have offended the common law rule against perpetuities. Hence, in some circumstances it may be necessary to check the limitation against the common law rule, because s 4(3) seems to imply that if the will would fail under the Act, the common law is then applied to see if the gift can be saved. [page 510] The problem with s 4(3), however, is that it does not specify whether the common law rule against perpetuities or the Perpetuities Act should be applied first. This means that at least two alternative approaches are available. The first is to test the validity of the will under the common law rules that were in place when the will was executed. If the will fails under those rules, then the provisions of the Perpetuities Act are then applied. The other approach is to begin by applying the provisions of the Act. If the will fails to satisfy those legislative requirements (and, hence, is void), then it is tested under the common law rules that would have been in place when the will was executed. Both approaches give rise to difficulties, but it has been

suggested that the second approach reflects the purpose of s 4(3) more effectively than the first.91 10.42 Pursuant to s 15 of the Perpetuities Act, the rule against perpetuities does not apply to: ‘any option to renew a lease of property’; ‘any option to acquire a reversionary interest in property comprised in a lease’; ‘any right of pre-emption given for valuable consideration or by will in respect of property’; or ‘any other option given for valuable consideration or by will to acquire an interest in property’.

Perpetuity period 10.43 Section 7 of the Perpetuities Act provides that the perpetuity period is set at 80 years from the date the instrument comes into effect. Whether a gestation period may be added to the statutory period as yet is undecided.92 There is no need to ascertain the identity of the life in being because the perpetuity period is not dependent on it. Further, there is no place for royal lives clauses. If, for example, an inter vivos deed containing a limitation were executed and delivered in 2017, the interest would simply need to vest by 2097. An exception to the position that under the Act the perpetuity period commences on the date the instrument comes into effect exists in the form of s 4(3) of the Act. That provision permits the perpetuity period, for certain wills, to commence on the date the will was executed rather than on the date of the testator’s death.

‘Wait and see’ rule 10.44 At common law, a breach of the rule against perpetuities occurred if it were possible that the interest could vest outside the perpetuity period. Indeed, even if the possibility of vesting outside the perpetuity period were remote, or even if the interest actually did go on to vest inside the perpetuity period, the gift could not be saved. One of the perceived advantages of the common law approach was that the validity of the interest could be determined immediately. In reality, however, the interest, although not necessarily infringing the rule against perpetuities, was still contingent. Not

until the contingency had been satisfied could one know who would be entitled to take.93 [page 511] The advantage of the system was not perhaps as great as first thought. By contrast, under the Perpetuities Act, no decisions concerning validity can be made at the outset unless it is absolutely certain that the interest will fail to vest within the perpetuity period,94 or unless the interest must vest (if at all) within the perpetuity period.95 Instead, pursuant to s 8 of the Perpetuities Act, one must ‘wait and see’ if the interest vests inside or outside the 80-year perpetuity period.96 Hence, the ‘wait and see’ rule applies in circumstances where there is uncertainty about when the interest will vest. In practice, the ‘wait and see’ rule saves a lot of gifts that would have failed at common law. It has recently been observed that: The learning on the rule against perpetuities has quickly faded from view since enactment of the “wait and see” provisions of the Perpetuities Act 1984 which, in the mindset of the current generation of lawyers, effectively “abolished” (but in truth, only modified) the rule against perpetuities.97

Section 8(1) of the Perpetuities Act requires that the gift be treated as valid until it is known for certain that it will vest outside the perpetuity period. When it is certain that the interest will vest outside the perpetuity period, the gift is void unless it is saved by the age reduction provisions in s 9(1), or the class-closing rules in s 9(4), of the Act.98 Put another way, under s 8 the interest is presumptively valid from the outset. Whether it remains valid is determined by ‘waiting and seeing’ if the interest does, in fact, vest in the perpetuity period. Should it vest within the perpetuity period, the interest remains valid. In Nemesis Australia Pty Ltd v Commissioner of Taxation,99 the rule was applied in the context of the relevant Queensland legislation.100 There, the question was whether distributions made by one trustee, in favour of other beneficiary trustees, would offend the rule against perpetuities given that the vesting date of one trust had been read back into the original trust. The result

was to extend, beyond 80 years, the period in which a trustee could make a disposition. The court affirmed that the ‘wait and see’ rule is: … designed to enable the court to look at what actually occurs before the expiry of the perpetuity period and the circumstances as they have unfolded in order to determine whether there has been a vesting within the perpetuity period. If, in fact, the interest is vested prior to the expiry of the perpetuity period, notwithstanding that a longer period is provided for in the trust deed, the trust may be valid.101

The court went on to observe that the ‘wait and see’ rule was designed to avoid the ‘draconian consequences’ of the common law rule.102 [page 512]

Age reduction 10.45 If it becomes obvious that a gift will fail because the age contingency is not met, s 9(1) of the Perpetuities Act permits the age in the limitation to be read down to the greatest age that will save the gift. Put another way, s 9 allows for substitution of the maximum lower age that will save the gift. This section differs from s 36 (now repealed) of the Conveyancing Act, in that s 36 permitted age reduction only if vesting depended on attainment of an age greater than 21 years. Then the greater age could be read down to 21 years. Section 9 of the Perpetuities Act operates in relation to the attainment of any age and is not limited to ages above 21 years. Like s 36 of the Conveyancing Act, s 9 of the Perpetuities Act operates as a last resort. It also applies only where vesting is dependent on the attainment of a specific age. Therefore, it is inapplicable in circumstances where a disposition, for example, refers to the vesting of an interest 100 years after a given event. The intention of s 9 is to allow the settlor’s or testator’s wishes to be adhered to by changing the limitation slightly so that the gift remains valid. For example, consider a bequest in the will of Tom ‘To the first grandchild of Mary to reach 21 years’. Assume Tom dies in 2017 and that in 2097 Mary has grandchildren, but none of those grandchildren has yet reached 21 years. By applying s 9(1), the eldest grandchild will take in 2097, even if he or she is not 21 years old, because the age the grandchild has reached by this date will be substituted.

Interaction of ‘wait and see’ rule and age reduction 10.46 Section 10 of the Perpetuities Act sets out the order in which the statutory provisions should operate. It requires that the ‘wait and see’ provisions should be applied in the following order: (i) the ‘wait and see’ provisions in s 8 of the Act; (ii) the age reduction provisions in s 9(1) of the Act; and (iii) the class-closing rules in s 9(4) of the Act. Under s 8(1), an interest is to be treated as valid until it ‘becomes certain’ that it must vest, if at all, outside the perpetuity period. Under s 9(1), the age in the limitation is reduced only when it ‘becomes apparent’ that the interest will offend the rule against perpetuities unless a lower age is substituted. Yet, despite the assistance of s 10, difficulties still arise in applying the age reduction provisions. These difficulties can be observed by examining how the ‘wait and see’ provision and the age reduction provision interact with each other. 10.47 For example, suppose that the will of Tom includes a bequest ‘To the first of Kim’s grandchildren who reaches 30 years’. Assume that Tom dies in 2017 and that, 60 years after Tom, Kim dies leaving children but no grandchildren. The perpetuity period would commence in 2017 and conclude in 2097. Clearly, Kim’s children could continue to have children between the date of Kim’s death (2077) and the date when the perpetuity period expires in 2097. However, the maximum age that any of Kim’s grandchildren could reach would be 20 years, but the limitation requires them to reach 30 years in order to be entitled. Pursuant to s 8(1) of the Perpetuities Act, it is ‘certain’ that no interest will vest, if at all, in the perpetuity period. It is also ‘apparent’ according to s 9(1), that the interest will infringe the rule against perpetuities unless a lower age than [page 513] 30 years is substituted. According to s 10 of the Act, we must first ‘wait and see’. This being done, s 8 should be invoked. But it is not quite so simple. Even if the eldest grandchild of Kim would potentially turn 20 years old at the expiration of the perpetuity period, one cannot simply read down the

limitation to 20 years on the birth of this grandchild without facing potential difficulties. For example, if this grandchild died before reaching 20 years, any later-born grandchildren would automatically be precluded from taking because it would be impossible for them to reach 20 years within the perpetuity period. One might surmise that the exclusion of later-born grandchildren in this way was not the wish of the testator, who presumably would have preferred that the eldest surviving grandchild took rather than the gift fail altogether. If this is true, then employing the provisions in this manner is not particularly helpful. It is perhaps possible, however, to reduce the age successively. Such an approach is suggested by the authors of Megarry and Wade: The of Real Property.103 Hence, the age of the grandchild might first be reduced to 20 years; but if that grandchild died before reaching 20 years, the age could be successively reduced to the next greatest age that would allow the interest to be taken within the perpetuity period, for example, to 15 years. It has been pointed out that such an interpretation would require the words ‘it becomes apparent’ in s 9(1) to be treated as meaning ‘it becomes apparent from time to time’.104 Another approach might be to reduce the age to 20 years and then wait until the perpetuity period has expired to see if the grandchild on whose account the age was reduced to 20 years is still alive to take the interest. If he or she is not, then the age could be reduced again to the age of the oldest living grandchild at the conclusion of the perpetuity period. This approach effectively extends the ‘wait and see’ period to the end of the perpetuity period. The problem is that this approach seems to run counter to the order for applying the provisions set out in s 10. Section 10 requires that one should ‘wait and see’ until it becomes apparent that the interest will offend the rule. Only then should one apply the age reduction provision. Instead, this approach requires that one ‘waits and sees’ long after it is apparent that the interest will offend the rule against perpetuities. These problems remain unresolved.105

Interaction of ‘wait and see’ rule, age reduction and classclosing rules

10.48 The Perpetuities Act contains a class-closing rule in s 9(4). That section does not simply replace the common law class-closing rules.106 The reason for this is that the common law class-closing rules are rules of construction, developed for administrative convenience, and hence are still used. [page 514] Section 9(4) provides that if, at the end of the perpetuity period, it is clear that a member of a class will not be able to take his or her share inside the perpetuity period and, as a result, the whole class gift would fail, then that member will be excluded from the class. It would seem necessary to apply the common law and statutory provisions in the Perpetuities Act in the following order: 1.

the common law class-closing rules;

2.

section 8 (‘wait and see’);

3.

section 9 (age reduction); and

4.

section 9(4) (statutory class-closing rule).107

In a devise ‘to the grandchildren of Mary as attain 30 years’, it is possible to see some of the practical difficulties involved in integrating the application of the remedial provisions. For example, if it became apparent that none of Mary’s grandchildren could attain 30 years within the perpetuity period, there would be no benefit in reading down the age to less than 30 years. This would be the case if no grandchildren had been born at all in the perpetuity period and, therefore, there were no children to whom the age reduction could apply. If, however, Mary’s first grandchild was born, say, 55 years after the testator’s death, we could then reduce the age to be attained to 25 years and that would allow one of Mary’s grandchildren to reach 25 years within the 80-year period following the testator’s death. However, if Mary’s children were still alive, the class of grandchildren could keep expanding and hence it would be necessary to close the class. Section 9(4) would need to be employed to close the class of grandchildren. Yet, the result of closing the class would be

to exclude Mary’s later-born grandchildren; a result that would appear contrary to the testator’s intention. Further, if the class were closed with Mary’s first grandchild to reach 25 years constituting its only member, and that grandchild died and hence did not reach 25 years, the whole gift would fail. Again, this would seem not to be the intention of the testator. One possible alternative would be to exclude the operation of the ‘wait and see’ rule until the death of Mary and her children, assuming that they die before the perpetuity period has elapsed. Another interesting issue is whether the age reduction is employed for all members of the class or only for those members of the class who cannot meet the original requirement within the perpetuity period.108 Perhaps a better way of dealing with the problems raised here would be to extend the ‘wait and see’ period for longer than a literal interpretation of s 10 of the Act might suggest. An extension of the period until the end of the 80-year perpetuity period may well alleviate some of the difficulties in applying the remedial provisions.109

Series of gifts 10.49

Examples of possible ‘series of gifts’ scenarios include:

a valid interest followed by an invalid interest; [page 515] an invalid interest followed by an interest with its own vesting date; and a dependent interest that follows an invalid interest (ie, an interest that is dependent on the preceding invalid interest). 10.50 Valid interest followed by an invalid interest Under the Perpetuities Act, as under the common law, a valid interest followed by an invalid interest still remains valid. The invalidity of the later interest for breach of the rule against perpetuities does not affect the earlier valid interest. For example, consider a bequest in a will ‘To Mary for life, remainder to Anna when New Zealand becomes part of Australia’. Under the Act, the ‘wait and see’ provisions still apply. One must ‘wait and see’ if the later sequential

interest vests within the 80-year perpetuity period. Even if it does not, the preceding interest remains valid. 10.51 Invalid interest followed by an interest with its own vesting date The later interest is valid if it has an independent date of vesting that is within the perpetuity period. Further, under the Act, the ‘wait and see’ rule is applied, rather than testing the validity of the later interest at the outset. Accordingly, we ‘wait and see’ if the interest vests in the 80-year perpetuity period. For example, suppose that the will of Tom includes a bequest ‘To Mary for life, then to Anna for life when Australia becomes a republic, and then to Nina in fee simple at 25 years’. Mary’s interest will be valid, but Anna’s interest might or might not vest within the perpetuity period. One must ‘wait and see’ if Anna’s interest is valid. However, Nina’s interest has an independent date of vesting, so it is valid if it vests in the 80-year period after the death of Tom, the testator. It is necessary to ‘wait and see’ if this happens. 10.52 Dependent interest following an invalid interest In this case, an invalid interest is followed by an interest that is dependent on the preceding invalid interest. Section 17(1) of the Perpetuities Act abolished the common law rule against perpetuities and states that an interest that is part of a series of interests is not invalid merely because it is ‘ulterior to and dependent upon’ an invalid interest. Pursuant to s 17(1), each interest is to be treated independently and separately. Hence, an interest is not automatically invalid because it is linked to a prior invalid interest in the series. In effect, dependent ulterior interests are treated under the Act as though they are independent ulterior interests. For example, consider a bequest in the will of Tom ‘To the first of Mary’s children who becomes a resident of Queensland, but if Mary has no children, then to Anna’. It is necessary to ‘wait and see’ if the first of Mary’s children to become a resident of Queensland does so within 80 years of Tom, the testator, dying. If none of Mary’s children becomes a resident of Queensland within the perpetuity period, the gift to Anna, although dependent on the earlier gift, is held valid under the Act, because it is treated independently and separately. If all Mary’s children died before the effluxion of the perpetuity period or, alternatively, if the state of Queensland ceased to exist before the perpetuity

period had elapsed, then the interest to Anna would become effective as soon as either of these events occurred. [page 516]

Section 4(3) of the Perpetuities Act 10.53 The operation of this section was raised at 10.42 and 10.43, and is considered in more detail here because of its complexity and uncertain operation. The section seems to require that a will executed before the Perpetuities Act, but not coming into effect until after the Act commenced on 31 October 1984, should be considered as though it came into operation when it was executed. The logic behind the provision would seem to lie in the unfairness that could result if a will were drafted under one law but tested under a different law. Where a will was tested for compliance with the rule against perpetuities under the common law, presumably events that took place after the will was executed would have to be ignored because, under the common law, validity is tested by reference to the position when the perpetuity period commences. Consider this example. A will was executed before 1984, say in 1980, which read: ‘To the first child of Lim who publishes his or her memoirs’. At the time the will was executed, Lim was alive but he did not have any children who had published their memoirs. Lim died in 2016 and at that time had one child, who had not published his or her memoirs. When the testator died in 2017, Lim’s child had still not published his or her memoirs. In fact (and by way of glancing into the future), we learn that Lim’s child was slow to take up the challenge of publishing and did not do so until 83 years after the testator died. Under s 7(1) of the Act and the 80-year perpetuity period, the devise in favour of Lim’s child is void because he or she did not publish his or her memoirs within 80 years of the testator’s death. Hence, it would be necessary to see if the devise were valid by application of s 4(3), which allows validity to be tested according to the common law. Under the common law, the perpetuity period would commence when the will was executed, that is,

in 1980. As a result, the life in being would be Lim (who was alive at that time and was causally related to the vesting). The question would become: Is it possible for the gift to Lim’s first child to vest more than 21 years after Lim dies? The answer to that question is affirmative, so the devise to Lim’s first child also would fail even when s 4(3) was applied. This result is based on a literal interpretation of s 4(3) and, accordingly, it has not taken into account that, by the time the testator died, Lim was already dead.

Determinable interest and conditions subsequent 10.54 Pursuant to s 14(2) of the Perpetuities Act, possibilities of reverter are subject to the rule against perpetuities.110 This brings them into line with rights of entry for breach of a condition subsequent, but is contrary to the favoured position at common law regarding determinable interests, where possibilities of reverter escaped the tentacles of the rule against perpetuities.111 [page 517] 10.55 Hence, under the Perpetuities Act, if a possibility of reverter offends the rule against perpetuities, the determinable interest is not bound by the determining event, and any later interests that do not themselves offend the rule are postponed to the extent necessary to preserve the determinable interest (now liberated from the offending determining event).112 Suppose, for example, that the will of Tom contains a bequest ‘To the Senior Citizens’ Corporation while the land is used for a community hall’. Under the Act, the possibility of reverter remains valid during the 80-year perpetuity period. Section 14 of the Act means that, if at the end of the perpetuity period the land was still being used for a community hall, the interest of the Senior Citizens’ Corporation would become absolute. Anyone taking under a residuary clause would receive nothing. If, however, the land ceased to be used as a community hall during the perpetuity period, then the interest would pass under the residuary clause in the will or on intestacy.

Accumulations

10.56 It is possible to draft a will or other instrument so that the income from a fund or from property accrues for some time before the accumulated amount is finally distributed. The rule against accumulations is applied in these circumstances. While the rule against perpetuities sought (and continues to seek) to prevent remoteness of vesting, the rule against accumulations was directed against remoteness of control.113 At common law, the accumulation could only be directed as long as the property could be rendered inalienable.114 Hence, the rule against accumulations was inextricably tied to the rule against perpetuities. This remained the case until the Accumulations Act 1800 (UK) was passed.115 It reduced the period for accumulation. The key aspects of the Accumulations Act were incorporated into ss 31 and 31A of the Conveyancing Act, which were repealed by s 19 and Sch 1 of the Perpetuities Act. Since then, s 18 of the Perpetuities Act has governed the situation. Section 18(1) of the Perpetuities Act provides that if a settlement takes place after the commencement of the Act, a power or direction to accumulate is valid if the disposition of the accumulated income is valid. Hence, a direction to accumulate will only be valid if the accumulated income vests within the perpetuity period (ie, in the 80-year period from the date the disposition comes into effect).116 One must ‘wait and see’ if the disposition of the accumulated income will vest within the perpetuity period. Until this is decided definitively, the direction to accumulate is treated as valid.117 [page 518]

Powers of appointment 10.57 Under a power of appointment, the title holder of property, known as the donor of the power, permits another person, known as the donee of the power, to deal with or dispose of the property. However, the donor does not give the donee title to the property. Usually the donee of the power is able to choose who will be the object of the power; that is, who is to receive the property. A general power allows the donee to appoint the property to anyone at all, even himself or herself,118 while a special power gives the donee

the right to appoint the property to specific individuals or classes of individuals excluding himself or herself.119 Other categories of powers have also developed and they cross the boundaries between the first two categories. For example, a hybrid power permits the donee of the power to appoint anyone in the world except certain individuals or people of a certain class and an intermediate power permits the donee of the power to add to the already specified class of objects. Section 6(1) of the Perpetuities Act requires that all powers of appointment be treated as special powers of appointment unless the donee of the power can exercise the power unconditionally and appoint himself or herself. The rule against perpetuities is relevant to general powers of appointment at the following stages: the first time the power is created; the time the power is exercised; and when considering the validity of the gifts over in default of appointment. The rule against perpetuities is relevant to special powers of appointment at the following stages: when the power is conferred or created; when the power is exercised; and when considering a gift over in default of an appointment. How the rule applies in each of these circumstances is complex and space does not permit further elaboration at this point. Reference should be made to specialist texts in the area.120

Superannuation funds 10.58 As superannuation funds assume growing significance in our society, it has become more important to preserve the validity of such funds and prevent them from falling foul of the rule against perpetuities. This has been achieved by s 13 of the Perpetuities Act, whereby an exemption is created in favour of provident, superannuation, sickness, accident, assurance, unemployment, pension and co-operative benefit funds.121

[page 519]

Applying the Rule against Perpetuities 10.59 Figure 10.3 below summarises the common law and statutory rules discussed in this chapter.122 Figure 10.3:

Applying the rule against perpetuities

[page 520]

Examples of the rule’s application 10.60 The application of the rule is illustrated by the following examples of perpetuity problems and the steps required to answer them:123 The will of Tom includes a bequest ‘To my grandchildren’. Tom died in 2001 and his will was made in 2000. At his death, he had two grandchildren. For the purpose of this example, let us assume that we can look into the future and by 2081, he has four grandchildren. In this case, we need to apply the common law class-closing rules. The two grandchildren alive at the testator’s death take half each. Grandchildren born later take nothing. The will of Tom includes a bequest ‘To Mary for life, remainder to the children of Anna’. Tom’s will was executed in 2008 and he died in 2009. At his death, Mary and Anna were both alive and Anna had no children. Mary died in 2011 and Anna had one child at that time. Anna had another child in 2012. In this case, we must apply the common law class-closing rules. The first child takes everything. An inter vivos trust makes a gift ‘To Mary for life, remainder to Mary’s grandchildren to reach the age of 25’. The trust came into existence in 2001 and, at this time, Mary had no grandchild who had reached the age of 25. For the purpose of this example, assume we know that Mary dies in 2036. In 2079, the first of Mary’s grandchildren turns 25 and her only other grandchild turns two. In this case, we need to take the following steps: –

Apply the common law class-closing rules. As the prior life estate has determined and the eldest grandchild has satisfied the contingency of reaching the age of 25, the class is closed to include that grandchild and the second grandchild who is alive at that time. All later-born grandchildren are excluded. The first-born grandchild will take a share immediately.

–

Apply the age reduction rule. The second-born grandchild will take a share if he or she is alive at the end of the perpetuity period in 2081, no matter how old he or she is.124

Reform 10.61 Despite the introduction of the Perpetuities Act 1984 (NSW), difficulties still exist in the application of the law regarding perpetuities. Some states have decided that the best way to approach the issue is to offer litigants a choice between using the common law or operating under the statute.125 Such a choice seems to complicate the matter unnecessarily. [page 521]

Abolition of the rule against perpetuities 10.62 By contrast, South Australia has taken a minimalist approach and has abolished the rule against perpetuities.126 However, this does not mean that property can simply be tied up in perpetuity. Amendments to the Law of Property Act 1936 (SA) were passed that state that if an interest has not vested within 80 years from the date of disposition of the property, an application can be made requesting that the court exercise its discretion to vary the disposition so that the interest vests immediately.127 Under the South Australian legislation, there is no need to wait until 80 years have elapsed before such an application is made. Further, any exercise of discretion is to have regard to the spirit of the original disposition.128 Pursuant to s 62(2) of the Law of Property Act, the court may bring forward the date of vesting of interests that clearly would vest beyond the 80-year period, or would be likely to vest beyond it. The practical effect of these reforms is to make valid many more dispositions than would the common law, which adopted what might be described as a vigilant approach to the perpetuities question.129 10.63 Since much case law reflects the difficulty practitioners have had in drafting wills130 and transfers that do not fall foul of the rule against perpetuities, perhaps it could be said that the South Australian approach has

the benefit of simplifying the law and that would be advantageous for all concerned. However, law reform should not be about mere simplification. Any simplification would also need to reflect appropriate policy considerations. Hence, only if New South Wales were keen to support a policy that inclined towards validating dispositions rather than striking them down, would abolition of the rule be an attractive alternative.131 Perhaps one reason to support the early vesting of dispositions is that today’s society is less accommodating of the view that parents and grandparents have an ongoing right to control the lives of their children and grandchildren. Given the changing nature of families and, in particular, the perceived trend towards the democratisation of the family through feminism and other forces, it is perhaps appropriate to support reform that reduces the ability to restrict the alienation [page 522] of property. Such restrictions have historically often operated along with contingencies restraining and controlling the lives of others, and, as a consequence, have caused relevant dispositions to vest a long time into the future and often only after certain conduct has been fulfilled.132 In thinking about the issue of reform, the changing nature of the family may well have implications for how we determine an appropriate legal solution. Further, the trend towards the embracing of sustainability principles in relation to resource management may also indirectly influence how we approach the rule against perpetuities in regard to dispositions of land. If, for example, land is to be used sustainably, perhaps it is important to reinforce the principle of sustainability through a legal system that acknowledges human beings’ temporary stewardship of land above and beyond a rigid, predetermined course of ownership commonly tied to particular behaviours. The latter method may be less likely to support the adaptive management of land as a resource because it is not particularly amenable to change and flexibility. Running contrary to the view that restrictions on alienation should be reduced or abolished is the view that one should be able to do with one’s property what one likes. Such a view reflects a laissez-faire approach and supports the proposition that present ownership also gives rise to extensive

rights in the future. Accordingly, if one has presently accumulated property, one should be able to determine what happens to that property for a long time into the future. In recent years, Australian scholarship has been fairly inactive on the question of perpetuities generally;133 in particular, on the question of whether the rule against perpetuities should remain at all. Perhaps it is time to revisit the question of whether the present rule remains relevant today. It has been described as ‘an absurd anachronism’,134 and in its common law form it was criticised for being: … abstruse and misunderstood by a substantial percentage of those who advise the public, so unrealistic that its ‘conclusive presumptions’ are laughable nonsense to any sane man and so capricious that it strikes down in the name of public order gifts which offer no offence except that they are couched in the wrong words [and] so misapplied that it sometimes directly defeats the end it was designed to further.135

Whether the present mix of statute and the common law relied on in New South Wales is regarded as any more efficient and effective invites attention. [page 523] If retention of the rule were favoured, the following may be one further question: Is an 80-year perpetuity period the most appropriate? Although proponents of free alienation think this period is too long, the English Law Commission recommended an even longer period in its 1998 report: 125 years.136 Meanwhile, the 2014 Northern Territory Law Reform Committee: Report on Perpetuities recommended a 150-year perpetuity period given increased life expectancies.137 On the question of whether a better statutory form of the rule may be devised, perhaps guidance may be found in United States jurisprudence and scholarship. That jurisdiction has demonstrated legislative enthusiasm and an academic appetite for the subject of perpetuities. In fact, in about one third of American states the common law rule of perpetuities has been largely abolished and partially replaced by the Uniform Statutory Rule Against Perpetuities (USRAP), which operates under a version of the ‘wait and see’ rule. The sudden transformation of the law in this area seems to have been

provoked by the flow-on effects of the Generation Skipping Transfer Tax (GSTT).138 Perhaps a New South Wales Law Reform Commission reference on the rule may be helpful in ascertaining whether (a) the law still has relevance, and (b) the rule could be simplified further and yet still serve useful policy and legal objectives.

Section 4(3) of the Perpetuities Act 10.64 However, before such a serious overhaul as abolition of the rule against perpetuities is undertaken, it may be prudent to introduce and examine the impact of some more minor reforms designed to clarify the present position in relation to the operation of the Perpetuities Act. For example, the issue of how s 4(3) of the Act is to apply needs to be clarified. As noted at 10.41 and 10.53, this section concerns wills that are executed before the appointed day, that is, the commencement date of the Perpetuities Act. Under the present provision, a will can be tested for validity at the time of execution according to the common law relevant at the time. If the will fails those requirements, the Perpetuities Act can then be applied. However, an alternative approach is available, and its application could yield very different outcomes. For example, it is possible to apply the provisions of the Perpetuities Act first; if this results in a void disposition, the disposition may be able to be saved under the common law. If it does not fall foul of the common law, it will be saved.139 Further, in requiring consideration of the date of execution of the disposition, which is obviously earlier than the date of the testator’s death, the result well might be that the [page 524] disposition is found to be too remote. By contrast, it is possible that if the relevant date were the testator’s death, the disposition might not be found to be too remote.

Amendments which deal with the present level of diversity of outcomes arising from the application of s 4(3) would appear to be necessary.

‘Wait and see’ rule 10.65 If the favoured approach is to retain the statutory rule against perpetuities, perhaps further consideration needs to be directed towards the effectiveness of the ‘wait and see’ rule, which presently forms part of the statutory approach to the rule against perpetuities. Can the ‘wait and see’ rule be reformed to accommodate social and scientific change better? The ‘wait and see’ rule overcomes difficulties associated with the ‘initial certainty rule’ (ie, the rule applied at common law requiring that validity be tested at the outset). However, the ‘wait and see’ rule has its own drawbacks nevertheless. One such drawback is the potential delay that is inherent in the rule. Clearly, waiting involves delay and it has been observed that the delay may be considerable.140 Indeed, a South Australian Law Reform Committee report observed that the ‘wait and see’ approach merely ‘puts off the evil day’.141 Further, with advances in scientific and medical knowledge, the waiting period may be very long. For example, it is now possible for sperm and ova to be stored well into the future and for women to be artificially inseminated well into their later years. That being the case, the ‘fertile centenarian’ may present challenges for the effective application of the ‘wait and see’ rule.142 The waiting period, for example, may be extended for the full length of the perpetuity period. In considering the effects of the ‘wait and see’ rule, the Irish Law Reform Commission observed: [I]t is by no means a flawless method of reform. To begin with it provides only limited relief. Where vesting occurs outside the perpetuity period, the “wait and see” principle is useless, and legatees’ interests continue to be disappointed. Secondly, the “wait and see” rule does not affect the length of the perpetuity period. … Thirdly, the introduction of a “wait and see” principle brings with it new problems of its own. Throughout the perpetuity period the validity of the gift remains mired in uncertainty, as does the identity of the proper recipient of any intermediate income generated by the subject matter of the gift.143

It would be beneficial for New South Wales to investigate ways in which these weaknesses could be overcome.

1.

F Pollock and F Maitland, The History of English Law, 2nd ed, Cambridge University Press, 1924, Vol 2, pp 18–19.

2.

See A W B Simpson, ‘Introduction’ to W Blackstone, Commentary on the Laws of England, Facsimile ed, Chicago and London, 1979, Vol 2, pp x–xi; A W B Simpson, History of the Land Law, 2nd ed, Clarendon Press, Oxford, 1986, pp 126–7. Consider the Statute of De Donis Conditionalibus 1285, the recovery and the fine. Note that, under Roman law, a fideicommissum (a form of trust) was used to extend settlements. However, Justinian ultimately decreed that settlements could not extend beyond four generations with the effect that land was somewhat freed from the tentacles of the settlor. Much European law adopted the Justinian approach. See J K B M Nicholas, An Introduction to Roman Law, Clarendon Law Series, Clarendon Press, Oxford, 1962, pp 268–9; D M Walker, The Oxford Companion to Law, Clarendon Press, Oxford, 1980, pp 468–9.

3.

For further discussion of this equivocation, see J H C Morris and W Barton Leach, The Rule Against Perpetuities, 2nd ed, Stevens, London, 1962, p 3.

4.

Acts such as the Succession Act 2006 (NSW) preserve reliance on the rule against perpetuities; eg, see s 41 of the Succession Act.

5.

Today, there is some relaxation of this rule and some partial restraints have been permitted. See Wollondilly Shire Council v Picton Power Lines Pty Ltd (1994) 33 NSWLR 551; Hall v Busst (1960) 104 CLR 206. See also P Butt, ‘Restraints on Alienation: Tenants in Common’ (1995) 69 ALJ 683.

6.

See the Conveyancing and Law of Property Act 1898 (NSW), eg, ss 37, 77.

7.

The statute permitted the creation of an estate that was, to all intents and purposes, inalienable until the death of the most distant descendant of the original tenant in tail.

8.

The fee tail estate is discussed in Chapter 3.

9.

Butt expresses this nicely when he says ‘[f]reedom of alienation was desirable to enable acquisition, but prohibition on alienation was desirable to prevent dissipation’: P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, p 157.

10.

The rule against perpetuities was, according to Holdsworth, first formulated in Perrot’s Case (1594) Moo KB 368; 72 ER 634: W Holdsworth, A History of English Law, 2nd ed, Methuen and Co, Sweet & Maxwell, London, 1937, Vol 7, p 193. By the time Whitby v Mitchell (1890) 44 Ch D 85 (CA) was decided, a clear and unequivocal expression of the rule was available to be taken up in that case.

11.

Whitby v Mitchell (1890) 44 Ch D 85 (CA). See Morris and Barton Leach, The Rule Against Perpetuities, note 3 above, p 4. Note that ‘issue’ means offspring or progeny.

12.

Eg, ‘To A for life, remainder to A’s as yet unborn second daughter, remainder to the children of that daughter and their heirs’ was void after application of the rule in Whitby v Mitchell (1890) 44 Ch D 85 (CA).

13.

Section 23A(1) of the Conveyancing Act states: (1) The rule of law prohibiting the limitation after a life interest to an unborn person of an interest in land to the unborn child or other issue of an unborn person is hereby abolished, but without prejudice to any other rule relating to perpetuities.

14.

Duke of Norfolk’s Case (1682) 3 Ch Cas 1; 22 ER 931. The rule was recast in Cadell v Palmer (1833) 1 Cl & Fin 372; 6 ER 956. Note that, except for having the same general objective of preventing

long-term controls on alienability, the modern rule of perpetuities (per the Duke of Norfolk’s Case) has little in common with the rule in Whitby v Mitchell (1890) 44 Ch D 85 (CA). Note also that the modern law of perpetuities developed in response to concerns about the Statute of Uses 1535 and the Statute of Wills 1540 having created a new type of interest, known as an executory interest, which, as a result of the decision in Pells v Brown (1620) Cro Jac 590, was rendered indestructible. The rule against perpetuities emerged as a method to circumvent a string of executory interests tying up land alienation in perpetuity. 15.

Here, ‘tied up’ means that the settlor or testator controlled the vesting of the interest.

16.

‘A life in being’ refers to a life that is in existence when the interest is created. It also needs to be a human life and one that is linked to the interest.

17.

For a discussion of the rationale for the rule, see D E Allan, ‘The Rule Against Perpetuities Restated’ (1963) 6 UWALR 27 at 30–3.

18.

Butt, Land Law, note 9 above, p 176. For an example, see Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1486 where, in deciding on the proper construction of a trust deed (and an error in the relevant trust deed), the court needed to consider the pre-Perpetuities Act position.

19.

Modified version of the formulation of J C Gray, The Rule Against Perpetuities, 4th ed, Little, Brown & Co, Boston, 1942, p 201.

20.

Gray, The Rule Against Perpetuities, note 19 above, p 201. In Morris and Barton Leach, The Rule Against Perpetuities, note 3 above, p 51, the authors frame the rule in the following manner: ‘No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest’.

21.

A similar chart appears in L McCrimmon, ‘Understanding the Rule Against Perpetuities: Adopting a Five Step Approach to a Perpetuities Problem’ (1997) 5 APLJ 130.

22.

Purefoy v Rogers (1671) 2 Wms Saund 380; 85 ER 1181.

23.

See C Sappideen and P Butt, The Perpetuities Act 1984, Law Book Co, 1986, p 7; Re Frost (1889) 43 Ch D 246; Re Ashforth [1905] 1 Ch 535; Whitby v Von Luedecke [1906] 1 Ch 783; In the Will and Estate of Malin [1905] VLR 270.

24.

C J Rossiter, Halsbury’s Laws of Australia, LexisNexis, Australia, Vol 19, 310 — Perpetuities and Accumulations, [310-85].

25.

Monds v Stackhouse (1948) 77 CLR 232; Carroll v Perpetual Trustee Co Ltd (1916) 22 CLR 423; Evans v Walker (1876) 3 Ch D 211; Abbiss v Burney (1881) 17 Ch D 211.

26.

Reversions are always vested. Remainders may be vested or contingent, depending on the circumstances.

27.

A prior particular estate is an earlier estate less than a fee simple, such as a life estate.

28.

An interest vests in interest when the contingency is satisfied.

29.

Clobery v Lampen (1683) 2 Free 24; 2 Ch Cas 155; Farmer v Francis (1824) 2 Bing 151; (1826) 2 S & St 505; Chaffers v Abell (1839) 3 Jur 577; Bartholomew’s Will (1849) 1 Mac & G 354; Williams v Clark (1851) 4 De G & Sm 472; Shrimpton v Shrimpton (1862) 31 Beav 425; Maher v Maher (1877) 1 LR Ir 22.

30.

Hanson v Graham (1801) 6 Ves 239; Lane v Goudge (1803) 9 Ves 225; Hart’s Trust (1858) 3 De G & J 195; Hardcastle v Hardcastle (1862) 1 H & M 405; Scotney v Lomer (1886) 31 Ch D 380 (CA); Re

Wrey (1885) 30 Ch D 507. 31.

Jones v Mackilwain (1826) 1 Russ 220; Re Hart’s Trusts (1858) 3 De G & J 195; Boulton v Pilcher (1861) 29 Beav 633; Re Bunn (1880) 16 Ch D 47.

32.

Re Hume [1912] 1 Ch 693; Re Blackwell [1926] Ch 223 (CA); Wilson v Knox (1884) 13 LR Ir 349; Russell v Russell [1903] 1 IR 168; Barrett v Barrett (1918) 18 SR(NSW) 637; Benjamin [1926] VLR 378; Zahl [1931] St R Qd 1; Re Harding [1956] NZLR 482.

33.

This principle is known as ‘the rule in Phipps v Acker’, so named because of Phipps v Acker (1842) 9 Cl & F 583; 8 ER 539. It does not apply if the attainment of the specified age is the method by which beneficiaries are to be identified. A gift ‘To my grandson, J, at 35 years, but if he does not attain 35 years, then to my niece, L’ would give J a vested interest subject to divesting on his death under 35 years. As the identity of J is not determined by the attainment of age (we know who J is), the rule in Phipps v Acker would apply.

34.

Note that, under s 4(3) of the Perpetuities Act, there is an exception to this position.

35.

These terms are discussed later at 10.26 and 10.43.

36.

Except in rare circumstance, such as in regard to alternative contingencies. See further, on the ‘wait and see’ rule, 10.44.

37.

Perpetuities Act 1984 (NSW) s 9(4).

38.

I J Hardingham, M Neave and H Ford, Wills and Intestacy, 2nd ed, Law Book Co, 1989, pp 359– 61. See also the examples of both per stirpes and per capita distributions provided by the same authors. To explain, assume that Mary’s will states that she leaves Blackacre to her son Lee-Nam and her daughter My-Linh jointly, but that, in the event of her son or daughter pre-deceasing her, the heirs of the pre-deceased beneficiary are to take per stirpes. If Lee-Nam pre-deceases Mary, MyLinh will still receive her half-share but Lee-Nam’s half-share will be taken in equal shares by his children. If, however, Mary’s will stipulated that the property be divided per capita (rather than per stirpes) on the basis of the same facts, My-Linh and Lee-Nam’s children will each take an equal share. Hence, if Lee-Nam had two children, each party (ie, My-Linh and the two children) will take a one-third share each of Blackacre. Note that, on these facts, if the will is silent as to the method of distribution, s 38 of the Succession Act 2006 (NSW) will apply.

39.

See J H C Morris, ‘The Rule Against Perpetuities and the Rule in Andrews v Partington’ (1954) 70 LQR 61; Andrews v Partington (1791) 3 Bro CC 401; 29 ER 610.

40.

For a recent case that discusses whether a class of beneficiaries has been closed, see Re Estate Late Chow Cho-Poon; Application for Judicial Advice [2013] NSWSC 844.

41.

Re Manners (dec’d); Public Trustee v Manners [1955] 1 WLR 1096; [1955] 3 All ER 83; Re Chapman [1977] 1 WLR 1163; Re Clifford [1980] 2 WLR 749; Re Wernher’s Settlement Trusts [1961] 1 WLR 136.

42.

Morris and Barton Leach suggest this is so because this must have been what the testator intended: Morris and Barton Leach, The Rule Against Perpetuities, note 3 above, p 113. See Re Manners (dec’d); Public Trustee v Manners [1955] 1 WLR 1096; [1955] 3 All ER 83.

43.

Picken v Matthews (1878) 10 Ch D 264; 39 LT 531; In the Will of Breheney [1915] VLR 242; (1915) 21 ALR 273.

44.

Ayton v Ayton (1787) 1 Cox 327; 29 ER 1188; Baldwin v Rogers (1853) 3 De GM & G 649; 43 ER 255; Re Bleckly; Bleckly v Bleckly [1951] Ch 740 at 749–50 per Evershed MR; at 755 per Jenkins LJ.

45.

See 10.19.

46.

As is explained at 10.26 and 10.43 respectively, the common law perpetuity period ends 21 years after the death of the life (or lives) in being, and the perpetuity period under the Perpetuities Act ends 80 years after the date the instrument creating the interest takes effect. Hence, in this example, assuming Mary’s parents are dead, the lives of Mary’s brothers and sisters are the lives in being and the gift to the nieces could not vest beyond that period plus 21 years. Nor is it the case that the gift could vest 80 years after Tom, the testator, dies. Hence, the gift is valid.

47.

See Butt, Land Law, note 9 above, p 194, for an example of where the class-closing rules would have saved a gift at common law, but do not save the gift under the Perpetuities Act.

48.

See Figure 10.1 in 10.9, above. Lives in being are discussed at 10.27. Twenty-one years was the age of majority and an arbitrary choice for the additional number of years forming part of the perpetuity period.

49.

Abbiss v Burney (1881) 17 Ch D 211; Mervin [1891] 3 Ch 197 at 204; Vanderplank v King (1843) 3 Hare 1 at 17; 67 ER 273 at 279.

50.

Robinson v Hardcastle (1788) 2 TR 241; 100 ER 131; Routledge v Dorrill (1794) 2 Ves Jun 357; 30 ER 671. For dates of commencement of the perpetuity period in relation to appointments and trusts, see Rossiter, note 24 above, [310–25].

51.

For a more detailed list of these dates, see Rossiter, note 24 above, [310–25].

52.

This is because, for example, the date the will comes into effect is different from the date the deed creating the inter vivos grant comes into effect.

53.

This issue has not yet been decided in relation to cases arising under the Perpetuities Act.

54.

If a child has been conceived but has not yet been born at the end of the perpetuity period, the child may still be included as a beneficiary. See Re Stern [1962] Ch 732 at 737. For the historical development of the inclusion of the gestation period, see Stephens v Stephens (1736) Cas t Talb 228; 25 ER 751; Cadell v Palmer (1833) 1 Cl & Fin 372; 6 ER 956. The position regarding frozen embryos is perhaps a little more problematic. Re Estate of K (1996) Tas R 365 suggests that a frozen embryo if later born alive may qualify as a life in being. Although it found a child conceived but not yet born at the end of the perpetuity period may also qualify as a beneficiary, by contrast Napper v Miller (2003) 11 BPR 21,175 held that a will referring to grandchildren ‘who survive me’ did not include grandchildren who were born after the testator’s death and by virtue of frozen embryos created before the testator’s death. It found surviving implies outliving. See J Greenfield, ‘Dad Was Born a Thousand Years Ago? An Examination of Post-Mortem Conception and Inheritance, with a Focus on the Rule Against Perpetuities’ (2007) 8 Minn JL Sc & Tech 277.

55.

Re Moore [1901] 1 Ch 936.

56.

Re Villar [1929] 1 Ch 243 (CA). Re Leverhulme [1943] 2 All ER 274 followed the decision in Re Villar, but the court issued a firm warning that it would not, in the future, be so willing to sustain such a large number of lives. In South Eastern Sydney Area Health Service v Wallace (2003) 59 NSWLR 259 at 265, Burchett AJ proceeded on the basis that a ‘King George VI’ clause was valid. In that case, the testator died in 1970.

57.

See L McCrimmon, ‘Gametes, Embryos and the Life in Being: The Impact of Reproductive Technology on the Rule Against Perpetuities’ (2000) 34 Real Property, Probate and Trust Journal 697.

58.

Re Kelly [1932] IR 255.

59.

Re Kelly [1932] IR 255 at 260–1.

60.

See B Edgeworth, C Rossiter, P O’Connor and A Godwin, Sackville and Neave Australian Property

Law, 10th ed, LexisNexis Butterworths, Australia, 2016, p 670, Example 10. 61.

See Tidex v Trustees Executors and Agency Co Ltd [1971] 2 NSWLR 453.

62.

Re Kelly [1932] IR 255.

63.

Jee v Audley (1787) 1 Cox Eq Cas 324; 29 ER 1186. For a contrary view, see A W B Simpson, Leading Cases in the Common Law, Clarendon, Oxford, 1995, pp 76–99.

64.

In Morris and Barton Leach, The Rule Against Perpetuities, note 3 above, p 79, the authors suggest that had the term ‘daughters’ been construed as meaning the daughters of Elizabeth Jee at the time of the testator’s death, the gift would have been saved.

65.

Re Gaite’s Will Trusts [1949] 1 All ER 459; (1949) 65 TLR 194.

66.

Harris v King (1936) 56 CLR 177.

67.

Harris v King (1936) 56 CLR 177 at 184.

68.

Re Wood; Tullett v Colville [1894] 3 Ch 381 (CA).

69.

See Morris and Barton Leach, The Rule Against Perpetuities, note 3 above, p 181.

70.

Cambridge v Rous (1858) 25 Beav 409; 53 ER 693 cited in South Eastern Sydney Area Health Service v Wallace (2003) 59 NSWLR 259 at 269.

71.

Morris and Barton Leach, The Rule Against Perpetuities, note 3 above, p 181.

72.

Curryer’s Will Trusts [1938] Ch 952.

73.

See 10.31.

74.

For other cases dealing with this issue, see Cambridge v Rous (1858) 25 Beav 409; 53 ER 693; Hancock v Watson [1902] AC 14.

75.

Butt points out that this rule was so well accepted it was assumed: Butt, Land Law, note 9 above, p 200, fn 127. However, see also Garland v Brown (1864) 10 LT 292 at 294.

76.

Proctor v Bishop of Bath and Wells (1794) 2 Hy Bl 358; 126 ER 594.

77.

Re Canning’s Will Trusts [1936] Ch 309; Re Coleman [1936] Ch 528; Macpherson v Maund (1937) 58 CLR 341; 11 ALJ 346.

78.

This section was in operation between 1920 and 1984, but was repealed by s 19 and Sch 1 of the Perpetuities Act. See Permanent Trustee Co of NSW v Richardson (1948) 48 SR (NSW) 313 at 318.

79.

Perpetuities Act 1984 (NSW) s 20(2).

80.

See Perpetuities Act 1984 (NSW) s 4(3).

81.

This point is made by Butt, Land Law, note 9 above, p 184.

82.

The class-closing rules are discussed at 10.18.

83.

Re Essex County Roman Catholic Separate School Board and Antaya (1977) 80 DLR (3d) 405 at 408.

84.

For a detailed discussion of determinable interests and conditions subsequent, see 3.80–3.89.

85.

See the English case of Re the Trustees of Hollis’ Hospital and Hague’s Contract [1899] 2 Ch 540 at 544–5; followed in In the Will of Brett [1947] VLR 483 at 488 per Herring CJ.

86.

These questions should be read in conjunction with Figure 10.3 at 10.59 below..

87.

See earlier discussion of ‘vested or contingent’ at 10.12–10.14.

88.

An interest is vested in interest if it is presently ‘owned’, but the ‘owner’ must wait for the

determination of a prior interest or estate before he or she is entitled to take possession. When the ‘owner’ is entitled to possession of the interest, and there is no preceding interest or estate preventing the ‘owner’ from taking possession, the interest is said to have vested in both interest and possession. In the case of the rule against perpetuities, we are concerned with whether the interest has vested in interest not possession. 89.

Perpetuities Act 1984 (NSW) ss 7, 8.

90.

This includes a trustee’s powers to distribute capital or income under a discretionary trust.

91.

See Sappideen and Butt, The Perpetuities Act 1984, note 23 above, p 28, for a discussion and examples of the different outcomes.

92.

If the position were to be made consistent with the common law position, it would be possible to add a gestation period to the 80-year statutory period.

93.

R H Maudsley, The Modern Law of Perpetuities, Butterworths, London, 1979, p 82.

94.

Eg, ‘To A 90 years from the date this will comes into effect’.

95.

Eg, ‘To A 50 years from the date this will comes into effect’.

96.

As noted, at common law there were rare exceptions when a form of the ‘wait and see’ rule could be applied; eg, where there were alternative contingencies.

97.

Re Estate Late Chow Cho-Poon; Application for Judicial Advice [2013] NSWSC 844 at [81].

98.

See P Sparkes and R Snape, ‘Class Closing Rules and the Wait and See Rule’ [1988] Conv 339.

99.

Nemesis Australia Pty Ltd v Commissioner of Taxation (2005) 225 ALR 576.

100. Property Act 1974 (Qld) s 210. 101. Nemesis Australia Pty Ltd v Commissioner of Taxation (2005) 225 ALR 576 at [41]. 102. Nemesis Australia Pty Ltd v Commissioner of Taxation (2005) 225 ALR 576 at [45]. For another recent application of the ‘wait and see’ rule, see Public Trustee v Bennett [2004] NSWSC 955. 103. C Harpum, S Bridge and M Dixon, Megarry and Wade: The Law of Real Property, 8th ed, Sweet & Maxwell, London, 2012, p 351. 104. This observation is made in Butt, Land Law, note 9 above, p 187. 105. For a more comprehensive analysis of the problems, see C Sappideen, ‘Perpetuities — Age Reduction and the Application of the Eighty-Year Period: Some Unexpected Problems’ (1986) 60 ALJ 471. 106. See Napper v Miller [2002] NSWSC 1122 at [27], where the following is observed: ‘[N]otwithstanding the substantial modification of the law of perpetuities by the Perpetuities Act, which inter alia removed the rule about possibilities and substituted a “wait and see” rule the class closing rules are still in force’. 107. See above in this paragraph. 108. This question is raised by Sappideen and Butt, The Perpetuities Act 1984, note 23 above, pp 98–100. This discussion draws heavily on the material discussed by those authors. 109. Butt, Land Law, note 9 above, p 188. 110. See 3.82–3.83 for discussion of the possibility of reverter. 111. The Attorney-General v Pyle (1738) 1 Atk 435, Re Cooper’s Conveyance Trusts [1956] WLR 1096 and The Cram Foundation v Corbett-Jones [2006] NSWSC 495 (Cram’s case) support the view that the

grantor’s possibility of reverter after a determinable fee is not subject to the rule against perpetuities at common law but a contrary and less appealing position was taken in Hopper v Liverpool Corp (1944) 88 Sol J 213. Hopper’s case has been widely criticised, including in Cram’s case. Cram’s case was followed in Freemasons Hospital v Attorney General (Vic) [2010] VSC 273. 112. See Perpetuities Act 1984 (NSW) s 14(2). 113. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 103 above, p 382, where the term ‘remoteness of control’ is used. 114. Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 103 above, p 382, citing Thellusson v Woodford (1799) 4 Ves 227 at 317, 318, 338 and 339; 31 ER 117; (1805) 11 Ves 112 at 146–7. 115. This Act is sometimes called ‘the Thellusson Act’. See Harpum, Bridge and Dixon, Megarry and Wade: The Law of Real Property, note 103, p 382. 116. As noted previously, s 7 of the Perpetuities Act sets the perpetuity period. 117. See Perpetuities Act 1984 (NSW) s 8. The rule against perpetuities also interacts to varying degrees with powers of appointment, the administrative powers of a trustee, the remuneration of a trustee and options to purchase land, among other things; however, these issues are beyond the scope of this work. 118. An example of general power contained in a settlement would be ‘To Fred for life, remainder to such person(s) as Fred may appoint’. 119. An example of a special power contained in a settlement would be ‘To Fred for life, remainder to such of Fred’s children as Fred may appoint’. 120. See Sappideen and Butt, The Perpetuities Act 1984, note 23 above, pp 37–42. 121. Note that s 1346 of the Corporations Act 2001 (Cth) exempts trust funds established for the benefit of employees of corporations. 122. For another flow chart setting out the steps to follow when addressing a perpetuities problem, see P Tan, E Webb and D Wright, Land Law, 2nd ed, LexisNexis Butterworths, Sydney, 2002, p 120. 123. The authors would like to acknowledge the work of W J Chappenden, formerly Lecturer in Law at the University of Sydney, for his assistance in originally formulating these examples and the accompanying solution strategies, which they have modified and updated. 124. For further worked examples, see McCrimmon, note 21 above. 125. To various extents the Northern Territory, Tasmania, Victoria and Western Australia offer such choices. 126. Law of Property Act 1936 (SA) s 61. 127. Law of Property Act 1936 (SA) s 62(1), (2). 128. Law of Property Act 1936 (SA) s 62(4). 129. Moore, Grattan and Griggs seem to share this view when they refer to the common law ‘remorselessly striking down gifts or bequests’: A Moore, S Grattan and L Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, 6th ed, Thomson Reuters, 2016, p 545. 130. This is demonstrated in Public Trustee v Bennett [2004] NSWSC 955 at [10], where Gzell J says of the will in question: ‘The will appears to have been drawn by a solicitor but it is badly drawn and should, in my view, be treated similarly to a will drawn by a lay person’.

131. A possible alternative approach is the introduction of a ‘cy-près’-type rule because such a rule would be more likely to accord with the testator’s intention. Cy-près schemes operate in relation to charitable trusts and involve the variation of the creator’s intended charitable purpose, so as to save the trust. They operate only where there is a general charitable purpose that is impossible to perform. It is worth noting that some jurisdictions do not have any rule against perpetuities. For example, in Scotland there has never been such a rule, and in some other jurisdictions, including Ireland and some American states, the rule has been abolished. However, there are many other international jurisdictions that still have such a rule. See discussion in Northern Territory Law Reform Committee, Northern Territory Law Reform Committee: Report on Perpetuities, Report No 40, Department of Attorney-General and Justice (NT), July 2014, p 12. 132. See A Giddens, Transformation of Intimacy, Blackwell, Oxford, 1995, particularly pp 53–65; C Smart and B Neale, Family Fragments, Blackwell, Oxford, 1999; E Silva and C Smart (eds), The New Family?, Sage Publications, London, 1999. 133. Going against the trend are J Glover, ‘The Rule Against Perpetuities and Its Application to Unit and Discretionary Trusts’ (2007) 14 APLJ 255; J Glover and P von Nessen, ‘Unintended Consequences: International Accounting Standards, Public Unit Trusts and the Rule Against Perpetuities’ (2008) 80 ALJ 675; McCrimmon, note 21 above, for example. 134. Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 129 above, p 534. 135. W Barton Leach, ‘Perpetuities Reform: London Proposes, Perth Disposes’ (1965) UWALR at 12; quoted in Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 129 above, p 534. 136. Law Commission, The Rules Against Perpetuities and Excessive Accumulations, Report No 251, London, 1998, [8.13]. 137. Northern Territory Law Reform Committee, Northern Territory Law Reform Committee: Report on Perpetuities, note 131 above, p 27. 138. See S Foster, ‘Fifty-One Flowers: Current Perpetuities Law in the United States’ (2008) 22 Probate and Property 3; S Shepard, ‘Which the Deader Hand — A Counter to the American Law Institute’s Proposed Revival of Dying Perpetuities Rules’ (2012) 86 Tul L Rev 559. 139. See Sappideen and Butt, The Perpetuities Act 1984, note 23 above, p 28, for examples of how different outcomes could be arrived at. 140. Northern Territory Law Reform Committee, Northern Territory Law Reform Committee: Report on Perpetuities, note 131 above, p 12. 141. Law Reform Committee of South Australia, Seventy-Third Report of the Law Reform Committee of South Australia to the Attorney-General — Relating to the Reform of the Law of Perpetuities, 1984, p 7. 142. Northern Territory Law Reform Committee, Northern Territory Law Reform Committee: Report on Perpetuities, note 131 above, p 12. 143. Irish Law Reform Commission Report, 2000, p 21 as cited in Northern Territory Law Reform Committee, Northern Territory Law Reform Committee: Report on Perpetuities, note 131 above, p 12.

[page 525]

Chapter 11

Leases and Tenancies Introduction 11.1 As the High Court made clear in Wik Peoples v Queensland,1 the law of leases in Australia has always diverged from its English progenitor. A majority of the court emphasised the extent to which local law was moulded to reflect geographical conditions unknown in the mother country. The divergence of laws was particularly evident in the area of pastoral leases, best seen, as Kirby J concluded, ‘[a]s a result of the different patterns of availability and utilisation of land in England’.2 From the beginning of European settlement, the fledgling colonies introduced statutory regimes which largely displaced the common law in rural areas. By contrast, in urban settings and more closely settled areas, the common law continued to apply as part of the law the settlers brought to the colony. The result was a patchwork quilt of leasehold regimes. This framework has been progressively complicated by statutory reform in relation to certain agricultural holdings, protected tenancies, residential tenancies and retail tenancies. In light of these changes, the common law should be seen as now occupying a less central role in the law of landlord and tenant than it did in the early days of settlement. Indeed, its primary area of exclusive operation today is in regulating the special, though very important, category of non-retail commercial leases. Of course, its influence is much greater than this: common law concepts flow through each of the supervening legislative schemes. Accordingly, this chapter will focus first on the common law, with separate treatment for the more important statutory regimes.

Leases at Common Law — Terminology 11.2 A lease is an interest in land granted by one person, the ‘landlord’ or ‘lessor’, to another, the ‘tenant’ or ‘lessee’, which confers a right to exclusive possession of land for a fixed period of certain duration. This interest is also known by the older expression ‘demise’. A lease is usually created by a document such as a deed, but may also be created [page 526] informally.3 As an interest in land, the lease is inherently capable of being dealt with in its own right.4 The same principle applies to the interest which the landlord retains, the ‘reversion’. Thus, each interest may be transferred outright to third parties. In neither case do the former owners, tenant or landlord, retain property rights. These transactions are known as ‘assignments’ of the lease and reversion respectively. The transferees are referred to as the ‘assignees’. The tenant may also carve a lease out of his or her lease to create a separate interest. This will be effected where the tenant grants a right of exclusive possession to the premises for a period less than he or she has, or where the tenant grants a right of exclusive possession to part only of the premises. In these cases, the new tenant is known as a ‘sublessee’ or ‘subtenant’, and his or her interest a ‘sublease’. The former tenant can now be variously described as the ‘head-tenant’ or ‘headlessee’ with respect to the original lease (the ‘headlease’), and the ‘sublessor’, with respect to the sublease. The subtenant has the same rights to assign and sublet, and so on, theoretically indefinitely. This fragmentation of interests is represented diagrammatically in Figure 11.1.

Figure 11.1:

Leases — fragmentation of interests

In this hypothetical example, the original lease granted was for a fixed term of 25 years. The tenant later assigned her interest to assignee A. A then became L’s tenant, having stepped into T’s shoes. A later created a sublease of 10 years in favour of a subtenant, ST. A is now both a landlord (in respect of ST) and a tenant (in respect of L). When ST assigns his sublease to an assignee, AST, AST becomes A’s new tenant.

Creation of Leases 11.3 The requirements necessary to create a valid lease may be divided into two basic categories: substantive and formal.

Substantive requirements Certainty of duration 11.4 For a lease to be valid, the maximum duration of the lease must be certain. This requirement must be met at the commencement of the lease. This means that both the [page 527] commencement date5 and the maximum duration of the term must be, or be capable of being, rendered certain at the time the lease takes effect.6 Accordingly, leases expressed to last ‘for the duration of the War’,7 ‘until the completion of new premises owned by the lessor M which are being built’,8

until ‘the end of the peanut crop’9 or ‘until the land is required by the council’10 are void.11 By contrast, if the duration of the lease is potentially uncertain, but its maximum duration is certain, such as a lease ‘for 21 years determinable if the tenant ceases to live on the premises’, it is valid.12

Exclusive possession 11.5 A further substantive requirement for the validity of a lease is that the tenant must be given the right to exclusive possession of the premises. This test requires an examination of the rights the parties have created, rather than the label they have used to describe the relationship. Thus, in Radaich v Smith,13 where parties entered into an agreement to ‘license’ premises and were described as ‘licensor’ and ‘licensee’, they were held to be landlord and tenant because the document (which conferred on the occupant rights to control who could come on to the premises, as well as imposing a duty to deliver up the premises at the end of the term, pay rent and be responsible for the repair of locks and windows) could be said to have given the tenant exclusive possession of the premises and was, therefore, a lease. A useful case to contrast with Radaich v Smith is KJRR Pty Ltd v Commissioner of State Revenue (Vic).14 In this case, the parties to a franchise agreement also entered into a licence agreement whereby the franchisor granted the franchisee a licence to conduct a retail business from premises leased to the franchisor. The licence provided that the franchisee did not have exclusive possession of the premises, and that the franchisor was entitled to possess and use them except to the extent that this would prevent the franchisee from enjoying its rights under the agreement. The court held that the licence agreement created a licence and not a sublease because it did not create in the franchisee a right of exclusive possession of the premises.15 [page 528] The court rejected the argument that the licence agreement did in fact confer a right of exclusive possession on the franchisee because the provision to the contrary did not reflect the true agreement between the parties (and

was thus a sham). The court also rejected the argument that, if the licence agreement did not confer exclusive possession on the franchisee, this nonconferral was impeachable because the transaction had been artificially structured so as to avoid a statutory provision that applied to leases (and was thus a pretence). The court held that, in denying the franchisee exclusive possession of the premises, the licence agreement was consistent with the rights of inspection and investigation of the franchisee’s business that the franchisor had under the franchise agreement. Accordingly, in the absence of any clear evidence to the contrary, it could not be said that the real intention of the parties was to confer a right of exclusive possession on the franchisee. Similarly, the refusal to confer exclusive possession on the franchisee could not be seen as structuring the transaction in an artificial manner to avoid the operation of provisions of the stamp duty legislation that applied to leases.16 In Street v Mountford17 and Bruton v London and Quadrant Housing Trust,18 the House of Lords approved and adopted the exclusive possession test as the hallmark of a lease. In Bruton, it was made clear that the intention of the parties that is relevant to the question of whether a lease or a licence has been granted is the intention whether or not the grantee is to have a right to exclusive possession of the premises, and not the intention to make a grant to which the terms ‘lease’ or ‘licence’ can be attached.19 In this case, the parties truly intended that a licence be granted, as the grantor itself held only a licence in respect of the premises, rather than a proprietary interest in them. Nevertheless, because the grant evinced an intention to confer on the grantee a right of exclusive possession of the premises, it was effective, as between those parties, to create a lease.20 The question as to whether exclusive possession has been granted in the instrument is one of construction.21 If the premises form part of the landlord’s house, there will be a presumption that a licence exists.22 [page 529] To the rule that the conferral of the right of exclusive possession on the grantee creates a lease rather than a licence, there appears to be a qualification: a licence rather than a lease may arise in ‘special’ or ‘exceptional’

circumstances.23 Although not seeking to define exhaustively these circumstances, the courts have made clear that exceptional circumstances can be present where the conferral of the right of exclusive possession on the grantee is referable to a relationship between the parties other than lessor and lessee.24 Thus, where close family relationships are concerned, the parties may be considered to have created a licence rather than a lease, even where exclusive possession is granted.25 Also, where there is a special relationship, such as between an employer and employee, a licence rather than a lease may arise if the intention to create the former is present, even if a right of exclusive possession is granted.26 However, in Bruton the fact that: (a) the grantor was a charitable housing trust that performed the important social function of providing residential accommodation to the homeless; and (b) the grantor itself lacked a proprietary interest in the land, did not constitute special or exceptional circumstances so as to deprive the purported grant of a right of exclusive possession of its prima facie character as a lease.27

Formal requirements Old system 11.6 At law As we have seen above,28 the basic rule for the creation of legal interests under old system title is contained in s 23B(1) of the Conveyancing Act 1919 (NSW): no interest can be created or transferred at law unless by a duly executed deed. A lease must, therefore, be created by deed to be valid at law. There is an important exception to this requirement. By s 23D(2) of the Conveyancing Act, a lease may be created at law ‘by parol … at the best rent which can reasonably be obtained without taking a fine taking effect in possession for a term not exceeding three years’.29 A fine is a lump-sum payment, or premium, given for the grant of the lease. ‘Taking effect in possession’ has been interpreted to mean ‘conferring a right to immediate possession’.30 Section 23D(2) includes short-term leases which contain options, where any option, when added to the original term, is three years or less. A lease which may be terminated by notice prior to the end of a fixed [page 530]

term does not come within the meaning of this section if the fixed term exceeds three years.31 As will be seen below, periodic tenancies may also come into existence at law by implication from the manner of payment of rent where no documentary formalities have been concluded.32 11.7 In equity By the doctrine in Walsh v Lonsdale,33 an enforceable agreement to grant a lease creates a lease in equity. For the agreement to be enforceable, the requirements for agreements for interests in land generally (set out in s 54A of the Conveyancing Act) must be met. Thus, there must be a sufficient note or memorandum of the agreement, or sufficient acts of part performance.34 Going into actual possession of premises pursuant to an agreement to grant a lease has been held to constitute a sufficient act of part performance.35 A condition precedent to the existence of the equitable lease is the availability of the grant of an order for specific performance of the agreement. Thus, if the plaintiff has been guilty of conduct that would disentitle him or her from the order, no equitable interest will arise, for example, where an order of specific performance of an agreement of a sublease would involve a breach of the headlease,36 or where the tenant has persistently breached a term of the agreement.37 Where the lessee seeks to have the existence of this form of equitable lease enforced against someone other than the lessor, the lessee must join the lessor as a party to the action so that the specific enforceability of the agreement to lease can be tested.38 By s 23C(1) of the Conveyancing Act, a lease in writing signed by the person entitled to create such an interest, or his or her agent lawfully authorised in writing, will give rise to an equitable lease. A lease may also be created in equity in the absence of formalities by the doctrine of equitable estoppel where a party relies on another’s promise to enter into a landlord– tenant relationship and suffers detriment in consequence of a reliance on the promise.39

Torrens title 11.8

As has already been discussed,40 the basic distinction in interests under

the Torrens system is between registered and unregistered interests. Accordingly, in order to acquire an [page 531] indefeasible lease, the lease must be registered. Section 53 of the Real Property Act 1900 (NSW) requires leases of more than three years duration to be registered. However, by Parkinson v Braham,41 leases of less than three years may be registered. In this case, they will become indefeasible by s 42 of the Real Property Act. Unregistered leases, unlike other interests under the Torrens system, may be either legal or equitable. Thus, because s 23D(2) of the Conveyancing Act applies to Torrens system land, it is possible to have such a legal lease over Torrens title land.42 Equally, an implied lease at common law can arise under the Torrens system.43 By contrast, where s 23D(2) does not apply, a deed of lease of land under the Torrens system will be effective in equity only, as a memorandum of agreement to grant a lease.44 Also, an executed memorandum of lease that remains unregistered will give rise to an equitable lease as a memorandum of agreement to grant a lease.45 In both of these circumstances, because the lessee’s rights arise out of a contract to grant a lease, the lessee must have provided consideration for the grant of the lease, and the contract for the grant must be one for which equity would decree specific performance. Equitable leases under the Torrens system can also arise by estoppel.46

Types of Tenancies at Common Law Fixed-term tenancies 11.9 The fixed-term tenancy, or the tenancy for a term of years, is a tenancy set by the parties to expire at a certain time in the future. This period may be for a number of years or for any shorter determinate period, such as a lease for one day. A lease may even be for discontinuous periods, as long as

they are determinate, such as a lease for one week a year for 80 years.47 A fixed-term tenancy automatically comes to an end when the period expires.

Periodic tenancies 11.10 A periodic tenancy is a tenancy that runs from one period to another (for instance, week to week or month to month) and continues indefinitely unless terminated by either party. It meets the requirement that leases must be of certain maximum duration if seen in this way: each period is a fixed term that contains a superadded condition [page 532] that another term of the same duration will arise unless the lease is terminated. Periodic tenancies arise in two ways: (i) by express agreement; or (ii) by inference, as where there is payment and acceptance of rent. A periodic tenancy that arises by inference is known as an implied periodic tenancy. Implied periodic tenancies are discussed below (at 11.12–11.15). Periodic tenancies by express agreement are subject to the same formal requirements as leases for a term of years. Thus, a weekly periodic tenancy will be effective at law if granted orally and the other conditions in s 23D(2) of the Conveyancing Act 1919 (NSW) are met. A periodic tenancy may have any period, such as daily48 or a period of 364 days.49 11.11 A periodic tenancy can be determined by notice given by either party at any time. In the absence of agreement, the notice must be at least equivalent to the duration of a period, and must expire at the end of a period.50 An exception to this rule is the yearly periodic tenancy. It can be brought to an end by notice equivalent to one-half of a period expiring at the end of a completed year of the tenancy.51 The notice period in respect of all periodic tenancies can be varied by agreement between the parties.52

Implied periodic tenancies 11.12 In certain circumstances, the common law would imply periodic tenancies where formalities were absent entirely or were merely inadequate, as

in the case of an unsigned deed. There are two types of implied periodic tenancies: (i) implied yearly tenancies at common law; and (ii) other implied periodic tenancies. 11.13 Implied yearly tenancies at common law These periodic tenancies could be implied by the payment of an annual rent, but they differed from other implied periodic tenancies because they could also be implied by the payment of periodic rent in other ways. As Jordan CJ stated in Dockrill v Cavanagh,53 the implied yearly tenancy at common law was a clear example of judicial creativity: ‘By a process of judicial legislation, considerable encroachments had been made upon the provisions of the Statute of Frauds’. The reasons for this creativity are obvious enough. Significant hardship could arise for tenants, especially agricultural tenants, where the requisite formalities for the creation of leases were not followed. In these circumstances, by s 1 of the Statute of Frauds 1677 (UK) and its present-day successor in New South Wales, s 23D(1) of the Conveyancing Act, a tenancy at will would be created. This could mean that an agricultural tenant could plant crops and tend them, only to have his or her lease brought to an end at the will or whim of the landlord. Accordingly, the common law courts would deem a yearly periodic tenancy to have been created where evidence was present to suggest that a yearly tenancy, rather than some other periodic tenancy, was intended. It is a question of fact as to whether a yearly tenancy or some other tenancy [page 533] should be implied.54 There are basically four separate fact situations where courts would find sufficient evidence to imply a yearly periodic tenancy: 1.

Where a tenant was let into occupation and no agreement was concluded as to the duration of the term, if rent was paid ‘by reference to a year or an aliquot part of a year’, the tenant would be deemed to hold a yearly periodic tenancy. Rent will be paid ‘by reference to a year’ if there is evidence to suggest that the parties computed the rent for the premises on an annual basis. Thus, a rent of $300 per month as a component of a $3600 yearly rent would imply a yearly periodic tenancy, rather than a

monthly periodic tenancy.55 By contrast, if a tenant took possession and merely paid a rental of $300 a month, a monthly periodic tenancy would arise.56 Also, if the rent was paid in aliquots (ie, in fractions that, when divided into the whole year, left no remainder, such as half-yearly or quarterly), a yearly periodic tenancy would be implied.57 2.

Where the lease was void — for instance, because a deed was defective or the term was of uncertain duration — but rent was paid by reference to a year or an aliquot part of a year, a yearly periodic tenancy would be implied.58

3.

Where a tenant held over at the expiry of a fixed-term lease, and paid rent by reference to a year or an aliquot part of a year, a yearly periodic tenancy would be implied. Thus, where a tenant had paid rent in the previous lease by reference to a sum computed on an annual basis, such as a rent of $5200 a year payable in weekly instalments of $100, an implied yearly periodic tenancy would arise if the tenant continued to pay in exactly the same way.59 Equally, if the rent was changed, but was paid by reference to a year or in aliquots, an implied yearly tenancy would arise.

4.

Where there was an enforceable agreement to grant a tenancy, a yearly periodic tenancy would arise if the tenant took possession and paid rent by reference to a year or an aliquot part of a year.60 There is also weighty authority for the proposition that rent paid by reference to any period in this situation will give rise to a periodic yearly tenancy at common law, for the reason that the intention to grant a term gives the lease a yearly character. In Moore v Dimond,61 the parties entered into an agreement for a lease for five years. The tenant took possession and paid rent weekly in accordance [page 534] with the terms of the agreement. It follows that, in these circumstances, the parties will have two co-existing leases: one equitable (a fixed term), and one legal (implied from the payment of rent). As these leases have

separate lives, owing their existence to different acts of creation, they must also be terminated separately. Thus, a tenant in possession under an equitable lease of Torrens title land, paying rent periodically, could bring the implied legal tenancy to an end by giving the appropriate notice, but that would not affect the equitable lease.62 Where an implied yearly tenancy at common law arises, the courts will imply into such a lease any covenants which are contained in the agreement. Thus, if the agreement originally envisaged that the lease was to last for no longer than two years, the yearly periodic tenancy will automatically expire at the end of that period without the need to give notice.63 11.14 Implied tenancies from year to year at common law are now governed by s 127(1) of the Conveyancing Act, which provides: (1) No tenancy from year to year shall, after the commencement of this Act, be implied by payment of rent; if there is a tenancy, and no agreement as to its duration, then such tenancy shall be deemed to be a tenancy determinable at the will of either of the parties by one month’s notice in writing expiring at any time.

The section has presented problems of interpretation. First, the phrase ‘and no agreement as to its duration’ gives rise to some difficulties. On one reading, it is hard to see it as other than surplusage. An implied lease at common law would never arise where its duration was agreed — it would simply be a fixed-term lease. The courts have resolved this by interpreting the phrase to mean ‘where there is no agreement effective at law as to duration’.64 The effect of this is to make the provision equally applicable to cases where there is an agreement to grant a lease for a specific duration only enforceable in equity as to cases where there is no agreement of any kind. Second, it is not clear from the wording of the section whether it applies to all implied periodic tenancies, or only implied yearly periodic tenancies. In Burnham v Carroll Musgrove Theatres Ltd,65 it was held that s 127 applied only to those leases where no agreement as to duration would have given rise to a year-to-year tenancy at common law. For example, a lease where the payment of rent was made by reference not to a yearly rent, but to a monthly rent, would not be converted to a tenancy at will terminable by one month’s notice. It would become, and remain, an implied monthly tenancy.66 Though described as ‘a tenancy determinable at the will of either of the parties’, a s 127 tenancy

differs from the common law tenancy at will: it may be assigned, and may support a sublease.67 [page 535] 11.15 Other implied periodic tenancies The very same ‘process of judicial legislation’ is evident in relation to other common law implied periodic tenancies.68 These tenancies will be implied from the conduct of the parties, or surrounding circumstances. Thus, if a tenant takes exclusive possession of property and pays rent by reference to a specific period, such as weekly or monthly, a weekly or monthly periodic tenancy will arise.69

Tenancy at will 11.16 A tenancy at will arises where a person is let into occupation as a tenant with the consent of the owner on the basis that either party may determine the tenancy at any time. This type of tenancy may be created expressly,70 or more commonly by implication, as where without the payment of rent on an agreed or periodic basis a tenant holds over at the expiry of a fixed-term lease with the consent of the landlord, or a purchaser is let into occupation prior to settlement.71 The landlord is entitled to compensation for use and occupation if the parties have agreed that rent is payable but the exact amount has not been determined.72 A tenancy at will is unassignable; in McMahon v Docker,73 it was held that a purported assignment will automatically determine the tenancy. A tenancy at will also determines on the death of either party.74 In some exceptional cases, the parties may agree expressly or impliedly that a reasonable notice period be given.75

Tenancy at sufferance 11.17 A tenancy at sufferance arises where a tenant remains on premises after the expiry of a fixed-term lease without either the assent or dissent of the landlord. Like a tenancy at will, it is unassignable. In the normal course of

events, a tenancy at sufferance would last for only a short period of time until either the landlord expressly agrees to a new tenancy (such as a tenancy at will, for a fixed term or whatever it may be), or a new implied tenancy comes into effect from the payment and acceptance of rent,76 or the landlord notifies the tenant that he or she must quit the premises. In this last-mentioned case, the tenant becomes a trespasser, entitling the landlord to mesne profits for any further period of possession. Until that time, the landlord under a tenancy at sufferance is not entitled to rent, but to compensation for ‘use and occupation’ on the basis that the tenant [page 536] remains in breach of an implied covenant to deliver up the premises to the landlord at the termination of the lease.77

Tenancy by estoppel 11.18 A tenancy by estoppel may arise in two situations: first, where there is a want of title in the ‘landlord’; and second, where, despite the absence of formalities, a lease comes into existence by operation of estoppel in equity. Thus, a tenancy by estoppel will arise where the landlord purports to grant a tenancy in respect of premises to which he or she lacks the necessary title because, for example, he or she is an adverse possessor, a tenant at will, or a licensee. As between the parties to the tenancy, it will be binding despite this defect: neither the landlord nor the tenant will be able to deny that a lease exists between them.78 Thus, the landlord will be able to enforce any of the covenants of the lease granted. Likewise, a tenant will be able to sue the landlord for any breaches of the landlord’s covenants. There is one exception to this principle: it cannot be asserted where the tenant is evicted by the exercise of title paramount, such as where the owner repossesses in the case of adverse possession. In this case, the tenant is liable to the owner for mesne profits, and so, for instance, is not obliged to pay rent. Rent already paid can be reclaimed.79 Where there is a tenancy by estoppel successors in title are also

bound, so that those claiming through the original parties to the lease are also estopped.80 A lease will arise by the operation of equitable estoppel where one party promises to grant or take a lease and the promisee relies on that promise to his or her detriment; it will also arise where one party contributes to an assumption by another that a lease will be entered into, and the other, relying on that assumption, acts to his or her detriment. Thus, in Waltons Stores (Interstate) Ltd v Maher,81 a landlord embarked on extensive building work on the assumption, created by the tenant, that a lease would be formally executed. The High Court held that a lease had come into existence on the basis of equitable estoppel, notwithstanding the absence of formalities. Equally, if the owner induces a prospective tenant into believing that a lease will be granted, and the tenant acts to his or her detriment (eg, by surrendering his or her existing lease on the basis that a new lease will be granted), the owner will be estopped from denying the existence of the new lease.82 However, if the tenant has not irretrievably prejudiced his or her position by acting in reliance on the [page 537] landlord’s representation, the landlord may withdraw the representation and the estoppel (and the equitable tenancy) will cease.83

Concurrent leases 11.19 A concurrent lease is a lease of the landlord’s reversionary interest. It has the effect of making the lessee of the reversion the landlord of the original tenant for the term of the concurrent lease.84 If the lease of the reversion is for a duration longer than the original term, the concurrent lessee will have a right to possession of the demised premises at the expiry of the first term. Until that point, the concurrent lessee is entitled to the benefit and subject to the burden of all the covenants in the original lease. It is also possible to have a concurrent lease that is shorter than the original lease; for example, where L grants a lease to T for five years, then immediately to R for three years, R will

be T’s landlord for the three-year period.85 Thereafter, L will become T’s landlord.

Reversionary leases 11.20 A reversionary lease is a lease expressed to come into existence at some time in the future. There is a limit to how far into the future such an interest can be made. By s 120A(3) of the Conveyancing Act, no reversionary lease can be granted if expressed to take effect more than 21 years from the date of the grant.

Covenants in Leases Introduction 11.21 A lease confers sets of rights and obligations on both landlord and tenant. These rights and obligations will usually be detailed by express terms in the lease itself or, in their absence, implied terms. These terms are commonly referred to as ‘covenants’. In general, at common law parties are free to put into the lease such covenants as they wish, with minor restrictions on freedom of contract imposed by statute.86 An express covenant will preclude the operation of an implied covenant relating to the same subject-matter.87 Covenants may be implied by common law, by statute or by necessary implication. These obligations may be further modified by principles of tort law. As express covenants commonly use the language of implied covenants, it will be necessary to look at the extent of the rights and obligations imposed by implied covenants first. [page 538]

Implied covenants At common law 11.22

There are six covenants implied at common law: three that impose

obligations on landlords, and three that impose them on tenants. The three covenants imposing obligations on the landlord are: 1.

to give the tenant quiet enjoyment of his or her lease;

2.

not to derogate from the grant; and

3.

in the case of furnished dwellings, to provide the premises in a state fit for habitation at the commencement of the term. The three covenants imposing obligations on tenants are:

1.

to use the premises in a tenant-like manner;

2.

to yield up the premises at the expiry of the lease; and

3.

in the case of a tenancy of agricultural land, to cultivate the land in a husband-like manner.

11.23 Quiet enjoyment The landlord is under an implied duty at common law to allow the tenant quiet enjoyment of the premises. This duty arises in all leases.88 As Megarry and Wade note, ‘quiet’ does not imply enjoyment in the ‘acoustic’ sense.89 ‘Quiet enjoyment’ means a right to occupy and enjoy the premises without disturbance or interference from the lessor or those for whom he or she is responsible.90 Breach of the covenant requires substantial interference with enjoyment of the premises. This requires material inconvenience, but need not amount to ‘practical frustration’ of the purposes of the lease.91 Acts that have been held to break this covenant are trespasses, such as the removal of the windows and doors of the demised premises;92 cutting off the tenant’s gas and electricity;93 overflow of water from blocked pipes on the landlord’s adjacent property;94 and repeated threats to remove the tenant.95 However, merely writing letters demanding that the tenant vacate is not a breach of covenant.96 In Browne v Flower,97 the building of an external staircase that passed the tenant’s bedroom and so interfered with the tenant’s privacy was held not to constitute a breach of this covenant. This case should be contrasted with J C Berndt Pty Ltd v Walsh,98 where it was held to be a breach of the covenant to erect a [page 539]

hoarding outside the tenant’s jewellery shop for the purposes of structural repairs, causing damage to the tenant’s business. A tenant may be able to get damages for mental distress if it ‘proceed[s] from physical inconvenience caused by the breach’.99 Formerly, there was no breach of the covenant for quiet enjoyment where another tenant of the landlord committed unlawful acts. Thus, where a tenant on adjoining premises committed a nuisance, the landlord was held not liable; only if the landlord had actively participated in the nuisance, and could therefore be held to have committed the unlawful act, would liability ensue.100 This position has now changed, with courts more willing to extend the landlord’s responsibilities. The courts will generally consider the landlord to be liable for breach of the covenant where the landlord in some way authorises the activity by the tenant that is argued to constitute the breach.101 In Aussie Traveller Pty Ltd v Marklea Pty Ltd,102 the court preferred the language of foreseeability asking whether, at the time possession and control was parted with, it was reasonably foreseeable that the tenant was likely to do acts constituting a nuisance.103 In any case, the landlord failed to exercise its express power under a lease to prevent a tenant from using sawmilling machinery in a manner that interfered with another tenant’s retail business. The failure was despite the fact that the landlord was aware at the time of granting the lease that the tenant’s business was likely to interfere with the business of other tenants. In Nordern v Blueport Enterprises Ltd,104 the lawful use of downstairs premises as a brothel, causing disturbance to another tenant and his employees, amounted to a breach of the covenant for quiet enjoyment on the basis that the landlord was under a duty ‘to act decisively in exercise of the powers it had under the lease to remove the taint’. In that case, the landlord had approved the assignment of the premises to an ‘escort agency’, despite being aware of the true nature of the business. The landlord will be liable for those claiming under him or her if their lawful acts cause interference, such as where the proper use of defective drains causes flooding,105 or where the use authorised in the lease of adjoining premises would necessarily cause disturbance to the tenant.106 There was once some doubt as to whether there is a need for some physical interference for this covenant to be breached.107 However, in a number of cases where the tenant’s business custom was reduced by a refurbishment of premises, it has

been held not to be necessary.108 The landlord will not be liable where the disturbance from another tenant results from structural defects in the premises, as in the case where a poorly constructed block of flats with negligible sound insulation between units allowed [page 540] intolerable transmission of noise, even though the noise in question resulted from the ordinary use of premises by neighbours.109 There is no breach of the covenant for quiet enjoyment where the tenant’s enjoyment of the premises is interrupted by the exercise of title paramount. Thus, a landlord who is also a head-tenant will not be liable for a breach of this covenant if he or she grants a sublease longer than his or her own, and the head landlord evicts the tenant when the headlease expires.110 Nor will such a landlord be liable where the head landlord prevents a use authorised in the sublease but prohibited by a restrictive covenant in the headlease.111 The landlord’s liability to one tenant for the acts of another tenant can be distinguished from the situation where questions arise as to the landlord’s liability to neighbours for acts of a tenant. The general rule is that a landlord will not generally be liable to third parties for the acts of a tenant.112 However, a landlord will be liable in nuisance to a neighbour if he or she authorised his or her tenant to commit the nuisance or if a nuisance was certain to result from the purposes for which the property was being let.113 11.24 Non-derogation from the grant The landlord is under an implied obligation not to derogate from his or her grant. A derogation from grant typically arises where the landlord uses retained premises in such a way as to undermine the purpose for which other premises are let.114 In Harmer v Jumbil (Nigeria) Tin Areas Ltd,115 the landlord was held to derogate from his grant where, having granted a lease for the purpose of storing explosives, he granted a lease over adjoining premises for a purpose which jeopardised the tenant’s statutory licence. A landlord will breach this covenant if he or she uses retained premises in a way which blocks the flow of air to the adjacent tenant’s premises, if the tenant requires ventilation for the ordinary conduct of

his or her business.116 A landlord will be similarly liable for removing a lift and obstructing a corridor needed to bring goods to the lessee’s business premises.117 A landlord will also be liable if he or she demolishes buildings on adjacent land and goods are stolen from the tenants because the work has rendered the tenants vulnerable to burglary.118 A landlord will not be in breach of this covenant if he or she did not know at the time of the grant that the demised premises were to be used for a special purpose, and the use of retained premises interfered with this special purpose. Thus, where a lease authorised [page 541] the storage of paper generally, and the tenant stored a special kind of paper, the landlord was not liable for damage caused to such special branches of the business.119 Where the landlord retains control of public areas adjoining the tenant’s premises, any nuisance caused by other tenants will constitute a derogation from grant to aggrieved tenants.120 The boundary between the covenant for quiet enjoyment and the covenant not to derogate from grant is sometimes difficult to draw.121 In Lamiri v Aidan Nominees, for example, Burt CJ concluded that ‘[t]he obligation created by the tenant’s covenant for quiet enjoyment would seem to be the same as his duty not to derogate from his grant’.122 The distinction has been seen to lie in ‘threats and other intolerable nuisances’ (quiet enjoyment) and ‘user of the retained part which makes the demised premises less fit for the purpose for which they were let’ (not to derogate from grant).123 The same issues arise with respect to the landlord’s liability for the actions of tenants as we saw in the context of the covenant for quiet enjoyment.124 A number of the cases discussed in that context also involved the covenant not to derogate from the grant, and the same considerations apply in determining liability. 11.25 Furnished dwellings fit for habitation Where the demised property is a furnished dwelling-house, the landlord is under an obligation to ensure that the premises are fit for habitation at the commencement of the term.125 This

will not be implied in leases of unfurnished dwellings,126 nor will it be implied where premises have become unfit for habitation during the currency of the lease.127 Thus, in the absence of express agreement, a landlord is not liable for defective premises or premises unfit for the purposes for which they are let.128 The application of this implied covenant has been drastically diminished by statute. The Residential Tenancies Act 2010 (NSW) imposes a very much enlarged array of responsibilities on landlords of residential premises. The Act draws no distinction between furnished and unfurnished dwellings. Accordingly, only those furnished dwellings that fall outside either the definitions of ‘residential tenancy’ or ‘residential premises’ in the Act (a comparatively small number) will be covered by this implied obligation.129 Equally, this implied covenant has been significantly modified by the law of negligence.130 [page 542] 11.26 Tenant-like use of premises From Warren v Keen,131 this covenant requires the tenant to use the premises in the manner of a reasonable tenant. It involves both positive and negative duties. The positive duties include carrying out small repairs such as unblocking sinks, replacing light bulbs and keeping premises clean. The negative duties include not intentionally or negligently damaging the premises, and ensuring that guests do not damage the premises. These duties do not extend to putting the premises into repair; nor is the tenant liable for ‘fair wear and tear’. So, in this case, the tenant was held not liable for damp in walls caused by water seeping in through gaps in brickwork. ‘Fair wear and tear’ has been defined as ‘reasonable use … by the tenant and the ordinary operation of natural forces’.132 In Haskell v Marlow, the tenant was held liable for not taking steps to ensure that the natural processes of decay would not cause consequential damage to the premises, as in the case where a tile falls from a roof (for which the tenant is not liable) and water then gets in, causing damage to ceilings (for which the tenant is liable). Thus, the exception for fair wear and tear also requires the tenant to take steps to ensure that further damage does not result from the initial damage due to fair wear and tear.133

11.27 Yielding up premises at expiry of the lease On first glance, this implied covenant would appear to be unnecessary. However, it embraces an obligation on the part of the tenant not merely to vacate the premises at the expiry of the lease, but also to ensure that the landlord receives vacant possession of the premises. Thus, the tenant will be liable for any costs incurred by the landlord in evicting a subtenant after the expiry of the headlease.134 11.28 Cultivation in a husband-like manner In the case of a tenancy of agricultural land, the tenant is under a duty to cultivate the land in a husbandlike manner. ‘Husband-like’ refers to the customary usages in the local area.135 This, too, has been substantially modified by statute.136

Covenants implied by statute 11.29 The implied covenants at common law have been significantly modified by ss 84 and 85 of the Conveyancing Act 1919 (NSW), which imply a range of covenants. Importantly, by s 74(2) of the Act, freedom of contract is preserved: these implied covenants may be ‘negatived, varied or extended by … an express declaration’. It appears, though it is not certain, that an express covenant on the same subject-matter as a statutory implied covenant and inconsistent with it will be effective to vary or negative it by ‘express declaration’.137 These covenants are examined below. [page 543] 11.30 Covenant to repair By s 84(1)(b) of the Conveyancing Act, the tenant covenants: (1)(b) that the lessee … will, at all times during the continuance of the said lease, keep and, at the termination thereof, yield up the demised premises in good and tenantable repair, having regard to their condition at the commencement of the said lease, accidents, war damage and damage from fire, flood, lightning, storm and tempest, and reasonable wear and tear excepted.

This covenant imposes limits on the liability to which the tenant is exposed under the standard, express repair covenant.138 Accidents have been held to be events causing unintentional and unexpected damage which could not have

been reasonably foreseen by the tenant.139 In Saviane v Stauffer Chemical Co (Australia) Pty Ltd, the tenant was held liable for the collapse of a wall because goods were carelessly stacked against it by an independent contractor. Also, if premises are in disrepair at the commencement of the tenancy, the tenant is not under a duty to put them in repair; this condition will reduce the tenant’s obligations. ‘Good, tenantable repair’ has been defined to mean: … such repair as, having regard to the age, character, and locality of the house, would make it reasonably fit for the occupation of a reasonably-minded tenant of the class who would be likely to take it.140

This implied statutory covenant would appear to override the common law implied covenant that obliges the tenant to keep the premises in a tenant-like manner, so that the common law implied covenant will arise only if the statutory covenant has been excluded and there is no express repair covenant to replace it. 11.31 Covenant to pay rent The tenant must pay the rent reserved by the lease at the times specified in the lease.141 In the absence of express agreement, this means that rent is payable in arrears, at the end of the period specified for payment. Where premises are destroyed or damaged by fire, flood, lightning, storm, tempest or war damage, the rent will abate until the premises are repaired. 11.32 Covenant to allow landlord to inspect and repair In the absence of agreement to the contrary, the landlord has a right to enter the premises to inspect their state of repair. This right is strictly limited. The landlord may enter only twice a year, and then only ‘at a reasonable time of the day upon giving to the lessee two days’ previous notice’.142 The landlord may also serve a notice in writing on the tenant requiring any repairs to be carried out within a reasonable time. If the tenant fails to repair the premises as required in the notice, the landlord has an implied right to enter and repair.143 Where repairs are of a structural nature or required by statutory authorities, the landlord may enter and carry them out at any time.144 [page 544]

11.33 Covenant to re-enter for non-payment of rent At common law, the landlord was given no implied right to forfeit the lease in the event of a tenant’s breach of covenant. The landlord now has an implied right to reenter and forfeit the lease if the rent is in arrears for at least one month.145 Like other implied statutory covenants, this may be varied by agreement.146 11.34 Covenant to re-enter for breach of non-rental covenants Where the tenant has breached any covenant, whether express or implied, for a period of two months, or has failed to repair the premises after receiving a notice to repair, within a reasonable time, a landlord may re-enter and forfeit the lease.147

Covenants by necessary implication 11.35 Covenants may need to be implied in a lease in order to give business efficacy to the contract. In Liverpool City Council v Irwin,148 tenants in a multi-storey council housing estate claimed that the landlord had breached a duty to keep the lifts and staircases in a satisfactory state of repair. The House of Lords held that there was an implied covenant to repair these parts of the building. Equally, in order for the premises to be enjoyed, a right of access to a shop has been implied,149 as has a right of access via the landlord’s premises to a shared toilet.150 In Karaggianis v Malltown Pty Ltd,151 a commercial tenant of sixth-floor premises successfully applied for a declaration that the landlord had breached an implied covenant to keep the lifts and escalators working in the same manner and to the same extent as at the commencement of the lease. As Wells J emphasised, the basis for implying such a covenant is that it ‘is something so obvious that it goes without saying’.152

Other implied obligations 11.36 There are two other sources of implied obligations: (i) the tort of negligence; and (ii) the doctrine of waste. 11.37 Tort of negligence The High Court has overturned the old rule in Cavalier v Pope,153 which held that the landlord was not liable for injury caused to the tenant or other occupants for defective premises in the absence of a contractual obligation. In Northern Sandblasting Pty Ltd v Harris,154 the court held that a landlord owes a duty of care

[page 545] in negligence to the tenant and members of the tenant’s family to ensure that reasonably discoverable defects in the premises are remedied at the commencement of the lease. Beyond this, the precise ambit of the duty is not clear. In Northern Sandblasting, the High Court held by a narrow majority (4:3) that the landlord was liable where the tenant’s young daughter was electrocuted as a result of defective electrical wiring. But it is difficult to extract a clear ratio decidendi from this case, as the majority split 2:2 on the basis of liability. Brennan CJ and Gaudron J held that the landlord was negligent in failing to identify a problem with the earthing system at the commencement of the tenancy. The remaining five judges rejected this basis for liability. Toohey and McHugh JJ found that the landlord was under a non-delegable duty to ensure that work done by an independent contractor was done properly. They found that the negligent repair of a stove by the electrician was enough to render the landlord liable. This reasoning was unacceptable to the other five judges. Therefore, it appears that the plaintiff was successful in this case only because two acts of negligence occurred; namely, the disconnected earth and the inadequate repair. It is highly likely that the result would have been otherwise if the plaintiff had been injured as a result of one act of negligence alone.155 Northern Sandblasting was applied in Assaf v Kostrevski,156 where a landlord was held liable for injury caused by the defective electrical condition of the premises at the commencement of the lease. In New South Wales v Watton,157 the New South Wales Court of Appeal held that the duty of a landlord is to make the premises as safe for the purpose as reasonable skill on the part of the landlord can make them. The High Court again considered a landlord’s duty of care in Jones v Bartlett.158 In that case, the High Court held that the landlord was not liable in negligence where the tenant was injured as a result of crashing through a glass door, where the type of glass installed conformed to building standards at the time of installation, even though the glass failed to meet the standards required for new buildings today. The court concluded that a landlord is under a duty

to take reasonable care to avoid foreseeable risk of injury to the tenant and members of his or her household, although the members of the court differed in the way in which they articulated the precise content of this duty.159 In Sakoua v Williams,160 the New South Wales Court of Appeal attempted to identify common ground among the judgments in Jones v Bartlett in order to determine whether a landlord was liable for the injuries to a tenant who fell down the front steps of residential premises. For Mason P, with whom Brownie AJA agreed, no member of the majority in Jones v Bartlett extended the duty of the landlord beyond remedying defects in the premises [page 546] of which he or she was aware.161 Although in the case before them the steps could have been safer — they had risers of varying heights and there was no handrail or landing between them and the front door of the premises — according to Mason P this did not constitute a defect. The state of the steps was obvious to the tenant and there was no evidence that they had caused any injury in the past. Because the steps were not defective, the landlord was not liable in negligence for the tenant’s injury.162 In dissent, Beazley JA construed the majority judgments in Jones v Bartlett as holding that a landlord is under an obligation to ensure that premises are, at the time they are let, reasonably safe for the purposes for which they are let. Her Honour relied on evidence that the design of the steps was contrary to good building practice (even though not contrary to the building ordinance in force at the time they were constructed), as well as the fact that the steps were obviously unsafe, to find that the landlord had breached this duty.163 In New South Wales Department of Housing v Hume,164 the New South Wales Court of Appeal followed the majority view in Sakoua. This case also involved injury following a fall down stairs which had no handrail. All members of the court agreed that the landlord owed a duty of care to take reasonable care to avoid foreseeable risk of injury, but was not required to make the premises as safe as reasonable care could make them.165 The members of the court disagreed, however, on whether on the facts this nevertheless required the landlord to make the stairs safer by erecting a handrail. McColl JA, with

whom Baston JA agreed, held that while the stairs could have been made safer, they were not inherently defective or dangerous.166 Beazley JA, however, held that the lack of rail posed a serious risk of injury and the erection of a handrail would have been appropriate.167 A landlord owes the same duty of care to a tenant’s visitor as to the tenant herself.168 As Butt points out, the uncertainty as to the scope of the landlord’s duty in tort to his or her tenant with respect to the safety of leased premises is likely to produce still further litigation.169 11.38 Waste Waste is an act or omission that causes permanent alteration to the premises.170 The sort of conduct that would constitute waste is mostly covered by either express or implied repairing covenants. An action for waste, by contrast, is an action in tort. Damages are assessed by reference to the damage caused to the landlord’s reversion.171 [page 547] All tenants are liable for voluntary waste.172 Tenants for a term of years and from year to year are also liable for permissive waste,173 though tenants holding short periodic tenancies, such as weekly or monthly tenancies, are liable only for voluntary waste.174 There is considerable doubt about whether tenants at will, either at common law or under s 127 of the Conveyancing Act, are liable only for permissive waste.175

Express covenants Covenant to repair 11.39 Tenant’s duty to repair Where a lease contains an express covenant ‘to keep and deliver up premises in a satisfactory state of repair’, and the premises are in a state of disrepair at the commencement of the lease, the tenant is immediately in breach. As Lord Esher MR said in Proudfoot v Hart:176 … where the premises are not in repair when the tenant takes them, he must put them into

repair in order to discharge his obligation under a contract to keep and deliver them up in repair.

There are other serious consequences of this covenant; for example, if the premises are destroyed by fire, lightning or earthquake, the tenant has to rebuild the premises.177 Also, as Bailey v J Paynter (Mayfield) Pty Ltd178 suggests, this rule applies even where the damage to the premises is the result of a former tenant’s breach of the repairing covenant, so that the incoming tenant will be liable under his or her repairing covenant. The obligation to repair is subject to limits. The first of these is that the tenant is not under an obligation to renew or improve the premises.179 The second is the ‘inherent defect’ rule. A repair covenant does not impose a duty to repair an inherent defect in the premises. An inherent defect is one which is an: … original or supervening defect of an abnormal kind, such as would not be found in a properly built structure, would not be produced in such a structure by the degenerative processes of user or decay, and cannot be remedied except by the replacement or remodelling of the structure or some substantial part of it.180

But compare the English position in Ravenseft Properties Ltd v Davstone (Holdings) Ltd,181 where the doctrine was rejected by Forbes J as having no basis in the English authorities. [page 548] Instead, the test advanced was whether what the tenant was being asked to do was to repair the premises, or to give back to the landlord ‘a wholly different thing from that which he demised’. In Ravenseft, the landlord was able to require the tenant to replace external stone cladding on a building with expansion joints that were not present in the original structure. The key test employed to determine whether there is a replacement of a ‘wholly different thing from that which he demised’ is one of degree. In conducting this exercise, Forbes J used a proportionality test to determine liability. Given the fact that the cost of inserting the expansion joints was £5000 out of a total repair bill of £55,000 for a building worth approximately £3 million, this was within the definition of ‘repair’. It is far from clear whether the English rule

applies in Australia, given that the High Court in Graham v Markets Hotel Pty Ltd182 did not reject Sir Frederick Jordan’s formulation of the rule.183 The most common express limitation on the duty to repair is damage resulting from ‘fair wear and tear’. As noted above, the meaning of this term has been described as ‘reasonable use … by the tenant and the ordinary operation of natural forces’.184 In the absence of such provision, the tenant is under a duty to make good damage to the premises that would have come under the rubric of fair wear and tear. 11.40 Landlord’s duty to repair Where the landlord covenants to repair, his or her liability depends on notice. The rule is no notice, no liability; so that, where the lessee and his wife were injured because a ceiling collapsed on them, the landlord was held not liable because he had no notice from the tenant that the premises were in disrepair.185 Moreover, no distinction is drawn between latent and patent defects. In McGreal v Wake,186 the court decided that the landlord is liable if he or she fails to repair within a reasonable time, even if notice is received from someone other than the tenant; for example, a local authority.

Covenant against assignment or subletting 11.41 A mark of the fact that the lease is a property right is the inherent right to transfer it in whole or in part; that is, to assign or sublet.187 This right is an incident even of a weekly periodic tenancy,188 though not of a tenancy at will or tenancy at sufferance.189 Accordingly, if parties wish to restrict this right, they must include a covenant in the lease to that effect. An assignment is a transfer of the balance of the term of the lease by the [page 549] tenant; a sublease is the grant of a term less than that possessed by the tenant. It is possible to assign part of the demised premises.190 A purported sublease that in fact grants a term at least as long as the balance of the lease will be an assignment. Covenants against assignment or subletting are strictly construed against the

landlord. A covenant against assignment does not prohibit a sublease, although it is less clear whether a covenant against subletting prohibits an assignment.191 Further, Butt points out that these covenants are generally construed as applying only to transactions at law, with the result that no breach will occur as a result of the assignment of an equitable interest,192 at least in the absence of clear words that include assignments in equity within the ambit of the covenant. This leaves open the question of whether, in the case of Torrens title land, a covenant against assignment would be breached by an unregistered assignment. Covenants against assigning or subletting fall into two categories: (i) absolute covenants; and (ii) qualified covenants. 11.42 Absolute covenant An absolute covenant against assignment or subletting prohibits any dealing with the lease by the tenant. The courts have developed a practice of construing such covenants strictly against the landlord.193 Thus, a covenant not to assign the lease has been held not to restrict the tenant’s right to sublet;194 a covenant against subletting is not breached if the tenant sublets part only of the premises;195 and a covenant against assigning or subletting will not be breached where the tenant merely parts with possession pursuant to the grant of a revocable licence.196 However, a covenant against subletting or parting with possession will be breached if the tenant assigns.197 These covenants do not render assignments or subleases in breach void; they will remain valid until the landlord forfeits the lease.198 Acceptance of rent from the assignee or sublessee will constitute implied consent to an assignment or sublease in breach.199 11.43 Qualified covenant A qualified covenant against assignment or subletting seeks to limit, rather than prohibit, the tenant’s rights, such as a covenant of the form that ‘the tenant may only assign or sublet with the prior written consent of the landlord’. If the landlord’s consent is required, s 133B of the Conveyancing Act provides that it cannot be withheld unreasonably. Parties cannot contract out of this requirement, though it is possible to limit its effect by an agreement that, as a condition of seeking the landlord’s consent, the tenant offer a surrender of the lease to the landlord first.200 One authoritative version of the test to be applied is to be found in J A McBeath Nominees Pty Ltd v Jenkins

[page 550] Development Corp Pty Ltd,201 where two considerations were considered relevant: the effect the transactions might have on future lettings of the property; and whether a reasonable person in the landlord’s position would anticipate an adverse impact from the transactions on his or her property interests. Landlords have been found to have unreasonably withheld consent where the proposed use of an office building, though lawful, was likely to be unattractive to investors;202 where the tenant was a respectable and responsible person who had purchased the tenant’s business;203 and where there was only a possibility that the assignee might breach the user covenant.204 Withholding consent has been held to be reasonable where: a proposed sublease would necessarily involve breach of the user covenant in the headlease;205 the proposed assignee’s references were unsatisfactory;206 the landlord had serious concerns about the proposed assignee’s financial ability to meet the obligations imposed by the lease;207 and the assignment was conditional on the assignee agreeing to additional onerous conditions that significantly restricted its ability to use the property.208 No fine or sum of money in the nature of a fine must be payable for the granting of consent.209

Enforceability of Covenants Privity of contract 11.44 Covenants can be enforced by the original parties to the lease as a matter of privity of contract. Each covenant is a term of a contract which, if breached, gives the innocent party a cause of action. Importantly, the contractual right to sue exists for the duration of the lease: so a tenant who takes a five-year lease is bound to his or her covenants for five years. This right remains after assignment, unless liability is expressly limited in the contract, so that the original covenantee can always sue the original covenantor for breach of an express covenant, even where an assignee of the covenantor commits a breach.210 However, while the tenant remains bound

by the express covenants in the lease, he or she is discharged from liability under implied covenants.211 This principle applies to assignments of the lease and assignments of the reversion.212 Therefore, parties cannot escape their [page 551] contractual obligations by assigning their interests. Equally, contractual rights are of no assistance to, or against, assignees of the covenantee and covenantor, because they are not parties to the contract.

Privity of estate 11.45 If a covenant is to be enforceable against the assignee of the covenantor, it must be on the basis of some legal principle other than that of contract. That principle is ‘privity of estate’. Where there is privity of estate between the parties, and the covenant ‘touches and concerns’ the land, it can be enforceable against the assignee. Privity of estate exists where there is a relationship of landlord and tenant between parties.213 Accordingly, on the grant of a lease, the landlord and tenant are in a relationship of both privity of contract and privity of estate. In the absence of both of these relationships, it is not possible to enforce the covenants under the lease. To this general proposition there are two exceptions. First, the benefit of any contract may be freely assigned as a chose in action.214 Second, certain restrictive covenants are enforceable where there is neither privity of contract nor of estate.215 It is possible to see how these relationships interact by means of the example shown in Figure 11.2.

Figure 11.2:

Privity of contract and privity of estate

[page 552] In this example, various transactions take place in order of the numbers given to them. Thus, the grant of the lease is 1, the assignment of the lease is 2, the assignment of the reversion is 3, and so on. After assignment of the lease, there is privity of contract between landlord and tenant, but not privity of estate. The landlord and the assignee of the tenant are now in a relationship of privity of estate. The difference in these relationships can be understood by returning to Figure 11.1 at 11.2, above. The arrows represent privity of contract; the grey lines represent privity of estate. Where there is no line or arrow connecting the parties, there is no right to sue directly on the covenants in the lease unless either of the two exceptions noted above applies. It follows from the above example that if, for instance, ST breaches a repairing covenant in the sublease, only A can sue him or her for doing so. Even if it involves damage to the premises that T has covenanted not to cause, ST cannot be sued by L. In this instance, L’s remedies lie against either T in contract (because T has promised either expressly or impliedly by s 70A of the

Conveyancing Act 1919 (NSW)216 to be bound for the duration of the lease), or A (because of privity of estate).

Covenants touching and concerning the land 11.46 Only covenants that ‘touch and concern’ the land will, in the absence of agreement, both bind and be enforceable by successors in title to the original lease and reversion, because they ‘run’ with the land. A covenant will touch and concern the land if it ‘affects the landlord qua landlord and tenant qua tenant’.217 The general sense of this somewhat obscure and tautologous formula is that the covenant must work to define the parties’ obligations in relation to the demised premises, and not be personal to the parties or relate to other premises. A more recent elaboration of what the term means was advanced in P & A Swift Investments v Combined English Stores Group plc,218 where it was held that three conditions exist for a covenant to touch and concern: (i) that the covenant benefits the lessee or reversioner for the time being; (ii) that it affects the nature, quality, user or value of the land; and (iii) that it is not of a personal nature. To this, a fourth condition can be added: that the fact that a covenant is to pay a sum of money will not prevent it from touching and concerning the land, so long as the three foregoing conditions are satisfied and the covenant is connected with something to be done on, to or in relation to, the land. These four conditions were recently approved by the High Court of Australia in Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd.219 To get an idea of this distinction, some examples may guide, as shown in Table 11.1 below.220 [page 553] Table 11.1: Tenant

Covenants touching and concerning the land

Covenants that touch and concern the land To pay rent221 To repair223 To insure against fire225

Covenants that do not touch and concern the land To pay an annual sum to a third person222 To repair chattels on the land224

Landlord

To use as a dwelling-house226 Not to assign without consent227 To renew the lease228 Not to build on adjoining land230 To supply premises with water232 Not to determine a periodic tenancy during the first 3 years233

To sell the reversion to the tenant229 To compensate tenant for non-renewal231

Assignment of the lease Benefit of covenants 11.47 Pursuant to Spencer’s Case,234 the assignee of the tenant has the benefit of covenants that touch and concern the land, and can sue the landlord for breaches because privity of estate exists between them. So, for example, if the landlord breaches a covenant not to build on adjoining land, the assignee can sue directly.

Burden of covenants 11.48 Also under Spencer’s Case, a landlord can sue an assignee of the tenant where the covenant touches and concerns the land, as there is privity of estate between them. The assignee will be liable for any breaches he or she commits, such as default in payment of rent, but not for breaches committed by later assignees.235 11.49 The landlord may also sue the original tenant where the tenant’s assignee breaches a covenant in the lease, because the tenant who takes a term agrees to be bound for the [page 554] duration of the term. Even if there is no express agreement, s 70A(1) of the Conveyancing Act deems a covenant: … unless a contrary intention is expressed … to be made by the covenantor on behalf of himself or herself and the covenantor’s successors in title, and the persons deriving title under the covenantor or the covenantor’s successors in title….

If the landlord elects to sue the original tenant, the tenant has an implied

right of indemnity against the assignee who committed the breach.236 Where a subtenant of the assignee has breached a covenant which would put the assignee in breach — if, for example, ST in Figure 11.2 (at 11.45) above were to breach a covenant to repair in the sublease mirroring a covenant in the headlease — T would have a right of indemnity against A but not ST, as ST is under no direct obligation and, therefore, has no liability to T.237

Situations where there is no privity of estate 11.50 Squatter barring tenant’s title Tichborne v Weir238 held that a squatter who bars the tenant’s title by a period of adverse possession does not stand in a relationship of privity of estate with the landlord. Accordingly, an adverse possessor cannot be subject to the burden of covenants in the lease, nor can he or she enforce them. 11.51 Informal lease, or informal assignment of legal lease Privity of estate is a common law principle.239 It follows that if the assignee requires the assistance of equity to establish his or her title (as where the original lease is equitable, or the assignment of a legal lease is enforceable only in equity),240 there is no privity of estate between them, and the covenants in the lease will not run. In this case neither party can sue on the lease. Of course, if the assignee enters and pays rent, an implied tenancy at common law may arise,241 but this will be a separate source of rights. If not, the landlord’s only remedy will be to sue the original lessee in contract. However, in Boyer v Warbey,242 the English Court of Appeal held that, since the Judicature Act 1873 (UK) and the fusion of law and equity, covenants would not only run in respect of legal leases and legal assignments, but also in the case of equitable leases and equitable assignments. It is not clear whether this is the law in Australia. In Chronopoulos v Caltex Oil (Australia) Pty Ltd,243 Fox J doubted that it was, so that a landlord could not enforce a covenant (a rent review clause) against an equitable assignee of a lease.244 [page 555]

Assignment of the reversion

Benefit of covenants 11.52 The rule in Spencer’s Case did not apply to assignments of the reversion. But by statute (now ss 117 and 118 of the Conveyancing Act), parallel rights and obligations arise on transfer of the landlord’s interest. Section 116 extends these provisions to Torrens title land. By s 117(1), ‘[r]ent reserved by a lease and the benefit of every covenant or provision therein contained having reference to the subject-matter [of the lease]’ will run with an assignment of the reversion. ‘Therein contained’ has been held to include implied covenants.245 ‘Having reference to the subject-matter of the lease’ means touching and concerning the land.246 One question that arises with respect to Torrens title land is whether s 51 of the Real Property Act 1900 (NSW) has the effect of overriding the requirement in s 117 of the Conveyancing Act that the covenant touch and concern on assignment of a reversion of Torrens land. On the one hand, s 117 specifically requires that the covenants have ‘reference to the subject matter of the lease’. In other words, it requires that they touch and concern the land. This was confirmed by the High Court in Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd.247 However, in the context of assignment of the lessee’s interest, it has been held that s 51 of the Real Property Act removes the requirement in Spencer’s Case that the covenant touch and concern.248 This is a result of the specific wording of s 51. Under that section, on transfer the transferee acquires ‘all rights, powers and privileges thereto belonging or appertaining, shall pass to the transferee …’. Transfer includes the assignment of a lease.249 However, s 116 of the Conveyancing Act, a later Act than the Real Property Act, states specifically that it applies to Torrens land ‘notwithstanding anything in that Act contained’ and may, therefore, potentially be interpreted as restricting the operation of s 51 as regards its effect on the assignment of the reversion.250

Burden of covenants 11.53 By s 118 of the Conveyancing Act, the burden of any covenant ‘with reference to the subject-matter of the lease’ (meaning ‘touching and concerning the land’)251 is annexed to and runs with the reversion. 11.54

As noted above, privity of estate is a common law concept.

Therefore, where the leasehold interest is equitable, or there has been an equitable assignment of a legal [page 556] lease, there can be no privity of estate between the parties and the covenants cannot run: see 11.51. However, in the case of assignment of the reversion these problems do not arise because the rights of the assignees are statutory and do not rely on privity of estate. Thus, ss 117 and 118 apply not only to legal but also to equitable leases.252 However, these provisions do not extend to merely oral leases,253 although they do apply to equitable assignments of the reversion.254 By s 119, where only part of the reversion has been assigned, the assignee can enforce the covenants in relation to that portion of the estate. 11.55 There is an important exception to the general requirement that covenants must touch and concern the land to be capable of enforcement against assignees of the lease. By s 51 of the Real Property Act, all transferees of an estate or interest in land under the Torrens system are subject to the same liabilities as the transferor on registration of the ‘transfer’. ‘Transfer’ includes the assignment of a lease.255 After the registration of a subsequent assignment, the earlier assignee ceases to be liable for a breach of the lease. By s 52, the assignee has the right to sue on an instrument by virtue of the registration of the transfer. The effect of these provisions is that if the land is Torrens land, this right is not limited to covenants that touch and concern the land.256

Can assignors or assignees sue or be sued for past breaches? 11.56 We have already seen how assignors of both lease and reversion can be sued for future breaches; that is, breaches committed by their respective assignees.257 Difficult questions arise in relation to another aspect of liability for the acts of others — the liability of assignees of the lease or reversion for breaches committed by their respective assignors. A related question is who has the right to sue in respect of this type of breach. The general position is

that an assignee is only liable for breaches that occur while the estate is vested in him or her. Hence, there is no liability for breaches which occurred prior to assignment, unless the breach is a continuing breach (eg, breach of a repair covenant where the repair has not been effected). Four different situations are possible: 1.

Tenant breaches, then assigns. If the breaches by the tenant are continuing, such as breaches of a repair covenant, the assignee will be liable.258 However, if the breaches are complete at the time of the assignment, the assignor will remain liable and the assignee will escape liability.259 If the assignee then assigns, the assignee continues to be liable for breaches committed while he or she held the lease, but not for future [page 557] breaches.260 Of course, the landlord can also sue the tenant on contractual principles for any breaches that occur after assignment of the lease.261

2.

Tenant breaches, then landlord assigns. In this case, the reversioner, and not the former landlord, can sue the tenant.262 So, if the landlord was entitled to sue for rent arrears and re-enter at the time of assignment, these rights will pass to the assignee. The assignee’s rights are seen to be within the meaning of s 117 of the Conveyancing Act.263 Of course, they may be varied by agreement so as to allow the assignor to sue.264

3.

Landlord breaches, then assigns. By s 118 of the Conveyancing Act, the burden of any covenant ‘with reference to the subject-matter of the lease’ (meaning ‘touching and concerning the land’)265 is annexed to, and runs with, the reversion. However, in Duncliffe v Caerfelin Properties Ltd,266 it was held that this provision did not make the assignee of the reversion liable for complete pre-assignment breaches that are accrued causes of action. It is different in the case of continuing breaches, such as a breach of a repair covenant, where the assignee is liable.

4.

Landlord breaches, then tenant assigns. The assignment does not affect the tenant’s right to sue for breaches that are complete, such as

damage caused by breach of a repairing covenant.267 But the assignee, not the tenant, will be able to sue for continuing breaches, such as a landlord’s liability where the assignee receives the premises in a state of disrepair.

Termination of Leases Termination by notice 11.57 We have already examined the types of leases that may be terminated by notice. Tenancies at will (both at common law and under s 127 of the Conveyancing Act 1919 (NSW)), tenancies at sufferance and periodic tenancies can all be terminated by notice.268

Effluxion of time 11.58 A fixed-term tenancy terminates automatically at the end of the period by effluxion of time. [page 558]

Contractual remedies 11.59 In recent years, contractual remedies have become available in the law of landlord and tenant. In Shevill v Builders Licensing Board and Progressive Mailing House Pty Ltd v Tabali Pty Ltd,269 the High Court held that a lease could be terminated under general contract law where the tenant committed a breach that amounted to a repudiation or a fundamental breach of the lease, with the result that contractual remedies would be available to the landlord. In consequence, the landlord would be entitled to loss of bargain damages; that is, damages for future losses occasioned by the termination of the contractual relationship. Traditionally, such damages were normally not possible under landlord–tenant law: When a lease is determined prior to the expiry of the term, the covenant to pay rent for the unexpired portion of the term ceases to bind the lessee.270

This is because forfeiture brings to an end all the covenants of the lease and, therefore, all potential liability under them. As a lease was primarily seen as an estate, contractual damages, such as ‘loss of bargain damages’, were not available. A landlord can both exercise his or her right to forfeit and re-enter for breach under s 85(1)(d) of the Conveyancing Act (or an express clause of the lease) and take action for fundamental breach or repudiation. Termination for breach under s 85(1)(d) will only give rise to a right to damages to the date of termination. In order to access additional damages for loss of bargain, the landlord will then need to establish fundamental breach or repudiation. These damages will generally comprise rent which the landlord would have received, as well as outgoings, from the date of termination until the end of the lease (subject to the duty to mitigate),271 discounted for present value to reflect the acceleration of the compensation.272 11.60 Despite the recent acceptance that such damages are available, it is not easy to prove either fundamental breach or repudiation of a lease. What must be shown is either breach of an essential term, or an intention by the tenant to no longer be bound by the lease or to perform it only in a manner substantially inconsistent with the tenant’s obligations under that lease.273 A repudiation may be evidenced by past conduct — where, for instance, a tenant has committed a single serious breach, such as abandonment of the premises,274 or many breaches of the lease that accumulatively amount to a fundamental breach. It may also be prospective or anticipatory, as where the tenant evinces an intention not to meet obligations in the future. Failure to pay rent will not of itself amount to repudiation,275 although a tenant’s consistent default in this regard can contribute to a [page 559] finding of repudiation,276 as can the failure to pay rent in combination with breaches of non-rental clauses.277 Generally, at common law, the tenant had no right to terminate the lease for the landlord’s breach, however serious. There was one exception; the

tenant could terminate or ‘throw up’ the lease of a furnished dwelling-house where the premises were unfit for habitation at the commencement of the term.278 However, now that contractual remedies apply to leases, the tenant can terminate the lease prior to the expiry of the term where the landlord’s breach amounts to a repudiation. It is possible that the circumstances where the tenant can terminate for repudiation may be more circumscribed than those for landlords — for the reason that, once the landlord has handed over possession of the premises, he or she has executed the bulk of his or her obligations under the lease.279 Nonetheless, the courts have found that a tenant can terminate for repudiation where the landlord has committed a repudiatory breach. In Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd,280 the landlord failed to register the lease, as required by the lease, despite numerous requests to do so by the tenant. The High Court held that this was a repudiatory breach by the landlord. Additionally, in Belperio v Linehaul Holdings Pty Ltd,281 the landlord was held to have repudiated the lease in wrongfully re-entering the premises after mistakenly alleging that the tenant had repudiated the lease. A lease may stipulate that particular clauses are essential or fundamental terms.282 It has been generally accepted that if the parties stipulate a term to be essential, the parties’ views are to be respected.283 Some doubt, however, was cast on this recently by the High Court of Australia in Gumland Property Holdings v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd.284 In that case, the court left open the question of whether or not the mere description of a covenant in a lease as essential, however trivial the subject matter may be, can make the covenant essential.285 If the clause is effective in stating that a covenant is to be considered essential, or that a breach of the clause will amount to a fundamental breach, loss of bargain damages will be available, subject to the right to mitigate.286 11.61 Where a landlord sues for loss of bargain damages based on fundamental breach or repudiation, he or she is under a duty to mitigate by attempting to obtain a new tenant. [page 560]

It is the duty to mitigate that stops double recovery. By terminating the landlord obtains possession, but can only also obtain loss of bargain damages if they have been unsuccessful in re-letting.287 If the landlord fails to mitigate, the damages will be reduced accordingly.

Forfeiture by re-entry 11.62 Where a tenant breaches a covenant in the lease, and the lease either expressly reserves to the landlord a right to forfeit the lease, or there is an implied statutory right to do so,288 the landlord may terminate the lease by forfeiture. Before the landlord may do so, however, he or she must follow a number of statutory requirements. These differ, depending on whether the tenant has breached a rental covenant or a non-rental covenant.

Breach of covenant to pay rent 11.63 Where the tenant is in arrears of rent, the landlord may re-enter and forfeit immediately if the lease so provides. If there is no express right of forfeiture, the landlord may forfeit if the rent is in arrears for at least one month without making a formal demand (as was required at common law).289

Breach of a non-rental covenant 11.64 If the tenant is in breach of a non-rental covenant, the process is more complicated. First, the landlord must have an express or implied right to re-enter and forfeit. The implied right to forfeit will arise if default is made of any express or implied covenant in the lease and has continued for a period of two months, or if the landlord has served a notice to repair and repairs have not been carried out within a reasonable time.290 Second, the landlord must serve a notice under s 129(1) of the Conveyancing Act. There is no fixed form for a notice under s 129. This notice must specify the breach and require it to be remedied if it is capable of remedy.291 In the recent decision in Macquarie International Health Clinic Pty Ltd v South Sydney West Area Health Service, it was held that the notice: … ought to be such a notice as will enable the tenant to understand with reasonable certainty what it is which he is required to do … that the tenant should be informed of the particular condition of the premises which he [is] required to remedy. The expression “breach” means the

neglect to deal with the condition of the premises so pointed out, and not merely failure to comply with the covenants of the lease.292

[page 561] The notice may also require payment of compensation if the landlord so requires. These requirements are expressly excluded from breaches of the rental covenant,293 and from leases of one year or less.294 Third, the tenant must have failed to remedy the breach within a reasonable time, if it is capable of remedy, and have failed to pay reasonable compensation, if it is required by the landlord. In Penton v Barnett,295 it was held that a reasonable time will usually be three months. A landlord will not be able to define what is a reasonable time. A specified seven-day period in Dogan v Morton296 was held to be irrelevant. The landlord need not claim compensation in the notice, if he or she does not want it;297 nor must the notice require the breach to be remedied if it is incapable of remedy,298 as in the case of ‘once and for all’ breaches such as the grant of a sublease or assignment without the requisite consent, or use for immoral purposes.299 Notice must still be served in the case of irremediable breaches; in these cases, the purpose of giving notice is to afford the tenant the opportunity of considering his or her position.300 In cases of irremediable breaches, the ‘reasonable’ notice period will be reduced. In Civil Service Cooperative Society Ltd v McGrigor’s Trustee,301 14 days’ notice was held to be sufficient. In the case of assignments without consent, the notice must be served on the assignee, not the tenant.302 The notice must also specify the breach, so that, where premises are in disrepair, it is insufficient for the notice merely to state that the premises are in disrepair. The specific breaches should be detailed.303 The notice requirement applies notwithstanding any stipulation to the contrary.304 The courts have struck down some ingenious attempts at circumvention. In Plymouth Corporation v Harvey,305 the tenant was required to execute a deed in escrow surrendering the lease to the landlord in the event of a breach. In Holden v Blaiklock306 and Kemp v Lumeah Investments Pty Ltd,307 the leases provided for conversion from a fixed term to a weekly periodic

tenancy in the event of breach of any covenant. All these stratagems were held to fall foul of s 129(10) of the Conveyancing Act and, thus, were void. By s 128 of the Conveyancing Act, the notice requirement extends to equitable leases (‘an agreement for a lease where the lessee has become entitled to have his or her lease granted’); however, where the breach is such as to disentitle the tenant to an order for specific performance [page 562] (such as the tenant’s persistent refusal to pay rates as required in the lease), no notice is required, on the basis that there is no longer an equitable lease.308

Repudiation and notice 11.65 Does this strict notice requirement apply where the lease is terminated pursuant to general law contractual rights? Unsurprisingly, legislation passed before contractual remedies became available to parties to the lease makes no mention of notice by the landlord in such circumstances. The courts have addressed various aspects of this question. First, if the landlord seeks to accept the tenant’s repudiatory contract by means of exercising a right of re-entry contained in the lease or implied by statute, it has been held that a s 129 notice must be served.309 This includes where the lease deems a covenant to be essential, and there is a breach of that term.310 Further, where the lease itself stipulates that repudiation will be dealt with as a breach of the contract, rather than through exercising the common law right to terminate, this will also require a notice under s 129.311 But if the landlord accepts the tenant’s repudiatory conduct and rescinds the contract, there is some doubt as to whether notice is required. In Wood Factory Pty Ltd v Kiritos Pty Ltd,312 Priestley and McHugh JJA declared it was. In Marshall v Council of the Shire of Snowy River,313 by contrast, Meagher JA (Powell JA agreeing) decided it was not.314 This is in contrast to the position in Victoria. After a detailed review of the authorities throughout Australia, the Victorian Court of Appeal has endorsed the latter view, holding that a landlord can terminate a lease following the

tenant’s repudiation without having to give the notice that would be needed if exercising a right of re-entry.315 To the extent that the basis for allowing contractual remedies lies in seeing the lease as a standard commercial relationship, and that the tenant may avail himself or herself of the remedy of loss of bargain damages without giving notice, it seems eminently fair that the same position is adopted with regard to termination. 11.66 Waiver The landlord may lose the right to forfeit, or elect to abandon the forfeiture of the lease, if he or she has waived the breach of covenant that triggered [page 563] the right to forfeit. Waiver may be express or implied. It will be implied if the landlord, knowing of the breach, performs some unequivocal act that recognises the continued existence of the lease. Such acts have included acceptance of rent316 or a demand for rent.317 It is irrelevant that the landlord may have accepted the rent on the basis that it was not to amount to a waiver;318 for example, by treating the rent as ‘mesne profits’.319 Acceptance of rent by the landlord’s agent will bind the landlord if the agent has knowledge of the breach,320 even if the landlord has no knowledge of the breach321 — or even if the landlord instructed the agent not to demand or accept rent.322 The waiver may be relied on by both the tenant and the tenant’s assignees, and will bind the landlord and the landlord’s assignees.323 Waiver of one breach will not prevent a landlord relying on a future breach.324 Thus, waiver of a past breach of the rent covenant is no obstacle to a forfeiture for future breaches.325 Nor will waiver prevent a landlord suing for other remedies for breach of the covenant that gave rise to the forfeiture.326 Manner of forfeiture 11.67 Forfeiture may be effected in two ways: by (i) re-entry by action (court proceedings); or (ii) by physical re-entry. These rules do not apply to residential tenancies.327

11.68 By court proceedings Forfeiture by court proceedings will be complete when the tenant is served with an unequivocal writ demanding possession of the premises.328 Any demand in the writ that implies a continuation of the landlord–tenant relationship, and therefore is inconsistent with termination of the lease, will render the purported forfeiture ineffective. If the writ seeks an order permitting the landlord to inspect the premises, or an injunction to prevent the tenant from doing anything on the land, there will be no forfeiture, as these activities are meaningful only in the context of a continuing lease.329 From the date of service of the unequivocal writ, the tenant is a trespasser (as long as the landlord does indeed have a right to forfeit), and is liable to pay mesne profits.330 The mere issue of the writ is insufficient to effect a forfeiture — it must be served on the tenant.331 [page 564] 11.69 By physical re-entry It is also possible for the landlord to forfeit by means of self-help; that is, by physically re-entering the premises. The landlord will be criminally liable if ‘more force than is reasonably necessary’ is used.332 And if the landlord uses more force than is reasonably necessary to remove the tenant, he or she will be liable in tort.333 A tenant who shot his landlady when she attempted to remove him pursuant to an invalid notice to quit was found not guilty of the charge of unlawful wounding.334 In all the circumstances, forfeiture by court proceedings seems the more advisable and socially desirable option.335 The right of re-entry is a right that passes with the assignment of the reversion under s 117 of the Conveyancing Act, even in respect of breaches that occurred prior to the assignment.336

Relief against forfeiture 11.70 After the lease has been forfeited, the tenant, or even subtenant, may still revive the original lease. This may be achieved by a court granting the tenant relief against forfeiture. The grant of relief has the effect of resurrecting the lease in its original form.337 There are two distinct situations where relief

may be sought: (i) where the lease has been forfeited for breach of the rental covenant; and (ii) where there have been breaches of other covenants. 11.71 For non-payment of rent Where the lease has been forfeited for breach of the covenant to pay rent, equity has historically relieved against forfeiture on the ground that the proviso for re-entry was merely security for the payment of rent. This power has been expressly preserved by statute.338 But relief against forfeiture must be justified; equity would relieve against forfeiture only if the landlord were put in the position he or she would have been in if the breach had not occurred.339 Thus, relief against forfeiture will usually be granted if the landlord is compensated for arrears in rent and any loss arising from non-payment.340 Nevertheless, relief is not as of right. Relief has been denied where the defaulting tenant was also running a brothel,341 and where the tenant’s continuing occupation would jeopardise the landlord’s reversion by rendering it uninsurable.342 Relief will also be denied where the tenant is insolvent,343 but not if the tenant’s financial position is not hopeless, as where the tenant has paid arrears and entered into a scheme of arrangement with creditors.344 [page 565] 11.72 For breaches of other covenants By s 129(2) of the Conveyancing Act, the courts have a statutory power to grant relief against forfeiture for breach of non-rental covenants. This has been interpreted to confer a very wide discretion.345 Normally, relief will be granted if the landlord can be adequately compensated by money and breaches are remedied.346 The discretion is governed by three principles: 1.

whether the tenant’s conduct was wilful;

2.

the gravity of the breaches; and

3.

the disparity of the damage caused by the breaches and the value of the property.347

Relief may be denied where the personal character of the tenant is important. In Earl Bathurst v Fine,348 the American tenant of an English stately

home had been convicted of a drugs offence and was banned from entering the country. It was held that because of the nature and value of the premises, and because he was not of suitable character for the property, he should not be granted relief, even though arrears of rent had been repaid. Relief was also denied where the tenant allowed illegal gambling on the premises, on the basis that the taint of this breach would continue after any relief.349 Section 129(2) allows the court to impose conditions on the tenant on grant of relief, such as requiring the tenant to return premises to their former condition.350 When considering an application for relief against forfeiture for the breach of non-rental covenants, the court will not usually impugn the tenant with breaches of covenants that were not the subject of a s 129 notice. However, this is not always the case. The court has a discretion to take such breaches into account if to ignore them would be unjust to the landlord. This would be the case where the landlord had terminated the lease by exercising a right of re-entry but where the tenant had also repudiated the lease.351 11.73 Time limits on relief Section 129(2) gives the courts the power to grant relief against forfeiture ‘where a lessor is proceeding by action or otherwise … or has re-entered without action’. This means that relief is possible at any time while court proceedings are in train; that is, until the landlord is granted an order for possession of the premises and has taken possession pursuant to the order.352 By contrast, where the landlord has reentered without action (ie, by physical re-entry), the tenant may still get relief against forfeiture. However, in such cases the tenant must act sufficiently promptly to avoid being postponed in equity for delay. Despite these limits, it is possible for the tenant to seek relief against [page 566] forfeiture as an alternative remedy in an action denying that either breach or forfeiture has occurred.353 Section 129(2) does not apply to leases of one year or less.354 11.74 Sublessees At common law, forfeiture of the lease entailed termination of all interests and rights carved out of the lease, such as subleases

and licences.355 By s 130(1) of the Conveyancing Act, a sublessee has an independent right to relief. The court has a discretion to vest the lease — a new lease, because forfeiture of the lease has terminated the lessee’s interest — or a portion of the term in the sublessee on such terms as it sees fit. However, the sublessee cannot acquire a term longer than that in the original sublease, nor rights over an area greater than that covered by the sublease. It is immaterial that the tenant is not entitled to relief, though in this case the sublessee must not have participated in the breach.356 The terms imposed by the courts may involve making good existing breaches. This can include the payment of the tenant’s outstanding rent by the sublessee to the landlord apportioned for the area occupied by the sublessee, even if the sublessee has already paid rent to the tenant for that period.357

Merger 11.75 Where one person becomes entitled to both the lease and the reversion, there is a merger.358 So, if either the landlord or the tenant acquires the other’s interest, as where the tenant purchases the reversion, a lease will come to an end. Merger will also arise where a third party acquires both the lease and the reversion. A merger will bring the lease to an end, but not any sublease.359 Merger is not complete in respect of Torrens title land until the lease is removed from the Register.360

Surrender 11.76 A surrender is a consensual transfer of the lease from the tenant back to the landlord. A surrender may be express or by operation of law. For old system land, it must be by deed, even if the lease is oral.361 For Torrens title land, a surrender will occur on registration.362 A surrender in equity will arise under the rule in Walsh v Lonsdale.363 A surrender by operation of law originates in the doctrine of estoppel by conduct,364 and is an exception to the old system requirement that a deed is necessary, or for Torrens title, a registered surrender.365 It arises where parties, by their conduct, evince an unequivocal intention to treat the lease as

[page 567] at an end — as where: the landlord, with the tenant’s consent, grants a new lease to a third party;366 the tenant moves furniture out and returns the key to the landlord, who accepts it;367 or the tenant abandons the premises and the landlord takes possession and changes the locks.368 An abandonment by the tenant, later followed by the landlord’s repossession, will constitute separately both a surrender by operation of law, and acceptance of the tenant’s repudiation of the lease,369 and so will not deprive the landlord of loss of bargain damages.

Frustration 11.77 Consistent with the reasoning in Progressive Mailing House Pty Ltd v Tabali Pty Ltd,370 the contractual principle of frustration has been held to apply to leases.371 The plaintiff will bear a heavy onus in establishing that frustration has occurred. In National Carriers Ltd v Panalpina (Northern) Ltd, closure by the local council of the only access road to the premises for a period of 20 months of a 10-year lease with five years to run was held not to amount to frustration. There have been no Australian cases as yet that have found that a lease has been frustrated, though statements in Progressive Mailing House — ‘the ordinary principles of contract law, including that of termination for repudiation or fundamental breach, apply to leases’, and ‘the clear trend of common law authority is to deny any general immunity of contractual leases from the operation of those doctrines of contract law’372 — suggest that frustration is now as much a part of leases as repudiation.373 Early authorities point in different directions. Thus, in Firth v Halloran374 the High Court held that the doctrine of frustration did not apply to leases, while in Robertson v Wilson375 the Supreme Court of New South Wales held that it did. However, until clear authority emerges, this area of the law is uncertain.376

Remedies 11.78

Once a party to a lease, or an assignee, can establish a breach of

covenant, and he or she has a right to sue, a number of remedies are available in addition to the right to terminate the lease. [page 568]

Damages and injunction 11.79 Damages can be awarded to the extent of the injury suffered by the landlord or tenant as a result of the breach. If either party can establish that the breach was of an essential term or a repudiation, prospective (or loss of bargain) damages can be awarded.377 Where a plaintiff succeeds in a loss of bargain damages claim, he or she is under a duty to mitigate the loss — by, for example, reletting the premises.378 A special rule applies in relation to the damages that can be awarded to a landlord for breach of a tenant’s covenant to repair. By s 133A of the Conveyancing Act 1919 (NSW), the amount of damages can never exceed the value of the reversion. An injunction will also lie at the suit of the landlord or tenant to restrain a breach of covenant379 or to compel performance.380

Set-off 11.80 The general position is that each party’s obligations under the lease are independent of the performance by the other party of his or her obligations. Accordingly, a tenant’s obligation to pay rent under the lease does not cease simply because the landlord is in breach of his or her obligations.381 However, this position is modified by the doctrine of set-off. This remedy allows a defendant to counter-claim damages from a plaintiff seeking damages, and so have the plaintiff’s award reduced. There are two types of set-off: (i) common law set-off; and (ii) equitable set-off.

Common law set-off 11.81 Common law set-off was possible in two situations. First, where the tenant expended money, at the request of the landlord, to do something that was properly the landlord’s responsibility; and second, where the tenant spent

money on repairs that the landlord had covenanted to carry out, the landlord having failed to do so.382 In the latter case, the tenant must first notify the landlord of the breach, and the sum must not be regarded as unliquidated damages, but actually paid and established as certain.383

Equitable set-off 11.82 The rules governing equitable set-off are more flexible. To be able to offset, the tenant’s ‘equity must impeach the title to the legal demand, or in other words go to the very foundation of the landlord’s claim’.384 This means that the tenant’s cross-claim must arise [page 569] under the lease, or out of the landlord–tenant relationship. In British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd,385 it followed that the tenant had a right to set off a claim for rent arrears against unliquidated damages claimed for the landlord’s breach of a repair covenant. Parties may agree to exclude the equitable right to set-off,386 but this must be effected by clear and explicit words.387 It is also possible for the landlord to cross-claim, if the tenant is seeking damages. For example, where the landlord negligently stores the tenant’s goods, causing loss, the landlord is able to set off rent arrears.388

Reform of the Common Law 11.83 A small number of reforms are arguably required to simplify this area of law and render it more equitable.

Removal of the certain duration requirement 11.84 It is hard to see what useful policy is achieved by the substantive requirement that the duration of a lease be fixed at the outset.389 One possible objection to this type of lease would be that it might render vulnerable certain players in the market by allowing the termination of a valuable asset in a

highly unpredictable way. Yet, against this, it can be argued that with special legislation now governing specific types of landlord–tenant relations, such as residential and retail tenancies, where particular inequalities of bargaining power are addressed, this concern has receded. It follows that the duration of leases should be as flexible as the duration of determinable and conditional freehold estates. Moreover, the Residential Tenancies Act 2010 (NSW) suggests a different way of dealing with this problem. The legislation provides that continuing tenancies cannot be terminated without a minimum notice period, and the notice period may differ for landlord and tenant.390 It does not seem to have presented difficulties in application. Further, one jurisdiction that has chosen to significantly modify this requirement for all leases is New Zealand. Section 212 of the Property Law Act 2007 (NZ) provides that a lease is not invalid because it only provides for termination on the occurrence of a future event, as long as the event is sufficiently defined in the lease so that it can be identified when it happens. The section [page 570] further provides, however, that the lease will terminate on the 10th anniversary of its commencement if the future event has not yet occurred.

Abolition of s 127 implied tenancies 11.85 The area of implied tenancies at common law is marked by great complexity. The reforming provision — s 127 of the Conveyancing Act 1919 (NSW) — has done nothing to reduce this, because it effectively incorporates all the (feudal) learning in relation to implied leases into the contemporary law. This level of complexity is quite unnecessary. It would be much simpler — and more in keeping with the intentions of the parties — if the implied tenancy was measured basically by reference to the paying period, but this evidence could be rebutted by other evidence of a different intention. It should, therefore, be irrelevant that the rental period amounted to an aliquot part of a year or not; thus, payment of rent, say, half-yearly, would give rise to a six-monthly periodic tenancy rather than a tenancy at will terminable by one

month’s notice in writing, as is the case at present. Such a reform would more accurately reflect the intention of the parties.

Privity of estate and continuing liability for tenants after assignment 11.86 The authors Megarry and Wade, in their discussion of Boyer v Warbey391 and the problems it raises, refer to ‘[t]he very reasonable decision to hold the assignee bound by the terms of [an equitable lease]’.392 This rule — and its non-application to equitable leases and equitable assignments of legal leases — is traceable to the historic cleavage between the courts of law and equity, and not to reasons of policy or justice. This rule looks even more unsatisfactory in light of the anomalous position of assignments of the reversion. Given that ss 117 and 118 of the Conveyancing Act apply not only to legal but also to equitable leases,393 there seems to be no sound reason why the same principle should not extend to assignments of the lease. A simple amendment of the Conveyancing Act, similar to s 128 (which extends the obligation to give a statutory notice prior to forfeiture to equitable leases), would and should remove this anomaly from the law. As for the question of continuing contractual liability in cases of assignment of leases, the United Kingdom Parliament has enacted legislation limiting the contractual liability of former tenants. The Landlord and Tenant (Covenants) Act 1995 (UK) is based on a report of the UK Law Commission.394 Though the legislation is not without its critics,395 it does point to a fairer, and more efficient, balance between innocent assignor and culpable assignee.396 [page 571]

Residential Tenancies Introduction 11.87 At common law, the duties of landlord and tenant were overwhelmingly governed by the principle of freedom of contract. As we

have seen above, some limitations were imposed, especially by courts of equity, but these were in the main confined to the forfeiture of the lease. Equity narrowed the scope for landlords’ recovery of premises following breach of the agreement; the substantive rights and obligations of the parties, however, were left for them to determine as they saw fit — or, commonly, as their respective bargaining powers and the market decreed. This state of affairs did not mean that there was no place for the common law to imply terms, or covenants, into leases. Where parties had not turned their minds to particular matters, the common law and statute would supply some terms, but these could be freely excluded by the parties.397 By contrast, the Residential Tenancies Act 2010 (NSW) has a comprehensive set of rights and duties that, in general, parties cannot contract out of. The residential tenancies legislation therefore steers the market.398 The Act provides for a specialised, informal tribunal, the NSW Civil and Administrative Tribunal,399 to deal with disputes arising under the legislation. This legislation has completely superseded the common law in relation to lettings of residential premises, whether the landlord is the state (in the case of public housing), or a private person or corporation. Though containing a detailed set of rights and responsibilities for residential landlords and tenants, the Residential Tenancies Act is not a comprehensive code. It is not expressed to be an exclusive statement and source of rights for residential landlords and tenants, either in the long title to the Act, or in any specific provision. However, successive versions of the Act have moved closer to being so. The 2010 Act, for example, contains fewer references to the common law and exclusions than its predecessor. Nevertheless, the Residential Tenancies Act still uses some technical terms from the common law, such as ‘merger’ and ‘frustration’, and still expressly excludes some provisions of the Conveyancing Act 1919 (NSW) (implying that other provisions from the Act may not be excluded).400 Moreover, certain matters are not dealt with at all, such as rights of co-owners. Accordingly, where the Act is silent, or where expressions used are familiar common law concepts, the common law will continue to apply. [page 572]

What is a residential tenancy? Residential tenancy agreement 11.88 By s 13 of the Residential Tenancies Act, a residential tenancy agreement is: … any agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence. …

It is immaterial for the purpose of this definition whether the right of occupation is a right of exclusive possession.401 From this definition, it is clear that a residential tenancy is much broader than a common law lease. The Act is expressed to bind the Crown: … this Act binds the Crown in right of New South Wales and, in so far as the legislative power of Parliament permits, the Crown in all its other capacities.402

Thus, where the Commonwealth Defence Housing Authority leased a house for defence personnel from the owners, the provisions of the Act applied, because the legislation setting up and governing the authority’s activities did not exclude the operation of the residential tenancies legislation.403 In 2005, the previous Residential Tenancies Act 1987 (NSW) was amended to create a special category of ‘social housing tenancy agreement’ in respect of premises let by a ‘social housing provider’, such as the New South Wales Land and Housing Corporation and the New South Wales Department of Housing. These are continued under the new Act.404 The most important provisions of the Act relating to social housing agreements deal with ‘acceptable behaviour agreements’405 and termination406 of social housing tenancy agreements. The Act also covers agreements or arrangements under which a person is given the right to occupy premises as part of remuneration for carrying out work on the premises or in connection with their employment.407

Exceptions 11.89 By s 8, certain residential tenancy agreements are excluded from the Residential Tenancies Act. In addition, s 7 of the Act makes an exception for agreements to lease particular sorts of premises. Both classes of exception are described below.

[page 573] 11.90 Occupation agreements in holiday parks and residential parks and for the purposes of holidays The Residential Tenancies Act excludes occupation agreements to which the Holiday Parks (Long-term Casual Occupation) Act 2002 (NSW) applies.408 The Act also excludes any agreement made for the purposes of giving a person the right to occupy residential premises for a period of not more than three months for a holiday.409 11.91 Contracts within the meaning of the Retirement Villages Act 1999 (NSW) The Residential Tenancies Act does not apply to residence contracts within the meaning of the Retirement Villages Act.410 11.92 Boarders and lodgers The Residential Tenancies Act does not apply to agreements under which a person ‘boards or lodges with another person’.411 These terms are not defined in the Residential Tenancies Act, so it is necessary to examine how they have been defined at common law. Thus, ‘boarder’ has been held to mean: “… one who … has his food, or food and lodging, at the house of another for compensation”. … In ordinary circumstances with both lodger and boarder legal possession remains in the person who provides room or rooms, or meals. He retains possession and control over rooms and means of ingress and egress, but grants licence to guests who pay, or give consideration for the privilege.412

‘Lodger’ means an occupant where ‘the landlord retains control of the rooms in question’.413 To determine whether a resident is a lodger, we need to ask: … whether the owner of the house retains his character of master of the house, and whether he occupies a part of it by himself or his servants, and at the same time retains the general control and dominion over the whole house; and this he may do, though he do[es] not personally reside on the premises.414

These meanings have been accepted and applied by the tribunal under the Act. Thus, an occupant of a self-contained unit in a block of flats (licensed to be used as a lodging house), where a manager lived on site and had access to units, was held to be a lodger.415 Conversely, where a resident in a hostel had exclusive use of her own room, she was held to be a tenant, even though the premises were designated as a ‘supported accommodation hostel’ and residents

were regularly visited and supervised by social workers.416 Factors that pointed to a tenancy were: [page 574] the landlord or landlord’s manager did not live on the premises; the tenant was generally free to do as she pleased within the hostel; and access by case workers was limited. 11.93 Residence in refuge or crisis accommodation The Residential Tenancies Act excludes from its scope agreements under which a person resides in refuge or crisis accommodation provided by a public authority, a council or another body or organisation where that authority, council or body is wholly or partly funded by the Commonwealth or the state, or an agency of the Commonwealth or the state.417 The parties may, however, agree in writing that the Residential Tenancies Act is to apply.418 11.94 Leases and licences under various Crown Lands Acts The Residential Tenancies Act does not apply to licences and leases under the Crown Lands Act 1989 (NSW), Western Lands Act 1901 (NSW) or Crown Lands (Combined Tenures) Act 1989 (NSW).419 11.95 Tenancies in an agreement for sale or purchase Where there is ‘an agreement for the sale of land that confers a right to occupy residential premises on the parties to that agreement’, the Residential Tenancies Act will not apply.420 A purchaser under a contract of sale is sometimes allowed to take possession of premises pending completion, either as a tenant at will421 or as a licensee.422 In this case, the rights of the tenant are covered by the common law. The scope of the expression ‘sale or purchase’ is unclear; while it obviously covers the position of the purchaser becoming tenant before settlement, it might also embrace an agreement which gave the vendor a tenancy after completion.423 11.96 Tenancies in a mortgage Some mortgages involve mortgagor and mortgagee in a simultaneous relationship of landlord and tenant. They are excluded by s 8(1)(g) of the Residential Tenancies Act.

11.97 For the purposes of a holiday Where an agreement is entered into for a period of not more than three months giving a person the right to occupy residential premises for the purpose of a holiday, that agreement will not be covered by the Residential Tenancies Act.424 11.98 Tenancies under a company title scheme Company title schemes provide a mechanism for group ownership. A company owns a multi-unit building, and the residents own shares in the company, which entitle them to a right of occupation. Leases [page 575] to shareholders are not covered by the Residential Tenancies Act,425 though leases to non-shareholders or subleases by shareholders are covered. 11.99 Term of 99 years Where an agreement has a term (together with any additional term that may be granted under an option) that is equal to or exceeds 99 years, the Residential Tenancies Act will not apply.426 11.100 ‘For value’ In this respect, the definition of residential tenancy is narrower than the definition of lease at common law: leases granted for no value are outside the Residential Tenancies Act.427 In Grundel v RegistrarGeneral,428 payment of rates and body corporate levies was held to be ‘value’. 11.101 Shared households A person who occupies premises that are subject to a residential tenancy agreement, and who is not named as a tenant, will only be a tenant for the purposes of the Residential Tenancies Act if either they pay money to the named tenant under the agreement or they are a subtenant under a written residential tenancy agreement with that person.429 11.102 Additional exempted agreements Several additional agreements have been exempted from the operation of the Residential Tenancies Act by Regulation. These include: equity purchase agreements;430 agreements applying to heritage properties where the landlord is the Crown, a public authority or council;431 residential premises that are subject to a life estate (legal or equitable) —

however, residential premises occupied by sub-tenants of life tenants are not exempt;432 and residential halls and halls of residence in educational institutions.433 11.103 Premises There is a second class of agreements that are excluded from the Residential Tenancies Act by s 7 of the Act. They are agreements to lease particular sorts of residential premises. These include: tenancies to which the Landlord and Tenant (Amendment) Act 1948 (NSW) applies; premises used to provide residential care or respite care within the meaning of the Aged Care Act 1997 (Cth); [page 576] serviced apartments — in other words, buildings or parts thereof used to provide self-contained tourist or visitor accommodation, and which are regularly cleaned by or on behalf of the owner or manager; premises used as hotel or motel; premises used as a backpackers’ hostel; a hospital or nursing home; any part of a club used for the provision of temporary accommodation; and residential premises where the predominant use of the premises is for the purposes of a trade, profession, business or agriculture.

Creating residential tenancies Formalities 11.104 Unlike the common law, no formalities are required by the Residential Tenancies Act for the creation of a valid residential tenancy agreement. Section 13(2) of the Act provides that a residential tenancy agreement may be: express or implied; oral or in writing; or partly oral and partly in writing. Notwithstanding this latitude, the Act imposes significant obligations in executing a residential tenancy agreement. But unlike the

position at common law, failure to follow these requirements will result in criminal penalties, rather than the interest being void. Section 15 of the Residential Tenancies Act provides for a standard form of residential agreement. This may be prescribed by Regulations. At present in New South Wales, one standard form is provided.434 However, if the term of the agreement exceeds three years (and therefore requires registration), the standard form must be annexed to the approved form required for registration under the Real Property Act 1900 (NSW).435 The standard form has two parts: the first part sets out the terms of the agreement and the second contains the condition report in triplicate.436 The standard form is taken to include any terms required by the Act and Regulations.437 It is possible to include additional terms in the agreement, but only as long as they do not conflict with the terms in the prescribed standard form.438 Any term of a residential tenancy agreement that is inconsistent with any term included by the Residential Tenancies Act, or prohibited by the Act, is void.439 Moreover, s 219(1) of the Residential Tenancies Act provides that any term that purports to ‘exclude, limit or modify the operation’ of the Act or Regulations is void. Further, entering into an agreement to evade or prevent the operation of the Act is an offence and subject to the imposition of a penalty not exceeding 20 penalty units.440 [page 577] Of course, parties may agree to avoid the operation of the Residential Tenancies Act by entering into an agreement that does not come within the Act; for example, a contract for board and lodging, or letting premises which are excluded. Once a residential tenancy agreement as defined by the Act is concluded, however, the requirements of the Act are inescapable.

Condition reports 11.105 A condition report relating to the condition of the residential premises must be included with the agreement.441 The standard form condition report is to be in the form prescribed in Sch 2 of the Residential

Tenancies Regulation 2010 (NSW).442 The condition report must be completed by the landlord at or before the time the agreement is given to the tenant for signing. Two copies must be given to the tenant at this time, and must then be completed by the tenant within seven days.443 The condition report must also be completed by both landlord and tenant in the presence of the other party at, or as soon as reasonably practicable after, the termination of the agreement.444 A new condition report does not need to be undertaken where a landlord and tenant enter into a new residential tenancy agreement for a property already occupied by the tenant under a previous agreement and they agree that the previous report is to apply to that new agreement.445

Types of tenancies 11.106 There are only two types of residential tenancies expressly capable of creation under the Residential Tenancies Act: fixed-term tenancies and periodic (or continuing) tenancies. Unlike the position at common law, a fixed-term tenancy does not automatically terminate by effluxion of time; it must be brought to an end by notice on the part of the landlord or the tenant. Where notice is given by the landlord, it must specify a day for delivery up of the premises that is on or after the date of ending of the fixed term and not earlier than 30 days after the giving of the notice.446 Where notice is by the tenant, the period is only 14 days.447 Where a fixed-term tenancy comes to an end, and no statutory notice has been given, a periodic tenancy comes into existence, regardless of the rental period.448 This, too, can be brought to an end by notice. In the case of the landlord, the notice period must be not less than 90 days,449 or 30 days if the landlord has contracted to sell the premises with vacant [page 578] possession.450 For the tenant, the notice must be not less than 21 days.451 These provisions also apply to tenancies that were created as periodic. There is no express mention in the Residential Tenancies Act of other types of tenancy (tenancy at will, tenancy at sufferance or implied tenancy).

However, it is implicit in the Act’s provision of only two types of termination by notice without any ground — one for fixed-term tenancies and one for tenancies which are not — that the distinctions between such tenancies in the residential context has been rendered irrelevant.

Parties’ obligations 11.107 By contrast with the common law regime, the Residential Tenancies Act imposes a number of non-negotiable obligations on the parties to a residential tenancy agreement. The most important of the statutory obligations are outlined below.

Quiet enjoyment 11.108 The tenant has a right to ‘quiet enjoyment’ of the premises.452 The meaning of this common law term has been elaborated in a large body of case law.453 The Residential Tenancies Act builds on this definition by also requiring the landlord not to ‘interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of the tenant in using the residential premises’.454 There is a penalty not exceeding 10 penalty units applicable for breach of this term.455 The Act also extends the common law by rendering the landlord liable where he or she does not take steps to ensure that neighbouring tenants do not interfere with the quiet enjoyment of another tenant of the landlord.456

Repairs 11.109 By s 52 of the Residential Tenancies Act, a landlord must provide the premises in a reasonable state of cleanliness and fit for habitation. Further, by s 63 of the Act, a landlord must provide and maintain the premises in a reasonable state of repair, having regard to the age of the premises, the rent payable for them and their prospective life. This is so even if the tenant had notice of the state of disrepair before entering into occupation.457 Here ‘premises’ has an expanded definition to include everything provided with the premises for use by the tenant.458 Unlike the position at common law, no distinction is drawn between furnished and unfurnished premises for the

purposes of the landlord’s responsibilities. The obligation that the premises be ‘fit for habitation’ will be breached if ‘by ordinary user [page 579] damage may be caused to the occupier either in respect of personal injury to life or limb or injury to health’.459 The tenant must take all reasonable measures to mitigate the loss.460 From Northern Sandblasting Pty Ltd v Harris,461Jones v Bartlett462 and Sakoua v Williams,463 a landlord will be liable in tort for injury to the tenant and members of the tenant’s family caused by reasonably discoverable defects in the premises. In keeping with a landlord’s express duty to repair at common law, the tenant is under a responsibility to notify the landlord of any damage to the premises as soon as is practicable.464 This is an obligation of potentially great significance; it has been held to be a precondition for the landlord to be liable for damage that arises in the course of the tenancy.465 If the tenant fails to notify the landlord after discovering the damage, he or she will be liable for consequential damage. The tenant’s primary responsibility is to keep the premises clean.466 The standard of cleanliness required is dependent on the state of the premises at the commencement of the tenancy. The tenant is also under a duty not to intentionally or negligently cause or permit any damage to the premises, and he or she should leave the premises as nearly as possible in the same condition — fair wear and tear excepted — as set out in the condition report.467

Urgent repairs 11.110 There are special provisions relating to urgent repairs.468 These provisions go far beyond the remedy of set-off.469 Where the need for urgent repairs has not been the result of a breach of the agreement by the tenant, and they have not been carried out by the landlord or nominated person within a reasonable time after notification, the tenant may authorise the carrying out of the repairs by a qualified person. In these circumstances, the landlord must reimburse the tenant within 14 days of notification of the sum incurred up to

a maximum of $1000 (or such other amount as may be prescribed). Urgent repairs include burst water services, blocked or broken lavatory systems, serious roof leaks, gas leaks, dangerous electrical faults, flooding or serious flood damage, serious storm or fire damage, and failure or breakdown of gas, electricity or water supply.470 [page 580]

Fixtures and alterations 11.111 A tenant may not annex anything to the premises, or alter or renovate the premises, unless in accordance with a term of the agreement, or the landlord’s consent.471 The landlord must not unreasonably withhold consent to a fixture, alteration or renovation of a minor nature.472 At the end of the tenancy, the tenant may remove the fixture. If any damage occurs, the tenant must notify the landlord and repair the damage or compensate the landlord.473 Any disputes as to fixtures and alterations may be the subject of an application to the tribunal.474

Locks, security devices and smoke alarms 11.112 Section 70 of the Residential Tenancies Act requires the landlord to provide and maintain such locks or other security devices as are necessary to ensure that the residential premises are reasonably secure. If the premises become insecure during the currency of the term, the landlord must either be aware of this or be informed by the tenant in order to be liable.475 Where the landlord’s agent allowed unsupervised inspections of the premises by prospective tenants, and the premises were subsequently burgled by the use of a duplicate key, the landlord was held liable.476 In Lawson v NSW Department of Housing,477 the tribunal rejected the proposition that deadlocks are necessary in all cases; and the fact that insurance companies will not provide insurance unless they are installed is not decisive. The tribunal accepted that burglary statistics for the district may be relevant, but not decisive, in determining what amounts to ‘reasonable security’. A landlord or tenant must not alter, remove

or add to locks or security devices without a reasonable excuse or the consent of the other party.478 Under s 146A of the Environmental Planning and Assessment Act 1979 (NSW) (EPA), owners are required to install smoke alarms if the premises are such as to require them by law. Under cl 38 of the Standard Residential Tenancies Agreement, the landlord agrees to ensure that smoke alarms are installed and maintained in the residential premises in accordance with the EPA provision. Clause 39 further provides that the landlord and tenant each agree not to remove or interfere with the operation of a smoke alarm installed on the residential premises, unless they have a reasonable excuse to do so.479

Assignment and subletting 11.113 The rights of residential tenants to assign and sublet are more restricted than those of tenants at common law. A tenant has a general right to assign and sublet, but may only do so with the written consent of the landlord.480 There is no requirement that the [page 581] landlord’s refusal to consent must be reasonable, at least for a transfer or sublet of the entire tenancy.481 However, in the case of partial transfer or sublet, consent must not unreasonably be withheld.482 A partial transfer is one which results in one or more tenants in addition to the original tenant.483 Presumably, because the Act is not an exclusive code,484 the common law rule that assignments and subleases in breach are valid until the landlord takes action to terminate the agreement applies.485

Right to a new tenancy 11.114 The Residential Tenancies Act gives the tribunal discretion to make an order vesting a new tenancy in certain circumstances. Where a person is in occupation of premises on the discontinuance of occupation of the tenant, or where the sole tenant has died, that person may apply to the tribunal to be recognised as a tenant under the agreement on such terms and

conditions as applied under the previous agreement.486 This provision does not apply if the landlord is a social housing provider.487

Abandoned goods 11.115 Special provisions govern the custody and disposal of goods left on the premises. Under the Residential Tenancies Act, landlords are given greater rights than at common law over goods left or abandoned by a former resident.488 However, the landlord has no right to seize goods that a tenant has left on the premises, as a lien for unpaid rent.489 The landlord can, however, charge an occupation fee for each day the goods are left on the premises. Such a fee may not exceed in total 14 days’ rent.490 Goods that are left after the agreement is terminated fall into two categories: perishable and non-perishable. A landlord may remove or dispose of goods which he or she reasonably believes are perishable goods at any time after vacant possession of the residential premises is given or after the residential premises are abandoned.491 Where goods are not perishable, the landlord must give the former tenant notice that the goods will be disposed of after 14 days unless they are claimed.492 In the meantime, the landlord may remove the goods and store them.493 [page 582] If the former tenant fails to collect them, the landlord may dispose of the goods by selling them, or in any other manner.494 If so requested by the former tenant, the landlord must pay the proceeds to that tenant, minus an occupation fee and the reasonable costs of the sale.495 A former tenant may collect the goods at any time prior to their disposal, but must pay an occupation fee for their storage.496 There are separate provisions for personal documents that are left behind. Personal documents are defined in s 126 of the Residential Tenancies Act to include, for example, passports, drivers licences, birth certificates, bank statements, other identify documents, and documents conferring qualifications. In the case of personal documents, the landlord must give 90 days’ notice of

disposal.497 If they are not collected, the landlord may dispose of them by returning them to the issuing authority or, if that is not practicable, in any other manner the landlord sees fit.498 However, the landlord must take care not to dispose of them in any way which results in the former tenant’s personal information becoming publicly available.499 If the tenant abandons the premises, or dies, the tribunal may make orders concerning any non-perishable goods. This includes orders to remove, dispose of, or sell the goods.500 If goods are disposed of otherwise than in accordance with these provisions, the tribunal may on application by the former tenant, or any other person with an interest in the goods, make orders for delivery of the goods, compensation for damage or disposal, or for the proceeds of sale to be paid.501 Where goods are sold in accordance with these provisions, the purchaser acquires a good title to the goods ‘freed and discharged of any interest’ of the former tenant or any other person who would otherwise have an interest.502

Rent 11.116 The basic principle underpinning the Residential Tenancies Act 2010 (NSW) in relation to rent is that rents are determined by the parties to the agreement. In this way rents are not ‘controlled’, as was the case under the Landlord and Tenant (Amendment) Act. This change, first seen in the Residential Tenancies Act 1987 (NSW), was one of the most significant breaks from the earlier protected tenancy regime. Nonetheless, the 2010 Act does tightly regulate the manner of payment of, and increases in, rent. It also contains provisions for reduction of rent in certain circumstances. [page 583]

Rent increases 11.117 In the case of continuing tenancies, rent may only be increased if the landlord has given 60 days’ notice in writing prior to the increase. The notice must contain the amount of the increased rent and the date from which

it is payable.503 Rent may only be increased during a fixed-term agreement of less than two years if the parties have expressly agreed on the amount (or the method of calculating the amount) of the increase and the landlord has given 60 days’ notice in writing prior to the increase.504 If the agreement is fixed for a period of more than two years, rent may be increased whether or not the parties have expressly agreed the amount (or a method of calculating the amount). However, the rent may only be increased once in each 12-month period.505 A penalty not exceeding 20 penalty units applies to failure to comply with the section.506 Where any rent has been paid that is not required under the Act, the tenant may make a written request to the landlord to repay the amount. The landlord has 14 days to repay the amount. If the landlord does not pay, the tribunal may make an order for repayment.507 The tenant has a right to challenge a proposed rent increase on the ground that it is excessive as long as an application is made to the tribunal within 30 days of receipt of the notice.508 In considering whether a rent increase is excessive, the predominant matter to which the tribunal may have regard is the general market level of rents for comparable premises in the same or similar locality, and may also have regard to the value of the premises, landlord’s outgoings, services, fittings, amenities and goods provided, the condition of the premises, and any work done to the premises by the tenant at the landlord’s request, and when the last increase occurred.509 Under the equivalent provision in the 1987 Act, ‘may’ was interpreted to mean ‘shall’, and the onus of proof to show that the increase is excessive is on the tenant. Notably, the language of the 2010 Act was not amended. In Kilpatrick v Gresser,510 it was held that the excessive rent provisions demonstrated that the overriding matter for consideration was the general market rent for comparable premises. Where the tribunal finds that an increase is excessive, it may specify a maximum rent for the premises, and specify that this rent may apply for a period not exceeding 12 months.511

Rent reduction 11.118 The Act provides that a tenant may apply for an order that the rent payable is excessive where there is a reduction or withdrawal of goods,

services or facilities provided with the premises.512 The tenant may apply at any time for such an order, but not after [page 584] the agreement has been terminated.513 Where the landlord refused the tenant access to a shop in a caravan park, a declaration that the rent payable was excessive would arise.514 ‘Reduction or withdrawal by the landlord’ has been held to mean more than intentional action on the part of the landlord; it will arise where the landlord fails to take steps to remedy problems after notification by the tenant.515 In addition, rent will abate if the premises are: destroyed or become wholly, or partly, uninhabitable; no longer lawfully usable as a residence; or compulsorily acquired by an authority.516

Termination General 11.119 The Residential Tenancies Act significantly changes those procedures which are necessary to bring a lease to an end at common law. The various ways in which a residential tenancy can be terminated are prescribed by s 81 of the Act. A residential tenancy can be brought to an end by: either party giving a notice of termination, followed by delivery up of possession by the tenant or an order by the tribunal terminating the agreement; a tribunal order terminating the agreement; a person with a superior title (eg, a head landlord), a successor in title of the landlord, or a mortgagee becoming entitled to the premises (preserving the old system and Torrens priority rules);517 abandonment of the premises by the tenant; express surrender;

merger; or disclaimer, such as repudiation by the tenant accepted by the landlord.

Termination by notice 11.120 Without any ground Notice is a necessary element in bringing both continuing and fixed-term agreements to an end.518 But again, unlike the position at common law, it is not a sufficient means of doing so. In addition, either the tenant must deliver up vacant possession, or the tribunal makes an order under s 83 of the Residential Tenancies Act terminating the agreement. Thus, if the tenant fails to leave following the notice, the landlord must get an order of the tribunal to repossess the premises. There are strict [page 585] penalties for landlords or agents who breach this requirement by physically reentering.519 The tribunal has exclusive jurisdiction over proceedings for recovery of possession where the parties are landlord and tenant, but not where a third party, such as an assignee, is seeking possession on the basis of priority.520 11.121 Following breach A landlord or a tenant may give notice of termination where the other party has breached the agreement.521 In the case of a breach of the obligation to pay rent, the rent must be at least 14 days in arrears before the landlord can give notice.522 The notice of termination must specify a period of at least 14 days for the delivering up of vacant possession.523 11.122 Frustration If the premises are destroyed, rendered wholly or partly uninhabitable, cease to be lawfully usable for the purposes of a residence, or acquired by any authority by compulsory process (otherwise than as a result of a breach of the agreement), either party may give immediate notice of termination of the agreement.524 In these circumstances, rent abates accordingly.525

Order for termination and possession

11.123 Where the tenant fails to deliver up possession of premises on the day specified in the notice of termination, the landlord may apply to the tribunal for an order of termination no less than 30 days after that day.526 The tribunal may grant an order for termination where the landlord establishes that the premises are contracted to be sold.527 In cases of notice of termination for breach, the tribunal may grant the order where the landlord establishes the breach, and establishes that, in the circumstances of the case, the breach is such as to justify termination of the agreement, and that a termination notice was given which was not complied with by the tenant.528 In determining whether to make an order, the tribunal may take into account certain matters, which include: the nature of the breach; any previous breaches; any steps taken by the tenant to remedy the breach; any steps taken by the landlord about the breach; and the previous history of the tenancy.529 [page 586] In all cases, the landlord must establish that a valid notice was given, unless the tribunal deems it appropriate in the special circumstances of the case to waive any defect.530

Suspension or refusal of orders for termination 11.124 The tribunal has discretion to either suspend or refuse orders for termination under ss 114 and 115 of the Residential Tenancies Act. First, having regard to the relative hardship that may be caused to the landlord or tenant, the tribunal may suspend the order for possession (as opposed to the order for termination) ‘for a specified period’.531 Second, the tribunal may refuse to make an order terminating the agreement if the landlord’s strategy amounts to a retaliatory eviction; that is, if the landlord is retaliating because the tenant has applied to the tribunal for an order, complained to a governmental authority or taken some other action to enforce his or her rights

as a tenant, or because an order of the tribunal was in force in relation to the landlord and the tenant.532 The tribunal must also refuse to make an order for termination if, in the case of failure to pay rent, the tenant pays all the rent or enters into, and fully complies with, a payment plan entered into with the landlord.533

Termination where notice not required 11.125 In certain circumstances, the tribunal may make an order for termination whether or not notice has been given by the landlord or tenant. First, where the tribunal is satisfied that the tenant has intentionally or recklessly caused or permitted, or is likely to intentionally or recklessly cause or permit, serious damage to the premises, or injury to the landlord or the landlord’s agent, or any person in occupation of neighbouring property,534 it may order a termination of the agreement without notice.535 This order may specify that it is to take effect immediately.536 In New South Wales Land and Housing Corporation v Green,537 it was held that use of the term ‘may’ in the previous s 68(2) (of the Residential Tenancies Act 1987 (NSW)) conferred a discretion on the tribunal, and that the tribunal had not erred in law in declining to make an order for termination for a single act of injury [page 587] to neighbouring premises and nervous shock to the occupants, as the Department of Housing had a relocation policy for difficult tenants that it could have used, but did not. Second, either the landlord or the tenant may apply to the tribunal to terminate the agreement on the basis that he or she would, in the special circumstances of the case, suffer undue hardship if the agreement were not terminated.538 Where the order is made, compensation may be payable to the other party, who is under a duty to mitigate his or her loss. Third, the tribunal may make a termination order if it is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the residential premises, has intentionally or recklessly caused or

permitted an illegal use of the residential premises, and the use is sufficient to justify termination.539 The tribunal may also make a termination order if the same persons have used the premises, or adjoining or adjacent premises, for the purposes of the manufacture, sale, cultivation or supply of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985 (NSW).540 In either case, no termination notice is required.541 Fourth, the tribunal may make a termination order if the tenant, or any person, occupying or jointly occupying the premises has seriously or persistently threatened or abused the landlord. It may also make an order if the same persons have engaged or permitted another to engage in conduct that would be reasonably likely to cause the person to be intimidated or harassed.542 In such a case, no termination notice is required.543

NSW Civil and Administrative Tribunal (NCAT) 11.126 Disputes between parties to a residential tenancy are dealt with by a specialised, informal tribunal, the NSW Civil and Administrative Tribunal as established by the Civil and Administrative Tribunal Act 2013 (NSW).544 The tribunal has jurisdiction up to $30,000 for matters relating to rental bonds and $15,000 for any other matters. The ‘guiding principle’ for the Civil and Administrative Tribunal Act procedurally is to effect a ‘just, cheap and quick resolution’ of the matters before it.545 The tribunal has a wide discretion in the conduct of proceedings before it. The rules of evidence do not apply.546 [page 588] The tribunal must act ‘with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms’.547 The tribunal is under an obligation to promote the use of other resolution processes, such as mediation and conciliation, in order to narrow or resolve the issues between the parties.548 If a settlement is made, the tribunal may make an order giving effect to the terms of the settlement, as long as the settlement is in writing and signed by the parties and the tribunal is satisfied that it would have power to

make a decision in terms of the agreement.549 Notably, if an application with respect to a tenancy is made to the tribunal, no court will have jurisdiction to deal with the issues raised in the application. This will not apply if the application is withdrawn or dismissed for want of jurisdiction.550 11.127 The tribunal may dismiss any proceedings where: a party to an application withdraws the application or fails to attend the hearing of the application; it is satisfied that the proceedings are ‘frivolous or vexatious or misconceived or lacking in substance’; or it considers there has been ‘a want of prosecution of the proceedings’.551 Hearings are generally open to the public unless ordered to be held in private due to the confidential nature of the matter or evidence.552 A hearing can be dispensed with if the tribunal is satisfied that the issues can be determined on the submissions or other documents.553 In proceedings before the tribunal, a tenant may be represented by the Commissioner for Fair Trading or the commissioner’s agent, who can additionally take, defend or intervene in proceedings before the tribunal.554 An investigator appointed under the provisions of the Fair Trading Act 1987 (NSW) may be empowered to investigate whether the Act or Regulations are being complied with, and to obtain evidence relation to any contravention.555

Representation and costs 11.128 Consistent with the principles of informality and affordability, there are limited rights to legal representation of parties before the tribunal. The basic principle is that each party shall have carriage of his or her own case, and shall not be represented by any other person.556 The tribunal has, however, wide powers to grant leave for a person to be represented, or it can appoint a person to represent a party, appoint a guardian ad litem or order that a party be separately.557 [page 589] Parties in any proceedings before the tribunal must pay their own costs.558 The tribunal may award costs if it is satisfied that there are ‘special

circumstances’.559 The Civil and Administrative Tribunal Act specifies the factors to be taken into account in determining if there are ‘special circumstances’. These include matters such as delay, the way in which parties conducted proceedings, whether proceeding were ‘frivolous or vexatious’, and the complexity of the matter.560 Costs include the costs of, or costs incidental to, proceedings.561

Tribunal orders 11.129 There is a wide array of orders that the tribunal may make when disputes arise. These orders include: termination orders;562 orders relating to performance or restraint;563 and orders relating to payments and compensation.564 In Residential Tenancies Tribunal of New South Wales v Offe,565 compensation was held to include compensation for non-economic loss. The tribunal cannot make conditional orders without giving the affected party the opportunity to challenge an applicant’s claim that the condition has been broken.566

Appeals and reservations of questions of law 11.130 The tribunal may refer questions of law to the Supreme Court of New South Wales if the President has consented to the reference in writing.567 Moreover, when a matter is referred to the Supreme Court, the tribunal must not make an order until the Supreme Court has decided the question. Once the Supreme Court has made a decision, it must remit its decision to the tribunal, and the tribunal must not proceed in a manner, or make an order or a decision, that is inconsistent with the decision of the Supreme Court.568 Appeals are possible against decisions of the tribunal. An appeal can be made to the Appeal Panel of the tribunal.569 The Appeal Panel has power to grant an extension of time in which to appeal.570 Appeals on questions of law may be made as of right, but [page 590]

with respect to any other decision leave of the Appeal Panel is required.571 In order to obtain leave to appeal, the Appeal Panel must be satisfied the appellant may have suffered a substantial miscarriage of justice because the tribunal’s decision was not fair or equitable, because it was against the weight of evidence or because substantial new evidence has arisen.572 In the case of termination of a tenancy where a warrant of possession has been executed, an appeal can only be made on a question of law.573 The Appeal Panel can deal with the matter by way of a new hearing if it believes that is warranted. This can include consideration of new or substitute evidence.574 A party to an appeal to the Appeal Panel, with leave, can appeal to the Supreme Court on a question of law in respect of any decision made by the tribunal.575 The court can affirm, vary or set aside the tribunal decision, or remit the case to be reheard by the tribunal.576 Further, a request for judicial review may be made to the Supreme Court. Such relief is discretionary. Moreover, the Civil and Administrative Tribunal Act provides a number of grounds on which the Supreme Court can refuse to exercise its supervisory jurisdiction. Most relevantly, that court can refuse jurisdiction where it believes ‘that adequate provision is made for an internal review of the decision or an administrative review of the decision by the tribunal’ under the Administrative Decisions Review Act 1997 (NSW).577

Residential tenancies and priorities 11.131 While s 13 of the Residential Tenancies Act has largely removed the distinction between legal and equitable interests by providing that agreements can be either written or oral, or partly written and partly oral, and draws no distinction between agreements under old system title and Torrens title, residential tenancies remain subject to the priority rules in operation under those systems.578 This is evident from s 81(4) of the Act, which provides that residential tenancy agreements will come to an end when various third parties (holders of superior title, assignees or mortgagees) ‘become entitled to possession of the residential premises’. These entitlements are governed by the relevant common law and statutory principles. It follows that, in the case of old system title, for instance, if the agreement is in the form of a deed, or oral within the requirements of s 23D(2) of the Conveyancing Act, it

will be legal and will have its priority determined by whether it is an earlier or later interest. Equally, if the agreement is for three years or less and the tenant is in occupation, the tenant will be able to take advantage of the exception to indefeasibility contained in s 42(1)(d) of the Real Property Act in the case of Torrens title. Of course, if the agreement would only [page 591] qualify as a licence at common law, as where the tenant does not have a right of exclusive possession, but does have the protection of the Residential Tenancies Act because he or she is not a boarder or lodger, that ‘tenant’ will be unable to take advantage of any priority rules because such an interest is not proprietary at common law.579 Although the priority rules prevail in determining disputes where successors in title of either the landlord or the tenant are in dispute, the Residential Tenancies Act contains an important provision that allows the tribunal, or any court that is hearing the action to recover possession, to vary those rules. By s 125 of the Residential Tenancies Act, the tribunal has power ‘in the special circumstances of the case’ to make an order vesting a tenancy in the tenant, or former tenant holding over after termination of the agreement, where a person (the plaintiff) who is not the landlord is proceeding to recover possession of the premises. The tribunal also has power to vest a tenancy in the tenant or former tenant where the plaintiff has recovered possession. The tenancy vested by the tribunal will be held on such terms and conditions as it thinks fit, having regard to the circumstances of the case. Though the heading of s 125 states that it is concerned with orders against a ‘person with a superior title’, and s 81(4) of the Residential Tenancies Act draws a clear distinction between persons with a superior title (‘for example, a head landlord’),580 a person who succeeds to the title581 and mortgagees,582 it has been held that the forerunner to s 125, s 76 of the Residential Tenancies Act 1987, applied to mortgagees, and presumably purchasers, because of the general wording in the section referring to ‘a person … who is not the landlord’.583 This wording is replicated in s 125. ‘In the special circumstances of the case’ does not merely mean the unique position of the tenant, but imposes a requirement on the

tenant ‘to provide grounds for taking his position out of the ordinary’; and it will not be easy to establish special circumstances where the tenant can obtain ‘alternative accommodation of an adequate kind’.584 Where the tribunal exercises its power to vest a tenancy, the effect is to displace pro tanto the priority rules in respect of both the old system and Torrens system. If an agreement has been entered into after a mortgage has been created, and the mortgage prohibits the granting of leases, the agreement is not binding on the mortgagee unless the mortgagee consents.585 Even in this case, the tribunal or court retains a discretion to grant a lease under s 125.586

Reform of residential tenancies legislation 11.132 The previous edition of this text identified a number of desirable reforms in residential tenancies law. Although a new Residential Tenancies Act came into force in [page 592] 2010, it seems that many of the suggested reforms remain outstanding (and all, therefore, remain addressed below). While not all of these, or possibly even any, would find favour with all those affected by the legislation, they represent serious weaknesses in the Act.

Rent regulation 11.133 As noted above, the tribunal’s power to police rents is very limited. Basically, only rent increases and excessive rent, in the context of withdrawal of services, come within its jurisdiction. Yet high rent is a significant factor in poverty in Australia.587 The excessive rent provision has not been of much assistance to tenants, given the great difficulties faced in proving general market rents for similar premises. In these circumstances, it would be fairer for landlords to have the onus of proving that a rent increase was not excessive, particularly because landlords usually engage agents who have expert knowledge about market rents. A further useful reform could be the restriction of rent increases by reference to the increases in the consumer price

index (CPI), as is commonly the case in commercial leases. This could alleviate one of the worst tendencies of housing markets: rapid and steep increases in times of shortage. This is a potentially acute problem in the context of ‘mega-events’, while guaranteeing that landlords have a satisfactory return on their investment.588 Another suggested strategy for dealing with this problem is by means of limiting the number of rent increases over a specified period.589 In respect of this last suggestion, it should be noted that in the specific context of fixed term residential tenancy agreements, the Residential Tenancies Act has undertaken one small reform, and limited rent increases to only one per 12-month period.590

Share housing, boarders and lodgers 11.134 The tribunal has no jurisdiction over disputes between tenants, because its jurisdiction is limited to landlord–tenant disputes. These disputes may only surface in the context of a residential tenancy dispute. Moreover, where a co-occupant is not a tenant (as is often the case where one person secures the property as tenant, and later finds others to occupy without the landlord’s consent, or where original tenants leave and others enter without consent), disputes may arise in relation to the bond, or debts incurred during the tenancy, but these parties cannot gain access to the tribunal, unless the tribunal consents under s 77 of the Residential Tenancies Act. It follows that they must go to the Local Court or opt for some alternative dispute-resolution process to get justice. This seems both wasteful and inefficient when the tribunal may often have already dealt with the same matter in the context of a landlord–tenant dispute. There appears no good reason why the tribunal should not also determine these disputes, as they will frequently be [page 593] cognate to the tenancy agreement. A study prepared for the Department of Fair Trading has recommended this.591 A further improvement in the Residential Tenancies Act would be a set of reforms relating to share households. The Act says nothing about the

formalities necessary to assign a residential tenancy agreement, or the consequences of informal arrangements such as those noted above. It follows that complex rules of the common law apply. Equally, in many instances, ‘cotenants’ in share households might be subtenants, boarders or lodgers, which may put them in an even more vulnerable position. A preferable position would be for each occupant, regardless of formal status, to have access to the tribunal to resolve disputes. Indeed, boarders and lodgers generally, given their particular vulnerability in terms of termination by notice (which depends exclusively on the contract), should have access to the tribunal to uphold their rights.

Reasonable security 11.135 A vast number of cases have found their way to the tribunal on the subject of reasonable security. As we have seen above,592 the tribunal uses a number of tests to determine what reasonable security is for particular premises. But, arguably, the best test is that of insurance companies, which have detailed data about such matters. This data forms the basis of decisions to insure. Often these decisions impose conditions on occupants, say, to install deadlocks as a condition of insurance. If the landlord fails to do this, the tenant may be unable to get insurance. As the tribunal has held, these conditions ought to be accepted as proof, in the event of burglary, that the premises were not reasonably secure, as long as they were brought to the attention of the landlord.593

Assigning and subletting 11.136 The Residential Tenancies Act 2010 (NSW) has partially reformed previous problems with assignment and subletting. The 1987 Act gave the landlord an unfettered discretion to withhold consent to a proposed assignment or sublease.594 This was at odds with the retail leases legislation and the residential tenancies legislation in other states. Unfortunately, the Act still gives a right of veto to landlords over an entire transfer or sublease. However, it does now make a request for a partial transfer or sublease subject to a reasonable withholding of consent by the landlord.595 Yet there remains little to justify the conferring of an effective veto on landlords with respect to full transfers and subleases, as long as their investment in the property is

satisfactorily protected. This end can be achieved as long as the landlord has ready access to the tribunal, and remedies are prompt, which is the case at present. As Bradbrook has argued, in principle a tenant’s separate [page 594] proprietary interest should be as ample as possible, consistent with protection of the landlord’s interest.596 This would require a general right to assign and sublet, subject to a reasonable withholding of consent by the landlord.

Retail Leases 11.137 Since 1994, certain retail leases have been governed by a special statutory regime, the Retail Leases Act 1994 (NSW).597 As is the case with residential tenancies, the legislation has introduced some compulsory terms into retail leases, but it differs in so far as it has not introduced an entirely new specialised tribunal to deal with disputes. Disputes in relation to retail leases may be heard at first instance in the NSW Civil and Administrative Tribunal.

What is a retail lease? 11.138 A retail lease for the purposes of the Retail Leases Act is a ‘retail shop lease’, defined as an agreement under which one party grants to another, for value, a right of occupation of premises for use as a retail shop.598 The agreement need not confer a right of exclusive possession,599 and the Act applies whether or not the agreement is express or implied, oral or in writing.600 Where the lease covers premises in addition to that of a retail shop, only the shop is covered by the Act.601 The Retail Leases Act applies to two basic categories of retail shop. First, those retail shops used, or intended to be used, wholly or predominantly for the carrying on of certain types of businesses listed in Sch 1 of the Act.602 The second class comprises those retail shops used to carry on a business (whether or not in Sch 1) in a ‘retail shopping centre’.603 A ‘retail shopping centre’ is in turn defined as a cluster of premises with at least five businesses as listed in Sch

1; the premises must be owned by one person, have the same landlord, or be in the one strata plan; the premises must be in one building, or in two or more related buildings; and the cluster must be promoted as, or be generally regarded as, a shopping centre, mall, court or arcade.604 The following leases are excluded from the Act: agreements where the term of the lease (including options for extension or renewal) is 25 years or more;605 [page 595] agreements where the term of the lease (including options for extension or renewal) is less than six months, except where the tenant has been, or is entitled to be, in uninterrupted possession of the shop for a period of more than one year under a series of two or more leases or lease extensions or renewals;606 agreements concerning a shop having a lettable area of 1000 square metres or more;607 and leases entered into before the Act commenced.608

Rights and obligations 11.139 By s 7 of the Retail Leases Act, it is not possible to contract out of the Act. If a term of the lease is inconsistent with the Act, the term is void. Part 2 of the Act deals with pre-agreement dealings between the parties. A lease cannot be advertised unless a copy of the proposed lease is available for prospective tenants,609 and each party must give to the other a disclosure statement that contains the prescribed information.610 By s 14(1), the landlord, or his or her agent, must not seek or accept key-money611 or lease preparation expenses in connection with the grant of a lease.612 Part 2A of the Act establishes a regime for the lodgment with a government agency of security bonds received by the landlord in respect of a lease, and for the payment of the bond on the application of one or both of the parties. The Retail Leases Act provides that the minimum duration of the lease

(including any right to renew) must be five years. This means that a one-year lease is automatically extended to five years.613 An exception to this is where a lawyer, not acting for the landlord, certifies that he or she has explained the provision to the tenant, and that it is not to apply in the instant case. This certificate can be given within six months of the lease being entered into.614

Rent 11.140 There is no restriction on the starting rent for the premises. Accordingly, a free-market regime applies. However, significant restrictions apply to changes to the rent. Unless the lease provides for the variation of the existing rent by a specified amount or a specified percentage, the rent payable cannot be varied in the first year of the lease, and thereafter may generally be varied only once a year.615 The lease cannot grant to either [page 596] party a discretion as to which of two or more methods of calculating the variation of the existing rent is to be used on a particular occasion.616 Where the existing rent would decrease under the method selected to calculate the variation, the lease cannot provide that the rent will not decrease.617 Where the lease provides for a review of the rent payable to a current market rent, the Retail Leases Act provides a procedure to be used if the parties cannot agree on the amount of rent payable under the review.618 It is possible to have rent clauses tied to ‘turnover’ (defined to include gross takings, receipts and incomes),619 though many charges, such as interest and refunds, are excluded.620 Charges payable by the tenant in relation to outgoings are strictly regulated.621 Rent abates in cases of damage to premises, but without prejudice to the right of the landlord to recover compensation from the tenant where the tenant caused the damage.622

Assignment and subletting

11.141 The Retail Leases Act represents a significant break with the common law in its very different treatment of the right to assign and the right to sublet. The landlord’s right to restrict dealings by the tenant is limited, though the tenant is given much greater freedom to assign than to sublet. By s 39 of the Act, as long as the tenant complies with the procedural formalities required, a landlord can refuse consent to a proposed assignment of a retail shop lease by the tenant only if the assignment provides for a change of use to which the shop is put,623 or if the financial resources or retailing skills of the assignee are inferior to those of the assignor.624 The lease must not require the payment of key-money,625 nor must the landlord or his or her agent seek the payment of key-money, in connection with the consent.626 The landlord may, however, require a reasonable sum to cover legal and other expenses incurred in giving consent.627 The Retail Leases Act requires the following formalities: The request for consent must be in writing; it must include such information as the landlord may reasonably require concerning the financial standing and business experience of the assignee; and the tenant must give the proposed assignee a copy of any disclosure statement, together with information of which the tenant is aware concerning any changes in the circumstances outlined in the disclosure statement since it was received.628 The landlord must deal [page 597] promptly with the request. The landlord is taken to have consented to the assignment if he or she has not notified the tenant of any refusal within 28 days.629 Section 41A of the Act provides a procedure through the issue of disclosure statements whereby the assignor can be relieved of liability for future breaches of the lease by the assignee, where the retail shop will continue to be an ongoing business. By s 42 of the Retail Leases Act, a retail lease may contain a clause giving the landlord an absolute discretion concerning: the grant of a sublease or licence; the parting with possession of the whole or part of the shop; or the granting of mortgages or other encumbrances over the lease.

Termination 11.142 A fixed-term retail lease does not expire by effluxion of time. Where the lease does not contain an option to renew, the landlord must give the tenant between six and 12 months’ notice, advising either that a renewal will be offered, or that no renewal will be offered.630 The tenant has one month to accept the offer of a new lease.631 If the landlord does not give this notice, the tenant can, before the expiration of the lease, make a written request for the extension of the lease, in which case the lease is extended until six months from the time the landlord does give the required notice.632 The tenant can terminate the extended lease by giving one month’s written notice.633 The Retail Leases Act imposes significant restrictions on relocation and demolition clauses, to offer a measure of protection to tenants.634 It also prohibits the inclusion in the lease of a power to terminate on the grounds of failure to meet specified turnover or sales targets.635

Disputes Dispute resolution 11.143 Part 8 of the Retail Leases Act deals with dispute resolution. The Registrar of Retail Tenancy Disputes may mediate disputes referred to him or her by either or both parties to a retail tenancy agreement.636 The NSW Small Business Commissioner currently acts as the Registrar. Importantly, a court cannot hear a retail tenancy dispute unless it is satisfied that mediation is unlikely to be successful, or that the Registrar has certified that mediation has failed.637 [page 598]

NSW Civil and Administrative Tribunal (NCAT) 11.144 Retail tenancy claims and unconscionable conduct claims may be dealt with at first instance by the Civil and Administrative Tribunal.638 When hearing claims of this nature, the tribunal is constituted in accordance with the relevant requirements of the Civil and Administrative Tribunal Act 2013

(NSW).639 Matters can be brought before the tribunal directly, or may be referred to the tribunal by a court where matters are commenced before a court. A court must refer matters to a tribunal if it is satisfied that they may be effectively dealt with by the tribunal, that they are appropriate to be dealt with in this way, and that it is in the interests of justice for them to be dealt with in this way.640 By s 70 of the Retail Leases Act, a retail tenancy claim is: a claim for, or a claim for relief from, the payment of a specified sum of money; a claim for the doing of specified work or the provision of specified services; or a claim for the surrender of possession of specified premises. This clearly includes actions for the payment of rent, but also covers moneys owing under a rent review clause,641 and claims for unliquidated damages.642 Formerly, the tribunal had no jurisdiction in relation to ejectment or equitable remedies, such as relief against forfeiture or specific performance.643 By s 72(1) of the Act, the tribunal may now grant such orders for the surrender of possession of premises and equitable remedies. By ss 62B(8) and 71A of the Retail Leases Act, an unconscionable conduct claim is an action brought by a landlord or tenant who has suffered loss because of the other’s unconscionable conduct in connection with a lease. Under s 72AA of the Act, the tribunal has the power to make an order that a party is obliged, or is not obliged, to pay money to another person, whether by way of debt, damages, restitution or refund. Prior to amendments made in 2005, appeals from orders of the tribunal were possible to the Supreme Court of New South Wales in relation to unconscionable conduct claims. Now those appeals, like those in relation to retail tenancy claims, are made to the Appeal Panel of the Civil and Administrative Tribunal.644 The limit of the tribunal’s jurisdiction is currently $400,000.645

1.

Wik Peoples v Queensland (1996) 187 CLR 1; 141 ALR 129.

2.

Wik Peoples v Queensland (1996) 187 CLR 1 at 226; 141 ALR 129 at 265–6.

3.

See 11.6–11.8 and 11.12–11.15.

4.

Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47.

5.

Say v Smith (1561) 1 Plowd 269; 75 ER 410.

6.

Lace v Chantler [1944] KB 368 at 370–1.

7.

Lace v Chantler [1944] KB 368.

8.

Mangiola v Costanzo [1980] ANZ ConvR 331.

9.

Bishop v Taylor (1968) 118 CLR 518.

10.

Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386. For some critical consideration of this case, and the general principle, see S Bright, ‘Uncertainty in Leases: Is It a Vice?’ (1993) 13 Legal Studies 38; P Sparkes, ‘Certainty of Leasehold Terms’ (1993) 109 LQR 93. See also the discussion on reform at 11.83.

11.

However, if the tenant goes into possession and pays rent a valid tenancy may otherwise arise under s 127 of the Conveyancing Act 1919 (NSW).

12.

Doe d Lockwood v Clarke & Brown (1807) 103 ER 313.

13.

Radaich v Smith (1959) 101 CLR 209. See the excellent discussion of this case in A Bradbrook, S MacCallum and A Moore, Australian Real Property Law, 3rd ed, Lawbook Co, Sydney, 2002, pp 425–7. For an application of this principle, see Penrith Whitewater Stadium Ltd v Lesvos Enterprises Pty Ltd (2007) 13 BPR 24,799 (NSWCA).

14.

KJRR Pty Ltd v Commissioner of State Revenue (Vic) [1999] 2 VR 174.

15.

KJRR Pty Ltd v Commissioner of State Revenue (Vic) [1999] 2 VR 174 at 176, 186 per Tadgell JA; at 187 per Callaway JA; at 187 and 189 per Chernov JA.

16.

KJRR Pty Ltd v Commissioner of State Revenue (Vic) [1999] 2 VR 174 at 182–4 per Tadgell JA; at 187 per Callaway JA; at 189–90 per Chernov JA. An example of the sham and pretence doctrines being employed by a court to find that a purported licence was truly a lease is Antoniades v Villiers (jointly reported with AG Securities v Vaughan) [1990] 1 AC 417. In this case, the purported licence agreement granted severally to the two licensees the right to occupy a small, one-bedroom flat, but also reserved to the licensor the right to occupy the flat and the right to allow additional persons to occupy the premises as well. These reservations were characterised as shams designed to deceive the court and were never intended to be relied on. Alternatively, Lord Templeman (at 465) characterised them as a pretence intended to deprive the grantees of the legislative protection applying to lessees.

17.

Street v Mountford [1985] AC 809.

18.

Bruton v London and Quadrant Housing Trust [2000] 1 AC 406.

19.

Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 at 411 per Lord Jauncey of Tullichettle; at 413 per Lord Hoffmann. Also see Street v Mountford [1985] AC 809 at 826.

20.

Third parties, such as the owner of the land, are not bound by the lease. See Kay v Lambeth London

Borough Council [2004] 3 WLR 1396, noted in P Butt, ‘Leases, Licences and the Modern “Contractual Tenancy”’ (2005) 79 ALJ 145 at 146. 21.

Lewis v Bell (1985) 1 NSWLR 731.

22.

Stuart v Marshall (1958) 75 WN (NSW) 252.

23.

Street v Mountford [1985] AC 809 at 822, 823; Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 at 411 per Lord Jauncey of Tullichettle; at 414 per Lord Hoffmann.

24.

Street v Mountford [1985] AC 809 at 826–7; Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 at 413 and 414 per Lord Hoffmann; at 417 per Lord Hobhouse of Woodborough.

25.

Errington v Errington [1952] 1 KB 290; Heslop v Burns [1974] 3 All ER 406.

26.

Metropolitan Fire Brigades Board v Tait [1949] VLR 231.

27.

See Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 at 411 per Lord Jauncey of Tullichettle; at 414 per Lord Hoffmann.

28.

See 6.5.

29.

This provision does not apply only to oral leases, but extends to written leases as well: Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 84; Enkelmann v Glissan (1982) 2 BPR 9640 at 9642–3. It was explained in the latter case that because the type of lease described in s 23D(2) of the Conveyancing Act need not be in writing, such a lease — whether in writing or not — comes within s 23B(2)(d), and is thus an exception to s 23B(1).

30.

Haselhurst v Elliot [1945] VLR 153.

31.

Kushner v Law Society [1952] 1 KB 264; [1952] 1 All ER 404.

32.

See 11.12–11.15.

33.

Walsh v Lonsdale (1882) 21 Ch D 9.

34.

For these requirements generally, see Chapter 6.

35.

Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169; [1962] 3 All ER 593.

36.

Warmington v Miller [1973] QB 877; [1973] 2 All ER 372.

37.

Marshall v Council of the Shire of Snowy River (1994) NSW ConvR ¶55-719 per Kirby P.

38.

Vella v Wah Lai Investment (Aust) Pty Ltd (2004) 12 BPR 22,671 at 22,772–6.

39.

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Perpetual Trustee Company Ltd v Smith [2010] FCAFC 91; Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 2016.

40.

See Chapter 8.

41.

Parkinson v Braham [1962] SR (NSW) 663.

42.

See P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, pp 300, 734. And as with old system land, such a lease in respect of Torrens title land will be legal, whether made by deed, in writing or orally. See Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 84 and Enkelmann v Glissan (1982) 2 BPR 9640 at 9642–3.

43.

Dockrill v Cavanagh (1944) 45 SR (NSW) 78. For implied leases, see 11.12–11.15.

44.

Carberry v Gardiner (1936) 36 SR (NSW) 559. Because s 53 of the Real Property Act does not require a lease for a term not exceeding three years to be registered, it might be possible to argue that such a lease, if made by deed, is a legal interest even if it does not satisfy the other requirements of s 23D(2).

45.

Australian Provincial Assurance Co Ltd v Rogers (1943) 43 SR (NSW) 202 at 205.

46.

See 11.18.

47.

Cottage Holiday Associates Ltd v Customs and Excise Commissioners [1983] QB 735.

48.

Butcher v Bowen [1964] NSWR 36.

49.

Land Settlement Association Ltd v Carr [1944] 1 KB 657.

50.

Crate v Miller [1947] KB 946.

51.

Sidebotham v Holland [1895] 1 QB 378; Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386.

52.

Re Threlfall (1880) 16 Ch D 274.

53.

Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 81.

54.

Moore v Dimond (1929) 43 CLR 105.

55.

Ladies’ Hosiery & Underwear Pty Ltd v Parker [1930] 1 Ch 304 at 328–9.

56.

For such periodic tenancies, see 11.15.

57.

Richardson v Langridge (1811) 4 Taunt 128. In this case, there is some disagreement between Mansfield CJ, who confines aliquots to half-yearly or quarterly (at 131), and Chambre J, who suggests that payment of rent by reference to any aliquot will do.

58.

Morison v Edmiston [1907] VLR 191. In that case, the lease was void for uncertainty of duration, since it was expressed to last ‘while the tenant is stationed at Hamilton’. See also 11.4.

59.

Adler v Blackman [1953] 1 QB 146 (CA). There is some doubt, however, about the interest of the overholding tenant where a one-year lease expires and the original rent was expressed simply as a weekly sum. In Adler v Blackman, it was held that a weekly tenancy arose; in Bank of Victoria v M’Hutchison (1881) 7 VLR (L) 452, yearly.

60.

Dockrill v Cavanagh (1944) 45 SR (NSW) 78 per Jordan CJ.

61.

Moore v Dimond (1929) 43 CLR 105.

62.

Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544.

63.

Dockrill v Cavanagh (1944) 45 SR (NSW) 78.

64.

Larke Hoskins & Co Ltd v Icher (1929) 29 SR (NSW) 142.

65.

Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540.

66.

Turner v York Motors Pty Ltd (1951) 85 CLR 55.

67.

Metropolitan Trade Finance v Coumbis (1973) 131 CLR 396.

68.

Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 81 per Jordan CJ.

69.

Turner v York Motors Pty Ltd (1951) 85 CLR 55.

70.

Manfield & Sons Ltd v Botchin [1970] 2 QB 612; Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23.

71.

Francis Jackson Developments Ltd v Stemp [1943] 2 All ER 601.

72.

Howard v Shaw (1841) 8 M & W 118; Zegir v Woop [1955] VLR 394.

73.

McMahon v Docker (1945) 62 WN (NSW) 155.

74.

James v Dean (1805) 11 Ves 383.

75.

Landale v Menzies (1909) 9 CLR 89.

76.

See 11.12–11.15.

77.

Anderson v Bowles (1951) 84 CLR 310 at 319.

78.

Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580. In Bruton v London and Quadrant Housing Trust [2000] 1 AC 406, it was said that it is the grant of the lease that gives rise to the estoppel, rather than the estoppel giving rise to the lease: at 415–16 per Lord Hoffmann; at 418 per Lord Hobhouse of Woodborough.

79.

Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580 at 596 per Lord Denning.

80.

Webb v Austin (1844) 7 Man & G 701.

81.

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.

82.

S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637. For a more extended treatment of the various ways in which leases by estoppel may arise, see Butt, Land Law, note 42 above, pp 293–6.

83.

Vella v Wah Lai Investment (Aust) Pty Ltd (2004) 12 BPR 22,671 at 22,678. On the cessation of the equitable lease, a tenancy under s 127 of the Conveyancing Act might still subsist. See 11.14.

84.

Minister for the Interior v Brisbane Amateur Turf Club (1949) 80 CLR 123. Also see D Klineberg, ‘Concurrent Leases in Commercial Transactions’ (2004) 10 APLJ 222.

85.

Conveyancing Act 1919 (NSW) s 120A(5).

86.

This position is reversed in the case of residential tenancies and retail leases, where statute establishes a large number of rights and obligations which the parties are prohibited from contracting out of: see 11.107–11.115 and 11.138.

87.

Malzy v Eichholz [1916] 2 KB 308 at 314. The extent to which the express terms of the lease can qualify the operation of the implied covenant will depend on the construction of the express covenant. See Carpet Fashion Pty Ltd v Forma Holdings Pty Ltd [2004] NSWCA 150.

88.

Markham v Paget [1908] 1 Ch 697.

89.

C Harpum, Megarry and Wade: The Law of Real Property, 6th ed, Sweet & Maxwell, London, 2000, p 861.

90.

Hudson v Cripps [1896] 1 Ch 265 at 268.

91.

Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd 1.

92.

Lavender v Betts [1942] 2 All ER 72.

93.

Perera v Vandiyar [1953] 1 WLR 672.

94.

Martins Camera Corner Pty Ltd v Hotel Mayfair [1976] 2 NSWLR 15.

95.

Kenny v Preen [1963] 1 QB 499.

96.

David Jones Ltd v Leventhal (1927) 40 CLR 357.

97.

Browne v Flower [1911] 1 Ch 219.

98.

J C Berndt Pty Ltd v Walsh [1969] SASR 34.

99.

Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 at 752 per Santow J.

100. Malzy v Eichholz [1916] 2 KB 308.

101. Nordern v Blueport Enterprises Ltd [1996] 3 NZLR 450; Southwark London Borough Council v Mills [2001] 1 AC 1. 102. Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd 1. 103. See also Harris v Commissioner for Social Housing (2013) 8 ACTLR 98. 104. Nordern v Blueport Enterprises Ltd [1996] 3 NZLR 450. 105. Sanderson v Berwick-upon-Tweed Corporation (1884) 13 QBD 547. 106. Malzy v Eichholz [1916] 2 KB 308. 107. Browne v Flower [1911] 1 Ch 219. 108. Owen v Gadd [1956] 2 QB 99; J C Berndt Pty Ltd v Walsh [1969] SASR 34; Lamiri v Aidan Nominees (1987) ANZ ConvR 497. 109. Southwark London Borough Council v Mills [2001] 1 AC 1. 110. Baynes & Co v Lloyd & Sons [1895] 2 QB 610. 111. Jones v Lavington [1903] 1 KB 253. 112. James v Harris (1876) 35 LT 240; Smith v Scott [1973] 1 Ch 314; Wilkie v Blacktown City Council (2002) 121 LGERA 444. 113. See Peden Pty Ltd v Bortolazzo [2006] 2 Qd R 574 at [29]. 114. Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437. Gordon v Lidcombe Developments Pty Ltd [1966] 2 NSWR 9. 115. Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200. 116. Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437 (drying sheds for timber business); Cable v Bryant [1908] 1 Ch 259 (hoardings obstructed ventilation for a stable). 117. Edward Kazas & Associates Pty Ltd v Multiplex (Mountain Street) Pty Ltd (2002) 11 BPR 20,353 at 20,364. 118. Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207. 119. Robinson v Kilvert (1889) 41 Ch D 88. 120. Chartered Trust plc v Davies (1997) 76 P & CR 396. 121. See Harpum, Megarry and Wade: The Law of Real Property, note 89 above, p 869. 122. Lamiri v Aidan Nominees Pty Ltd (1987) ANZ ConvR 497 at 501. 123. Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 at 208 per Kirby P, with whom Hope and Samuels JJA agreed. 124. See 11.23. 125. Smith v Marrable (1843) 11 M & W 5; 152 ER 693. 126. Cruse v Mount [1933] Ch 278. 127. Pampris v Thanos [1968] 1 NSWR 56. 128. Manchester Bonded Warehouse Co Ltd v Carr (1880) 5 CPD 507; [1874–80] All ER Rep 563. 129. See 11.109. 130. See 11.37. 131. Warren v Keen [1954] 1 QB 15.

132. Haskell v Marlow [1928] 2 KB 45 at 58 per Talbot J. 133. Regis Property Co Ltd v Dudley [1959] AC 370. 134. Anderson v Bowles (1951) 84 CLR 310. 135. Powley v Walker (1793) 5 Term Rep 373; 101 ER 208. 136. See, eg, s 13 of the Agricultural Tenancies Act 1990 (NSW) and the many and varied obligations imposed under the Crown Lands Acts. 137. Bucknall v Reid (1876) 10 SALR 188. 138. As to which, see 11.39. 139. Saviane v Stauffer Chemical Co (Australia) Pty Ltd [1974] 1 NSWLR 665. 140. Proudfoot v Hart (1890) 25 QBD 42 at 52. 141. Conveyancing Act 1919 (NSW) s 84(1)(a). 142. Conveyancing Act 1919 (NSW) s 85(1)(a). 143. Conveyancing Act 1919 (NSW) s 85(1)(b). 144. Conveyancing Act 1919 (NSW) s 85(1)(c). 145. Conveyancing Act 1919 (NSW) s 85(1)(d). 146. Conveyancing Act 1919 (NSW) s 74(2). 147. Conveyancing Act 1919 (NSW) s 85(1)(d). 148. Liverpool City Council v Irwin [1977] AC 239. 149. Dowse v Wynyard Holdings Ltd [1962] NSWR 252. 150. Dillon v Nash [1950] VLR 293. 151. Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381. 152. Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 at 392, citing MacKinnon LJ in Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 at 227. Also see Edward Kazas & Associates Pty Ltd v Multiplex (Mountain Street) Pty Ltd (2002) 11 BPR 20,353 at 20,362–3. 153. Cavalier v Pope [1906] AC 428. 154. Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313. For a discussion of this case, see L Griggs, ‘The Tragedy of Northern Sandblasting v Harris and the Landlord’s Liability to Third Parties’ (1998) 6 APLJ 169. 155. For the difficulties in predicting the impact of this case on landlords’ responsibilities, see Y de Fina, ‘Common Law Obligations of a Landlord of Residential Premises’ (1997) 12 Aust Ins Law Bulletin 93. 156. Assaf v Kostrevski (1999) NSW ConvR ¶55-883. 157. New South Wales v Watton (1999) NSW ConvR ¶55-885. 158. Jones v Bartlett (2000) 205 CLR 166. 159. See Butt, Land Law, note 42 above, p 312. 160. Sakoua v Williams (2005) 64 NSWLR 588. 161. Sakoua v Williams (2005) 64 NSWLR 588 at 590.

162. Sakoua v Williams (2005) 64 NSWLR 588 at 593–5. 163. Sakoua v Williams (2005) 64 NSWLR 588 at 600–2. 164. New South Wales Department of Housing v Hume [2007] NSWCA 69. 165. New South Wales Department of Housing v Hume [2007] NSWCA 69, [88]. 166. New South Wales Department of Housing v Hume [2007] NSWCA 69, [93]. 167. New South Wales Department of Housing v Hume [2007] NSWCA 69, [8]–[9]. 168. Ahluwalia v Robinson [2003] NSWCA 175; New South Wales Department of Housing v Hume [2007] NSWCA 69 at [87] per McColl JA. 169. P Butt, ‘Landlord’s Liability for Defective Premises’ (2006) 80 ALJ 284 at 285. 170. For the various types of waste, see 3.50–3.54. 171. Whitham v Kershaw (1886) 16 QBD 613. 172. Imperial Acts Application Act 1969 (NSW) s 32(1), (3). 173. Warren v Keen [1954] 1 QB 15. 174. Regis Property Co Ltd v Dudley [1959] AC 370. 175. There seem to be degrees of doubt as to the extent to which the various categories of tenants are liable for permissive waste. See, generally, the discussion in Bradbrook, MacCallum and Moore, Australian Real Property Law, note 13 above, [12.35]. 176. Proudfoot v Hart (1890) 25 QBD 42 at 50. 177. Matthey v Curling [1922] 2 AC 180. However, the emerging contractualisation of leases and the consequent applicability of the frustration doctrine may render this principle irrelevant. See 11.75. 178. Bailey v J Paynter (Mayfield) Pty Ltd [1966] 1 NSWR 596. 179. Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567. 180. Graham v Markets Hotel Pty Ltd (1942) 43 SR (NSW) 98 at 103 per Jordan CJ. 181. Ravenseft Properties Ltd v Davstone (Holdings) Ltd [1979] 2 WLR 897 at 904. 182. Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567. The English position has been accepted in New Zealand. See Weatherhead v Deka New Zealand Ltd (No 2) [1999] 1 NZLR 453. 183. See, generally, A McGee, ‘Inherent Defects and the Repair Covenant in Commercial Leases’ (2007) 7 QUTLJJ 325. 184. Haskell v Marlow [1928] 2 KB 45 at 58 per Talbot J. 185. O’Brien v Robinson [1973] 1 All ER 583. See also 7-Eleven Stores Pty Ltd v United Petroleum Pty Ltd [2010] QSC 469. 186. McGreal v Wake (1984) 269 EG 1254. See, generally, A Stanfield, ‘A Landlord’s Liability for Repair: When Does It Arise and How Far Does It Extend?’ (1995) 3 APLJ 209. 187. Keeves v Dean [1924] 1 KB 685. 188. Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47. 189. Pinhorn v Souster (1853) 8 Exch 763. 190. G J Coles & Co Pty Ltd v Commissioner of Taxation (1975) 49 ALJR 188. 191. Marks v Warren [1979] 1 All ER 29.

192. Butt, Land Law, note 42 above, p 363. 193. Field v Barkworth [1986] 1 WLR 137. 194. Sweet & Maxwell v Universal News Service Ltd [1964] 2 QB 699. 195. Cook v Shoesmith [1951] 1 KB 752. 196. Stening v Abrahams [1931] 1 Ch 470. 197. Marks v Warren [1979] 1 All ER 29. 198. Massart v Blight (1951) 82 CLR 423. 199. Hyde v Pimley [1952] 2 QB 506. 200. Creer v P & O Lines of Australia (1971) 125 CLR 84. 201. J A McBeath Nominees Pty Ltd v Jenkins Development Corp Pty Ltd [1992] 2 Qd R 121 at 130 per Kelly SPJ. 202. International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 Ch 513. 203. McKenzie v McAllum [1956] VLR 208. 204. Killick v Second Covent Garden Property Co Ltd [1973] 1 WLR 658; [1973] 2 All ER 337. 205. Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWLR 480. 206. Shanly v Ward (1913) 29 TLR 714. 207. British Bakeries (Midlands) v Michael Testler & Co Ltd [1986] 1 EGLR 64. 208. Boss v Hamilton Island Enterprises Ltd [2009] QCA 229. 209. Conveyancing Act 1919 (NSW) s 132. 210. The covenantee is the party who receives the benefit of the contractual obligation and the covenantor is the party who is bound to perform the contractual obligation. For example, in respect of the covenant for the payment of rent, the landlord is the covenantee and the tenant is the covenantor. In respect of the covenant for quiet enjoyment, the tenant is the covenantee and the landlord is the covenantor. 211. See Ahern v LA Wilkinson (Northern) Ltd [1929] St R Q 66. 212. Moule v Garrett (1870) LR 5 Ex 132 (tenant liable where assignee breached covenant to repair); Stuart v Joy [1904] 1 KB 362 (landlord liable where assignee of reversion breached repair covenant). 213. Milmo v Carreras [1946] KB 306. 214. For the formalities, see s 12 of the Conveyancing Act 1919 (NSW). 215. The principles governing restrictive covenants will be dealt with in detail in Chapter 13. 216. See 11.49. 217. Breams Property Investment Co Ltd v Stroulger [1948] 2 KB 1 at 7 per Scott LJ. 218. P & A Swift Investments v Combined English Stores Group plc [1989] AC 632 at 642 per Lord Oliver of Aylmerton. 219. Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237. 220. For a more complete list and a critical assessment of the requirement, see K Gray and S Gray, Elements of Land Law, 4th ed, Oxford University Press, Oxford, 2005, pp 1565–71.

221. Parker v Webb (1693) 3 Salk 5; 91 ER 656. 222. Mayho v Buckhurst (1617) Cro Jac 438. 223. Williams v Earle (1868) LR3QB 739. 224. Williams v Earle (1868) LR3QB 739. 225. Vernon v Smith (1821) 5 B & Ald 1; 106 ER 1094. 226. Wilkinson v Rogers (1864) 2 De GJ & S 62; 46 ER 298. 227. Cohen v Popular Restaurants Ltd [1917] 1 KB 480. 228. Weg Motors Ltd v Hales [1961] Ch 176. 229. Woodall v Clifton [1905] 2 Ch 257. 230. Ricketts v Enfield Churchwardens [1909] 1 Ch 544. 231. Re Hunter’s Lease [1942] Ch 124. 232. Jourdain v Wilson [1821] 4 B & Ald 266. 233. Breams Property Investment Co Ltd v Stroulger [1948] 2 KB 1. 234. Spencer’s Case (1583) 5 Co Rep 16a; 77 ER 72. 235. Paul v Nurse (1828) 8 B & C 486. 236. Moule v Garrett (1872) LR 7 Ex 101. 237. Bonner v Tottenham & Edmonton Permanent Investment BS [1899] 1 QB 161. 238. Tichborne v Weir (1892) 67 LT 735; [1891–94] All ER Rep 449. 239. See Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 at [41]. 240. Cox v Bishop (1857) 8 De GM & G 815. For the creation of equitable leases, see 11.7. For the creation and assignment of equitable interests generally, see 6.8–6.24. 241. See 11.12–11.15. 242. Boyer v Warbey [1953] 1 QB 234. 243. Chronopoulos v Caltex Oil (Australia) Pty Ltd (1982) 45 ALR 481. 244. While not directly at issue, the decision in Chronopoulos v Caltex Oil (Australia) Pty Ltd would seem supported by the general maintenance of the distinction between law and equity in the context of assignments in Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235. See B Edgeworth, ‘The Rights and Liabilities of Assignees of Leases, Reversions and Mortagages under the Real Property Acts: Recent Developments’ (2009) 21 Bond LR 26 at 37. 245. Cole v Kelly [1920] 2 KB 106. 246. Davis v Town Properties Investment Corp Ltd [1903] 1 Ch 797; Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 at [67]. 247. Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237. 248. See 11.55. 249. Real Property Act 1900 (NSW) s 3(1)(a). 250. See Butt, Land Law, note 42 above, p 392. 251. Re Hunter’s Lease [1942] Ch 124.

252. Rickett v Green [1910] 1 KB 253. 253. Ex parte Anderson; Re Green (1946) 46 SR (NSW) 389. 254. Dalegrove Pty Ltd v Isles Parking Station Pty Ltd (1988) 12 NSWLR 546. 255. See s 3(1)(a) of the Real Property Act; Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235. 256. See also Edgeworth, ‘The Rights and Liabilities of Assignees of Leases, Reversions and Mortagages under the Real Property Acts: Recent Developments’, note 244 above, pp 35–6. 257. See 11.44. 258. Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592. 259. Grescot v Green (1700) 1 Salk 199. 260. Paul v Nurse (1828) 8 B & C 486. 261. Moule v Garrett (1872) LR 7 Ex 101. 262. London and County (A & D) Ltd v Wilfred Sportsman Ltd [1970] 3 WLR 418; Ashmore Developments Pty Ltd v Eaton (1992) Qd R 1. 263. However, in Measures v McFadyen (1910) 11 CLR 723, the High Court held that leases of Torrens title land were governed by ss 51 and 52 of the Real Property Act, and that these provisions did not confer on the assignee the right to sue for pre-assignment breaches. For a persuasive criticism of this decision, see A Lang, Leases and Tenancies in New South Wales, Law Book Co, Sydney, 1976, pp 195–6. Compare with Ashmore Developments Pty Ltd v Eaton (1992) Qd R 1. 264. Dalegrove Pty Ltd v Isles Parking Station Pty Ltd (1988) 12 NSWLR 546 at 555 per Bryson J. 265. Re Hunter’s Lease [1942] Ch 124. 266. Duncliffe v Caerfelin Properties Ltd [1989] 2 EGLR 38. 267. City and Metropolitan Properties Ltd v Greycroft Ltd [1987] 1 WLR 1085. 268. For the relevant notice periods, see 11.10–11.17. 269. Shevill v Builders Licensing Board (1989) 149 CLR 629; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17. 270. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 39 per Brennan J. 271. See 11.61. 272. Butt, Land Law, note 42 above, p 398. 273. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 33 per Mason J. 274. Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544. 275. Shevill v Builders’ Licensing Board (1982) 149 CLR 620. 276. See, eg, Batiste v Lenin (2002) 11 BPR 20,403 at 20,414 and 20,417. 277. See, eg, Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17. 278. Smith v Marrable (1843) 11 M&W 5 at 7 per Parke B. 279. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 43 per Brennan J. 280. Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623. 281. Belperio v Linehaul Holdings Pty Ltd (2004) 89 SASR 185.

282. Shevill v Builders Licensing Board (1989) 149 CLR 629. Such clauses are sometimes referred to as antiShevill clauses. 283. For recent cases, see, eg, Macquarie International Health Clinic v Sydney South West Area Health Service [2010] NSWCA 268 at [296] per Hodgson JA; Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 29 at [232] per Barrett J. 284. Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237. 285. Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 at [47]. 286. Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 at [58]. 287. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; Gumland Property Holdings Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 at [56]. 288. Conveyancing Act 1919 (NSW) s 85(1)(d). 289. Conveyancing Act 1919 (NSW) s 85(1)(d). 290. Conveyancing Act 1919 (NSW) s 85(1)(d). 291. For an examination of this issue, see S Christensen and B Duncan, ‘Breaches of Lease “Capable of Remedy”: A Technical or Practical Approach?’ (2006) 13 APLJ 204. 292. Macquarie International Health Clinic Pty Ltd v South Sydney West Area Health Service [2010] NSWCA 268 at [311]. 293. Conveyancing Act 1919 (NSW) s 129(8). 294. Conveyancing Act 1919 (NSW) s 129(6)(a). 295. Penton v Barnett [1898] 1 QB 276. 296. Dogan v Morton (1935) 35 SR (NSW) 142. 297. Rugby School (Governors) v Tannahill [1934] 1 KB 695. 298. Horsey Estate Ltd v Steiger & Petrifite Company Ltd [1899] 2 QB 79. 299. See, generally, Harpum, Megarry and Wade: The Law of Real Property, note 89 above, pp 833–5. 300. Horsey Estate Ltd v Steiger & Petrifite Company Ltd [1899] 2 QB 79 at 91–2 per Lord Russell CJ. 301. Civil Service Co-operative Society Ltd v McGrigor’s Trustee [1923] 2 Ch 347. 302. Old Grovebury Manor Farm v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504. 303. Gerraty v McGavin (1914) 18 CLR 152. 304. Conveyancing Act 1919 (NSW) s 129(10). 305. Plymouth Corporation v Harvey [1971] 1 WLR 549. 306. Holden v Blaiklock [1974] 2 NSWLR 262. 307. Kemp v Lumeah Investments Pty Ltd (1984) NSW ConvR ¶55-162. 308. Marshall v Council of the Shire of Snowy River (1994) NSW ConvR ¶55-719 per Kirby P. 309. Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105. 310. World Best Holdings Ltd v Sarker [2010] NSWCA 24; Macquarie International Health Clinic Pty Ltd v

Sydney South West Area Health Service [2010] NSWCA 268. 311. World Best Holdings Ltd v Sarker [2010] NSWCA 24. 312. Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 132 per Priestley JA; at 144 per McHugh JA. 313. Marshall v Council of the Shire of Snowy River (1994) NSW ConvR ¶55-719. 314. This question was before the Court of Appeal in the recent Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268. However, that court did not need to rule on the matter as the lease deemed repudiatory conduct to be a matter that should be dealt with under a clause of the lease itself, thus bringing it within the wording of s 129 of the Conveyancing Act. The tenor of the judgment might suggest that a s 129 notice would not be required as on the face of it repudiation is not within the terms of s 129. 315. Apriaden Pty Ltd v Seacrest Pty Ltd (2005) 12 VR 319 at 334–5. One of the reasons given for so holding was that courts are wary about too readily finding repudiation, whereas a lease can be drafted to give the landlord a right of re-entry for a relatively minor breach of covenant. 316. Larking v Great Western (Nepean) Gravel Ltd (in liq) (1940) 64 CLR 221. 317. Dendy v Nicholl (1858) 4 CB (NS) 376. 318. Segal Securities Ltd v Thoseby [1963] 1 QB 887. 319. Lidsdale Nominees Pty Ltd v Elkharadly [1979] VR 84. 320. Argyle Art Centre Pty Ltd v Argyle Bond & Free Stores Co Pty Ltd [1976] 1 NSWLR 377. 321. David Blackstone Ltd v Burnetts (West End) Ltd [1973] 1 WLR 1487. 322. Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048. 323. Brikom Investments Ltd v Carr [1979] QB 467; [1979] 2 All ER 753. 324. Conveyancing Act 1919 (NSW) s 120. 325. Bird v Hildage [1948] 1 KB 91. 326. Wilson v Stewart (1889) 15 VLR 781. 327. See 11.119–11.126. 328. Moore v Ullcoats Mining Co [1908] 1 Ch 575. 329. Moore v Ullcoats Mining Co [1908] 1 Ch 575. 330. Elliott v Boynton [1924] 1 Ch 236. 331. Canas Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433. 332. Imperial Acts Application Act 1969 (NSW) s 18. 333. Hemmings v Stoke Poges Golf Club Ltd [1920] 1 KB 720. 334. R v Hussey (1924) 18 Cr App R 160. 335. For a good discussion, see Gray and Gray, Elements of Land Law, note 220 above, pp 1498–500. 336. London and County (A & D) Ltd v Wilfred Sportsman Ltd [1970] 3 WLR 418. 337. Supreme Court Act 1970 (NSW) s 73. 338. Conveyancing Act 1919 (NSW) s 129(8). 339. Gill v Lewis [1956] 2 QB 1.

340. Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of New South Wales Ltd (1970) 2 BPR 9562. 341. GMS Syndicate Ltd v Garry Elliott Ltd [1982] Ch 1. 342. Stieper v Deviot Pty Ltd (1977) 2 BPR 9602. 343. Direct Food Supplies (Victoria) Pty Ltd v DLV Pty Ltd [1975] VR 358. 344. Greenwood Village Pty Ltd v Tom the Cheap (WA) Pty Ltd [1976] WAR 49. 345. Hyman v Rose [1912] AC 623. 346. Earl Bathurst v Fine [1974] 2 All ER 1160. 347. Shiloh Spinners Ltd v Harding [1973] AC 691. 348. Earl Bathurst v Fine [1974] 2 All ER 1160. 349. Hoffman v Feinberg [1949] 1 Ch 245. 350. Rose v Spicer [1911] 2 KB 234 at 243 per Lord Cozens-Hardy MR. 351. Batiste v Lenin (2002) 11 BPR 20,403 at 20,420. 352. Billson v Residential Apartments Ltd [1992] 1 AC 494. 353. Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723. 354. Conveyancing Act 1919 (NSW) s 129(6)(a). 355. Great Western Railway Co v Smith (1875) 2 Ch D 235. 356. Imray v Oakshette [1897] 2 QB 218. 357. Chatham Empire Theatre (1955) Ltd v Ultrans Ltd [1961] 2 All ER 381. 358. Rye v Rye [1962] AC 496. 359. Conveyancing Act 1919 (NSW) s 122. 360. Shell Co of Australia Ltd v Zanelli [1973] 1 NSWLR 216. 361. Conveyancing Act 1919 (NSW) s 23B(1). 362. Real Property Act 1900 (NSW) s 54(1) and (3). 363. Walsh v Lonsdale (1882) 21 Ch D 9. 364. Robinson v Kingsmill (1954) 71 WN (NSW) 127. 365. Conveyancing Act 1919 (NSW) s 23B(2)(c); Real Property Act 1900 (NSW) s 54(1). 366. Maridakis v Kouvaris (1975) 5 ALR 197. However, this must be distinguished from an agreement between the landlord and tenant that the existing lease be kept on foot and assigned to a third party. See Forte-Senes Hotels Pty Ltd v Austcorp No 473 Pty Ltd (2004) NSW ConvR ¶56-095 at 59,182–3, noted in P Butt, ‘Leases: Some Miscellaneous Issues’ (2005) 79 ALJ 205. 367. Dykes v Gerke [1963] NSWR 721. 368. James v Nesbitt (1954) 28 ALJR 482. 369. Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105. 370. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17. 371. National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675. 372. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 29 per Mason J (emphasis added); at 52 per Deane J.

373. Recently in Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 29, Barrett J declined to determine the matter. However, he expressed a preference for the view that the doctrine of frustration can apply to leases: at [220]. Some limited support can also be found in City of Subiaco v Heytesbury Properties Pty Ltd [2001] 24 WAR 146. 374. Firth v Halloran (1926) 38 CLR 261. 375. Robertson v Wilson (1958) 75 WN (NSW) 503. 376. See, for instance, A O’Hara, ‘The Frustrated Tenant — Towards a Just Solution’ (1994) 2 APLJ 1. The doctrine of frustration applies to residential tenancies. See 11.122. 377. See 11.59. The various bases on which a landlord can recover this form of damages is considered in Bradbrook, MacCallum and Moore, Australian Real Property Law, note 13 above, pp 478–9. 378. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17. 379. Munday v Prowse (1878) 4 VLR (Eq) 101. 380. Macintosh v Bebarfalds Ltd (1922) 22 SR (NSW) 371. 381. R & J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2006] NSWCA 177. 382. Taylor v Beal (1591) Cro Eliz 222; 78 ER 478. 383. Lee-Parker v Izzet [1971] 1 WLR 1688; [1971] 3 All ER 1099. 384. British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063 at 1074 per Forbes J. See the general discussion of equitable set-off in this context in the reasons of Campbell JA, albeit in obiter, in Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297 at [51]–[60] (McColl JA agreeing with these comments). 385. British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063. 386. Hong Kong and Shanghai Banking Corp v Kloekner & Co AG [1989] 3 All ER 513. 387. Grant v NZMC Ltd [1989] 1 NZLR 8. See Batiste v Lenin (2002) 11 BPR 20,403 at 20,417, where the court expressed the view, without deciding, that the requirement in the lease that rent be paid ‘without deduction’ would not have been sufficient to displace the common law right of recoupment, had such a right otherwise been available to the tenant. 388. Bowden v Lo (1999) 9 BPR 16,317. 389. In Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 396–7, Lord BrowneWilkinson stated that no one has produced a satisfactory explanation for the genesis or retention of this ‘ancient and technical rule’, and called on the Law Commission to investigate whether it should be overturned by statute. Lord Mustill (at 397) agreed that the rule could produce unsatisfactory results. 390. See 11.120–11.122. 391. Boyer v Warbey [1953] 1 QB 234. 392. Harpum, Megarry and Wade: The Law of Real Property, note 89 above, p 958. 393. Rickett v Green [1910] 1 KB 253. 394. United Kingdom Law Commission Report No 174. 395. See S Bridge, ‘Former Tenants, Future Liabilities and the Privity of Contract Principle: The Landlord and Tenant (Covenants) Act 1995’ [1996] Camb LJ 313; P Walter, ‘The Landlord and Tenant (Covenants) Act 1995: A Legislative Folly’ [1996] Conv 432.

396. For a detailed consideration of this issue in the Australian context, see W D Duncan, ‘The Continuing Liability of Original Lessees After Assignment of Lease — Time for Reconsideration?’ (2005) 12 APLJ 93. 397. Conveyancing Act 1919 (NSW) s 74. 398. This is in contrast to the earlier Landlord and Tenant (Amendment) Act 1948 (NSW). Unlike that Act, modern legislation does not provide for rent control, or security of tenure, which were much more radical ways of regulating the market and protecting tenants. See generally see D Dobell, ‘Those Powerful “Protected” Tenants’ (1990) 15 Legal Services Bulletin 270. 399. See 11.126–11.129. 400. A Anforth and T Thawley, Residential Tenancies Law and Practice in New South Wales, Law Book Co, Sydney, 1998, pp 8–9. See also, A J Bradbrook, ‘Residential Tenancies Law in Australia: The Second Stage of Reforms’ (1998) 20 Syd LR 402. While these comments were made in the context of the Residential Tenancies Act 1987 (NSW), they would equally apply to the Residential Tenancies Act 2010 (NSW). 401. See 11.5. 402. Residential Tenancies Act 2010 (NSW) s 4. 403. Re Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 146 ALR 495. 404. Residential Tenancies Act 2010 (NSW) s 3. 405. Residential Tenancies Act 2010 (NSW) ss 138–441. 406. Residential Tenancies Act 2010 (NSW) ss 143–154. 407. Residential Tenancies Act 2010 (NSW) s 10. This section applies even if the premises are premises except from the Act by s 7: Residential Tenancies Act s 9(2). 408. Residential Tenancies Act 2010 (NSW) s 8(1)(a). For the definition of ‘holiday park’ and ‘longterm casual occupant’, see s 3 and s 5 respectively of the Holiday Parks (Long-term Casual Occupation) Act 2002 (NSW). 409. Residential Tenancies Act 2010 (NSW) s 8(1)(c). 410. Residential Tenancies Act 2010 (NSW) s 8(1)(b). For the definition of ‘Retirement Village’, see s 5 of the Retirement Villages Act 1999 (NSW). 411. Residential Tenancies Act 2010 (NSW) s 8(1)(c). For a legal and policy analysis of the treatment of such persons under the common law and the former legislation, see A Bradbrook, ‘Creeping Reforms to Landlord and Tenant Law: The Case of Boarders and Lodgers’ (2004) 10 APLJ 157. 412. Noblett and Mansfield v Manley [1952] SASR 155 at 158 per Mayo J. 413. Torrisi v Oliver [1951] VLR 380 at 385 per Coppel AJ. 414. Thompson v Ward (1871) LR 6 CP 327 at 361 per Bovill CJ. 415. Walker v Puvesi Pty Ltd (RTT 86/000006). 416. Ellis v City Women’s Hostel (RTT 97/022789). 417. Residential Tenancies Act 2010 (NSW) s 8(1)(d); Residential Tenancies Regulation 2010 (NSW) reg 14(1). 418. Residential Tenancies Regulation 2010 (NSW) reg 14(2).

419. Residential Tenancies Act 2010 (NSW) s 8(1)(e). 420. Residential Tenancies Act 2010 (NSW) s 8(1)(f). 421. Kater v Kater (No 3) [1964] NSWR 987. 422. Sanders v Cooper [1974] WAR 129. 423. See the analysis of A Lang, Residential Tenancies Law and Practice: New South Wales, 2nd ed, Law Book Co, Sydney, 1990, pp 11–12. 424. Residential Tenancies Act 2010 (NSW) s 8(1)(h). 425. Residential Tenancies Act 2010 (NSW) s 8(1)(i). 426. Residential Tenancies Act 2010 (NSW) s 8(1)(j). 427. See the definition of ‘residential tenancy agreement’ in s 13 of the Residential Tenancies Act. 428. Grundel v Registrar-General (1990) NSW ConvR ¶55-548. 429. Residential Tenancies Act 2010 (NSW) s 10. 430. Residential Tenancies Regulation 2010 (NSW) reg 15. An ‘equity purchase agreement’ consists of a series of agreements which provide for an initial purchase by the tenant, as a tenant in common, of not less than 20% of the owner’s interest in the residential premises, as well as the further purchase by the tenant, from time to time, of a greater percentage of the owner’s interest in the premises. 431. Residential Tenancies Regulation 2010 (NSW) reg 16. For the definition of ‘heritage’, see reg 16(3). 432. Residential Tenancies Regulation 2010 (NSW) reg 19. 433. For the scope of this exemption, see Residential Tenancies Regulation 2010 (NSW) reg 20. 434. Residential Tenancies Regulation 2010 (NSW) reg 4(1) and Sch 1. 435. Residential Tenancies Regulation 2010 (NSW) reg 4(2). 436. For discussion of condition reports, see 11.105. 437. Residential Tenancies Act 2010 (NSW) s 15(5). 438. Residential Tenancies Act 2010 (NSW) s 15(4). 439. Residential Tenancies Act 2010 (NSW) s 21(1). 440. Residential Tenancies Act 2010 (NSW) s 219(2). For the definition of a ‘penalty unit’, see s 17 of the Crimes (Sentencing Procedure) Act 1999 (NSW). 441. Residential Tenancies Act 2010 (NSW) s 29(1). 442. Residential Tenancies Act 2010 (NSW) s 29(6); Residential Tenancies Regulation 2010 (NSW) reg 6, Sch 2. 443. Residential Tenancies Act 2010 (NSW) s 29(1)–(3). 444. Residential Tenancies Act 2010 (NSW) s 29(4). 445. Residential Tenancies Regulation 2010 (NSW) reg 21. 446. Residential Tenancies Act 2010 (NSW) s 84. 447. Residential Tenancies Act 2010 (NSW) s 96. 448. Residential Tenancies Act 2010 (NSW) s 18.

449. Residential Tenancies Act 2010 (NSW) s 85. 450. Residential Tenancies Act 2010 (NSW) s 86. 451. Residential Tenancies Act 2010 (NSW) s 97. 452. Residential Tenancies Act 2010 (NSW) s 50. 453. See 11.23. 454. Residential Tenancies Act 2010 (NSW) s 50(2). 455. Residential Tenancies Act 2010 (NSW) s 50(2). 456. Residential Tenancies Act 2010 (NSW) s 50(3). See also Newman v Blundell-Felisak (RTT 97/023358); 11.23. 457. Residential Tenancies Act 2010 (NSW) s 63(2). 458. Residential Tenancies Act 2010 (NSW) s 62. 459. Summers v Salford Corp [1943] AC 283 at 285 per Lord Atkin. 460. See, eg, Bannister v Cheung [2014] NSWCATCD 105. 461. Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313. 462. Jones v Bartlett (2000) 205 CLR 166. 463. Sakoua v Williams (2005) 64 NSWLR 588. See 11.37. 464. Residential Tenancies Act 2010 (NSW) s 51(2)(b). 465. O’Brien v Robinson [1973] 1 All ER 583. 466. Residential Tenancies Act 2010 (NSW) s 51(2)(a). Here ‘premises’ has an expanded meaning to include everything provided with the premises for use by the tenant: s 51(4). 467. Residential Tenancies 2010 (NSW) s 51(3)(b), (c). 468. Residential Tenancies Act 2010 (NSW) s 64. 469. See 11.80. 470. Residential Tenancies Act 2010 (NSW) s 62. 471. Residential Tenancies Act 2010 (NSW) s 66(1). 472. Residential Tenancies Act 2010 (NSW) s 66(2). 473. Residential Tenancies Act 2010 (NSW) s 67. 474. Residential Tenancies Act 2010 (NSW) s 68 (tenant’s remedies); s 69 (landlord’s remedies). 475. Tate v Commonwealth (NSWSC, Loveday J, 17 June 1988, unreported, BC8801829). 476. Li v Eliezer (NSWSC, Simpson J, 1 May 1997, unreported, BC9703051). 477. Lawson v NSW Department of Housing (RTT 92/001699). 478. Residential Tenancies Act 2010 (NSW) s 71. 479. See Residential Tenancies Regulation 2010 (NSW) Sch 2. 480. Residential Tenancies Act 2010 (NSW) s 74. 481. Residential Tenancies Act 2010 (NSW) s 75. 482. Residential Tenancies Act 2010 (NSW) s 75(2).

483. Residential Tenancies Act 2010 (NSW) s 75(2). 484. Bradbrook, ‘Residential Tenancies Law in Australia: The Second Stage of Reforms’, note 400 above. 485. Massart v Blight (1951) 82 CLR 423. 486. Residential Tenancies Act 2010 (NSW) s 77. 487. Residential Tenancies Act 2010 (NSW) s 77(5). 488. For the principles governing proprietary rights in goods generally, see 2.40–2.67. 489. Martin v King (1996) 7 BPR 14,681. 490. Residential Tenancies Act 2010 (NSW) s 132(5). 491. Residential Tenancies Act 2010 (NSW) s 128. 492. Residential Tenancies Act 2010 (NSW) s 127. 493. Residential Tenancies Act 2010 (NSW) s 129. In Bowden v Lo (1998) NSW ConvR ¶55-868, it was held that the landlord becomes an involuntary bailee until the tenant regains possession of the goods, and is thus under a duty to keep safe custody of them. If goods are lost due to the landlord’s negligence, the tenant can sue for damages. However, the tenant may commit contributory negligence by failing to retrieve the goods promptly. 494. Residential Tenancies Act 2010 (NSW) s 130. 495. Residential Tenancies Act 2010 (NSW) s 130(4). The cost of the occupation fee must be calculated in accordance with s 132. 496. Residential Tenancies Act 2010 (NSW) s 132. 497. Residential Tenancies Act 2010 (NSW) s 127(1). 498. Residential Tenancies Act 2010 (NSW) s 131(2). 499. Residential Tenancies Act 2010 (NSW) s 131(3). 500. Residential Tenancies Act 2010 (NSW) s 133. 501. Residential Tenancies Act 2010 (NSW) s 134. 502. Residential Tenancies Act 2010 (NSW) s 135. 503. Residential Tenancies Act 2010 (NSW) s 41(1). 504. Residential Tenancies Act 2010 (NSW) s 42(1). 505. Residential Tenancies Act 2010 (NSW) s 42(2). 506. Residential Tenancies Act 2010 (NSW) s 42(3). 507. Residential Tenancies Act 2010 (NSW) s 47. 508. Residential Tenancies Act 2010 (NSW) s 44(1); Residential Tenancies Regulation 2010 (NSW) reg 22(1). 509. Residential Tenancies Act 2010 (NSW) s 44(5). 510. Kilpatrick v Gresser (NSWSC, Foster J, 13 May 1987, unreported, BC8701375). 511. Residential Tenancies Act 2010 (NSW) s 44(6). 512. Residential Tenancies Act 2010 (NSW) s 43(1). 513. Swain v Residential Tenancies Tribunal of New South Wales (NSWSC, Rolfe J, 22 March 1995,

unreported, BC9504317). 514. Craig v Green and Huggins (RTT 97/008879). 515. Coombs v Rogers (RTT 88/288). 516. Residential Tenancies Act 2010 (NSW) s 43(2). On wholly or partly uninhabitable, see Elsom & Taylor-Parker v Coroneos [2016] NSWCATCD 47. 517. For a discussion of these cases, see 11.131. 518. Residential Tenancies Act 2010 (NSW) s 81(2). 519. Residential Tenancies Act 2010 (NSW) s 120(1) (not exceeding 200 penalty units). 520. Residential Tenancies Act 2010 (NSW) s 119. 521. Residential Tenancies Act 2010 (NSW) s 87(1) (breach by tenant); s 98(1) (breach by landlord). 522. Residential Tenancies Act 2010 (NSW) s 88(1). 523. Residential Tenancies Act 2010 (NSW) s 87(2). 524. Residential Tenancies Act 2010 (NSW) s 109. 525. Residential Tenancies Act 2010 (NSW) s 43(2). 526. Residential Tenancies Act 2010 (NSW) s 84(3) (fixed term); s 85(3) (periodic tenancy). 527. Residential Tenancies Act 2010 (NSW) s 86(4). 528. Residential Tenancies Act 2010 (NSW) s 87(4). Section 87(5) specifies the matters which the tribunal may take into account, including previous breaches by the landlord. 529. These provisions appear to respond to the decision by the New South Wales Court of Appeal that, under the previous legislation (Residential Tenancies Act 1987 (NSW)), the tribunal was required to consider the circumstances of the case before ordering termination: Roads and Traffic Authority of New South Wales v Swain (1997) 41 NSWLR 452 at 455. In addition, the tribunal had identified other factors as relevant ‘circumstances’, these being the period the tenant has occupied the premises; the age, health and employment status of the tenant; the tenant’s capacity to find alternative accommodation; any breaches by, or neighbours’ complaints about, the tenant; and the landlord’s need for the premises for other persons: Adavale Realty Pty Ltd v Williams (RTT 96/024133). Many, but not all, of these factors would now be relevant under s 86(4) of the Residential Tenancies Act. 530. Residential Tenancies Act 2010 (NSW) s 113. 531. Residential Tenancies Act 2010 (NSW) s 114. 532. Residential Tenancies Act 2010 (NSW) s 115. 533. Residential Tenancies Act 2010 (NSW) s 89(4). 534. For the definition of ‘neighbouring property’, see s 90(5) of the Residential Tenancies Act. 535. Residential Tenancies Act 2010 (NSW) s 90(1), (3). 536. Residential Tenancies Act 2010 (NSW) s 90(2). 537. New South Wales Land and Housing Corporation v Green (NSWSC, Graham AJ, 31 October 1997, unreported, BC9705949). See also Crook v Consumer, Trader and Tenancy Tribunal (2003) 59 NSWLR 300. 538. Residential Tenancies Act 2010 (NSW) s 93(1) (landlord’s hardship), s 104 (tenant’s hardship).

539. Residential Tenancies Act 2010 (NSW) s 91(1)(b). On ‘intentionally’ and ‘recklessly’, see Cure v Bridge Housing Ltd [2014] NSWCATAP 80. On the Tribunal’s discretion to make an order, see Cain v New South Wales Land and Housing Corporation [2014] NSWCA 28. On connection between premises and offence, see McGuiness v NSW Land and Housing Corporation [2014] NSWCATAP 98. 540. Residential Tenancies Act 2010 (NSW) s 91(1)(a). 541. Residential Tenancies Act 2010 (NSW) s 91(4). 542. Residential Tenancies Act 2010 (NSW) s 92(1). 543. Residential Tenancies Act 2010 (NSW) s 92(3). 544. Civil and Administrative Tribunal Act 2013 (NSW) s 7 and Sch 4. 545. Civil and Administrative Tribunal Act 2013 (NSW) s 36(1). 546. Civil and Administrative Tribunal Act 2013 (NSW) s 38(2). There are some exceptions, for example, relating to the privilege against self-incrimination and disclosure of documents protected by privilege: ss 38(3)(b), 67. 547. Civil and Administrative Tribunal Act 2013 (NSW) s 38(4). 548. Civil and Administrative Tribunal Act 2013 (NSW) s 37. 549. Civil and Administrative Tribunal Act 2013 (NSW) s 59(1). 550. Civil and Administrative Tribunal Act 2013 (NSW) Sch 4 Pt 5 cll 3, 4. 551. Civil and Administrative Tribunal Act 2013 (NSW) s 55. 552. Civil and Administrative Tribunal Act 2013 (NSW) s 49. 553. Civil and Administrative Tribunal Act 2013 (NSW) s 50(2). 554. Residential Tenancies Act 2010 (NSW) ss 192–195. 555. Residential Tenancies Act 2010 (NSW) s 196(1); Fair Trading Act 1987 (NSW) s 18. 556. Civil and Administrative Tribunal Act 2013 (NSW) s 45(1)(a). 557. Civil and Administrative Tribunal Act 2013 (NSW) s 45(1)(b), (4); Civil and Administrative Tribunal Rules 2014 (NSW) r 31. 558. Civil and Administrative Tribunal Act 2013 (NSW) s 60(1). 559. Civil and Administrative Tribunal Act 2013 (NSW) s 60(2). 560. For a full list, see Civil and Administrative Tribunal Act 2013 (NSW) s 60(3). 561. Civil and Administrative Tribunal Act 2013 (NSW) s 60(5). 562. Residential Tenancies Act 2010 (NSW) s 187(1)(i). 563. Residential Tenancies Act 2010 (NSW) s 187(1)(a), (b). 564. Residential Tenancies Act 2010 (NSW) s 187(1)(c), (d). 565. Residential Tenancies Tribunal of New South Wales v Offe (NSWSC, Abadee J, 1 July 1997, unreported, BC9708044). This decision was set aside on appeal, but only for reasons of standing. Abadee J’s interpretation of s 16(2)(d)(iii) of the Residential Tenancies Act 1987 (NSW) was not considered. The tribunal has since given compensation for non-economic loss in a number of cases: see, eg, Ellis v City Women’s Hostel (RTT 97/022789) (lockout leading to deterioration in the tenant’s health). 566. King v New South Wales Land and Housing Corp (1992) 26 ALD 684.

567. Civil and Administrative Tribunal Act 2013 (NSW) s 54(1), (2). 568. Civil and Administrative Tribunal Act 2013 (NSW) s 54(4). 569. Civil and Administrative Tribunal Act 2013 (NSW) s 80(1). 570. Civil and Administrative Tribunal Act 2013 (NSW) s 40(1); Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. 571. Civil and Administrative Tribunal Act 2013 (NSW) s 80(2)(b). 572. Civil and Administrative Tribunal Act 2013 (NSW) Sch 4 Pt 6 cl 12(1). See Collins v Urban [2014] NSWCATAP 17. 573. Civil and Administrative Tribunal Act 2013 (NSW) Sch 4 Pt 6 cl 12(2)(b). 574. Civil and Administrative Tribunal Act 2013 (NSW) s 80(3). 575. Civil and Administrative Tribunal Act 2013 (NSW) s 83(1). 576. Civil and Administrative Tribunal Act 2013 (NSW) s 83(3). 577. Civil and Administrative Tribunal Act 2013 (NSW) s 34(1)(a). In effect, this reiterates the common law position that judicial review may be refused if another form of redress, including internal review or appeal, is available. 578. For the separate sets of rules, see Chapter 7 for old system title; Chapter 8 for Torrens title. 579. See 11.5. 580. Residential Tenancies Act 2010 (NSW) s 81(4)(a). 581. Residential Tenancies Act 2010 (NSW) s 81(4)(c). 582. Residential Tenancies Act 2010 (NSW) s 81(4)(b). 583. Perpetual Finance Corporation Ltd v Blain (1996) 9 BPR 16,243. 584. Perpetual Finance Corporation Ltd v Blain (1996) 9 BPR 16,243 at 16,249 and 16,251 per Giles CJ. 585. Real Property Act 1900 (NSW) s 53(4). For the complex issue of the granting of leases by mortgagors, see Chapter 14. 586. Perpetual Finance Corporation Ltd v Blain (1996) 9 BPR 16,243; Halaseh v Citibank Pty Ltd (RTT 96/016769) (referring to the previous s 76 of the Residential Tenancies Act 1987 (NSW)). 587. See, eg, J Hall, Housing New South Wales’s Low to Moderate Income Households: Policies, Conditions, and Performance, 1991–1996, Monograph 47, Planning Research Centre, Sydney, 1998. 588. See, eg, G Cox, The 2000 Olympics and the Residential Tenancies Market, New South Wales Department of Fair Trading, Sydney, 1998. 589. This was preferred in Cox, The 2000 Olympics and the Residential Tenancies Market, note 588 above, Ch 8. 590. See 11.117. 591. J Goddard and S Stamatellis, The Fair Share: Reform of Residential Tenancies Law in Relation to Share Housing, New South Wales Department of Fair Trading, Sydney, 1998. 592. See 11.112. 593. Moon v Diroan Pty Ltd (RTT 96/024196). 594. Residential Tenancies Act 1987 (NSW) s 33.

595. See 11.113. 596. Bradbrook, ‘Residential Tenancies Law in Australia: The Second Stage of Reforms’, note 400 above. 597. A comprehensive evaluation of the current state of retail leases legislation throughout Australia can be found in E Webb, ‘Almost a Decade On — A (Reid) Report Card on Retail Leasing’ (2006) 13 APLJ 240. 598. Retail Leases Act 1994 (NSW) s 3. 599. Retail Leases Act 1994 (NSW) s 3 definition of ‘retail shop lease’ para (a). 600. Retail Leases Act 1994 (NSW) s 3 definition of ‘retail shop lease’ para (b). 601. Retail Leases Act 1994 (NSW) s 79. 602. Retail Leases Act 1994 (NSW) s 3 definition of ‘retail shop’ para (a). 603. Retail Leases Act 1994 (NSW) s 3 definition of ‘retail shop’ para (b). 604. Retail Leases Act 1994 (NSW) s 3. 605. Retail Leases Act 1994 (NSW) s 6(1)(b); Pyrmont Point Pty Ltd v Westacott (2016) 91 NSWLR 170. 606. Retail Leases Act 1994 (NSW) s 6A. Where the tenant has been, or is entitled to be, in uninterrupted possession in these circumstances, the Act applies to the lease from the expiration of that one-year period. 607. Retail Leases Act 1994 (NSW) s 5. 608. Retail Leases Act 1994 (NSW) s 6(1)(c). 609. Retail Leases Act 1994 (NSW) s 9. 610. Retail Leases Act 1994 (NSW) ss 11, 11A. 611. Defined in s 3 of the Act as money paid ‘by way of premium, non-repayable bond or otherwise’ in connection with the granting, extension or assignment of a lease. 612. Retail Leases Act 1994 (NSW) s 14. 613. Retail Leases Act 1994 (NSW) s 16(1), (2). 614. Retail Leases Act 1994 (NSW) s 16(3). 615. Retail Leases Act 1994 (NSW) s 18(2). 616. Retail Leases Act 1994 (NSW) s 18(3). 617. Retail Leases Act 1994 (NSW) s 18(4). 618. Retail Leases Act 1994 (NSW) ss 19, 19A. 619. Retail Leases Act 1994 (NSW) s 20(4). 620. Retail Leases Act 1994 (NSW) s 20(1). 621. Retail Leases Act 1994 (NSW) ss 22–30. 622. Retail Leases Act 1994 (NSW) s 36. 623. Retail Leases Act 1994 (NSW) s 39(1)(a). 624. Retail Leases Act 1994 (NSW) s 39(1)(b). 625. See 11.139.

626. Retail Leases Act 1994 (NSW) s 40(1). 627. Retail Leases Act 1994 (NSW) ss 39(2), 40(3). 628. Retail Leases Act 1994 (NSW) s 41. 629. Retail Leases Act 1994 (NSW) s 41(d). 630. Retail Leases Act 1994 (NSW) s 44(1). 631. Retail Leases Act, 1994 (NSW) s 44(2). 632. Retail Leases Act 1994 (NSW) s 44(3). 633. Retail Leases Act 1994 (NSW) s 44(4). 634. Retail Leases Act 1994 (NSW) ss 34A, 35. 635. Retail Leases Act 1994 (NSW) s 58. 636. Retail Leases Act 1994 (NSW) s 66. 637. Retail Leases Act 1994 (NSW) s 68. For an application of this provision, see Ticehurst v Cross (2006) NSW ConvR ¶56-136. 638. Retail Leases Act 1994 (NSW) ss 71, 71A. 639. See Retail Leases Act 1994 (NSW) Pt 8 Div 3; Civil and Administrative Tribunal Act 2013 (NSW) Sch 4. 640. Retail Leases Act 1994 (NSW) s 75(1). For an application of this provision, see Ticehurst v Cross (2006) NSW ConvR ¶56-136. Note s 75(1) relates to ‘retail tenancy disputes’ (defined in s 63), rather than simply to ‘retail tenancy claims’ and is thus wide enough to encompass unconscionable conduct claims. 641. S O Lovely Foods Pty Ltd v Macquarie Bank Ltd (CT, Cavanagh C, 28 March 1996, unreported). 642. Oxley v Imperial Charter Pty Ltd (1996) NSW ConvR ¶55-783. 643. Henriksen v Bilpin Inn Pty Ltd (CT, Rossiter DC, 3 May 1996, unreported). 644. Retail Leases Act 1994 (NSW) s 77. 645. Retail Leases Act 1994 (NSW) s 73.

[page 599]

Chapter 12

Easements and Profits à Prendre Introduction 12.1 Easements and profits à prendre1 (or profits) are sets of limited rights that non-occupiers of land hold over land occupied by someone else. Along with restrictive covenants, they are in the class of subsidiary interests that burden, or restrict, the full use of the land of an owner.2 Though they confer limited rights, they are nonetheless property interests as they bear, as noted in Chapter 1, the characteristic of a right of enjoyment that is enforceable in the absence of contractual privity. Easements and profits are sufficiently similar in nature to warrant treatment in a single chapter. However, they also exhibit sufficient differences to be be dealt with separately.

Easements General 12.2 Easements are one of a class of interests in land known historically as ‘incorporeal hereditaments’.3 This term captures two features of easements: first, they are classified as incorporeal because they are regarded as conferring rights over the land rather than rights to the physical land itself; and second, they are heritable, as they are forms of real property. The essence of an easement, according to Blackstone, is: … a right issuing out of a thing corporate, whether real or personal, or concerning or annexed

to, or exercisable within, the same. It is not the thing corporate itself, which may consist in lands, house, jewels, or the like; but something collateral thereto, as a rent issuing out of those lands or houses.4

The most common form of easement is the right of way, although, as we will see later, the term embraces a much wider range of rights. [page 600] As in the case of other proprietary interests, there are both substantive and formal requirements for the creation of a valid easement. Of course, easements have their own particular substantive requirements necessary for their creation, and may be formally created in a variety of ways. In addition to the usual way of creating proprietary interests — that is, by express grant — easements can be created by: express reservation; an approved plan of subdivision under s 88B of the Conveyancing Act 1919 (NSW); an implied grant or reservation; and acquisition by long user or prescription. Easements may also be granted by the Supreme Court under s 88K of the Conveyancing Act5 and by the Land and Environment Court under s 40 of the Land and Environment Court Act 1979 (NSW).

Substantive requirements for the creation of an easement 12.3 There are four basic substantive requirements for the creation of an easement. The classic statement of this proposition comes from Re Ellenborough Park:6 1.

there must be a dominant and a servient tenement;

2.

the easement must accommodate the dominant tenement;

3.

the dominant and servient tenements must not be held and occupied by

the same person; and 4.

the right must be capable of forming the subject matter of a grant.

There must be a dominant and a servient tenement 12.4 An easement must operate for the advantage of one property to the disadvantage of another. The advantaged property is known as the ‘dominant tenement’; and the disadvantaged property is described as the ‘servient tenement’. The dominant tenement, therefore, has the benefit of the easement, while the servient tenement bears the burden. For example, if A grants to B the right to pass over her land so as to reach the road, A’s land is the servient tenement and B’s land is the dominant tenement. This can be diagrammatically represented in Figure 12.1 below. Figure 12.1:

Dominant and servient tenement

[page 601] It is not possible to have an easement that benefits a person, without also benefiting land; the easement must be annexed to land.7 The technical term for this is that the easement is said to be appurtenant to the dominant tenement. Therefore, unlike a profit à prendre,8 it is not possible to have an easement that does not benefit a dominant tenement. At common law, an easement that is not appurtenant to a dominant tenement is known as an easement in gross.9 The grant of a right to an individual not possessed of a dominant tenement will give rise to personal rights in the nature of a contractual licence only, and

will not be enforceable against third parties.10 The prohibition against easements in gross does not apply to the Crown or local authorities. By s 88A of the Conveyancing Act, easements in gross are permitted in favour of the Crown, a public or local authority established by legislation, or, where the easement is for the supply of a utility service to the public or for the supply of rail infrastructure facilities, a corporation prescribed by regulation.11 This provision applies to both old system and Torrens title land.12 There is no need for the dominant tenement to be a corporeal interest, such as a fee simple or life estate. It may also be another incorporeal interest, such as an easement or profit. Thus, a profit in the form of a right to fish was held to be a dominant tenement for the purposes of supporting a right of way.13

Easement must accommodate the dominant tenement 12.5 In Re Ellenborough Park,14 it was held that an easement must ‘accommodate’ the dominant tenement, in the sense that it must confer a benefit on that tenement. In Re Ellenborough Park, the right to use a small park adjacent to the dominant property for recreation was held to accommodate that tenement, for the reason that this was a right connected with the normal enjoyment of houses. If, however, the rights include both benefits for the dominant tenement and also rights unconnected with that tenement, for example, rights to pass along a road ‘for all purposes’, no easement will arise.15 Those rights unconnected to the tenement would amount to an easement in gross and would not, therefore, form part of a valid easement. Likewise, in Hill v Tupper,16 the owner of a canal and land on the bank of the canal leased a small plot of the land to Hill and gave him an exclusive right to hire out pleasure boats for use on the canal. Hill sued [page 602] for alleged interference with his rights over the canal when Tupper, who owned other nearby land, put out pleasure boats on the canal. The court held that the rights over the canal were personal to Hill only; they did not accommodate his lease. However, if the rights conferred on Hill were to go

back and forth across the canal for the purposes of access to the leased land, there is no doubt that this would have been an easement for the benefit of a dominant tenement. It is sufficient for the purposes of accommodating a tenement if the easement benefits a business that is conducted on land — although there must be a clear connection between the activities on the dominant tenement and the rights granted over the servient tenement. In Moody v Steggles,17 an easement to fix a sign on the wall of the defendant’s house was held to accommodate the plaintiff’s tenement, because it benefited the business (a public house) he carried on there. What is required is that the business or commercial advantage endure as an aspect of the dominant tenement. The fact that the right benefits other land as well is no obstacle to it being an easement.18 The Moody v Steggles principle was unsuccessfully invoked by the grantee in Clos Farming Estates Pty Ltd v Easton,19 where the New South Wales Court of Appeal held that a purported ‘Easement for Vineyard’ was not a valid easement. The purported dominant tenement (Lot 86) was a small parcel of land in a winery estate. The owner had constructed a machinery shed, chemical shed and a farm office on Lot 86, and used the lot to store farm machinery. The alleged easement purportedly allowed the owner of the dominant tenement the right to carry out various acts associated with a viticulture operation (such as planting and maintaining vines, and harvesting grapes) on the 80 purported servient tenements, each of which was in separate individual ownership.20 The court held that a valid easement had not been created because the right created did not benefit the dominant tenement in the sense of being reasonably necessary for its normal use and enjoyment. Instead, the right benefited the owner of Lot 86 in its personal capacity. In this way, the facts of Clos Farming Estates were distinguishable from those in Moody v Steggles and instead were analogous to those in Hill v Tupper: the purported dominant tenement was merely a convenient incident to the enjoyment of the right. There was no benefit to Lot 86 as a parcel of land by the conduct of the viticulture business. Lot 86 was incidental to the business rather than the business being incidental to the land.21 There is no need for the dominant and servient tenements to be contiguous, but they must be sufficiently close for a benefit to be discernible.

In Todrick v Western National Omnibus Co Ltd,22 the fact that there was an intervening field between [page 603] the easement and the dominant tenement was held to be irrelevant to its validity. The right to occupy a church pew is sufficiently close to the homes in the parish to benefit them.23 There is a presumption that an easement enures to the benefit of the subdivided parts of the dominant tenement. Thus, where four lot-holders received rights of way over a private road and two lots were later subdivided, the new owners’ lots would be entitled to the benefit of the easement.24 Conversely, however, if the dominant tenement is consolidated with other land, the easement continues to benefit only that part of the new consolidated lot that is constituted by the former dominant tenement.25

Dominant and servient tenements must not be held and occupied by the same person 12.6 An easement is a right over the land of another, so that at general law there cannot be an easement where both the dominant tenement and servient tenement are owned and occupied by the same person. Thus, at general law no one can have an easement over his or her own land.26 Similarly, if a dominant and servient tenement come into the same ownership and occupation, the easement will cease to exist; a subsequent transfer of either the former dominant tenement or the former servient tenement will not revive the easement. However, as the land cannot be both owned and occupied by the same person, where an owner of two properties leases one of them, or where he or she leases part of the land, there is no obstacle to the tenant holding an easement over his or her landlord’s land.27 The easement binds the landlord and his or her successors in title for the duration of the lease.28 In New South Wales, the principle that the same person cannot own the dominant and servient tenements has been modified. First, under s 88B of the Conveyancing Act, the registration of a plan of subdivision (which is available for both old system and Torrens title land29) will create all easements referred

to in it, and will vest them in the owner of the land benefited by the easement. By s 88B(3)(c)(ii), where the dominant and servient tenements are in the same ownership, or by s 88B(3)(c)(iii), where they come to be in common ownership, they will not be extinguished. Second, under s 46A of the Real Property Act 1900 (NSW), it is possible to create an easement over separate parcels of land even if those parcels are owned and possessed by the same person, provided that the parcels are all held under Torrens title. By s 47(7) of the Real Property Act, a recorded easement will not be extinguished by the dominant and servient tenements coming into common ownership and possession. [page 604]

The right must be capable of forming the subject matter of a grant 12.7 The category of easements is not closed. In the oft-quoted words of Lord St Leonards: ‘The category of servitudes and easements must alter and expand with the changes that take place in the circumstances of mankind’.30 But there are limits. If the right is too broad or imprecise, it cannot be an easement.31 The requirement that the right must be capable of forming the subject matter of a grant has two aspects. First, the right must be sufficiently definite to be capable of forming the subject matter of a grant. In Re Ellenborough Park, this was expressed as a requirement that the right be well defined and understood.32 The right to enjoy a park, as in Re Ellenborough Park, is sufficiently confined to meet this criterion; but a right to a general flow of air is not capable of being granted or reserved as an easement.33 A right to a view is too indefinite to form the subject matter of a grant,34 as is a right to protection of one’s privacy.35 There is no right to hit cricket balls on to neighbouring land,36 and there is no right to have the wall of a house on the dominant tenement weather-proofed by the servient tenement.37 A right to receive a television signal cannot be an easement.38 However, there can be an easement for the free flow of air through a defined aperture,39 and for air and light for a narrow section of a building.40

The second manifestation of the requirement that the easement must be capable of forming the subject matter of a grant is the rule that a purported easement will be invalid if it confers a right to exclusive possession in relation to the servient tenement.41 However, the nature of an easement is that it assumes some interference with, or bars some ordinary use of, the servient land. It can, therefore, be difficult to identify what [page 605] degree of interference is permissible from interference which is incompatible with rights in the nature of an easement. In Copeland v Greenhalf,42 a right to store vehicles on the servient tenement was held not to be an easement because it was akin to a right to possession, while in both London & Blenheim Estates v Ladbroke Retail Parks Ltd and Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd, easements to park motor vehicles have been recognised as valid easements in certain circumstances.43 Further, a right to store goods in a cellar was not an easement because it conferred a right to exclusive use of the confined space,44 while a right to store coal in a shed has been held the subject matter of an easement.45 In Clos Farming Estates Pty Ltd v Easton,46 the rights of the grantee to enter the putative servient tenement in order to plant and maintain the vines, and to harvest, market, package and sell the produce, were held to be so extensive that they were inconsistent with the owner of the putative servient land retaining possession of that land. This was an independent ground for the purported easement being held to be invalid.47 A different test has been proposed by the House of Lords in Moncrieff v Jamieson.48 In that case, several members of the House of Lords suggested that a distinction be drawn between the grant of a right of sole use or occupation on the one hand, and a continued right of possession in law on the other. If this test were accepted, the essential requirement for validity of the easement would be, therefore, that the servient owner retains possession and control of the property, even though sole use and enjoyment of the servient tenement for a limited period has been granted to the holder of the dominant tenement.49 For example, the sole user of a shed for storing coal would not

preclude the servient tenement holder using the shed for any purposes of his or her own which do not interfere with reasonable use by the holder of dominant tenement of the shed for the storage of coal.50 [page 606] In formulating this approach, Lord Scott declined to follow the test of ‘reasonable use’ from Batchelor v Marlow.51 In that case, the English Court of Appeal suggested that a grant would not be capable of recognition as an easement if its exercise would leave the servient owner with no reasonable use to which he could put the servient land. This would, in essence, be a test of degree or proportionality and would rely on an assessment of how much of the land was subject to the easement, and for what periods of time. Lord Scott, on the other hand, was of the opinion that a servient tenement holder could grant an easement over his land to any extent he wished, subject to retaining possession and control. Hence, the question would be determined by looking at the area subject to the easement itself, rather than necessarily the whole of the servient tenement.52 In the recent decision in Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd,53 the Court of Appeal followed the approach in Clos Farming Estates and London & Blenheim Estates,54 applying a ‘degree and proportionality’ approach in order to determine whether the use of the servient tenement as a car park would be capable of forming the subject matter of the grant of an easement.55 In Jea Holdings, the owner of the dominant tenement had the right to park 198 vehicles on the servient tenement, effectively covering the entire surface area of the tenement. The Court of Appeal concluded that while Clos Farming Estates stood for the proposition that the owner of the servient tenement must have reasonable use of the servient tenement, that did not require reasonable use of the tenement in its entirety. It held that it is also relevant to consider the extent of the interference with the rights of the servient tenement holder on the part of the land actually affected by the easement. As the servient tenement holder still had some ability to park and on the servient tenement, as well as the use of the subterranean land and airspace above, the Court of Appeal concluded that

there was still reasonable use of the tenement and a valid easement had been granted.56 [page 607]

Examples of easements 12.8 Traditionally, easements are seen as falling into two categories: they are either positive or negative. Positive easements allow the grantee to make positive use of the land burdened by the easement. Negative easements give the grantee the right to restrict certain lawful usages of the servient property. However, there appear to be at least two forms of easement that transcend this dichotomy: the fencing easement57 and the easement for the removal of support that can be created under s 177 of the Conveyancing Act.58 The following rights have been recognised by the courts as easements.

Positive easements 12.9 Positive easements come in many forms, the paradigm case being a right of way across the land of a neighbour. A right to use the toilet59 or cattle yards60 on a neighbouring property is a positive easement; as are the rights to discharge water,61 occupy a church pew,62 fix advertising signs and hoardings on a servient tenement,63 enjoy a recreation area,64 and use part of a block of land as a garden.65

Negative easements 12.10

Examples of negative easements are:

the right to a flow of air through a defined aperture;66 the right to receive light for a building;67 the right to receive water through pipes;68 and the right of support for buildings.69 These easements are negative because they restrict what the owner of the servient tenement might otherwise lawfully do on his or her land. For

example, an easement for the flow of air or light might prohibit the owner of the servient tenement from constructing a building above a certain height in a particular location. An easement to [page 608] receive water through a pipe will preclude the owner of the servient land from removing or blocking the pipe. Similarly, an easement for support might prevent the owner of the servient tenement from removing soil or a structure from his or her own land.

Easements distinguished from other types of rights Natural rights 12.11 An easement differs from a natural right in that an easement must be created; it cannot exist automatically. Natural rights, by contrast, are inherent features of ownership. They are generally protected by the law of tort, such as nuisance and trespass, and are most commonly found in relation to rights to use, enjoy, exclude and alienate.70 There are some natural rights that extend to the land of a neighbour, and so resemble easements. Thus, the right of a landholder to prevent the removal of earth by a neighbour in order to maintain support for his or her own land is a natural right rather than an easement.71 The right to support does not extend to buildings and the additional pressures they bring to bear on the subsoil.72 However, if the land would have collapsed anyway, by the removal of the adjacent subsoil, the owner of damaged buildings may recover for damage to the buildings.73 As noted below, these rights may be expressly created as an easement,74 or by means of the other ways of creating easements other than by express grant.75 These common law principles have now been significantly modified by statute. In place of a right to sue in nuisance, s 177 of the Conveyancing Act has introduced an action in negligence for landholders whose right to support has been infringed.76 The action is not limited to the owner of the supporting land, but applies to all who remove support. Supporting land includes the

natural surface of the land, subsoil and subsurface water. It does not, however, include a building or structure on the supporting land unless that building or structure replaced the support provided by the land in its natural state.77 The right to support includes the support of buildings on land. As an action in negligence, the landholder will only be able to sue in cases of reasonably foreseeable damage caused by withdrawal of support. Section 177 of the Conveyancing Act also allows for the creation of an easement for the removal of support. Such an easement allows the owner of the dominant tenement to remove the support that his or her land provides to the servient tenement in circumstances that would otherwise be a breach of the duty of care imposed by s 177.78 Because the easement for the removal of support allows the owner of the dominant tenement to do [page 609] something on his or her own land — as opposed to on the servient land — which he or she would not otherwise be permitted to do, it does not neatly fit into either the category of a positive or a negative easement. Another natural right that arises at common law is the right to the flow of water in a definite channel.79 This right does not extend to underground, percolating water where there is no channel.80 There is no natural right to light, save by means of protection of the airspace that exists over land through an action in trespass brought by the owner.81

Public rights 12.12 As noted in Chapter 1, in Stow v Mineral Holdings (Australia) Pty Ltd,82 the rights that members of the public have to cross Crown land or park land are not properly described as property rights at all. In this way they differ fundamentally from easements, which have all the defining characteristics of a property right: a right to enjoyment that is enforceable against third parties.83 Equally, because public rights exist in gross, it is impossible to create these by means of an easement.

Restrictive covenants 12.13 Easements share some characteristics with restrictive covenants.84 They are both forms of limited rights over land, or incorporeal hereditaments. Also, they can both involve a limitation of the rights of the owner of land, as in the case of negative easements conferring rights to light, air, support or water. However, easements differ from restrictive covenants, in that, first, they can be positive in nature; and second, they can exist at law. Restrictive covenants, by contrast, exist in equity only, and generally exhibit the vulnerability of equitable interests.85 Third, easements may be acquired by prescription (or long user) — this is not possible with restrictive covenants.

Licences 12.14 Easements also share characteristics with licences. If A gives B a right to cross A’s land, or to use it for some limited purpose such as billposting, this may be a licence.86 But a licence is not a proprietary right, and so cannot be enforced against third parties. Other differences are that a licence may give a right to occupation, whereas easements do not; [page 610] a licence does not require a dominant tenement, whereas an easement does; and there are formalities necessary for the creation of easements (for instance, those set out in s 54A of the Conveyancing Act) that do not apply to licences.

Formal requirements for the creation of an easement 12.15 Easements can be created in one of two basic forms where land has been subdivided. First, they may take the form of a reservation, where the vendor retains one parcel, sells the other parcel of land to someone else, but wants to exercise rights over the land parted with. In this case, the vendor’s retained land will be the dominant tenement. If the vendor does not retain land, the reservation will be construed as an attempted easement in gross and

will therefore be void.87 Second, an easement may be created in favour of the purchaser, by means of a grant of rights by the vendor. In this case, the vendor’s land becomes the servient tenement. The same principles apply where an owner leases one parcel of land and retains another. There are some differences in the rules that apply to grants and reservations.

Express grant 12.16 Old system — at law By s 23B(1) of the Conveyancing Act, a deed must be executed to create an easement effective at law. It is not necessary to use a particular form of words to create an easement.88 12.17 Old system — in equity A variety of ways of creating easements in equity is possible. By Walsh v Lonsdale,89 an enforceable agreement to grant an easement will give rise to an equitable easement. The agreement must satisfy the requirements of s 54A(1) of the Conveyancing Act, or there must be sufficient acts of part performance.90 So, in McManus v Cooke,91 an oral agreement to allow access to light to a particular window was held to be enforceable after the dominant tenement holder demolished a section of a party wall to facilitate it. An equitable easement may also be created by signed writing under s 23C(1) of the Conveyancing Act. Also, an easement may come into existence in equity by the doctrine of estoppel,92 or by acquiescence.93 As with other equitable interests, equitable easements will be vulnerable against successors in title to the holder of the legal estate who purchase without notice.94 12.18 Torrens system In order to create an easement, the proprietor must execute a transfer in the approved form.95 The particulars of the easement are to be recorded on [page 611] the folio of the Register for the servient tenement and the folio of the Register of the dominant tenement if that parcel is also Torrens title.96 The easement will be indefeasible on registration.97 Certain easements, however, gain a measure of protection even if unregistered.98 These will be dealt with

separately.99 An expressly created unregistered easement, like most unregistered interests in Torrens title land, takes effect as an equitable interest.100

Express reservation 12.19 Old system — at law At common law, a reservation could only be created at law by means of a re-grant from the purchaser to the vendor. Thus, a separate deed was necessary to reserve an easement effective at law. Section 45A of the Conveyancing Act has abolished this rule. Now, the reservation can be expressed in the conveyance, which the purchaser need not execute. 12.20 Old system — in equity Under the Walsh v Lonsdale principle,101 an enforceable agreement to grant an easement will give rise to an equitable easement.102 12.21 Torrens system The same principles that apply to expressly granted easements in relation to Torrens title land also apply to expressly reserved easements.103

Approved plan of subdivision 12.22 Under s 88B of the Conveyancing Act, the registration of a plan of subdivision, which is available for old system and Torrens title land,104 will create all easements referred to in it, and will vest them in the owner of the land benefited by the easement.105 The Registrar-General will record easements on the folios for the benefit and burdened lands.106 The plan is accompanied by an instrument setting out the terms of the easement, and the lodgment of a plan without an accompanying instrument will not create an easement.107

Section 88(1) of the Conveyancing Act 12.23 At common law it is not necessary for the instrument which creates the easement to identify the dominant tenement. In Re Maiorana and the Conveyancing Act,108 it was held [page 612]

that a court will look to surrounding circumstances to identify the dominant tenement. But s 88(1) of the Conveyancing Act provides that where an easement is expressed to be created by an instrument, the easement is not enforceable against a person interested in the servient land who was not a party to its creation: … unless the instrument clearly indicates: (a)

the land to which the benefit of the easement is appurtenant;

(b) the land which is subject to the burden of the easement …; (c) the persons (if any) having the right to release, vary, or modify the restriction …; and (d) the persons (if any) whose consent to a release, variation, or modification of the easement … is stipulated for.109

This provision applies to both Torrens title and old system title,110 and the methods of expressly creating an easement described above.111 In Papadopoulos v Goodwin,112 the words ‘clearly indicates’ were held to mean ‘to point out, to point to, or make known without entanglement, confusion or uncertainty’, so that an instrument creating a right of way appurtenant to land conveyed in a specifically identified transfer met this requirement. In accordance with Margil Pty Ltd v Stegul Pastoral Pty Ltd,113 extrinsic evidence, written or unwritten, may be examined to determine whether dominant and servient tenements are clearly indicated.

Implied easements 12.24 Easements may also be created impliedly. Easements can be created by implied grant. However, there is a general rule that it is not possible to impliedly reserve easements. If the owner of the dominant tenement wishes to reserve an easement, he or she must do so expressly.114 There are two exceptions: easements of necessity and easements of common intention. Both can be created by implied reservation. 12.25 Implied grants The general rule is that a grant is construed against the grantor.115 It follows that grants will be readily implied in favour of a grantee. They may be created: under the rule in Wheeldon v Burrows; under s 67 of the Conveyancing Act;

by necessity; by common intention; or by force of a description of the land. [page 613] 12.26 Implied easements under the rule in Wheeldon v Burrows It was held in Wheeldon v Burrows116 that an implied easement will arise if the following four conditions are satisfied: 1.

there is a severance or grant of the grantor’s land;

2.

at the time of the severance, the exercise of the quasi-easement is ‘continuous and apparent’;

3.

the quasi-easement is necessary for the reasonable enjoyment of the land granted; and

4.

at the time of the severance, the quasi-easement has been used by the grantor for the benefit of the land granted.

Because it is not possible to have an easement over one’s own land, the term ‘quasi-easement’ is used to refer to rights which someone habitually exercises over his or her own land, but which, in another’s hands after a grant, become easements. The basis of the rule lies in the principle of non-derogation from grant. It is presumed that the grantor intended to transfer to the grantee all the continuous and apparent easements that the grantor created when the lots were in common ownership. Thus, the grantor is required not to do anything to lessen the rights implicit in that original grant and the provision of the easement is an implied term of the grant.117 So where, for example, prior to a subdivision, the part to be sold received a flow of water through a pipe from the part retained, an easement by implication arose as to the supply of water on severance.118 In determining intention, regard can be had to the circumstances surrounding the grant.119 Severance requires a grant of part of the owner’s land. The requirement will

be satisfied where there has been either a subdivision of a single parcel of the grantor’s land; or the grant of one of two parcels of land, both of which were owned by the grantor.120 The requirement for ‘continuous and apparent’ exercise appears to no longer require continuity following Borman v Griffith,121 where it was held that it was not necessary for a right of way over the grantor’s land to be continuously used for the grantee to be able to take advantage of it. ‘Apparent’ means capable of discovery from a careful inspection of the servient land. In Ward v Kirkland,122 the right to enter a neighbour’s land for the purpose of repairing a wall lying on the boundary of the dominant land was held not to be ‘continuous and apparent’, because there was no evidence of the exercise of this right. The principle that, at the time of the severance, the quasi-easement must have been used by the grantor for the benefit of the land granted assumes that the land granted and the land retained are not just in common ownership, but also in common possession.123 So, [page 614] for example, if the land granted is held under a lease, or under a by-law operating to give exclusive use of a common area, then it may not be possible to argue that the owner or the entirety was using the easement for the benefit of the part granted.124 Where a purchaser was unaware that the vendor also owned adjacent land onto which water from the purchaser’s land drained, it was held that such knowledge was not necessary at the time of purchase for the implied easement to arise.125 A Wheeldon v Burrows easement can also arise where a vendor sells land to separate purchasers simultaneously, so that instead of selling the dominant tenement to one party and the vendor retaining the servient tenement, the vendor sells the dominant tenement to one party and the servient tenement to another party.126 For the easement to arise in these circumstances, the facts surrounding the contemporaneous sales must be such as to impute to the purchaser of the putative servient tenement an intention to purchase the land subject to the Wheeldon v Burrows easement in favour of the putative dominant tenement. Put another way, the circumstances must be such as to imply into

the contract of purchase of the putative servient tenement a term whereby the purchaser agrees to take subject to the easement. For this to occur, ‘the probability that the implication of such a term was intended must be so strong that a contrary intention cannot be supposed’.127 An easement can arise under the rule in Wheeldon v Burrows in respect of Torrens title land in New South Wales if the easement comes within a statutory or in personam exception to indefeasibility.128 12.27 Implied easements under s 67 of the Conveyancing Act Section 67(1) of the Conveyancing Act provides that, unless a contrary intention is evidenced in the conveyance, general words will be imported to transfer, among other rights, ‘liberties, privileges, easements, … rights, and advantages whatsoever appertaining to the land or any part thereof, at the time of conveyance’. Despite its intended word-saving function, the provision has been interpreted in some English cases as also creating implied easements. As a result of the word ‘appertaining’, rights in the nature of privileges only (eg, rights exercisable by permission only), and which were enjoyed at the time of the conveyance, are transformed into easements on conveyance. In Wright v Macadam,129 a landlord gave his tenant permission to store coal in a shed on the landlord’s property. When a new lease was granted, the tenant was held to acquire an easement to store coal by virtue of the English equivalent of s 67(1). There is no requirement that the rights or privilege in question should be ‘continuous or apparent’ at the time of the conveyance, or even reasonably necessary for the enjoyment of the property conveyed; that is, the Wheeldon v Burrows requirements are unnecessary.130 [page 615] Section 67 implied easements are limited in scope. First, s 67 does not apply to Torrens title land, although a broadly equivalent provision in the Real Property Act might have an analogous effect.131 Second, the section does not apply to interests which could never meet the substantive requirements for the creation of an easement.132 Thus, in Regis Property Co Ltd v Redman,133 the

right to be provided with hot water could not be enforced because this was not a recognised easement; nor could the right to weather-proof the wall of a house, for the same reason.134 Third, from Long v Gowlett,135 the provision will apply only if the dominant and servient tenements are in separate ownership at the time of the conveyance. 12.28 Implied easements under s 51 of the Real Property Act While s 67 of the Conveyancing Act does not apply to Torrens land, there is a comparable, although not identical, provision in the Real Property Act. Section 51 of the Real Property Act provides that on registration the transferor’s estate or interest passes to the transferee ‘with all rights, powers and privileges thereto belonging or appertaining’. The approved form of transfer is expressed to transfer an estate ‘in land’, and under s 3(1) land includes ‘hereditaments corporeal and incorporeal of every kind … together with … liberties, privileges, easements’. Whether s 51 would create easements where only privileges previously existed is unclear. On the one hand, this would not seem in keeping with the integrity of a system of title by registration such as Torrens. On the other hand, the language of s 51 is close enough to that of s 67 of the Conveyancing Act that a similar result might be found. 12.29 Easements of necessity It is also possible for easements to be granted (or reserved) impliedly if they qualify as ‘easements of necessity’. For an easement to be of ‘necessity’, it must be necessary for the enjoyment of the land conveyed. Most obviously, where land the subject matter of a grant is landlocked, the grantor is held to have impliedly granted an easement of necessity — a right of way, in this example — to get access to the property. These easements only arise where there has been a severance of the land. Where title passes in other ways, such as by adverse possession, there is no such implication.136 Easements of necessity have been held to arise in cases where there is need for the support of a building,137 or where a ventilation shaft has to be constructed to comply with food hygiene regulations.138 But an easement of necessity will not arise unless the easement is essential for the use of the alleged dominant land; mere inconvenience will not do. Thus, in Union Lighterage Co v London Graving Dock Co,139 it was held that as long as the land could be enjoyed in some manner, no easement of necessity would arise, so that the

[page 616] owners of a dock that was supported by means of underground tie-rods did not have a continuing right to keep them in place as easements of necessity because, even without them, the dock could still be used. Easements may also be impliedly reserved if they qualify as easements of necessity. Such easements arise on the same basis as where they are impliedly granted, such as when the grantor of the servient tenement retains the dominant tenement but it is landlocked by virtue of the grant. The dominant, landlocked owner may choose the particular right of way required,140 as long as it is a convenient right of way.141 Once a right of way has been chosen, it cannot subsequently be changed.142 An easement of necessity will not arise where parties did not intend that one should exist, even in the event that the grantor’s retained land is landlocked. In North Sydney Printing Pty Ltd v Sabemo Investment Corp Pty Ltd,143 the retained, landlocked land, which was zoned for parking, was always intended for sale to the owner of an adjacent car park. The grantor, therefore, never intended to retain a separate means of access, so was not entitled to an easement of necessity. 12.30 Easements of common intention The grant of an easement will be implied if it is necessary to give effect to the common intention of parties to a transaction. The common intention is to be inferred: … with reference to the manner or purposes in or for which the land granted or some land retained by the grantor is to be used … But it is essential for this purpose that the parties should intend that the subject of the grant or the land retained by the grantor should be used in some definite and particular manner.144

A common intention can form the basis of an easement either by grant or reservation.145 The purchase of land for an electricity substation gave rise to an implied easement for the transmission of such noise and vibration as was reasonably necessary for the operation of the substation.146 Further examples of easements implied from the common intention of the parties include Jones v Pritchard,147 where the grantee was held to have been impliedly given a right to use the chimneys connected to the grantor’s fireplaces; and Richards v Rose,148 where, on the sale of one of two adjoining houses which depended on each other for support, an implied right to support was granted to the

purchaser. In the latter case, there was also an implied reservation of an easement of support.149 These are known as mutual cross-easements, or reciprocal and mutual easements. [page 617] 12.31 Easements implied from the description of the land On the conveyance of land described as ‘bounded by’ or ‘abutting on’ or ‘adjoining’ a road or street also owned by the seller, the seller will be deemed to have impliedly granted an easement over such part of the road as forms part of the seller’s land. This is often known as the rule in Dabbs v Seaman.150 Further, the grantor will be deemed to have impliedly granted an easement over the grantor’s land to get access to the road if land belonging to the grantor lies between the land sold and the road. So, in Mellor v Walmesley151 land sold under the description of ‘situated on the seashore’ was actually separated from the seashore by a strip of land belonging to the vendor. It was held that an easement was impliedly granted to the purchaser allowing unrestricted access to the seashore. This principle applies to old system land. It also applies to Torrens title land provided that the road itself is Torrens title.152

Acquisition by ‘long user’ or prescription 12.32 General In addition to the above ways in which easements can be created, it is possible to acquire an easement by a period of protracted and continuous use, or ‘long user’.153 Known as the doctrine of prescription, it is an analogous doctrine to adverse possession. It originates in the same policy; that is, an owner who sleeps on his or her rights deserves to forfeit them in the face of a claim of someone who has used them for a considerable period of time. In the case of easements, the length of the use has to be at least 20 years. However, there is a fundamental difference in the way that the doctrines of prescription and adverse possession operate. In the case of prescription, the claimant asserts positive rights acquired by virtue of certain practices, such as the exercise of rights of way or the use of a channel as a drain. However, in the case of adverse possession, the claimant asserts negative rights, as we have seen: the trespasser’s actions have the effect of extinguishing the documentary

titleholder’s interest, and consequently the adverse possessor’s trespassory title becomes, by default, the remaining best title to the land.154 In English law, there were three modes of acquisition of an easement by prescription: 1.

at common law (involving use from time immemorial);155

2.

by the doctrine of the ‘lost modern grant’; and

3.

under the Prescription Act 1832 (UK). [page 618]

Only the second has ever been applicable in New South Wales.156 The courts have treated claims based on prescription originating in the doctrine of lost modern grant by presuming that, where 20 years’ use was established, the grant had been made but was later lost. This was because the servient owner would not have remained inactive for a period of 20 years had the grant not been made to the alleged dominant owner.157 An alternative rationale for the rule is that, in the absence of some other explanation, the courts will find a lawful basis for use of such length.158 The basal Australian authority has recast the rationale, finding that its origins lie in an implied contractual obligation.159 The case of prescription based on the (fictitious) presumption of a lost modern grant marks an additional difference between the doctrines of prescription and adverse possession. In contrast to an easement by prescription, an adverse possessor does not claim any dealings with the documentary title holder. Clearly, there are similarities between easements acquired by prescription at common law and native title rights grounded in customary usage.160 12.33 Elements of long user The fiction of the lost modern grant is irrebuttable, even where it can be proven that no grant was made,161 except in the case of grantors without legal capacity to make the grant for reasons such as infancy, insanity, illegality or, in the case of corporations, a lack of power.162 In order to establish an easement by lost modern grant, the alleged easement must have been enjoyed ‘as of right’, as in the case where an existing

laneway was openly used for a period in excess of 20 years.163 This expression has been held to mean that the right was in some way acquiesced in.164 Three elements must be present to establish the requisite acquiescence. These are captured by the Latin expressions nec vi (‘without force’), nec clam (‘without secrecy’) and nec precario (‘without permission’),165 for the reason that the early English authorities followed Roman law in this area.166 [page 619] The first element, without force, must be lack of physical violence, but its meaning also extends to user without contention or protest. In Eaton v Swansea Waterworks Co,167 no easement was acquired because the parties were in constant conflict over its existence. The test applied by the courts to the ‘without secrecy’ requirement is that the enjoyment must be sufficiently open to allow discovery by the ordinary, diligent owner.168 This principle is most relevant to easements which are least obvious, such as those involving the underground flow of liquids, so that no easement arose in the case of discharge of factory waste fluids into a local authority’s sewers at night,169 or where a prescriptive easement of support was alleged in relation to beams which could not be discovered by an inspection of the external or internal walls of the servient tenement.170 The final element, without permission, requires absence of consent on the part of the servient tenement holder.171 Acquiescence that allows or tolerates a particular use is not permission.172 Neighbourly good nature and tolerance of limited use will not give rise to a prescriptive easement,173 though use that commenced by virtue of ‘neighbourly indulgence may come, in time, to bear the stamp of legal right’.174 Even a single instance of permission, oral or written, during the period of use will vitiate the user.175 The use must be continuous, but only in the sense that the easement was used whenever needed.176 Occasional use, as where the verges of a one-lane right of way were used to allow vehicles to pass, will not suffice.177 As is the case with adverse possession, periods of use of less than 20 years by different owners of the dominant tenement can be added together.178 It is not possible to acquire

an easement of light or air by prescription.179 Nor can prescriptive rights of way be acquired against the Crown.180

Creation by statute — s 88K of the Conveyancing Act 12.34 Section 88K was inserted into the Conveyancing Act to provide a supplementary set of rights in the nature of easements of necessity.181 The provision allows the Supreme Court to grant an easement over land ‘if the easement is reasonably necessary for the [page 620] effective use or development of other land that will have the benefit of the easement’.182 The requirement of reasonable necessity is thus less strict than the analogous requirement for an easement of necessity that the easement must be essential for the enjoyment of the land. Additionally, for the purposes of s 88K, the reasonable necessity need not exist at the time of the severance of the two parcels of land. Where an easement is imposed under s 88K, s 88K(4) provides for the payment of compensation by the owner of the dominant tenement to the owner of the servient tenement. The question as to whether a proposed easement is reasonably necessary involves an inquiry as to whether the use and development of the putative dominant tenement that would be possible with the easement is substantially preferable to the use and development that is possible without the easement.183 ‘Reasonably necessary’, therefore, means something more than reasonably desirable or preferable over the alternative means available.184 This is a matter to be determined objectively in the light of the present circumstances, taking into account the factual position at the time of the making of the order, as opposed to the court being confined to taking into account only the facts at the time the court proceedings were commenced.185 Thus, matters to be taken into account include: the capacity of the developer’s land for particular kinds of development or use; the nature of the development; the manner in which the development is to be effected; and the effect of the easement on the servient tenement.186 The inquiry as to whether the proposed easement is

reasonably necessary also involves consideration of the adverse effect of the imposition of the proposed easement on the use and enjoyment of the putative servient tenement.187 Accordingly, the court might refuse to impose an easement because it would significantly impede the future development of the burdened land,188 or significantly infringe on the privacy of the occupier of that land.189 In addition to establishing that the proposed easement is reasonably necessary for the effective use or development of the putative dominant tenement, the owner of that land must satisfy the court of certain other matters: first, that the use of the benefited land is consistent with the public interest;190 second, that the owner and other registered interest [page 621] holders of the burdened land can be adequately compensated;191 and third, reasonable attempts must have been made to obtain an easement, and have been unsuccessful.192 Section 88K has generated a large body of case law.193 The provision has been used to impose rights of way and easements for temporary or permanent encroachment. For example, it may be used to impose a permanent right of way for access to a road, or to give a temporary right for the encroachment of a crane or scaffolding into the airspace of a neighbour’s land to allow the construction of a building on one’s own land.194 Additionally, drainage easements and easements for the flow of light and air have been imposed in circumstances where such easements need to be obtained as a condition of a council’s deferred development consent. In this respect, s 40 of the Land and Environment Court Act 1979 (NSW) is also relevant. Where the New South Wales Land and Environment Court has, on appeal, determined to grant development consent in respect of land, s 40 allows the court to impose an easement in favour of the land in circumstances that are relevantly identical to the power of the Supreme Court to impose an easement under s 88K of the Conveyancing Act.

Common types of easements and the extent of rights conferred 12.35 Though easements may take on a wide variety of forms, the most common examples are: rights of way; rights to support; fencing easements; and rights to create a nuisance. Each of these commonly confers specific, characteristic rights on the owner of the dominant tenement.195

Rights of way 12.36 A right of way is a right to pass over or to make use of the land of another.196 Commonly, an easement for a right of way will include the words ‘pass and re-pass at all times for all purposes’. The precise ambit of rights conferred by such an easement [page 622] depends on the wording of the document creating it.197 The question arises, however, as to whether, and the extent to which, the surrounding circumstances can be taken into account;198 in particular, where the easement is registered. In Westfield Management Ltd v Perpetual Trustee Co Ltd,199 the High Court of Australia held that where the easement is registered, the principle of indefeasibility requires that regard be had only to the Register, and that the rules as to the admissibility of extrinsic evidence to construe contracts have no place in construing registered dealings. The rationale for this decision is that it is inconsistent with the principles underlying the Torrens system for third parties to be required to go beyond the Register to establish facts and circumstances existing at the time of the grant. However, material relating to the physical characteristics of the tenement can be resorted to.200

The physical features are there for all to see. So, in Hare v Van Brugge,201 relevant physical features included that an inclinator that crossed the servient tenement was a fixture and, therefore, part of the servient tenement. The inclinator pre-dated the easement, and the court concluded that the right to ‘pass and re-pass’ in the grant included passage by means of the inclinator structure.202 Decisions subsequent to Westfield have raised whether other extrinsic material, beyond that relating to physical features, may be included. In Tempe Recreation Reserve Trust v Sydney Water Corporation, Leeming JA held that where several easements were included in a memorandum of transfer and registered with respect to the same land, it would not be inconsistent with Westfield to interpret one of these easements by having recourse to the others where it was clear that there was a relationship between definitional terms in the instruments.203 In Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS,204 Fryberg J considered that recourse may be able to be had to other material where [page 623] that material was available to third parties without unreasonable effort. Some decisions subsequent to Westfield have also suggested that where there is a grant of a bare right (such as a ‘right of way’) recourse should still be had to the surrounding factual matrix in order to construe the extent of the easement, although they have held themselves bound by the Westfield decision.205 While the resort to extrinsic material does infringe on the strict principles of Torrens, in cases where there is only a bare grant, without such material it will be difficult to determine the intention of the parties. If the words in the instrument are clear, they will confer a right to override the presence of any physical obstacles on the route; so that, where a right of way granted was of a specified width, it could not be restricted by the existence of a narrow gate.206 However, unless the terms of the grant or the surrounding circumstances make it clear, where a right of way potentially affords access to the dominant tenement at a number of points along the right of way, the owner of that land cannot insist on taking advantage of all of those

points of access. The owner of the dominant tenement is entitled only to such access at a point that is reasonable for the use and enjoyment of the dominant land, taking into account the impact of such access on the use and enjoyment of the servient tenement.207 Nevertheless, recent authority is, as has been noted in a number of recent decisions, moving towards allowing access at more than one point.208 A further consideration for the court is the purpose for which the right of way is granted. For example, a right of footway will not normally give the owner of the dominant tenement the right to put up a ladder on the site of the easement in order to paint his or her house, as this would constitute excessive user of the right.209 However, a right of way conferring vehicular access to business premises will be construed to allow the parking of vehicles for the purposes of loading and unloading,210 but not if the right is strictly defined.211 So, in Fanigun Pty Ltd v Woolworths,212 the court held that because an easement expressly prohibited the obstruction of the right of carriageway giving access to the petrol station on the dominant tenement, customers were not permitted to stop and queue on the right of way. If a particular mode of user is specified, it is not restricted to the mode of carriage at the time of the grant. A right to drive horse-drawn carriages will allow motor [page 624] cars.213 The issue may arise as to whether the owner of the dominant tenement and those authorised by him or her can use the right of way to transit from the dominant tenement to another parcel of land that does not have the benefit of the easement. Traditionally, the rule in Harris v Flower214 was thought to prohibit this. An exception to the rule was articulated in National Trust v White,215 where it was held that it was permissible to use a right of way to gain access to land other than the dominant tenement where the purpose of such access was ancillary to the enjoyment of the dominant tenement. In that case, the court upheld the use of the right of way to access a car park for the purpose of getting to and from the historic site that formed the dominant tenement. The rule in Harris v Flower was revisited in Westfield Management Ltd v

Perpetual Trustee Co Ltd.216 In the Supreme Court of New South Wales, Brereton J held the use of an easement cannot be extended so as to impose a burden greater than that which the servient tenement holder agreed to accept. Further, it would not be in excess of the grant to use the dominant tenement for purposes that were contemplated at the time of the grant. On appeal, the High Court of Australia noted that while these were useful starting points, the matter remained essentially one of construction of the terms of the particular grant.217 12.37 Extent of obligations The instrument creating the easement will determine the extent of the obligations relating to it. Thus, in the absence of express provision, the grantor of a right of way will not be under an obligation to construct it.218 Equally, there is no obligation on the part of the grantor to repair or maintain the easement in the absence of express provision.219 Even where such positive obligations arise, at common law they cannot bind successors in title of the grantor;220 although, by legislation, positive obligations can be imposed on successors in title by registration.221 This applies to both old system and Torrens title land. Where the grantor is free from positive obligations to repair or maintain, the grantee has an ancillary right to enter the servient tenement to establish, repair and maintain the site, but if they choose to do so, they must also bear the cost.222 It is also possible for the owner of the dominant tenement to have an implied right [page 625] to traverse various parts of the servient tenement by an undefined route in order to gain access to an expressly granted and defined right of way.223 12.38 Change of use Where an easement is expressed in wide terms, courts will rarely interpret the grant restrictively. The general position is that, absent specific words in the grant, the court will not cut down a grant by reference to the use of the dominant tenement at the time the easement was created. For example, a right of way ‘to go, pass and repass at all times for all purposes’ will generally be given a wide construction, whereby a change in use of the dominant tenement will not prevent continued use of the easement as a right

of way. So, where a private home was converted into a butler’s lodge, the right of way could still be exercised over the servient tenement;224 and where a dominant tenement that originally contained several cottages was developed as a 10-storey building, the easement could be used by construction vehicles.225 If an easement has been granted in wide terms, then a substantial increase in use of the easement is permissible. However, in some cases, the increase has been of such a magnitude that the courts have held it unreasonable. The question is one of what was in the reasonable contemplation of the parties at the time the easement was created?226 Or, some courts prefer to ask whether the rights of the servient tenement holder have been unreasonably interfered with.227 In Jelbert v Davis,228 for example, the conversion of the dominant tenement from agricultural land to a large camping park led to an unreasonable increase in user of the easement across the servient tenement. 12.39 Interference with rights of way A grantor must not obstruct the right of way. An obstruction amounts to an actionable nuisance,229 but only as long as it is substantial.230 An example of such substantial interference would be where the owner of the servient tenement constructed a suspended building over a right of way that would impede access to the dominant tenement by large trucks, even though it would not affect the passage of smaller vehicles.231 The grantee is entitled to use an alternative route across the servient land until the obstruction is removed.232 In Sinclair v Jut,233 the erection of a greater than usual number of internal gates on the servient tenement (a rural property) was held to amount to a real and substantial interference with the plaintiff’s right of carriageway. [page 626]

Rights to support 12.40 As noted above, rights to support of buildings are not among the natural rights that form part of the land.234 Accordingly, if they are to exist, they must do so in the form of easements or a statutory regime such as s 177 of the Conveyancing Act. An easement for support may come from adjoining

land or adjoining buildings. In the case of land, this may be done by express or implied grant or reservation, or prescription. With regard to buildings, s 181B(1) of the Conveyancing Act provides that in the case of ‘party walls’, mutual cross-easements of support are created on the severance of buildings that share the party wall where the wall is described in the assurance as a party wall. Also, cross-easements to support of party walls are deemed to be intended by parties on the lodgment of plans for registration or recording.235 In most cases where buildings support one another, they would originally have been in common ownership, and so, on the sale of one lot, an implied grant of an easement will arise under the rule in Wheeldon v Burrows.236 Equally, there will be an implied reservation of an easement in this case.237

Fencing easements 12.41 A fencing easement is something of an anomaly (‘a spurious easement’)238 because, unlike other easements, it requires a positive duty to fence on the part of the servient tenement owner.239 In the normal case, the servient tenement owner must merely submit to the rights of the owner of the dominant tenement. By s 10 of the Dividing Fences Act 1991 (NSW), it is not possible to acquire a fencing easement (that is, the right to compel performance of fencing work) by implication or prescription.240 This legislation provides for the sharing of obligations for the repair of dividing fences.

Rights to create a nuisance 12.42 An easement may confer a right to do things on the servient tenement which might otherwise amount to an actionable nuisance. Thus, the right to emit vibrations and noise from an electricity substation over the land of another has been held to be a valid easement,241 as has the right to discharge polluted water over a neighbour’s land.242 Where [page 627] the right is too vague or indeterminate, however, it cannot be the subject of

an easement, as in the case of a right to emit coal dust particles over the entire servient tenement.243

Remedies 12.43 There are two remedies available to the owner of the dominant tenement for the infringement of an easement: (i) abatement; and (ii) action.

Abatement 12.44 Abatement is the technical term for the remedy of self-help to prevent an infringement of an easement. Though not favoured by the courts, the owner of an easement has a general right to abate the interference, provided that: no more force is used than is reasonably necessary in the circumstances;244 there is not likely to be a breach of the peace;245 and there is no injury to third parties or the public.246 Thus, in the case of an obstructed right of way, the owner of the dominant tenement may break open a locked gate or may even pull down a dwelling if necessary.247 No notice need be given to the owner of the servient tenement,248 unless an inhabited dwelling is to be demolished.249

Action 12.45 In the alternative, an owner of an easement is entitled to sue for damages, a declaration or an injunction, or a combination of these remedies, in cases of interference with his or her rights.250 The relevant tort is nuisance, not trespass.251 Interference is not actionable unless ‘real and substantial’, although proof of actual damage or loss is not necessary.252 Where the owner of the servient tenement erected a gate across a right of way, the interference was held not to be substantial if it remained open during business hours, and was closed but unlocked at other times.253 Where the holder of the servient tenement over which an inclinator passed refused to supply electricity to that inclinator, this was not a real and substantial interference; they were under no obligation to maintain

[page 628] nor keep it working.254 The owner of an easement does not have possession of land over which the easement is exercised, so he or she is not able to set up a possessory title against a third party who interferes with the easement. Instead, he or she must prove a good title to the easement. Therefore, the defendant may plead the jus tertii defence, claiming that the plaintiff lacks standing to bring the action.255

Easements and the Torrens system 12.46 The enforceability of easements under the Torrens system is complex. By s 42 of the Real Property Act, a registered easement, like other interests in land, will be indefeasible. But the Act also makes certain easements exceptions to indefeasibility. Also, as we have seen above, the manner of creation of implied easements runs directly counter to the central Torrens policy of making registration a condition of enforceability. Accordingly, implied easements are given limited protection under the Torrens system if they are not registered.

‘Omitted or misdescribed’ easements 12.47 Section 42(1)(a1) of the Real Property Act provides that omitted and misdescribed easements ‘subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or Commonwealth Act’ are an exception to indefeasibility. For the purposes of this provision, easements may be omitted from, or misdescribed in, the Register in two ways: first, when old system title is converted to Torrens title and an easement ‘subsisting immediately before’ is not recorded; and second, where an easement is ‘validly created’ over land that is already Torrens system, but the easement is not registered. 12.48 For the purposes of s 42(1)(a1) of the Real Property Act, ‘omitted’ means ‘left out’ or ‘not there’.256 As noted in Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd,257 the presupposition of the section is that an easement existed; that is, it continues to exist, but has not been registered. The section

provides for the continued effect of the easement in respect of the land. It is not necessary to establish neglect on the part of the Registrar-General to gain protection.258 However, some inquiry is necessary into why the easement is ‘not there’. Where a registered easement was deliberately removed by the Registrar-General with the consent of the holder of the dominant tenement, this was held not to be [page 629] an ‘omission’ because the presupposition of the section — that the easement continues to exist — was not valid.259 It had been removed. 12.49 With respect to the first way in which an easement can be ‘omitted’ or ‘misdescribed’, namely during the process of conversion of the land from old system title to Torrens title, the exception includes express easements, implied easements and prescriptive easements.260 12.50 In the second case — easements created while the land is held under the Torrens system — the position is more complicated. As s 42(1)(a1) of the Real Property Act makes clear, an unregistered easement will only be an exception to indefeasibility if it is ‘validly created’. Section 41 of the Act requires an instrument be registered in order to pass an estate or interest in land. By s 46 of the Act, ‘[w]here … any easement … is intended to be created, the proprietor shall execute a transfer in the approved form’. Section 36(6A) of the Act specifies the mode of registration in so far as it provides that a dealing is registered when the Registrar-General has made such recording in the Register with respect to the dealing as the Registrar-General thinks fit. It seems, to follow, therefore, that unless an easement is created by an appropriate instrument that is lodged for registration and registered in the Register, the easement has not been validly created. Section 47(1) of the Real Property Act further requires that the Registrar-General record the particulars of an easement on the folios of the burdened and benefited land. It has been, held, however, that the Registrar-General’s obligation to record under s 47(1) is not a requirement for valid creation of the easement.261 If ‘validly created’, the easement will be enforceable against a subsequent

registered transferee of the servient tenement if it is left off the folio of the servient tenement, either because of a failure to comply with s 47(1);262 because of a later omission;263 or because it was misdescribed on the folio of the servient tenement.264 The exception is, therefore, a narrow one because of the earlier registration requirement imposed by the term ‘validly created’: implied or prescriptive easements can never clear this hurdle. In Dewhirst v Edwards,265 it was held that easements by prescription are not included in the exception. This position has been accepted by the New South Wales Court of Appeal in Williams v State Transit Authority of New South Wales266 in regard to easements by prescription, and [page 630] in McGrath v Campbell267 in regard to easements arising under the Wheeldon v Burrows principle.

Easements and the in personam exception 12.51 Despite the limited coverage offered by s 42(1)(a1) of the Real Property Act, an unregistered easement can be enforced against the registered proprietor of the servient tenement if the easement comes within the in personam exception to indefeasibility.268 In Ryan v Starr,269 for example, an expressly created, but unregistered, easement was enforced against a registered proprietor of the servient tenement who was not a party to its creation. That registered proprietor had, when purchasing the land, contracted to be bound by the easement, which meant that under the principle in Bahr v Nicolay,270 the in personam exception to indefeasibility applied, in the form of a constructive trust, to protect the unregistered easement. Defining the protection afforded to implied and prescriptive easements under the in personam exception is more complex. It has been assumed that, by virtue of the in personam exception, a Wheeldon v Burrows easement can arise on the severance of land held under Torrens title in a way that is binding on the registered proprietor of the servient tenement at the time of the severance. Such an interest would not be binding on a subsequent registered proprietor,

who would take an indefeasible title.271 While binding on the earlier registered proprietor, however, the grantee would be able to perfect the unregistered interest by bringing an action for equitable relief that would require the registered proprietor of the servient tenement to execute, deliver up and allow the registration of an instrument that would formalise the in personam right.272 Although this reasoning was not articulated by the New South Wales Court of Appeal in Wilcox v Richardson,273 it seems impliedly to have underpinned the court’s decision. In that case, the lessees of Torrens title land subleased part of their premises. The sublessees later assigned the sublease. The assignees of the sublease claimed that they were entitled to use part of the premises retained by the lessees that was not subject to the sublease. The court found for the assignees on the basis that the grant of the sublease created a Wheeldon v Burrows easement burdening the relevant part of the premises retained by the lessee and benefiting the premises subject to the sublease. 12.52 Two decisions of the New South Wales Court of Appeal appear to have substantially limited the availability of the in personam exception to indefeasibility to [page 631] protect implied and prescriptive easements, even though the relevant party remains the registered proprietor of the servient tenement. First, in Williams v State Transit Authority of New South Wales,274 the court held that a prescriptive easement that would come within the in personam exception could not arise in respect of Torrens title land. This is so even if the 20-year period of adverse user — in this case, the discharge of sewage through a pipe under the putative servient tenement — occurred while the same party was registered proprietor of the relevant land. Among the reasons given for this was the incompatibility between the common law nature of the easement that arises from the doctrine of a lost modern grant, and the equitable origin of the rights and relief that forms the basis of the unregistered interest protected by the in personam exception.275 An application for special leave to appeal to the High Court

against the decision was refused.276 This decision has been the subject of some disapproval by academic writers.277 There seems logically no reason why a prescriptive easement should not be capable of protection via the in personam exception. First, it is not the nature of the interest (prescriptive easement or other) that should determine whether the exception exists. Rather, the inquiry is to the conduct of the registered proprietor. Second, the focus of the exception as being based on equitable rights is incorrect. A legal right can form the basis of an in personam exception. Second, in McGrath v Campbell,278 the Court of Appeal rejected the claim that on the facts of the case a Wheeldon v Burrows easement that would be protected by the in personam exception arose over Torrens title land. The easement alleged to have arisen was of the Aldridge v Wright type: a Wheeldon v Burrows easement that is created when a common vendor sells both the dominant and servient tenements to separate parties in contemporaneous transactions.279 In McGrath, the purchasers of the servient tenement had knowledge of two pertinent facts concerning the putative dominant and servient tenements: that while the parcels were in common ownership, the driveway on the latter was used to gain access to the former; and that the parcels were being sold in contemporaneous transactions. The court regarded the purchasers’ knowledge in this respect as possibly being sufficient to imply a term into their contract to purchase the putative servient tenement that the land was subject to an easement in favour of the putative dominant tenement. If the [page 632] implication of such a term were justified, this would give rise to an easement burdening the servient tenement had that land been held under old system title.280 However, as the putative servient tenement was held under Torrens title, an unregistered easement of the relevant type would arise within the in personam exception only if it were the actual, as opposed to the presumed or imputed, intention of the registered proprietors of the putative servient tenement that they take the land subject to the unregistered easement. This is

because central to the applicability of the in personam exception in this context is some conduct on behalf of the registered proprietor that contributes to the creation of the unregistered interest or which could otherwise be regarded as unconscionable. There was no evidence of such conduct in this case because the purchasers of the putative servient tenement had no control over the terms on which the putative dominant tenement was sold, or even the timing of the sale.281 12.53 What room is left within the in personam exception to indefeasibility for prescriptive and implied easements that purportedly arise over land that at all relevant times has been held under Torrens title? So far as prescriptive easements are concerned, Williams v State Transit Authority of New South Wales issues an uncompromising denial that these can exist. This result is also consistent with the more refined analysis in McGrath v Campbell, which brings the inquiry back to the actual conduct of the registered proprietor of the putative servient land. It is unlikely that the mere acquiescence of that party to the exercise of acts of adverse user, even for a period in excess of 20 years, would make it unconscionable for him or her to deny the existence of the purported easement.282 With regard to implied easements, such as of the Wheeldon v Burrows type, the position is less clear. The decision in McGrath leaves open the possibility that on any specific facts it is possible that it can be inferred that the registered proprietor of the putative servient land had an actual intention to take the land subject to an implied easement. If this can be shown, this would bring the easement within the protection of the in personam exception. Further, the matter is complicated because McGrath concerned a variation of the Wheeldon v Burrows easement where the common grantor did not retain the putative servient tenement. The question arises whether a different approach is needed in the context of the standard Wheeldon v Burrows easement. Would the conduct of a putative servient owner in conveying the putative dominant land and retaining the putative servient land — in circumstances where the transfer of existing quasieasements is not expressly excluded — itself be sufficient to give rise to the in personam exception? Put another way, is the obligation of the grantor not to derogate from his or her grant such

[page 633] as to obviate the need for an actual, rather than a presumed or imputed, intention to be bound by the easement? Answering this question in the affirmative would reconcile the result in McGrath with the court’s earlier decision in Wilcox v Richardson,283 referred to above. However, the omission of the court in McGrath to distinguish expressly between the standard Wheeldon v Burrows easement and the Aldridge v Wright variation in relation to the operation of the in personam exception suggests that the question should be answered in the negative. This conclusion is fortified by Tobias JA’s identification of the similarities between implied and prescriptive easements, and his statement that if ‘prescriptive easements are trumped by the indefeasibility provisions of the [Real Property Act], logic requires that those provisions should apply to implied easements in the same way’.284 Consideration of this issue by the High Court would be welcome so that clarity could be brought to both the areas of implied and prescriptive easements so far as the in personam exception to indefeasibility is concerned.

Easements arising from the description of land 12.54 There is a special exception for easements over Torrens title land where the land is described as abutting a road, street or lane owned by the vendor. In Dabbs v Seaman,285 it was stated that if the vendor is also the owner of the road (and the road is under Torrens title)286 an easement will be implied in favour of the purchaser, even though it is not registered. While this principle is ‘settled law’,287 Dabbs v Seaman is usually ‘closely confined’ as it sits outside general Torrens principles.288 This decision imports this form of implied easement under old system title directly into the Torrens system; it is not an easement ‘omitted’ from the Register, but part of the natural rights of the land.289

Extinguishment of easements Express release 12.55

The most obvious way of extinguishing an easement is by means of

an express release by the owner of the dominant tenement. In the case of old system title, this can be effected at law only by execution of a deed.290 For land under the Torrens system, a release is effected by means of a registered transfer.291

Abandonment 12.56 At common law, an easement will be extinguished if it is abandoned. Declaratory orders to the effect that an easement has been abandoned can be sought under s 89(3) [page 634] of the Conveyancing Act. Whether an easement has been abandoned is a question of fact. The test for abandonment is a twofold one. First, the owner must have ceased to use the easement; and second, he or she must have positively intended to abandon the easement.292 The onus of proof is on the person alleging the easement has been abandoned. There is no predetermined abandonment period as in the case of adverse possession.293 This fact should not imply that it is easier to establish abandonment of easements. Mere nonuse will be insufficient to found abandonment, although a lengthy period of non-user may be a material element from which intention can be inferred.294 The degree of difficulty is evident from Treweeke v 36 Wolseley Road Pty Ltd.295 In this case, it was held that where the owner of the dominant tenement had failed to use the easement for over 40 years, so that a swimming pool had been built without protest over it, the owner had placed a fence across it, and bamboo and other obstructions had rendered it all but impassable, it was still insufficient to establish an intention to abandon.296 While an easement of old system land can be abandoned at common law, under a system of Torrens title the question arises whether a registered easement can be abandoned? Where the current owner can be found to have abandoned the easement, a declaration can be sought under s 89(3) of the Conveyancing Act by the owner of the servient tenement that the easement has been abandoned.297 In addition, s 49 of the Real Property Act allows the

Registrar-General to remove a recording of an easement from the Register on the basis that the easement has been abandoned. Under s 49(2), non-use of the easement for a period of at least 20 years constitutes a basis for the RegistrarGeneral treating the easement as having been abandoned. However, because the provision is administrative in nature, s 49(2) cannot be relied on if the issue of the abandonment of the easement is brought before a court.298 This provision often provides a practical alternative to proving abandonment at common law or under s 89(1) of the Conveyancing Act.

Alteration to the dominant tenement 12.57 As noted above, if the dominant tenement changes significantly in character, an easement may come to an end, as in Jelbert v Davis299 where a conversion of agricultural land to a large camping park led to unreasonable increase of use of the right of way. The basis of the rule is that an excessive burden not within the intention of the parties has [page 635] been imposed on the servient tenement. So, in Graham v Philcox300 the enlargement of the dominant tenement to take in an additional floor was held not so significant as to lead to an excessive use.

Unity of dominant and servient tenement 12.58 Subject to the exceptions noted above, when ownership and possession of both the dominant and servient tenements pass to the one person, the easement will be extinguished.301

Statutory extinguishment — s 89(1) of the Conveyancing Act 12.59 By s 89(1) of the Conveyancing Act, the Supreme Court is given power to modify or wholly or partially extinguish an easement. The grant of relief under s 89 grounds is discretionary.302 This power can be exercised if the court is satisfied that:

there has been a change in the user of any dominant land, or in the character of the neighbourhood, or other circumstances render the easement obsolete; or the continued existence of the easement would impede the reasonable user of the land subject to the easement, without securing practical benefit to the persons entitled to the easement; or the persons entitled to the easement have agreed to the easement being modified or wholly or partially extinguished, or by their acts or omissions may reasonably be considered to have abandoned the easement; or the proposed modification or extinguishment will not substantially injure the persons entitled to the easement. These provisions apply to both old system and Torrens title land.303 The power also extends to easements created under s 88B of the Conveyancing Act. 12.60 Obsolescence Obsolescence is established if the original purpose of the easement can no longer be served, or the right of way currently serves no useful purpose.304 Section 89(1)(a) of the Conveyancing Act provides two grounds for obsolescence. First, where there has been a change in the land that has the benefit of the easement or the character of the neighbourhood, the easement can be deemed obsolete. This involves an identification of the relevant neighbourhood and an examination of the evidence in order to determine whether there has been a change between the date of the grant and the time of the application. ‘Neighbourhood’ has been held to mean the ‘immediately [page 636] surrounding area of the dominant and servient tenements’.305 So, in Couche v Adams306 the redevelopment of a former shop and factory on the servient tenement to residential premises was insufficient to constitute a change in the character of the neighbourhood for s 89(1) where the dominant tenement had at all times been used for residential purposes. 12.61

No practical benefit The second basis involves an assessment of

whether or not the continued user would impede the reasonable user of the servient tenement without securing practical benefit to the persons entitled. In order to establish that the easement impedes the reasonable user, it must be shown that no reasonable use of the land is possible unless the easement is modified or extinguished.307 In Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd,308 the court ordered the extinguishment of the easement because it had become obsolete, in the sense that it was no longer capable of fulfilling its intended purpose. The right of carriageway had become physically impassable; it could no longer be used legally to gain access to the relevant public highway; and alternative access to the dominant tenement had been created. Similarly, in Walker v Bridgewood, a right of carriageway granted in 1899 for horses to reach stables was found to be obsolete to vehicular passage, although not abandoned, because the construction of a driveway in conformity with council requirements would pose an unreasonable interference with the rights of the holder of the servient tenement.309 In Re Bona Vista Properties,310 an easement to draw water from a river was found to be obsolete after the dominant tenement had been redeveloped for residential purposes. 12.62 While abandonment is a common law doctrine, it is reflected in the court’s power under s 89(1)(b) of the Conveyancing Act. The principles applied under s 89(1)(b) are the same as those at common law. Abandonment occurs where the dominant owner has made it clear that neither he nor she nor his or her successors in title will make use of the easement.311 As at common law, intention to abandon is not lightly inferred. In Ashoil Holdings Pty Ltd v Fassoulas,312 the court refused to order the extinguishment of the relevant easement where there was no evidence of a firm and fixed intention of the owner of the dominant tenement to abandon the easement, and the fact that alternative access to the land had become available did not itself make the easement obsolete.313 Notably, as the result of amendment to s 89 in 2009, the court can now treat an easement as extinguished where it is satisfied that the easement has not been used for at least 20 years [page 637] before the application is made: see s 89(1A).314 This provision has the effect of

aligning s 89(1) of the Conveyancing Act with s 49 of the Real Property Act, under which the Registrar-General has powers, in certain circumstances, to remove easements from the Register. Section 89(1A) of the Conveyancing Act is a deeming provision intended to facilitate proof and, even where there is 20 years of non-use, it is still a matter of discretion as to whether the easement is declared abandoned.315 One question that arises with respect to registered easements is whether abandonment can be found based on the conduct of a predecessor in title to the current registered proprietor of the easement. Some authority suggests that the court has discretion under s 89 of the Conveyancing Act to order the easement abandoned, even where the easement was on the Register at the time the dominant tenement was purchased by the current registered proprietor.316 In Long v Mitchie,317 Austin J noted that in exercising its discretion under s 89(3) the court may take into account that the owner of the dominant tenement acquired the easement relying on the existence of the easement as shown on the Register; while in Ashoil Holdings Pty Ltd v Fassoulas,318 the matter was treated as an ‘open question’.

Substantial injury 12.63 A separate basis for an application to the court is that the modification or discharge will not cause substantial injury to the owner of the dominant land.319 A substantial injury is one that has real and present substance, but it need not be necessarily large or considerable.320 In Webster v Bradac,321 McLelland CJ in Eq described the extent of this ground as follows: The kind of injury contemplated in para (c) is injury to the relevant person in relation to his ownership of (or interest in) the land benefited. The injury may be of an economic kind, eg reduction in the value of the land benefited, or of a physical kind, eg subjection to noise or traffic, or of an intangible kind, eg impairment of views, intrusion upon privacy, unsightliness, or alteration to the character or ambience of the neighbourhood. … [I]t is clear that a person may be “substantially injured” within the meaning of para (c)

[page 638] notwithstanding that the value of his land would be unaffected or even increased by the proposed modification.322

The party seeking the extinguishment bears the onus of showing that no substantial injury will occur.323 The court has granted an order for extinguishment where it was shown that a second easement conferred rights that were at least as extensive as those granted in the easement sought to be extinguished.324 Conversely, the court has refused to modify a right of way by reducing its width where to do so would injure the dominant owners by reducing the convenience and safety of their existing access.325

Suspension of easements 12.64 Section 28(2) of the Environmental Planning and Assessment Act 1979 (NSW) allows easements to be overridden by, among other things, a council’s local environmental plan or development consent (in combination with a local environmental plan) to the extent that this is necessary to allow the development of land. However, the easement is only suspended and not extinguished in this context. The easement will revive on the lapsing of the plan or consent, or on the issue of a later inconsistent plan or consent.326

Profits à Prendre General 12.65 A profit à prendre, or profit, is a right to remove from the land of another person something naturally occurring on that land.327 A right to remove something that does not naturally occur on the land, such as by harvesting a cultivated crop, cannot be a profit à prendre under the general law.328 Examples of profits include a right to hunt and take wild animals,329 a right to remove slate330 and a right to harvest trees.331 Additionally, by virtue of s 88AB of the Conveyancing Act 1919 (NSW), ‘forestry rights’ (as defined by s 87A of the Act) are deemed to be profits à prendre. [page 639]

Where rights are given to remove soil or the natural produce of land, the right cannot be an easement, but is a profit.332 This is an important distinction because, unlike easements, profits can exist in gross; that is, the holder does not need to own a dominant tenement to which the profit is attached. However, like an easement, a profit à prendre cannot sterilise or neutralise the servient owner’s rights.333 A profit should be distinguished from a licence. A profit is an interest in land,334 whereas a licence is a personal right only.335

Creation of profits à prendre Profits created by an instrument 12.66 By s 88AA of the Conveyancing Act, a profit that is expressed to be created by an instrument is not enforceable against successors in title of the burdened land unless that land is identified in the instrument. Where the profit is not in gross, but is appurtenant to other land, the benefited land must also be identified in order for the profit to be enforceable against successors in title of the burdened land.

Formalities — old system 12.67 At law As with easements, by s 23B(1) of the Conveyancing Act, a deed must be executed to create a profit effective at law. 12.68 In equity A variety of ways of creating profits in equity are possible. Under s 23C(1) of the Conveyancing Act, an equitable profit can be created by a written instrument signed by the grantor. Also, under Walsh v Lonsdale,336 an agreement to grant a profit will give rise to an equitable profit, provided the formal requirements of s 54A of the Conveyancing Act are satisfied and the agreement is one that a court will specifically enforce.337 Thus, an oral agreement to grant a profit, such as the snaring of rabbits, if supported by sufficient acts of part performance, will give rise to an equitable profit.338 As with easements, profits may also arise by prescription. In Earl de la Warr v Miles,339 the defendant and predecessors had jointly taken ferns, heather and

litter from a forest without permission for a period of 60 years. These acts were held to give rise to a valid profit.

Torrens system 12.69 A profit will be indefeasible if registered.340 The particulars of the profit are to be recorded on the Folio of the Register for the burdened land and, if the profit is one [page 640] that is appurtenant to Torrens title land, the Folio of the Register of that land as well.341 Unregistered interests under the Torrens system may receive the assistance of equity, with all the vulnerability that attaches to those interests.342 But, like easements, there is a special protective provision in the Act for unregistered profits if they are ‘omitted or misdescribed’. 12.70 ‘Omitted or misdescribed’ profits à prendre By s 42(1)(b) of the Real Property Act 1900 (NSW), omitted or misdescribed profits are an exception to indefeasibility. Like easements, they may be omitted from the Register in two ways: first, when old system title is converted to Torrens title and the profit is not recorded; second, where a profit is created over land that is already Torrens system and the profit is not registered. In the first case, the law is the same as it is for easements. That is, failure to register either by the parties to the transaction or the Registrar-General will not be enough to deny protection of the interest.343 It is not necessary to establish neglect on the part of the Registrar-General to gain protection. As with easements, this exception includes both express profits and prescriptive profits.344 In the second case — profits created while the land is held under the Torrens system — there is a requirement that the instrument creating the profit be properly executed and lodged for registration before it can come within the definition of ‘omitted’ from the Register.345 If an unregistered profit does not come within s 42(1)(b) of the Real Property Act, it will only exist as an equitable interest under the Torrens system if it comes within the in personam exception to indefeasibility.346

Remedies 12.71 The same remedies are available for interference with profits as for easements: abatement and action. As to these, see above.347 There is one difference between the rules relating to remedies for easements and profits. Unlike easements, it is not necessary for the holder of a profit to be prepared to meet the jus tertii defence in the case of infringement by a third party.348 The reason for the difference lies in the nature of a profit: it confers on the holder rights akin to possession, and so the holder does not have to prove title where a third party is alleged to have interfered with the profit.349 By parity of reasoning, where the right is interfered with, the relevant tort is trespass, not nuisance.350 [page 641]

Extinguishment of profits 12.72 A profit will be extinguished in much the same way as an easement.351 In addition, it will be extinguished on the exhaustion of its subject matter, as where all minerals have been removed from a mine.

Profits à rendre 12.73 A different form of profit is the profit à rendre, which gives to the holder the right or obligation to enter another’s land and to leave there something of benefit to the land.352 Although no profit à rendre has been found in recent cases, in Clos Farming Estates Pty Ltd v Easton Santow JA noted that it was a ‘category [that] may still be alive, if an endangered species, awaiting future use and consideration by the courts’.353

Access to Neighbouring Land Act 2000 (NSW) 12.74 The Access to Neighbouring Land Act 2000 (NSW) enables the Local Court of New South Wales to make orders permitting temporary access to land by persons who own adjoining or adjacent land for the purpose of

carrying out work on their own land.354 Examples of the work for which access can be granted include the construction and repair of buildings, and ascertaining the course of drains, sewers, pipes or cables.355 The applicant must restore the land to its original condition, and indemnify the owner against damage.356 The court may order that the applicant pay compensation to the owner of the land for any damage or injury suffered, other than for loss of privacy or inconvenience.357

Reform Easements in gross 12.75 Why is there a prohibition against easements in gross? It is difficult to see what policy objection could be raised to their existence in New South Wales, especially as profits à prendre exist in gross, and these are directly comparable rights. Equally, s 88A(1) of the Conveyancing Act 1919 (NSW) provides for the existence of easements in gross in favour of public or local authorities. This suggests that there are no obvious practical problems with the creation and operation of such interests. Clearly, the exception exists because of [page 642] the overriding public interest in public ownership of sewerage pipes, watercourses and so on, but it is not difficult to imagine why private individuals might want to create such easements. One reason offered by Baron Martin in Hill v Tupper358 was that to recognise interests in gross ‘would lead to the creation of an infinite variety of interests in land, and an indefinite increase of possible estates’. Given the explosion of new property rights over the last century, this concern with ensuring an economy of interests in land seems obsolete. Examples of cases where such easements could be beneficial for both grantor and grantee are an easement to land helicopters on a particular property, or the right of a haulage company to park on a particular property on a regular basis.359 Easements in gross are recognised in the United

States without any apparent problems.360 As Sturley argues, the two original arguments against easements in gross — that they might stifle changes in land use with the onset of industrialisation, and that they would make conveyancing overly complex361 — have now been overtaken by historical changes. First, he suggests that there is a contemporary need to make land more productive and so allow for multiple forms of access and use; and second, he concludes that registration systems minimise title difficulties. Further, similar sorts of rights to easements could be created by means of a carefully crafted lease, with a reservation in favour of a grantor, as in the case of a right of way over a particular path or advertising hoarding. There is no legal objection to such interests without a dominant tenement. Easements should be regulated in the same way.

Easements and profits by prescription 12.76 There is much to be said for complete abolition of the easements and profits by prescription. As evidenced by the decision in Williams v State Transit Authority of New South Wales,362 they are out of step with systems of land ownership based overwhelmingly on documentation and registration. The majority of the United Kingdom Law Reform Committee so concluded in 1966,363 though a strong minority dissent suggested that the law should merely be simplified, and a 12-year period of user be substituted for the present 20 years. While the problems in the United Kingdom are slightly different — there are three forms of prescription, rather than the single ‘lost modern grant’ prescription in New South Wales — the principles are the same. At any rate, the 20-year period seems anomalous; it appears to be based on the former shared period with the doctrine of adverse possession, which is now 12 years.364 Butt has noted the paradox: ‘A longer period is required to acquire a lesser right’.365 The abolition of prescriptive easements and profits [page 643] would have the effect of doing away with the arguably unprincipled distinction that currently exists in relation to the timing of the creation of

these interests. There seems to be no good reason why a prescriptive interest that came into existence before land was brought under Torrens title should be binding on the current and subsequent registered proprietors under a statutory exception to indefeasibility, while those prescriptive interests that (putatively) arise after the land is brought under Torrens title are not even binding on the current registered proprietor. Any hardship to the alleged holder of a prescriptive easement brought about by this suggested reform could be ameliorated by the imposition of an easement under s 88K of the Conveyancing Act.

1.

In French, the term means to take a benefit or advantage.

2.

For the most detailed and comprehensive treatment in Australia, see A J Bradbrook and M A Neave, Easements and Restrictive Covenants in Australia, 2nd ed, Butterworths, Australia, 2000.

3.

See Figure 2.1 at 2.1.

4.

William Blackstone, Commentaries on the Laws of England, Dawsons, London, 1966, Vol II, p 16.

5.

See 12.34.

6.

Re Ellenborough Park [1956] Ch 131.

7.

Municipal District of Concord v Coles (1905) 3 CLR 96.

8.

See 12.65.

9.

See also 12.5, 12.15 and 12.75.

10.

Ex parte Johnson; Re Whyte (1868) 5 WW & A’B (L) 55.

11.

Conveyancing Act 1919 (NSW) s 88A(1)–(1C).

12.

Conveyancing Act 1919 (NSW) s 88A(3).

13.

Hanbury v Jenkins [1901] 2 Ch 401.

14.

Re Ellenborough Park [1956] Ch 131.

15.

Ackroyd v Smith (1850) 10 CB 164. This finding is doubted by the most recent authors of Gale on Easements: ‘It seems reasonable to suppose, however, that a right granted in the same quite common form would now be treated as annexed to the land conveyed’: J R Gaunt and P Morgan, Gale on Easements, 18th ed, Sweet & Maxwell, London, 2008, p 14. This uncertainty, if it exists, only lends support to the reform arguments below. See 12.75.

16.

Hill v Tupper (1863) 2 H & C 121.

17.

Moody v Steggles (1879) 12 Ch D 261.

18.

Simpson v Mayor of Godmanchester [1897] AC 696.

19.

Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20,605.

20.

Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20, 605 at [8]–[14].

21.

Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20, 605 at [30]–[34] and [43].

22.

Todrick v Western National Omnibus Co Ltd [1934] Ch 561. See also City Developments Pty Ltd v Registrar-General of the Northern Territory [2001] NTCA 7 at [14] and [19], where a right to use the area next to a lake for ‘private recreational purposes’ was held to be a valid easement which could benefit nearby blocks of land.

23.

Phillips v Halliday [1891] AC 228.

24.

Gallagher v Rainbow (1994) 179 CLR 624; Short v Patrial Holdings Pty Ltd (1994) 6 BPR 13,996.

25.

Re Eddowes [1991] 2 Qd R 381.

26.

Moody v Steggles (1879) 12 Ch D 261.

27.

Borman v Griffith [1930] 1 Ch 493.

28.

Cardwell v Walker [2004] 2 P & CR 9.

29.

Conveyancing Act 1919 (NSW) s 69.

30.

Dyce v Lady James Hay (1852) 1 Macq 305, at 312–3. Accordingly: ‘Proprietary estates in easements must have a clear-cut, hard-edged quality. “Property” must come in neat, discrete, pre-packaged conceptual compartments’: K Gray and S Gray, Elements of Land Law, 4th ed, Oxford University Press, Oxford, 2005, p 631.

31.

Even a well-recognised type of easement will be held invalid if it is subject to an uncertain condition. So, in Duncan v Cliftonville Estates Pty Ltd (2001) 10 BPR 19,127 a right of way was held to be too uncertain where its existence was made conditional on the size and height of structures on the dominant tenement remaining unaltered.

32.

Re Ellenborough Park [1956] Ch 131 at 176.

33.

Commonwealth v Registrar of Titles (Vic) (1918) 24 CLR 348.

34.

Re Aldred’s Case (1610) 9 Co Rep 57b. Note, however, that it is possible to protect a view by means of a restrictive covenant. See 13.15–13.28 for the requirements for the enforceability of restrictive covenants.

35.

Browne v Flower [1911] 1 Ch 219; Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479.

36.

Miller v Jackson [1977] QB 966.

37.

Phipps v Pears [1965] 1 QB 76.

38.

Hunter v Canary Wharf Ltd [1997] AC 655.

39.

Bass v Gregory (1890) 25 QBD 481.

40.

Commonwealth v Registrar of Titles (Victoria) (1918) 24 CLR 348.

41.

Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 at 91 per Windeyer J. A number of the relevant authorities were recited in Lolakis v Konitsas (2002) 11 BPR 20,499 at 20,504–7. In that case, however, it was held that the requirement that a right of way over the servient tenement be fenced in with the dominant tenement did not confer on the owner of that land a right of exclusive possession over the site of the easement.

42.

Copeland v Greenhalf [1952] Ch 488.

43.

London & Blenheim Estates v Ladbroke Retail Parks Ltd [1992] 1 WLR 1278; Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd (2008) 37 WAR 498. See also

Brydall v Owners of Strata Plan No 66794 (2009) 14 BPR 26,831. 44.

Grigsby v Melville [1973] 1 All ER 385.

45.

Wright v Macadam [1949] 2 KB 744.

46.

Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20,605.

47.

Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20,605 at [35]–[42] and [45]–[47]. See also Tiller v Hawes (2005) 13 BPR 24,203 at [47]–[49], where the combined effect of an easement and a related covenant was to give exclusive use of a driveway across the servient land to the proprietors of the dominant land.

48.

Moncrieff v Jamieson [2007] 1 WLR 2620.

49.

Moncrieff v Jamieson [2007] 1 WLR 2620 at [143]–[144] per Lord Neuberger; at [55] per Lord Scott. In support, Lord Scott pointed to Re Ellenborough Park [1956] Ch 131 at 176, where Lord Evershed noted that the easement amounted to joint occupation of the park, but ‘did not involve an inconsistency with the possession or proprietorship of the council as lessees’. For recent decisions that, while also applying a degree or proportionality approach, are not inconsistent with this decision, see White v Betalli (2007) 71 NSWLR 381 at [39] per Santow JA (‘While [a storage area for watercraft] may affect the exercise or enjoyment by the appellant of her land, I do not consider that it is incompatible with the appellant’s right of possession’); Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd (2008) 37 WAR 498; Brydall v The Owners of Strata Plan 66794 (2009) 14 BPR 26,831, noting Moncrieff with approval at [15].

50.

Moncrieff v Jamieson [2007] 1 WLR 2620 at [55] per Lord Scott.

51.

Batchelor v Marlow [2003] 1 WLR 764. This would also call into question whether London & Blenheim Estates v Ladbroke Retail Parks Ltd [1992] 1 WLR 1278 is good authority, as noted by Buss JA in Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd (2008) 37 WAR 498 at [64].

52.

Moncrieff v Jamieson [2007] 1 WLR 2620 at [57] and [59]. This approach has been noted in Australia in Owners of East Fremantle Shopping Centre West Strata Plan 8618 v Action Supermarkets Pty Ltd (2008) 37 WAR 498 at [64] per Buss JA; Brydall v The Owners of Strata Plan 66794 (2009) 14 BPR 26,831 at [15] per McDougall J. Lord Neuberger, further, was not convinced that effective exclusion of the holder of the servient tenement from the land would necessarily prevent the right from being an easement: Moncrieff v Jamieson at [140].

53.

Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321.

54.

Both the judge at first instance (Windeyer AJ) and Bathurst CJ and Beazley P were of the opinion that the easement, in any case, would have been valid under the approach in Moncrieff v Jamieson: Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) NSWLR 321 at 336 per Bathurst CJ and Beazley P; Jea Holdings (Aust) Pty Ltd v Registrar-General (NSW) [2013] NSWSC 587 at [43] per Windeyer AJ.

55.

Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321 at 330 per Bathurst CJ and Beazley P.

56.

Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321 at 336 per Bathurst CJ and Beazley P.

57.

See 12.41.

58.

See 12.11.

59.

Miller v Emcer Products Ltd [1956] Ch 304; [1956] 1 All ER 237.

60.

Clifford v Dove (2003) 11 BPR 21,149.

61.

Mason v Shrewsbury and Hereford Railway Co (1871) LR 6 QB 578.

62.

Phillips v Halliday [1891] AC 228.

63.

Moody v Steggles (1879) 12 Ch D 261. But compare King v David Allen & Sons, Billposting Ltd [1916] 2 AC 54. See further, 1.50.

64.

Re Ellenborough Park [1956] Ch 131.

65.

Evanel Pty Ltd v Nelson (1995) 39 NSWLR 209.

66.

Bass v Gregory (1890) 25 QBD 481.

67.

Colls v Home and Colonial Stores Ltd [1904] AC 179.

68.

Rance v Elvin (1985) 50 P & CR 9.

69.

P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, p 422, citing Dalton v Angus (1881) 6 App Cas 740. Compare Phipps v Pears [1965] 1 QB 76 at 82, in which Lord Denning MR doubted that the easement for support was strictly a negative easement; see B Edgeworth, C J Rossiter and M A Neave, Sackville and Neave Property Law: Cases and Materials, 7th ed, LexisNexis Butterworths, Australia, 2004, pp 997–8.

70.

See 1.66 and Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 for an example of an attempt to protect property rights through tort law.

71.

Backhouse v Bonomi (1861) 9 HLC 503.

72.

Wyatt v Harrison (1832) 3 B & Ad 871; Fyvie v Anand (1994) BPR 13,743.

73.

Stroyan v Knowles (1861) 6 H & N 454; Pantalone v Alaouie (1989) 18 NSWLR 119 at 129.

74.

Dalton v Henry Angus & Co (1881) 6 App Cas 740.

75.

See 12.24.

76.

Introduced by the Conveyancing Amendment (Law of Support) Act 2000 (NSW).

77.

Conveyancing Act 1919 (NSW) s 177(3), (4).

78.

Conveyancing Act 1919 (NSW) s 177(5)–(7).

79.

Swindon Waterworks Co Ltd v Wilts and Berks Canal Navigation Co (1875) LR 7 HL 697. This area of the law is now heavily regulated by statute, currently the Water Management Act 2000 (NSW). See D E Fisher, Water Law, Law Book Co, Australia, 2000; J Gray, ‘Legal Approaches to the Ownership, Management and Regulation of Water from Riparian Rights to Commodification’ (2006) 1(2) Transforming Legal Cultures eJournal 65, available at .

80.

Bradford Corporation v Pickles [1895] AC 587.

81.

See Chapter 2. See also A Bradbrook, ‘The Development of an Easement of Solar Access’ (1982) 5 UNSWLJ 299.

82.

Stow v Mineral Holdings (Australia) Pty Ltd (1977) 14 ALR 397. See 1.64.

83.

See 1.3–1.6.

84.

For restrictive covenants generally, see Chapter 13.

85.

Equitable interests are considered in Chapter 6.

86.

King v David Allen & Sons, Billposting Ltd [1916] 2 AC 54.

87.

See 12.4.

88.

Conveyancing Act 1919 (NSW) s 46.

89.

Walsh v Lonsdale (1882) 21 Ch D 9.

90.

Conveyancing Act 1919 (NSW) ss 23E(d), 54A(2).

91.

McManus v Cooke (1887) 35 Ch D 681.

92.

Crabb v Arun District Council [1976] Ch 179.

93.

ER Ives Investment Ltd v High [1967] 2 QB 379. For details of these doctrines, see 6.37ff.

94.

See 7.10–7.22.

95.

Real Property Act 1900 (NSW) s 46.

96.

Real Property Act 1900 (NSW) s 47(1).

97.

Real Property Act 1900 (NSW) s 42.

98.

Real Property Act 1900 (NSW) s 42(1)(a1).

99.

See 12.47.

100. See 8.129. 101. Walsh v Lonsdale (1882) 21 Ch D 9. 102. See 6.8. 103. See 12.18. 104. Conveyancing Act 1919 (NSW) s 69. 105. Also see 12.6. 106. Conveyancing Act 1919 (NSW) s 88B(3A). 107. Butt, Land Law, note 69 above, p 453. 108. Re Maiorana and the Conveyancing Act [1970] 1 NSWR 627. 109. The instrument need not refer to the existence or non-existence of a person described in either s 88(1)(c) or (d) unless there is such a person. See Dresdner v Scida (2003) 12 BPR 22,629 at 22,636. 110. Conveyancing Act 1919 (NSW) s 69. 111. See 12.16–12.23. 112. Papadopoulos v Goodwin [1982] 1 NSWLR 413 at 417 per Wootten J. 113. Margil Pty Ltd v Stegul Pastoral Pty Ltd [1984] 2 NSWLR 1. 114. This principle is sometimes referred to as the second rule in Wheeldon v Burrows: McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,896–8. 115. Williams v James (1867) LR 2 CP 577 at 581 per Willes J. 116. Wheeldon v Burrows (1879) 12 Ch D 31 at 49 per Thesiger LJ. 117. Sovmots Investments Ltd v Secretary of State for the Environment [1979] AC 144 at 175 per Lord Edmund-Davies; McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,903. 118. Schwann v Cotton [1916] 2 Ch 459. 119. Cuzeno Pty Ltd v The Owners — Strata Plan 65870 [2013] NSWSC 1385 at [88]–[91] per Darke J.

120. McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,896. 121. Borman v Griffith [1930] 1 Ch 493. 122. Ward v Kirkland [1967] Ch 194. 123. Kent v Kavanagh [2007] Ch 1. 124. Cuzeno Pty Ltd v The Owners — Strata Plan 65870 [2013] NSWSC 1385 at [82] per Darke J. 125. Lancaster v Lloyd (1927) 27 SR (NSW) 379. 126. Aldridge v Wright [1929] 2 KB 117 at 130–1 per Greer LJ; White v Taylor (No 2) [1969] 1 Ch 160. 127. McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,903. 128. See 12.47–12.53. 129. Wright v Macadam [1949] 2 KB 744. The relevant provision was s 62 of the Law of Property Act 1925 (UK). 130. Ward v Kirkland [1967] Ch 194. 131. Conveyancing Act 1919 (NSW) s 67(5). See 12.28. 132. As to these, see 12.3–12.7. 133. Regis Property Co Ltd v Redman [1956] 2 QB 612. 134. Phipps v Pears [1965] 1 QB 76. 135. Long v Gowlett [1923] 2 Ch 177. See further Butt, Land Law, note 69 above, pp 436–7. 136. Wilkes v Greenway (1890) 6 TLR 449. 137. Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557. 138. Wong v Beaumont Property Trust Ltd [1965] 1 QB 173. 139. Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557. 140. Bolton v Bolton (1879) 11 Ch D 968. 141. Pearson v Spencer (1861) 1 B & S 571. 142. Deacon v South-Eastern Railway (1889) 61 LT 377. 143. North Sydney Printing Pty Ltd v Sabemo Investment Corp Pty Ltd [1971] 2 NSWLR 150. 144. Pwllbach Colliery Co Ltd v Woodman [1915] AC 634 at 646–7 per Lord Parker. 145. For an example of an easement by reservation, see Richards v Rose (1853) 9 Ex 218. 146. Re State Electricity Commission of Victoria and Joshua’s Contract [1940] VLR 121. 147. Jones v Pritchard [1908] 1 Ch 630. 148. Richards v Rose (1853) 9 Ex 218. 149. For easements of support, see 12.40. 150. Dabbs v Seaman (1925) 36 CLR 538. 151. Mellor v Walmesley [1905] 2 Ch 164. See also Lake Macquarie City Council v Luka (1999) 9 BPR 17,481; Permanent Trustee Co of NSW v Campbelltown Municipal Council (1960) 105 CLR 401 at 421–2 per Windeyer J; Weber v Ankin (2008) 13 BPR 25,231. 152. Note that where the road is a public road, a right of access across the boundary between the land and road is given by s 6(1) of the Roads Act 1993 (NSW). See also Weber v Ankin (2008) 13 BPR

25,231. 153. See, generally, F Burns, ‘The Future of Prescriptive Easements in Australia and England’ (2007) 31 MULR 2; L Bennett Moses and C Sherry, ‘Unregistered Access: Wheeldon v Burrows Easements and Easements by Prescription over Torrens Land’ (2007) 81(7) ALJ 491. 154. See 5.144. 155. See Maher v Bayview Golf Club Ltd (2004) 12 BPR 22,457 at 22,462. 156. Delohery v Permanent Trustee Co of New South Wales (1904) 1 CLR 283 at 183. Note that recently the Victorian Law Reform Commission recommended that the rule of law permitting a person to acquire an easement by long user under the fiction of lost modern grant should be abolished: Victorian Law Reform Commission, Easements and Covenants, Final Report 22, p 55. 157. Wynstanley v Lee (1818) 36 ER 643 at 646 per Plumer MR. 158. Attorney-General v Simpson [1901] 2 Ch 671 at 698 per Farwell LJ. 159. Delohery v Permanent Trustee Co of New South Wales (1904) 1 CLR 283 at 313–14 per Griffith CJ. 160. See, generally, Chapter 3 and Chapter 4. 161. Dalton v Henry Angus & Co (1881) 6 App Cas 740. 162. Thwaites v Brahe (1895) 21 VLR 192. See further, Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 2 above, p 122. In Bakewell Management Ltd v Brandwood [2004] 2 AC 519, it was held that the illegality exception does not apply where the prescriptive acts, which were otherwise illegal, would not be so if authorised by the owner of the putative servient tenement. 163. Dewhirst v Edwards [1983] 1 NSWLR 34. 164. Sturges v Bridgman (1879) 11 Ch D 852; R (Beresford) v Sunderland City Council [2004] 1 AC 889; Dockray v Chick [2010] TASSC 32. 165. Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286 at 292–3. 166. C Harpum, Megarry and Wade: The Law of Real Property, 6th ed, Sweet & Maxwell, London, 2000, p 119. 167. Eaton v Swansea Waterworks Co (1851) 17 QB 267. 168. Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557. 169. Liverpool Corporation v H Coghill & Sons Ltd [1918] 1 Ch 307. 170. Milne v James (1910) 13 CLR 168. 171. Healey v Hawkins [1968] 1 WLR 1967. 172. Dalton v Henry Angus & Co (1881) 6 App Cas 740. 173. Ironside v Cook (1981) 41 P & CR 326. 174. Dobbie v Davidson (1991) 23 NSWLR 625 at 629 per Kirby P. 175. Tickle v Brown (1836) 4 Ad & E 369. 176. Dare v Heathcote (1856) 25 LJ Ex 245. 177. Ironside v Cook (1981) 41 P & CR 326. 178. Dobbie v Davidson (1991) 23 NSWLR 625 at 627 per Kirby P. 179. Conveyancing Act 1919 (NSW) s 179.

180. Conveyancing Act 1919 (NSW) s 178. See Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286 at 289–92. 181. As to the reasons for the enactment of s 88K of the Conveyancing Act, see New South Wales Land Titles Office, Review of Easements Discussion Paper, 1990, pp 32–40. 182. Conveyancing Act 1919 (NSW) s 88K(1). 183. 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 509; Gittany v McDowell (2009) 14 BPR 26,803; Lonergan v Lewis [2011] NSWSC 1133; Evans v Cornish Nominees Pty Ltd (2009) 14 BPR 27,257; O’Shea v Athanasakis (2009) 14 BPR 27,093. 184. Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445 at [154]. In the Matter of an Application by Kindervater [1996] ANZ Conv Rep 331; Gittany v McDowell (2009) 14 BPR 26,803; Govindan-Lee v Sawkins [2016] NSWSC 328. 185. Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638 at 14,643–4; 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504. 186. Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568 at [6]. Thus, the stronger the burden on the servient tenement, the stronger the case needed to justify a finding of reasonable necessity: Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445 at [156]. 187. Katakouzinos v Roufir Pty Ltd (1999) 9 BPR 17,303 at 17,308. 188. Blulock Pty Ltd v Majic (2001) 10 BPR 19,143. 189. See Hanny v Lewis (1998) 9 BPR 16,205 at 16,208–9. 190. Conveyancing Act 1919 (NSW) s 88K(2)(a). See Woodland v Manly Municipal Council (No 1) (2003) 11 BPR 20,903 at 20,910–11 and 20,913. 191. Conveyancing Act 1919 (NSW) s 88K(2)(b). See Blulock Pty Ltd v Majic (2001) 10 BPR 19,143 at 19,150–1; Evans v Cornish Nominees Pty Ltd (2009) 14 BPR 27,257. 192. Conveyancing Act 1919 (NSW) s 88K(2)(c). See Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638; PD Consultants Pty Ltd v Childs [2004] NSWSC 1076; Khattar v Wiese (2005) 12 BPR 23,235; Gittany v McDowell (2009) 14 BPR 26,803. 193. See S Grattan, ‘The Name(s) of the Rose: Personality, Preferences and Court-Imposed Easements’ (2004) 10 Cantab LR 329; S Grattan, ‘Courting Councils and Counselling Courts: Subjectivity and Objectivity in s 88K Applications’ (2005) 12 APLJ 126. 194. 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504; Katakouzinos v Roufir Pty Ltd (1999) 9 BPR 17,303. 195. See, generally, Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 2 above, Chs 6–10; Gaunt and Morgan, Gale on Easements, note 15 above, pp 42–45. 196. International Tea Stores Co v Hobbs [1903] 2 Ch 165. 197. Gallagher v Rainbow (1994) 179 CLR 624; Moncrieff v Jamieson [2007] 1 WLR 2620. 198. In Kyren Pty Ltd v Cinema Place Pty Ltd [2006] SASC 93, the Full Court of the Supreme Court of South Australia considered a possible tension between giving effect to the literal terms of the grant and construing those terms in the context of the surrounding circumstances that prevailed at the date of the grant: at [6]–[8] per Besanko J; at [17]–[24] per Vanstone J; at [70]–[122] per Layton J. In so doing, the court referred to its earlier decision in Yip v Frolich (2004) 89 SASR 467, in which a grant expressed in the language of a right of way was construed as creating a drainage easement.

199. Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528 at [37]–[39]. 200. See also Sertari Pty Ltd v Nirimba Developments Pty Ltd (2008) NSW ConvR ¶56-200; Chick v Dockray [2011] TASFC 1 at [19]–[20]. See also M Weir, ‘The Westfield Case: A Change for the Better?’ (2009) 21 Bond LR 182. 201. Hare v Van Brugge (2013) 84 NSWLR 41 at 46 per Barrett JA. 202. It has been suggested, without decision, that different considerations may apply if there has been some material change in the physical circumstances since the creation of the easement. This may not be information readily available to third parties: Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS [2012] 2 Qd R 511 at [49] per Fryberg J (McMurdo P and Fraser JA concurring). See also Hare v Van Brugge (2013) 84 NSWLR 41 at 46 per Barrett JA. 203. Tempe Recreational Reserve Trust v Sydney Water Corporation (2014) 88 NSWLR 449 at [57]. In Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS [2012] 2 Qd R 511 at [52], Fryberg J raised, without deciding, whether resort to extrinsic material might include unregistered instruments explicitly referenced in registered instruments. 204. Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS [2012] 2 Qd R 511 at [53] per Fryberg J. 205. See Neighbourhood Association DP No 285220 v Moffat (2008) NSW ConvR ¶56-208, at [31]–[42]; Berryman v Sonnenschein [2008] NSWSC 213 at [29]. 206. Bulstrode v Lambert [1953] 1 WLR 1064. 207. Natva Developments Pty Ltd v McDonald Bros Pty Ltd (2004) 12 BPR 22,287 at 22, 296–300. Also see Chiu v Healey (2003) 11 BPR 21,241 at 21,249. 208. Timpar Nominees Pty Ltd v Archer [2001] WASCA 430 at [53]; Krolczyk v Raffan [1992] ANZ ConvR 228 at 231; Berryman v Sonnenschein [2008] NSWSC 213 at [25]; Chick v Dockray [2011] TASFC 1 at [26]. 209. Chiu v Healey (2003) 11 BPR 21,241 at 21,249–50. 210. Elliott v Renner [1923] St R Qd 172. The issue of whether an easement to pass and repass allows parking on the easement is a vexed one, and the subject of much litigation. See, in particular, Moncrieff v Jamieson (2007) 1 WLR 2620. 211. SS & M Ceramics Pty Ltd v Kin [1996] 2 Qd R 540. 212. Fanigun Pty Ltd v Woolworths Ltd [2006] ANZ ConvR 196. 213. Lock v Abercester Ltd [1939] Ch 861. But note Walker v Bridgewood [2006] NSWSC 149, where it was noted, without deciding, that the easement at issue that allowed rights of way for horses would not now include vehicular traffic as the easement would have been incapable of use by motor vehicles at the time of the grant. 214. Harris v Flower (1904) 74 LJ Ch 127. For a more detailed consideration of the rule and the exceptions to it, see Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 2 above, pp 177–9. 215. National Trust v White [1987] 1 WLR 907. 216. Westfield Management Ltd v Perpetual Trustee Co Ltd (2006) NSW ConvR ¶56-163. 217. Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528. 218. Newcomen v Coulson (1877) 5 Ch D 133.

219. Duncan v Louch (1845) 6 QB 904; Carter v Cole [2006] All ER(D) 139 at [8] per Longmore LJ. 220. Austerberry v Corporation of Oldham (1885) 29 Ch D 750; Clifford v Dove (2003) 11 BPR 21,149. For detailed discussion of these principles, see Chapter 13. 221. Conveyancing Act 1919 (NSW) s 88BA. 222. Stokes v Mixconcrete (Holdings) Ltd (1978) 38 P & CR 488; Clifford v Dove (2003) 11 BPR 21,149; Carter v Cole [2006] All ER(D) 139 at [8] per Longmore LJ; Hare v Van Brugge (2013) 84 NSWLR 41 at 48 per Barrett JA. 223. Maurice Toltz Pty Ltd v Macy’s Emporium Pty Ltd [1970] 1 NSWR 474. 224. White v Grand Hotel, Eastbourne Ltd [1913] 1 Ch 113. 225. In Kyren Pty Ltd v Cinema Place Pty Ltd [2006] SASC 93. 226. Todrick v Western National Omnibus Co Ltd [1934] 1 WLR 589. 227. Jelbert v Davis [1968] 1 WLR 589. 228. Jelbert v Davis [1968] 1 WLR 589. See also Walker v Bridgewood [2006] NSWSC 149. 229. Powell v Langdon (1944) 45 SR (NSW) 136. 230. Pettey v Parsons [1914] 2 Ch 653. 231. See Middleton v Arthur (2002) 11 BPR 20,263, where an injunction was granted in order to prevent this threatened interference from occurring. This depended on the construction of the easement as permitting access to the dominant tenement by tradesmen’s vehicles and removal vans: at 20,269. 232. Selby v Nettlefold (1873) 9 Ch App 111. 233. Sinclair v Jut (1996) 9 BPR 16,219. Also see Dresdner v Scida (2003) 12 BPR 22,629. 234. Dalton v Henry Angus & Co (1881) 6 App Cas 740. For information about the extent of such natural rights and how they compare with easements, see 12.11. 235. Conveyancing Act 1919 (NSW) s 88BB. On this issue generally, see Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 2 above, pp 200–2. 236. Wheeldon v Burrows (1879) 12 Ch D 31. See 12.26. 237. Richards v Rose (1853) 9 Ex 218. See 12.24. 238. Coaker v Willcocks [1911] 2 KB 124 at 131 per Farwell LJ (CA). 239. Crow v Wood [1971] 1 QB 77. On fencing easements generally, see Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 2 above, Ch 10. 240. For the creation of easements by implication, see 12.24–12.31. For easements by prescription, see 12.32–12.33. 241. Re State Electricity Commission of Victoria and Joshua’s Contract [1940] VLR 121. 242. Wright v Williams (1836) 1 M & W 77. 243. Pwllbach Colliery Co Ltd v Woodman [1915] AC 634. 244. Lagan Navigation Co v Lambeg Bleaching, Dyeing and Finishing Co Ltd [1927] AC 226 at 244 per Lord Atkinson. 245. Davies v Williams (1851) 16 QB 546. 209; Roberts v Rose (1865) LR 1 Ex 82. 210; Lane v Capsey [1891] 3 Ch 411. 211; Perry v Fitzhowe (1846) 8 QB 757. 246. Roberts v Rose (1865) LR 1 Ex 82.

247. Lane v Capsey [1891] 3 Ch 411. 248. Perry v Fitzhowe (1846) 8 QB 757. 249. Davies v Williams (1851) 16 QB 546. 250. Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851. 251. Paine & Co v St Neots Gas & Coke Co [1939] 3 All ER 812. 252. Mount Cathay v Pty Ltd v Lend Lease Funds Management Ltd [2012] QCA 274 at [17]–[19] per McMurdo P (White and Gotterson JJA agreeing). 253. Pettey v Parsons [1914] 2 Ch 653. 254. Hare v Van Brugge (2013) 84 NSWLR 41 at 49 per Barrett JA. 255. Paine & Co v St Neots Gas & Coke Co [1939] 3 All ER 812. For details of this rule, see 2.54–2.57 and 5.25. For a comprehensive discussion of who can use, and who can be sued, for the infringement of an easement, see Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 2 above, pp 437–40; Gaunt and Morgan, Gale on Easements, note 15 above, pp 567– 79. 256. Dobbie v Davidson (1991) 23 NSWLR 625; Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149 at [23] per Hayne, Crennan, Keifel and Bell JJ; Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321 at [118] per Bathurst CJ and Beazley P. 257. Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149 at [24] per Hayne, Crennan, Keifel and Bell JJ. 258. Dobbie v Davidson (1991) 23 NSWLR 625. 259. Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (2013) 247 CLR 149 at [25] per Hayne, Crennan, Keifel and Bell JJ. 260. Australian Hi-Fi Publications Pty Ltd v Gehl [1979] 2 NSWLR 618. 261. Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 321 at 349 per Bathurst CJ and Beazley P; Papadopoulos v Goodwin (1983) 2 NSWLR 113 at 120 per Wooton J (reversed on other grounds by the Court of Appeal in Goodwin v Papadopoulos (1985) NSW ConvR ¶55-256); Christopoulos v Kells (1988) 13 NSWRL 541. While these cases considered provisions of the Real Property Act that have since been amended, the same determination would seem likely under the current legislation. 262. Registrar-General of New South Wales v Jea Holdings (Aust) Pty Ltd (2015) 88 NSWLR 88. 263. James v Registrar-General (1967) 69 SR (NSW) 361. 264. Papadopoulos v Goodwin (1983) 2 NSWLR 113. 265. Dewhirst v Edwards [1983] 1 NSWLR 34. 266. Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286 at 298. 267. McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,904. 268. See 8.92–8.105. 269. Ryan v Starr (2005) 12 BPR 22,803. 270. The decision in Bahr v Nicolay (No 2) (1988) 164 CLR 604 is explained at 8.97. 271. Australian Hi-Fi Publications v Gehl [1979] 2 NSWLR 618 at 623–4. See also Kebewar Pty Ltd v

Harkin (1987) 9 NSWLR 738 at 743; Dobbie v Davidson (1991) 23 NSWLR 625 at 660. 272. See Dewhirst v Edwards [1983] 1 NSWLR 34 at 48; Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286 at 296–7. 273. Wilcox v Richardson (1997) 43 NSWLR 4. 274. Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286. 275. Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286 at 299–300. This logic was accepted in the Tasmanian case of Dockray v Chick [2010] TASSC 32 at [37]. 276. Williams v State Transit Authority of New South Wales [2005] HCA Trans 296; McGrath v Campbell (2006) NSW ConvR ¶56-159. 277. B Edgeworth, ‘The Fate of Prescriptive Easements under the NSW Torrens System’ (2004) 42 LSJ 66; M McGuire, ‘A New South Wales Perspective on Implied and Prescriptive Easements and the Rights In Personam Exception to Indefeasibility of Title’ (2006) 12 APLJ 228 at 239–41; L Bennett Moses and C Sherry, ‘Unregistered Access: Wheeldon v Burrows Easements and Easements by Prescription over Torrens Land’ (2007) 81(7) ALJ 491. 278. McGrath v Campbell (2006) NSW ConvR ¶56-159. 279. Aldridge v Wright [1929] 2 KB 117. See 12.26. 280. Hodgson JA appeared to accept that, on the facts, such an easement would have arisen had the land been held under old system title: McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,892. Tobias JA (with whom Giles JA agreed) does not appear to reach a concluded view on this issue: compare his Honour’s statements at [78] and [82]. 281. McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,907–9 per Tobias JA (Giles JA agreeing). Hodgson JA stated (at 59,891) that he was in substantial agreement with the reasons of Tobias JA. 282. In this respect, see Dewhirst v Edwards [1983] 1 NSWLR 34 at 48. 283. Wilcox v Richardson (1997) 43 NSWLR 4. 284. McGrath v Campbell (2006) NSW ConvR ¶56-159 at 59,910. 285. Dabbs v Seaman (1925) 36 CLR 538. See 12.31. 286. Cowlishaw v Ponsford (1928) 28 SR (NSW) 331. 287. Lake Macquarie City Council v Luka (1999) 9 BPR 17,481 at [98]. 288. Bellevue Crescent Pty Ltd v Marland Holdings Pty Ltd (1998) 34 NSWLR 364 at 372 per Young J. 289. See T Stein and M Stone, Torrens Title, Butterworths, Sydney, 1991, pp 109–10. 290. Conveyancing Act 1919 (NSW) s 23B(1). 291. Real Property Act 1900 (NSW) s 47(6). 292. Re Marriott [1968] VR 260. 293. As described in 5.67, the relevant period for adverse possession is 12 years. 294. Swan v Sinclair [1924] 1 Ch 254. It is, however, difficult to find a modern case in which non-user for a significant period of time has been found to constitute abandonment. See Couche v Adams (2002) 11 BPR 20, 101; Long v Mitchie [2003] NSWSC 233; McIntyre v Porter [1983] VR 439. 295. Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274. 296. See also Ashoil Holdings Pty Ltd v Fassoulas (2005) NSW ConvR ¶56-125, noted in P Butt,

‘Abandonment of Easement’ (2005) 79 ALJ 331. 297. See 12.62. 298. Lolakis v Konitsas (2002) 11 BPR 20,499 at 20,512. 299. Jelbert v Davis [1968] 1 WLR 589. 300. Graham v Philcox [1984] QB 747. 301. James v Plant (1836) 4 A & E 749. See 12.6. Real Property Act 1900 (NSW) s 47(6). 302. Pieper v Edwards [1982] 1 NSWLR 336. 303. Conveyancing Act 1919 (NSW) s 89(8); Treweeke v 36 Wolseley Road Pty Ltd (1973) 128 CLR 274 at 301 per Mason J. See also Chiu v Healey (2003) 11 BPR 21,241 at 21,249 at [36]; Campbell v Baigent (2010) 15 BPR 28, 959 at [74]. 304. Re Rosedale Farm (NSW) Pty Ltd (2010) 15 BPR 28,791 at [63] per Slattery J; Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd (2000) NSW ConvR ¶55-933; 10 BPR 18,099 at [10,099]–[18,100] per Mason P; Campbell v Baigent (2010) 15 BPR 28,959 at [69] per Slattery J. 305. Markos v O R Autor (2007) 13 BPR 24,487 at [88]. 306. Couche v Adams (2002) 11 BPR 20,101. See also Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd (2000) NSW ConvR ¶55-933; 10 BPR 18,099. 307. Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke [2008] NSWSC 743 at [13] per Brereton J; Campbell v Baigent (2010) 15 BPR 28,959 at [72] per Slattery J. 308. Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd (2000) NSW ConvR ¶55-933; 10 BPR 18,099. 309. Walker v Bridgewood (2006) 12 BPR 23,537. 310. Re Bona Vista Properties Pty Ltd [2007] NSWSC 1278. 311. Grill v Hockey (1991) 5 BPR 11,421; Campbell v Baigent (2010) 15 BPR 28,959. 312. Ashoil Holdings Pty Ltd v Fassoulas (2005) NSW ConvR ¶56-125. 313. See also Treweeke v 36 Wolseley Road (1973) 128 CLR 724; Effeney v Millar Investments Pty Ltd [2011] NSWSC 708. 314. This section was intended to facilitate the removal of abandoned easements: Real Property and Conveyancing Legislation Amendment Bill 2009 (NSW), Explanatory Memorandum. In addition, it has the effect of removing any perceived conflict between s 89(1) of the Conveyancing Act and s 49 of the Real Property Act, under which an application can be brought to the Registrar-General for abandonment of easement. 315. In Effeney v Millar Investments [2011] NSWSC 708, Ward J noted that while 20 years did not need to have elapsed prior to filing an application in reliance on s 89(1A) of the Conveyancing Act, it was necessary that there had been 20 years of non-use at the date the applicant moves on the application for extinguishment. 316. Treweeke v 36 Wolseley Road (1973) 128 CLR 724; Proprietors Strata Plan No 9968 v Proprietors Strata Plan No 11173 [1979] 2 NSWLR 605. 317. Long v Mitchie [2003] NSWSC 23. 318. Ashoil Holdings Pty Ltd v Fassoulas (2005) NSW ConvR ¶56-125. 319. Conveyancing Act 1919 (NSW) s 89(1)(c). 320. Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke [2008] NSWSC 743 at [24] per Brereton J; Re Mason

and the Conveyancing Act [1962] NSWR 762; (1960) 78 WN (NSW) 925. 321. Webster v Bradac (1993) 5 BPR 12,032. 322. Webster v Bradac (1993) 5 BPR 12,032 at 12,035. 323. Tujilo v Watts [2005] NSWSC 209 at [36]. 324. Coffill v Lagudi Holdings Pty Ltd [2016] NSWSC 1764 at [54]. 325. Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke [2008] NSWSC 743 at [28] per Brereton J. 326. See Natva Developments Pty Ltd v McDonald Bros Pty Ltd (2004) 12 BPR 22,287 at 22,294–6. 327. Australian Softwood Forests Pty Ltd v Attorney-General (NSW) (1981) 148 CLR 121. On profits generally, see S Hepburn, ‘Carbon Rights as New Property: The Benefits of Statutory Verification’ (2009) 31(2) Sydney LR 239. 328. See Natva Developments Pty Ltd v McDonald Bros Pty Ltd (2004) 12 BPR 22,287 at 22,294–6. A distinction can be drawn between crops which need tending after planting and those that do not (fructus industriales and fructus naturales): Permanent Trustee Australia Ltd v Shand (1992) 27 NSWLR 426 at 431; Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20,605 at [55]–[58]. 329. Mason v Clarke [1955] AC 778. 330. Mills v Stokman (1967) 116 CLR 61. 331. Corporate Affairs Commission v ASC Timber Pty Ltd (1989) 18 NSWLR 577. 332. Pennant Hills Golf Club v Roads and Traffic Authority of New South Wales (1999) 9 BPR 17,011 at 17,014–15. 333. Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20,605 at [57]. 334. R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327. 335. King v David Allen & Sons, Billposting Ltd [1916] 2 AC 54. 336. Walsh v Lonsdale (1882) 21 Ch D 9. 337. The requirements of s 54A of the Conveyancing Act are considered in 6.8 and 6.10. 338. Mason v Clarke [1955] AC 778. 339. Earl de la Warr v Miles (1881) 17 Ch D 535. 340. Real Property Act 1900 (NSW) s 42. 341. Real Property Act 1900 (NSW) s 47(1). 342. See, generally, Chapter 8. 343. James v Stevenson [1893] AC 162. 344. Dobbie v Davidson (1991) 23 NSWLR 625. 345. James v Registrar-General (1967) 69 SR (NSW) 361. 346. For a discussion of the operation of the in personam exception in the context of unregistered easements, see 12.51–12.53. 347. See 12.43–12.45. 348. For details of this rule, see 2.54–2.57. 349. Nicholls v Ely Beet Sugar Factory Ltd (No 1) [1931] 2 Ch 84. 350. Mason v Clarke [1955] AC 778.

351. See 12.55–12.63. 352. Permanent Trustee Australia Ltd v Shand (1992) 27 NSWLR 426 at 431; Hornsby Council v Roads and Traffic Authority (1997) 41 NSWLR 15. 353. Clos Farming Estates Pty Ltd v Easton (2002) 11 BPR 20,605 at [60]. See, generally, B Edgeworth, ‘Profits à Rendre: A Reincarnation’ (2006) 12 APLJ 200. 354. Access to Neighbouring Land Act 2000 (NSW) ss 7, 11 and 17(c). For an examination of the doctrinal and policy dimensions of the Act, and its Tasmanian and English equivalents, see S Grattan, ‘Proprietarian Conceptions of Statutory Access Rights’ in E Cooke, Modern Studies in Property Law, Hart Publishing, Oxford, 2003, Vol 2, pp 353ff. 355. Access to Neighbouring Land Act 2000 (NSW) s 12. 356. Access to Neighbouring Land Act 2000 (NSW) s 21. 357. Access to Neighbouring Land Act 2000 (NSW) s 26. 358. Hill v Tupper (1863) 2 H & C 121 at 128. 359. See A Bradbrook, S MacCallum and A Moore, Australian Real Property Law, 3rd ed, Lawbook Co, Sydney, 2002, pp 682–3. 360. See Bradbrook et al, Australian Real Property Law, note 359 above, p 683. 361. M Sturley, ‘Easements in Gross’ (1980) 96 LQR 557. See also, D McLean, ‘The Nature of an Easement’ (1966) 5 U Western Ontario LR 32. 362. Williams v State Transit Authority of New South Wales (2004) 60 NSWLR 286. 363. Law Reform Committee, Report No 14, Command 3100. 364. See Chapter 5. 365. Butt, Land Law, note 69 above, p 458.

[page 645]

Chapter 13

Freehold Covenants Introduction 13.1 A freehold covenant is a mechanism that can be used to privately regulate the use of land in order to preserve its amenity. This can occur on a small scale by means of an agreement between two or more parties. For example, if A subdivides her land and sells part to B, she may require B to enter into an agreement which restricts B’s use of the land. Such an agreement might be that B not use the land for commercial purposes, or that B is restricted to building a dwelling of only one storey. Entering into an agreement that prohibits certain activities is a way of securing protection for the retained land. On a larger scale, the developer of a planned housing estate may wish to restrict the kinds of dwellings that can be built by the owners of the lots in the estate so as to maintain a certain ‘look and feel’ on that estate. For example, owners may have to agree to a certain minimum standard for building materials — say, all ‘brick and tile’ — or to commence building within a particular time frame. The aim is to ensure that the value and amenity on the estate is not jeopardised by undesirable development on some lots at any stage in the future. As between the parties to the agreement, the covenant is clearly enforceable as a matter of contract law. However, in order to be an effective protection of land such an agreement needs to be enforceable beyond the original parties to the contract — most obviously by and against the original parties’ successors in

title — but also, in some circumstances, by third parties; for example, the owner of land adjoining that subject to the burden. The law of freehold covenants, therefore, addresses the issue of how and when an agreement reached between two or more parties can have the effect of creating property rights enforceable by and against third parties to that original agreement, namely successors in title to the original covenantor and original covenantee. In Chapter 1, we examined the fundamental distinction between contract and property.1 Contracts bind only the parties who enter into them. In Chapter 11, we introduced the concept of privity of estate and looked at a particular example in the context of leases [page 646] in which the enforceability of a covenant contained in a lease agreement could extend beyond the parties to that contract. Where parties are in a relationship of landlord and tenant, the common law permits certain covenants (those that ‘touch and concern’ the land) to be enforceable independently of the law of contract.2 As long as the relationship of landlord and tenant subsists, all those covenants in the original contract that touch and concern the land remain enforceable against successors in title to the original lessor and lessee. Historically, however, the position was different in relation to freehold land. In general, the common law treated covenants concerning freehold land in the same way as it treated any other non-leasehold covenants: they were contractual arrangements only and, as such, binding only the parties to the contract. Equity, however, eventually came to adopt a broader approach so as to render certain covenants binding against third parties and, by that means, enabled freehold covenants to become encumbrances on land in a manner akin to easements and profits à prendre. In modern law, private agreements in the nature of freehold covenants operate alongside a plethora of public planning and environmental regulations.3 The former privileges afforded to land-holders to develop their property as they please have been restricted to ensure that local and national heritage is protected, that urban planning proceeds in an orderly and

reasonable manner, that the natural environment is not despoiled and that natural resources are not threatened. Despite this, freehold covenants still play a significant role in land regulation, particularly in the case of planned estates. They have also come to have a new role through their use in wider statutory contexts. For example, legislation regulating multiple-occupancy dwellings, such as the Strata Schemes Management Act 1996 (NSW), provides for obligations in the nature of covenants to encumber land in the form of statutory obligations and by-laws.4 In some states new forms of statutory covenants are being employed in the context of environmental protection. For example, in New South Wales, legislation facilitates the protection of the nature conservation values of land by way of what is termed a conservation land covenant.5 While this type of covenant operates differently to a private law freehold covenant, it takes the idea of a legally enforceable restriction on land use which is voluntarily entered into by the owner of the land and moves it to a quasi-public context. 13.2 In determining when an agreement between two parties can be enforced, either by the original parties, or by their successors in title, it is important to identify which party is seeking to enforce the agreement and against whom. The original parties to the agreement are known as the covenantor (the party which makes the promise) and the covenantee (the person who receives the benefit of the promise). A typical example is a [page 647] freehold covenant where A buys land from B and covenants not to use it for commercial purposes. Here A is the covenantor and has the burden of, or obligation to perform, the covenant. B is the covenantee, and has the benefit of the covenant — in other words, B can enforce the agreement against A. In this example, the obligation is negative or restrictive in character. A is restrained from doing something with the land. This is generally referred to then as a restrictive covenant. Covenants, however, may be positive in nature. An example would be where A covenants to contribute to the upkeep of a common road. As we will

see, there are limits on the circumstances in which the burden of a positive covenant can be enforced beyond the original parties to the agreement. Thus, it is important to be able to determine whether a covenant is positive or restrictive in nature. As between the original covenantor and covenantee, remedies for breaches of covenant can be enforced simply as a matter of contract law. Also, the covenantee has a right to sue the original covenantor for breaches of covenant even after he or she parts with the land.6 Only nominal damages are recoverable, however, because the covenantee who has parted with the land has suffered no meaningful loss. Matters become more complex when we consider the position of the successors-in-title to the covenantee or the covenantor. When we look at whether the benefit or burden of a covenant can be enforced by these parties, we refer to this as being a question of whether the benefit or burden of a covenant runs with the land of either the covenantor or the covenantee. In other words, has the benefit of a covenant become attached to the land of the covenantee so as to be enforceable by the successor in title to the covenantee and does the burden of a covenant run with the land of the covenantor so as to be enforceable against the covenantor’s successors in title? Different rules apply to running the benefit and to running the burden, both at law and in equity. Finally, it should be noted that, unlike most real property interests, freehold covenants cannot be registered. Rather, their particulars are recorded on the Folio of the land burdened by the covenant.

Enforceability of the Benefit of a Covenant at Common Law (Benefit of the Covenant Running with the Land of the Covenantee) 13.3 Here we are considering the situation in which the successor in title to the original covenantee wishes to enforce the covenant against the original covenantor. To take a simple example, A enters into an agreement with B, in which B covenants that she will not build a dwelling of more than one storey. As a matter of contract law, A can enforce the agreement against B. However, A subsequently sells to A1. Can A1, as the successor in title to the covenantee,

enforce the covenant against B? The answer to this depends on whether the benefit of the covenant has run with the land. Figure 13.1 puts this question in diagram form. [page 648]

Figure 13.1:

Running the benefit at common law

At common law, the general rule is that the benefit of the covenant, whether positive or negative (restrictive) in nature, will run with the land so as to enable a successor in title of the covenantee to sue on it, either if it is ‘annexed’ to the land, or if the benefit is expressly assigned by the agreement that creates the covenant. As the common law did not recognise equitable interests, the benefit of a covenant could not run at common law if the covenantee’s interest was equitable in nature only.7 Annexation will arise when the following conditions are met: first, the covenant must not be merely personal in nature but must demonstrate an intention to benefit the land of the covenantee; second, the covenant must ‘touch and concern’ the land; and third, the land intended to be benefited must be identified, or be capable of being identified. There is no requirement for the covenantor to own burdened or servient land for the benefit to run. In Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board,8 the defendant covenanted to keep riverbanks in a satisfactory state of repair, though it owned no land nearby. The court held that the covenant could be exercised by an assignee of the original covenantee.

If the covenant has become annexed to the land, then it ‘runs with the land’ of the covenantee. This means that it is not necessary to specifically refer to the covenant on the transfer to the incoming purchaser of the covenantee’s land.9 Further, as the covenant has become annexed to the covenantee’s land, it is not necessary for the purchaser to have notice of the covenant at the time of the transfer (including that the purchaser will enjoy the benefit of the covenant against the original covenantor). In our above example, even if A1 did not know of the covenant at the time of purchase, he or she can subsequently enforce the benefit as it is part of the rights he or she acquired at the time of transfer.

Annexation of covenant to the land Intention to benefit land of the covenantee 13.4 For the benefit of the covenant to run, it must be made not merely for the personal benefit of the original covenantee, but also with his or her successors in title and with a view to benefiting the land. Therefore, it was necessary at common law to show that, at [page 649] the time they entered into the agreement, the covenantor and covenantee intended the covenant to run with the land of the covenantee (ie, for the benefit of the covenant to run). This was generally evidenced by pointing to words in the document creating the covenant which provided evidence of the required intention that the covenant enure for the benefit of both the original covenantee and his or her successors in title. In Rogers v Hosegood, it was held that a covenant expressed in terms that it ‘may enure to the benefit of the vendors, their successors and assigns and others claiming under them to all or any of their lands adjoining’ demonstrated the requisite intention.10 By contrast, where the covenant is expressed to be made with persons, without reference to land, there will be no annexation. In Renals v Cowlishaw,11 the covenant was expressed simply to be made with the vendors, ‘their heirs, executors, administrators, and assigns’. The court held that this phrase evinced

no intention to annex the covenant to the land and could not benefit the successors in title to the original covenantee (who took their interest as registered proprietors of the covenantee’s land). The required intention that the benefit of a covenant run with the land is now generally considered to be implied by statute. Section 70(1) of the Conveyancing Act 1919 (NSW) provides that: A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and the covenantee’s successors in title and the persons deriving title under the covenantee or them, and shall have effect as if such successors and other persons were expressed. For the purposes of this subsection in connection with covenants restrictive of the user of land “successor in title” shall be deemed to include the owners and occupiers for the time being of the land of the covenantee intended to be benefited.

On one view, this type of provision is merely a word-saving device once the covenant has already been effectively annexed to the land.12 In England, however, the Court of Appeal in Federated Homes Ltd v Mill Lodge Properties Ltd13 interpreted the equivalent provision14 much more broadly, so that a covenant that touches and concerns the covenantee’s land will be annexed to that land even though the covenant does not use the otherwise appropriate wording. This is because of the breadth of the wording of the section. It makes the covenant enforceable by the covenantee, his or her successors in title, persons deriving title under them and each owner and occupier of the benefited land. The High Court has left open the question of whether the English interpretation will be followed in Australia.15 [page 650] Although this is not clear on the words of the section, subsequent cases have held that this form of statutory annexation will not occur where the covenant expressly indicates that its benefit is not to pass to the covenantee’s successors in title.16 For example, a statement that the ‘covenant will not enure for the benefit of any owner or subsequent purchaser unless the benefit is expressly assigned’ will exclude the section’s implication that the benefit will run with the land of the covenantee.17 It is also possible to exclude certain

persons who derive title from receiving the benefit, such as tenants, while allowing the benefit to run to others.18 The effect in s 70 of the expression ‘and the persons deriving title under the covenantee’ is to allow all occupiers of the land, such as tenants, to enforce the covenant.19

The covenant must ‘touch and concern’ the land 13.5 In order for the covenant to be annexed to the land (ie, be capable of running with the land of the covenantee), the covenant must ‘touch and concern’ the land of the covenantee. Importantly, the covenant must touch and concern land held by the covenantee at the date of creation of the covenant.20 The meaning of the term ‘touch and concern’ is similar to the meaning it has in the context of leases; that is, a covenant will touch and concern the land if it enables the land of the covenantee to be benefited in some way rather than a covenant that is merely personal in nature that only benefits the covenantee herself. The covenant must affect the use or mode of occupation of the land, or must of itself affect the value of the land.21 In Rogers v Hosegood, a covenant to build no more than one dwelling-house on the covenantor’s land was held to touch and concern the covenantee’s land. Other examples of covenants held to ‘touch and concern’ the land are covenants to: repair riverbanks to prevent flooding on the covenantee’s land;22 supply pure water to the covenantee’s land;23 and not to use the covenantor’s land for the retail sale of goods.24 The expression ‘relating to land’ in s 70(1) of the Conveyancing Act means the same as ‘touch and concern’. 13.6 Given the requirements of the touch and concern test — that the covenant must affect the mode of use or occupation of the land, or must of itself affect the value of the land — problems may arise about whether there is actually any benefit for the covenantee’s land, given the nature and location of the respective properties. A covenant cannot touch and concern the land if the land to be benefited is so large that it cannot [page 651]

be benefited as a matter of fact.25 For instance, can a covenant that burdens a small lot, such as a covenant prohibiting the construction of a second storey on a house, benefit the entirety of a very large adjacent estate? In Re Ballard’s Conveyance,26 it was held that an attempt to annex the benefit of a covenant which restricted building on land of 18 acres to the whole of an adjoining estate of 1700 acres was ineffective since the covenant was not capable of benefiting the whole of the land of the covenantee. Moreover, the court held that it had no power to sever a covenant so as to allow it to benefit a designated part of the land of the covenantee. Despite the rule in Re Ballard’s Conveyance, it is possible by careful drafting of the covenant to avoid this result. So, the parties may, for example, express an intention to annex the covenant to ‘each and every part of the covenantee’s land’, so that the covenant will touch and concern each and every part that is, in fact, benefited.27 An analogous problem concerning whether the covenant touches and concerns land arises where the benefited land is later subdivided. Does a covenant that touches and concerns a large lot, which is later subdivided, also touch and concern each subdivided portion of the whole? Some cases suggest that there is a prima facie presumption that a covenant for the whole does not benefit each and every part,28 although the proposition has been doubted.29 In any event, the presumption can be rebutted by evidence that the covenant was intended to benefit not merely the totality of the land, but its constituent parts. This will generally be a matter of construction of the covenant. The expression ‘whole of the land’ has been held to express such an intention,30 although more direct words such as ‘each and every part into which it may be subdivided’ (or words to that effect) would be more certain. Another difficulty in discerning actual benefit arises where the covenantee’s land is a considerable distance away from the burdened land. In McGuigan Investments Pty Ltd v Dalwood Vineyards Pty Ltd,31 a covenant requiring the covenantor not to produce or sell wine under the name ‘Dalwood’ was held not to touch and concern the land of the plaintiff — in part, because the properties were 17 miles apart.

Benefited land must be identifiable

13.7 Under the general law, in order for the benefit of the covenant to run with ownership of the covenantee’s land, the benefited land must be identified by the covenant, or be identifiable by means of extrinsic evidence.32 The enactment of s 88(1) of the Conveyancing Act, which restricts the enforceability of a covenant against the successors [page 652] in title of the covenantor, does not impact on the ability of a successor in title of the covenantee to enforce the covenant at law against the original covenantor.33 This is because s 88(1) concerns the persons ‘against’ whom a covenant is sought to be enforced, not the persons who are enforcing the covenant.

Express assignment of the benefit at law 13.8 The benefit of a covenant relating to land, whether it is positive or restrictive, may be assigned like any other chose in action by complying with the rules for assigning a legal chose in action. By s 12 of the Conveyancing Act, a chose in action may be assigned in writing signed by the assignor if he or she expressly notifies, in writing, the person against whom the chose is enforceable (ie, the covenantor). On assignment, the assignee may enforce the covenant against the original covenantor. 13.9 One further question is the effect of ss 67 and 68 of the Conveyancing Act (for old system title land) and s 51 of the Real Property Act 1900 (NSW) (for Torrens title land) on the transfer of the benefit of the covenant by the original covenantee. If the benefit has not been annexed to the land of the covenantee, is it nevertheless possible that on transfer of the land these sections operate so as to allow the successor in title of the covenantee to enforce the benefit?34 Section 67 of the Conveyancing Act states that all ‘rights … whatsoever appertaining to the land, or any part thereof, at the time of conveyance’ pass on conveyance of the land. Section 51 of the Real Property Act uses the same language in relation to land held under the Torrens system. It could be argued

that these two provisions allow the benefit of any covenant to pass with the land without having to show that the covenant has been annexed. However, in Kumar v Dunning,35 the English Court of Appeal has held that the English equivalent of s 67 of the Conveyancing Act only passes rights that have already been annexed. Only rights that have been annexed are rights ‘appertaining to the land’ as required by the section.36 These sections, therefore, operate only as word-saving provisions, but do not cause the benefit to pass unless it would otherwise do so. Notably, however, if s 70(1) of the Conveyancing Act is interpreted as bringing about a statutory annexation of the covenant, then ss 67 and 68 of the Conveyancing Act and s 51 of the Real Property Act might operate in tandem with that provision to pass the benefit where it is not expressly mentioned.37 [page 653]

Enforceability of Covenants and s 36C of the Conveyancing Act 1919 (NSW) 13.10 In some circumstances, third parties to a covenant may also wish to enforce the covenant. If we continue the example used in this chapter, A enters into an agreement with B, in which B covenants that she will not build a dwelling of more than one storey. C owns the lot adjacent to that of A. She also wishes to enforce the covenant against B. As a matter of contract law, C cannot enforce the benefit of the agreement against B as she was not a party to the contract. However, in certain circumstances C may be able to enforce the contract by virtue of s 36C of the Conveyancing Act. Based on comparable English legislation, s 36C provides that: A person may take … the benefit … of any … covenant, or agreement over or respecting land … although the person may not be named as a party to the assurance or other instrument.

Importantly, the provision has been held not to overturn the traditional doctrine of privity.38 Instead, it allows a person who is in existence, and who is identified in a covenant, although not a party to it, to enforce the covenant. This is only the case, however, where the covenant purports to be made with the person.39 Also, classes of people may acquire the benefit of a covenant

where it refers to them in this manner. For instance, in Re Ecclesiastical Commissioners for England’s Conveyance,40 a purchaser covenanted ‘with owners for the time being of land adjoining or adjacent to the said land hereby conveyed’. The court held that this covenant was made with the owners of the adjoining and adjacent land and could be enforced by them and their successors in title because they were parties intended to be benefited by the covenant. However, if the covenant had been purportedly made with future purchasers of adjoining or adjacent land, such purchasers could not enforce the covenant under the provision because they were not identifiable at the time the covenant was made.41

Enforceability of the Burden of a Covenant 13.11 Here we are considering the situation in which the original covenantee or her successors in title wish to enforce the covenant against a successor in title to the original covenantor. If we take the same example considered above, A enters into an agreement with B, in which B covenants that he or she will not build a dwelling of more than one storey. As a matter of contract law, A can enforce the agreement against B. However, B subsequently sells to B1. Can A, or his or her successors in title, enforce the covenant [page 654] against B1? The answer to this depends on whether the burden of the covenant has run with the land. Figure 13.2 puts this question in diagram form.

Figure 13.2:

Running the burden

While the burden of a freehold covenant cannot run at law, the burden can in equity where certain requirements are satisfied.

At law 13.12 At common law, the general rule is that a burden that affects freehold land does not run with the land of the covenantor. This rule is a specific example of the fundamental principle of privity of contract. In Austerberry v Oldham Corporation,42 it was held that the burden never runs with land, except where there is privity of estate between the parties; that is, where they stand in the shoes of landlord and tenant. These covenants become enforceable not as freehold covenants but under the doctrine of privity of estate by virtue of the covenant being contained in the lease and binding the leasehold estate. Because the burden of the covenant cannot run at law, where the successor in title of the covenantor breaches the covenant, the covenantee or its successors in title have no remedy against the successor in title to the original covenantor at law. However, the covenantor does remain contractually liable to the covenantee for any breaches by the covenantor’s successor in title. This is in accord with contractual principles and works the same way as it does in the case of leases. This is statutorily confirmed by s 70A(1) of the Conveyancing Act 1919 (NSW): 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.

Section 70A(1) is a word-saving provision. It follows that the contract now must stipulate that a covenantor’s obligations will cease on assignment for continuing liability to be avoided. As we will see, this means that s 70A(1) is still relevant in determining whether the burden of covenant can bind successors in title to the original covenantor in equity. In this respect, s 70A(1) has been interpreted as leaving intact the common law rule that the burden of a covenant at law does not run so as to bind successors in title to the original covenantor.43 [page 655] 13.13 To ensure that land remains subject to a burden after assignment, there are a number of techniques at common law by which landholders may attempt to circumvent the difficulties of enforcing covenants against successors in title of the covenantor.44 They include leasing instead of selling land, and relying on privity of estate under the landlord and tenant relationship. Also, the use of a chain of indemnity covenants can assist enforcement: each assignee agrees to indemnify the assignor (the covenantor) for any liability he or she incurs. However, the strategy of indemnification will be frustrated by a break in the chain. Moreover, the covenantee’s remedy will only be damages against the covenantor, whereas an injunction against the perpetrator will usually be needed as well. At law, the covenantee has no rights against this person as there is no privity of contract between them.45 13.14 One exception to the principle that the burden cannot be enforced at law against successors in title of the original covenantor is the principle that the person who takes the benefit of a covenant must also shoulder the burden. Where applicable, the result is that positive covenants (eg, an obligation to pay for the upkeep of a common road) may run with the land of the covenantor where that covenantor’s successor in title is, for example, trying to take advantage of an easement drafted in the covenantor’s favour as the owner of the dominant tenement of the easement. However, the burden will not run absolutely, but conditionally: the burden will bind successors in title only so long as they elect to take the benefit of the covenant or a right into which the burden of the covenant is inextricably bound. In Halsall v Brizell,46 a covenant

requiring a contribution to the upkeep of roads was held to bind the successor in title of the original covenantor because he continued to take advantage of the benefits the roads conferred on him. The defendant was bound by the conditions imposed on the exercise of the right. In E R Ives Investment v High,47 a landowner who acquired land was held to be subject to the burden of allowing access over his land as long as the foundations of his property encroached on the dominant land. In Thamesmead Town Ltd v Allotey,48 the court held that a successor in title of the original covenantor was not bound to contribute to the maintenance costs of the common areas of an estate, even though they added value to the property, because he had no legal right to use them. The rule, therefore, is limited to cases where: first, the obligation must be a condition of the exercise of the right; second, the benefit claimed can be linked to a specific burden — in other words, they must be truly reciprocal obligations; and third, the covenantor’s successors in title are in a position to choose whether or not to take the benefit.49 [page 656]

In equity — the doctrine in Tulk v Moxhay 13.15 From the middle of the 19th century, equity developed its own rules for the enforcement of covenants. In a striking demonstration of judicial innovation, courts responded creatively to the challenges posed by the twin social developments of widespread urbanisation and rapid industrialisation. Effective urban planning and environmental protection required landholders to have rights to restrict the uses of land by means other than contract. Contract offers feeble obstacles to constrain the otherwise unfettered rights of landholders to develop their land, because its sphere of enforceability is confined to the parties to the contract. Equity’s particular contribution came in the form of affording protection to covenantees by allowing the burden of certain covenants to run, as well as the benefit. In particular, equity allowed restrictive covenants (or negative covenants, as they are also known) to be enforced against successors in title of the original covenantor where the original covenant otherwise permitted the burden of the covenant to run with

the land of the covenantor.50 By this means, the restrictive covenant became not merely a contractual but a proprietary interest. It is no historical accident that private planning rights were greatly enhanced by the courts at the same time as legislatures conferred on modern states increased statutory powers for the purposes of regulating the built and natural environments: reform in the spheres of both public law and private law was essential to achieve a balance between private rights of development and the public interest. Unlike the common law, which does not allow the running of the burden of the covenant, equity came to allow the burden of freehold covenants to run in certain circumstances. This is known as the doctrine in Tulk v Moxhay.51 As noted, not all covenants can run in equity. Despite equitable intervention, it remains the case that the burden of a positive covenant does not run with the land of the covenantor. Therefore, unlike negative covenants, positive covenants remain within the sphere of contract, not property subject to the one exception we have discussed above.52 The type of covenant enforceable in equity under the doctrine in Tulk v Moxhay is a restrictive covenant. 13.16 In 1808, Tulk, who owned houses and the adjacent vacant land, sold the vacant land to Elms. The deed included a covenant by Elms that he, his heirs and assignees would keep and maintain the land in its present form, in sufficient and proper repair as a square garden and pleasure ground, and would not build on it. The land was eventually transferred to Moxhay in 1848. The conveyance to Moxhay did not contain the restrictive covenant, though he admitted that he took with notice of it. Tulk sought an injunction restraining the erection of buildings on the land. The injunction was granted. As Lord Cottenham concluded: It is said that, the covenant being one which does not run with the land, this court cannot enforce it; but the question is, not whether the covenant runs with the land, but whether a

[page 657] party shall be permitted to use the land in a manner inconsistent with the contract entered into by his vendor, and with notice of which he purchased.53

Lord Cottenham’s reasoning in Tulk v Moxhay, based as it is on the purchaser’s notice of the vendor’s prior contractual obligations, is consistent

with the enforcement against successors in title of the covenantor of the burden of both positive and negative covenants. However, the court did not go so far as to completely overturn the common law rule prohibiting the running of burdens with the land. The case is authority only for the narrower principle: any purchaser of land who has notice of a restrictive covenant that burdens that land may be restrained in equity from using it in a manner inconsistent with the terms of the covenant.54 As the facts of the case demonstrate, one important aspect of the equitable rule is that it provides for the private control of urban and environmental planning and development. There are four elements to the doctrine: 1.

the covenant must be negative (restrictive) in substance;

2.

the purchaser must have notice of the covenant;

3.

the covenant must benefit the covenantee’s land; and

4.

the burden of the covenant must be intended to run with the covenantor’s land.

In addition, in order for a covenant to be enforceable against the successor in title to the covenantor, it must also comply with the requirements of s 88(1) of the Conveyancing Act. 13.17 The burden of a covenant enforceable in equity under Tulk v Moxhay is a burden on the land, and not on the estate, held by the covenantor. Thus, it is not necessary to show that a successor in title holds the exact estate that the covenantor held, for the successor in title is bound merely by coming to the land, whether as squatter, tenant at will or underlessee. It follows that the doctrine of Tulk v Moxhay applies to restrictive covenants in a headlease, which may be enforced by the landlord against a sublessee, even though there is neither privity of contract nor privity of estate between them. In Re Nisbet and Potts’ Contract,55 N had purchased land in 1901 from X and Y, who had purchased it from H. H’s title was based on adverse possession of the land since 1878. N agreed to accept H’s possessory title, but restrictive covenants had been imposed on the land before the period of adverse possession. N knew nothing of these covenants, but would have discovered them if he had made appropriate inquiries. It was held that a purchaser has constructive notice of such covenants, and that the restrictive covenants were

an equitable burden on the land, and so were not terminated by H’s adverse possession.

Covenant must be negative (restrictive) in substance 13.18 The burden of positive covenants will not run with the land in equity. To determine the difference between a positive and a negative covenant usually involves a [page 658] determination of whether the covenantor is required to incur expenditure in performing the burden of the covenant. If so, the covenant is normally regarded as a positive covenant. So, if A covenants to build a house, or if the covenant obliges the owner not to allow premises to fall into disrepair, the covenant is regarded as positive in substance as in fact it requires the covenantor to carry out some positive act in order to fulfil her obligations under the covenant.56 In Tulk v Moxhay,57 the obligation not to build on the land was enforceable as this was a restrictive covenant, but a further obligation to keep the garden in a state of proper repair was regarded as a positive covenant and, as such, was not enforceable against the covenantor’s successor in title. Whether a covenant is positive or negative (restrictive) in nature depends on the substance of the covenant. So, if A covenants not to build a house, the covenant is negative; but a covenant not to allow a house to fall into disrepair is positive, as it requires the covenantor to undertake certain acts. Conversely, a covenant may be stated in positive terms, but in substance is negative in its operation. So, a covenant in which A covenants to use a house only for business purposes is stated in positive terms, but in substance it is negative because it restricts the use of the house for other purposes.58

Purchaser must have notice of the covenant 13.19 Restrictive covenants are equitable interests and are, therefore, vulnerable to subsequent purchasers of the burdened land who have no actual, constructive or imputed notice of the covenant at the time of the purchase.59

Where a purchaser buys the burdened land without notice of a restrictive covenant but sells the land on to a purchaser who does have notice, the second purchaser will take free of the covenant.60 The reason for preventing revival of the covenant in these circumstances is to preserve the value of the first purchaser’s interest. Under s 88(3) of the Conveyancing Act, the Registrar-General is authorised to note restrictive covenants on the Folio of the burdened land where that land is held under Torrens title. Further, under s 47(1) of the Real Property Act 1900 (NSW), the Registrar-General is required to record the particulars of restrictive covenants on the Folio of the burdened land. Where the restrictive covenant has been so recorded on the Folio, this in effect then constitutes actual and constructive notice to any subsequent interest holder of the burdened land of the existence of the restrictive covenant burdening the Folio. Further, by virtue of the operation of s 88(3), where the RegistrarGeneral has so noted a restrictive covenant on the Folio then the covenant is an ‘interest’ for the purposes of s 42 [page 659] of the Real Property Act, with the result that the transferee takes subject to the recorded covenant.61

Covenant must benefit the covenantee’s land 13.20 In order for the burden of a restrictive covenant to run, the covenant must benefit the covenantee’s land at the date of creation of the covenant. The test to determine benefit is broadly the same for covenants in equity as at law, namely that the covenant must ‘touch and concern the land’ of the covenantee.62 The requirement that the covenant ‘touch and concern the land’ of the covenantee has been interpreted as necessitating that the covenantee must in fact have owned the land at the date of creation of the covenant. The rationale for this is found in Tulk v Moxhay itself, namely that the covenant must be made for the protection of land held by the covenantee.

In London County Council v Allen,63 Allen, a builder, applied to the council for permission to lay out certain land of which he was in possession under an option to purchase. The council gave permission subject to a condition that Allen would enter into a covenant not to build on part of the land which was needed for the construction of certain proposed streets. Allen covenanted by deed for himself, his heirs and assigns. Part of the land was sold to Allen’s wife (E) with Allen’s concurrence. E built three houses on the plot and mortgaged it to N. Was the covenant binding on E and N? While the council succeeded in contract against Allen (receiving only nominal damages), the court held that the covenant was not binding on the successors in title, because at the time the council entered into the covenant they did not own the land that could be benefited by the covenant. In New South Wales, this is referred to as the rule in Kerridge v Foley.64 This requirement can raise particular problems where a vendor (say, a developer) subdivides land into a number of lots, and enters into restrictive covenants with the purchasers of each lot in the subdivision. Assume that the vendor sells lots to A, B and C, entering into a restrictive covenant with each of them that they (A, B and C) will not use the land for commercial purposes. The problem facing the developer is to drop out of the picture while at the same time ensuring that all the purchasers have the benefits of the covenant they themselves made with each other. Each will not only be subject to the burden of a covenant, but need to be able to enforce the benefit against each other. A particular problem arises where the sale of lots proceeds in stages. Due to the rule that the covenantee must also have held the benefited land at the time the covenant was made, whether or not A, B and C can enforce the benefit against each other will depend on the order in which they purchased the lots. Assume the vendor sells the lots in order. C will be [page 660] able to enforce the covenant against A and B because at the time the vendor entered into the covenant with A and B, he or she (the vendor and original covenantee) still owned the land to be benefited (the land now owned by C). A and B, on the other hand, will be unable to enforce against C. At the time

the covenant was entered into with C, the vendor had already sold the lots to A and B. Hence, the original covenantee did not own the land to be benefited (now owned by A and B) at the time the covenant was entered into with C. One way around this problem is to argue that the subdivision is a building scheme.65 Where a building scheme exists, the requirement that the covenant must benefit the covenantee’s land is generally agreed to provide an exception to the rule in Kerridge v Foley.66

Covenant must be intended to run with the covenantor’s land 13.21 The burden of a restrictive covenant must be intended to run with the covenantor’s land. If it is personal only, the burden will not run. By s 70A(1) of the Conveyancing Act, this intention is presumed unless the covenant indicates to the contrary. The section deems the covenant to be entered into by the covenantor on behalf of himself or herself and the covenantor’s successors in title. Though s 70A(1) does not alter the common law rule that prohibits the burden of a covenant from running with the land, it supplies the requisite intention in equity.

Requirements of s 88(1) of the Conveyancing Act 13.22 Section 88(1) of the Conveyancing Act prescribes certain formalities for creating covenants. These apply specifically to covenants enforceable in equity, and which are contained in an ‘instrument’. Therefore, in order for a covenant to be enforced against successors in title of the covenantor, the instrument must ‘clearly indicate’: the land benefited by the covenant; the land burdened by the covenant; the persons (if any) having a right to release, vary or modify the restriction; and the persons (if any) for whose consent to a release, variation or modification of the land is stipulated.67

Enforceability of the Benefit of a Covenant in Equity 13.23 As we have seen, the benefit of a covenant can run at law. In several circumstances, however, it is necessary to ensure that the benefit has run in equity, rather than at law, in order for the benefit to be enforceable by the successor in title to the covenantee. The first is where the covenantee holds an equitable, rather than legal, estate. The second is where the successor in title to the covenantee wishes to enforce the benefit of the covenant [page 661] against a successor in title to the covenantor. A enters into an agreement with B, in which B covenants that she will not build a dwelling of more than one storey. A subsequently sells to A1. B sells to B1. Can A1, as the successor in title to the covenantee, enforce the covenant against B1? Figure 13.3 puts this question in diagram form. Figure 13.3:

Running the benefit in equity

Assuming that the burden has run in equity under the rules in Tulk v Moxhay, the covenant will be enforceable by A. However, in order for it to be enforceable by A1, the benefit of the covenant must have run in equity. As the common law does not recognise the running of the burden in equity, it is

necessary to also run the benefit in equity in order for A1 to be able to enforce against B1. In equity, the benefit of a covenant will run with the land in favour of successors in title in three situations: 1.

where the benefit of the covenant was annexed to the land;

2.

where the benefit of the covenant was expressly assigned to them; or

3.

in the case of a building scheme.

Benefit annexed to the land 13.24 As in the case of annexation at common law, the benefit will be annexed to the land if: the covenant is worded to make it clear that the benefit is intended to be taken by the original covenantee and by successors in title; the covenant touches and concerns the benefited land; the benefited land is identified; and the covenantee retained the benefited land at the time the covenant was entered into. As with annexation at law, where the benefit is annexed in equity it becomes part of the estate. Therefore, no express reference is needed to the covenant in the transfer, nor is it necessary for the covenantor to be aware of the covenant at the time of transfer.

Intention to annex covenant to the land 13.25 As in the case of the running of the benefit at law, the instrument must contain clear words indicating not only that successors in title of the covenantee are to benefit, [page 662] but also the land of the covenantee.68 However, s 70(1) of the Conveyancing

Act 1919 (NSW) applies to the running of the benefit in equity no less than at law. It follows that the section has the effect of annexing covenants that touch and concern the benefited land unless a contrary intention is expressed in the instrument, at least if Federated Homes Ltd v Mill Lodge Properties Ltd69 is good law in Australia.

Covenant must ‘touch and concern’ the benefited land 13.26 This requirement is the same as it is at law. The covenant must affect the mode of use or occupation of the land, or affect the value of the land in a direct way.70

Benefited land must be identified 13.27 The benefited land must be sufficiently identified in the instrument. The requirements are governed by s 88(1) of the Conveyancing Act.71

Covenantee must retain benefited land 13.28 Where the original covenantee did not retain land at the time the covenant was entered into, the original covenantee nevertheless can enforce the covenant against the covenantor under normal contractual principles. However, in order for the benefit of a restrictive covenant to be enforced by a successor in title to the covenantee, the covenantee must have retained the land benefited by the covenant at the time the covenant was entered into. This is also a requirement for the running of the burden of a covenant in equity, and was discussed in that context.72 These principles were demonstrated in Formby v Barker.73 Formby sold all the land he owned to a company. The company covenanted not to use the land for various purposes. The defendant purchased part of that land with knowledge of the covenant. The plaintiff’s widow, who was the beneficiary of Formby’s property by will, sought to restrain the defendant from building shops on the land, claiming that he was in breach of the covenant. The covenant was held to be unenforceable on the basis that, if the covenantee does not retain land, the benefit he or she can claim can only be a personal one. It follows that such a personal benefit cannot be transferred: It appears to me that it is not legally permissible for him to assign the benefit of such a covenant

to any person or persons he may choose, so as to place the assign or assigns in his position.74

[page 663] If this requirement is not met, the covenant may still be enforceable under the principles relating to building schemes.75 If a building scheme is found to exist, then it will provide an exception to the general rule in Kerridge v Foley.76

Express assignment 13.29 Where the benefit of a restrictive covenant has not been effectively annexed to the dominant land in accordance with the above requirements, it may be expressly assigned to successors in title of the covenantee. Where the covenantee is seeking to enforce the burden against a successor in title of the original covenantor, and so is relying on assistance from equity, the assignment must be effective in equity. A restrictive covenant, as a subsisting equitable interest in land, must be assigned in accordance with s 23C(1)(c) of the Conveyancing Act.77 This provision requires the document purporting to transfer the interest to be in writing and signed by the person entitled to create it. Also, to be valid, it must be assigned at the same time as the assignment of the land, and it must be possible to identify the dominant land where the benefit is assigned. In Newton Abbot Co-op Society v Williamson & Treadgold Ltd,78 it was held that it was unnecessary for the document itself to identify the land; it was sufficient that the land could be identified by surrounding circumstances.

Building Schemes 13.30 If land is developed in multiple, subdivided lots, as in the case of a housing estate, the developer may wish to require all purchasers to enter into restrictive covenants for the purposes of maintaining the character of the estate. For example, the developer may wish to prevent certain types of use of buildings, or limit their height. The running of the benefit and burden of such covenants will be integral to the conservation of the estate’s character. The

problem facing the developer is to drop out of the picture while at the same time ensuring that all the purchasers have the benefits of the covenant they themselves made with each other. A particular problem arises where the sale of lots proceeds in stages. As discussed in 13.20, the rule that when running the burden at law the covenantee must have held the benefited land at the time the covenant was made poses particular problems in the context of building schemes. An earlier purchaser (of Lot A) is not in a position to enforce covenants against a later purchaser (of Lot B), because the developer, having already disposed of Lot A, cannot annex to Lot A the benefit of the covenant burdening Lot B made by the purchaser of Lot B.

Requirements of a building scheme 13.31 One way of ensuring that all the purchasers have the benefits of the covenant they made with each other is by means of s 36C of the Conveyancing Act. If each new [page 664] purchaser covenants with all earlier purchasers and the vendor, purchasers — and their successors in title, by operation of s 70(1) — may enforce the covenant against the new purchaser. However, this is a cumbersome procedure. Instead, building schemes, or ‘schemes of development’ as they are also known, have been preferred as mechanisms to ensure the continuing enforceability of this type of covenant by and against all purchasers of lots. The ultimate result of the building scheme is to annex the benefit of restrictions to all lots in the scheme, irrespective of when the vendor transferred them, so that earlier and later purchasers are in the same position. The basis of the building scheme is the equitable principle of mutuality. There must be a substantial reciprocity of obligations within the scheme; it operates separately from the contractual relationships entered into by the various covenantors in the scheme. The emergence and elaboration of this doctrine is a further expression of the policy of private control of urban planning and

development. In the leading case, Elliston v Reacher,79 Parker J stated the following requirements for the establishment of a building scheme: Both the plaintiff and the defendant must derive their titles from a common vendor. Prior to the sales to the plaintiff and defendant, the vendor must have laid out the estate, or a definite part of the estate, for sale in lots, and indicated that the relevant restrictions were intended to apply to all lots. Moreover, the restrictions must be consistent only with a general scheme of development. The vendor must have intended that the restrictions be for the benefit of all the lots to be sold. Both plaintiff and defendant, or their predecessors in title, must have purchased their lots on the basis that the restrictions were to enure for the benefit of the other lots included in the scheme. The land to which the building scheme is applicable must be clearly identified or be identifiable. From Re Dolphin’s Conveyance,80 this requirement will be met if the wording of the document in conjunction with surrounding circumstances identifies the land. One additional question, however, is whether in order to be enforceable the requirements of s 88(1) of the Conveyancing Act must be complied with.81 13.32 Since the first appearance of the doctrine, courts have gradually loosened the requirements for building schemes by adopting a flexible approach to the apparently stringent rules in Elliston v Reacher. The primary focus of the courts has been on the intention behind the development. For instance, the first requirement that both plaintiff and defendant derive their titles from a common vendor has been dispensed with to the extent that, where one common vendor died and was replaced by another, a valid building scheme was held to exist. There was a sufficient continuity of intention that the restrictions would apply to all the lots in the scheme.82 [page 665]

In Re Mack and the Conveyancing Act,83 a number of vendors were involved in a building scheme. Nonetheless, Wootten J held that there was a valid building scheme because of the presence of a prevailing common intention that the covenants would apply to all lots. He found that there could be no sound basis for distinguishing between a single vendor and a number of vendors for the reason that ‘“the community of interest” between the purchasers is as real in the one case as the other’. Of course, the lack of a common vendor may well indicate that no such common intention exists, as where a later vendor has very different plans for the development. 13.33 The second requirement laid down by Parker J in Elliston v Reacher — that the scheme be laid out in lots before sale, with allotted restrictions — has also been interpreted flexibly by the courts. In Baxter v Four Oaks Properties Ltd,84 the size of lots was determined by individual purchasers’ needs. It was held that the requirement would be met if the purchasers were informed on sale that lots would be subject to mutually enforceable covenants, and also if each purchaser would be obliged to execute the same deed. Also, in Re Dolphin’s Conveyance85 the vendors had failed to lay out the estate in demarcated lots prior to sale; yet this was held not to be fatal for the scheme because a common intention of mutuality could be clearly discerned in the conveyances to the earlier purchasers. Even though, on the facts of this case, the benefit of the covenant had not been annexed to the land of the defendants and the benefit had not been expressly assigned, they were able to enforce it. It follows that where a valid building scheme exists, annexation of the benefit of the covenants to every plot still unsold is established from the surrounding facts, so that no special formula of annexation need be used. In Hosking v Haas,86 a valid building scheme was found where only some of the lots in the estate were subject to covenants and, with respect to those which were, not all were identical. The basic principle is that whether a building scheme exists is a question of fact to be determined from the documents and the circumstances surrounding the sales.87 Relevant evidence may be adduced from the terms and conditions of auction sales, and terms in the relevant contracts of sale.88 13.34 Even if two of the plots in the building scheme become united in the hands of one person, the covenants will not be extinguished, but will merely be suspended until such time as they are subdivided.89 This is an

exception to the general rule that unity of ownership will extinguish a covenant.90 The principle of mutuality of obligation will be established even if the restrictions imposed by the covenants are not identical; but not if some lots are to be free of obligations.91 In Ferella v Otvosi,92 Gzell J stated that: [page 666] … the impact of the various restrictions on an area as a whole [that creates] a local law … may impinge differently on different parts of the area but, overall, [must work] to give a particular character and amenity to the area.93

13.35 Generally, in order for a restrictive covenant to be enforceable, it must comply with s 88(1) of the Conveyancing Act.94 One uncertain question, however, is whether the requirements of s 88(1) apply to building schemes. Section 88(1) refers to restrictions ‘the benefit of which is intended to be annexed to other land’. It is not clear that this is wide enough to cover building schemes. The law on this point is somewhat uncertain. However, it appears that after Re Louis and the Conveyancing Act,95 building schemes remain untouched by s 88(1), at least under the general law. This is because s 88(1) operates where there is an ‘instrument’, and there is no relevant instrument between parties where a building scheme is being relied on. The position under the Torrens system is different.96

Freehold Covenants and Torrens Restrictive covenants 13.36 As discussed in 13.19, where a restrictive covenant is recorded on the Folio of the burdened land, it is an ‘interest’ for the purposes of s 42 of the Real Property Act 1900 (NSW). Therefore, the transferee will take subject to the recorded covenant. In the case where the covenant is not recorded, the effect of the transfer will depend on the normal rules applying to indefeasibility.97 In other words, the subsequent registered proprietor will take free of the interest — even where they had notice by some other means — unless there is fraud or a personal equity can be established.

The Registrar-General only has the power to record covenants that comply with s 88(1) of the Conveyancing Act 1919 (NSW). If a covenant is recorded which does not comply with this section, the covenant will not bind the new registered proprietor.98 Notably, recording does not confer the full benefits of indefeasibility and the restrictive covenant remains an unregistered equitable interest.

Building schemes and the Torrens system 13.37 Much doubt has surrounded building schemes under the Torrens system. A doctrine that establishes rights on the basis of facts surrounding a particular type of development sits uneasily with a title system that places primary emphasis on registration (the ‘mirror principle’).99 Very commonly, the need to rely on the doctrine of the building scheme is obviated by s 88B of the Conveyancing Act. Section 88B provides that when a plan of subdivision is registered by the Registrar-General, all restrictive covenants [page 667] benefiting and burdening land in the plan, and indicated on the plan, become effective and are annexed to the land. Moreover, s 88B requires vendors to indicate all restrictions intended to benefit and burden lots on the plan. But, in the absence of registration in this way, is it possible for building schemes to create enforceable rights under the Torrens system? In Re Louis and the Conveyancing Act,100 a majority of the New South Wales Court of Appeal held that the Torrens system poses no obstacle to the operation of schemes of development as long as two conditions are met. First, the instrument creating covenants must express an intention that every lot in the scheme will be benefited; and second, the requirements of s 88(1) must be complied with — that is, the covenant must clearly indicate the benefited and burdened land. Compliance with s 88(1) is necessary in any case to enable the covenants to be recorded under s 88(3). Re Louis would appear to be at odds with the general principle underpinning the Torrens system: that the Register reflect as fully as possible all interests in the land. However, the result in Re

Louis is consistent with other aspects of the enforcement of covenants under the Torrens system; for instance, it is necessarily the case that some matters unrecorded on the Register are relevant to the enforceability of covenants, such as whether an actual benefit flows to land from a particular covenant.

Formal Requirements for the Creation of Freehold Covenants Old system title 13.38 As the burden of a covenant over freehold land does not run at law, such a covenant does not constitute a legal interest in the covenantor’s land. The use of a deed is, therefore, not essential in the creation of the covenant. However, as the burden of a restrictive covenant can run in equity, a restrictive covenant is an equitable interest in the covenantor’s land, so it must meet the requirements for the creation of equitable interests.101 By s 23C(1) of the Conveyancing Act 1919 (NSW), an equitable interest must be created by writing signed by the person entitled to the interest.102 Equitable interests can also be created by the doctrine of part performance.103 As we have seen above, s 88(1) of the Conveyancing Act imposes substantive requirements on the creation of covenants. Significantly, the section relates only to ‘restrictions’, so it would appear to have no bearing on the creation of positive covenants. In the absence of a clear indication of the lands burdened and benefited, a covenant will not be enforceable by or against successors in title of the original parties to the covenant. As s 88(1) is concerned only with successors in title, the original parties to the covenant are unaffected by the [page 668] provision. They may, therefore, rely on the general rule that surrounding circumstances may be adduced to identify the land intended to be benefited by the restrictive covenant.104

Torrens title 13.39 Where a restrictive covenant is created on the transfer, the covenant can be incorporated into the approved form of transfer. Otherwise, the covenant should be created by written agreement — often by deed. The Registrar-General can then be requested, under s 47(1) of the Real Property Act 1900 (NSW), to record the particulars of the restrictive covenant on the Folio of the burdened land.105 As they are equitable interests in land, unregistered restrictive covenants may be protected by the lodgment of a caveat noted on the title of the covenantor.106

Section 88B of the Conveyancing Act 13.40 By s 88B of the Conveyancing Act, when a plan of subdivision is registered by the Registrar-General, all restrictive covenants benefiting and burdening land in the plan, and indicated on the plan, become effective and are annexed to the land. This provision also applies to Torrens title.

Remedies 13.41 The covenantee and those of his or her successors in title to whom the benefit of the covenant has run can sue the original covenantor in damages in the event of a breach. In equity, the remedy of an injunction may also be available. While the courts are often reluctant to order the demolition of structures which have been built in breach of covenant, courts will award mandatory injunctions.107 Courts also have the power to award damages instead of an injunction.108 They will normally award damages if: the injury to the plaintiff’s legal rights is small; the injury is capable of being estimated in money; the injury can be adequately compensated by a monetary payment; and the case is one where it would be oppressive to grant an injunction.109 [page 669]

The remedy of injunction may not be available where the usual discretionary bases for denying equitable remedies apply; for example, where the plaintiff has delayed in asserting his or her rights, where an injunction would cause hardship, or where the balance of convenience would suggest denial. If the person entitled to the benefit seeks to enforce the covenant against a successor in title, he or she must establish that the covenant is restrictive and that the equitable requirements for the running of the burden have been met. And, because the restrictive covenant is an equitable interest, only equitable remedies are available to protect it. The court may grant a mandatory injunction where a defendant acts ‘in flagrant disregard’ of the plaintiff’s rights. So, where a building was constructed in breach of covenant in order to block the plaintiff’s view of the sea, the court ordered demolition.110 A remedy of damages in this instance would merely have allowed the defendant to compulsorily purchase the right to build.

Modification and Extinguishment of Covenants 13.42

Covenants may be modified or extinguished in four separate ways:

1.

express agreement;

2.

implied agreement;

3.

merger; or

4.

an order of the Supreme Court under s 89(1) of the Conveyancing Act 1991 (NSW).

Additionally, the operation of a covenant may be suspended pursuant to s 28(2) of the Environmental Planning and Assessment Act 1979 (NSW).

Express agreement 13.43 The holder of the benefit of a covenant may modify or extinguish the covenant by express agreement. A restrictive covenant is an equitable interest in land, so the holder of the benefit of the covenant must comply with the formalities necessary for dealing with equitable interests.111 In the case of land under the Torrens system, s 88(3)(a) of the Conveyancing Act gives the

Registrar-General power to delete or amend any recording of a covenant on the Register if the parties have agreed to modify or extinguish it.

Implied agreement 13.44 The owner of burdened land may also be impliedly released from his or her obligations under the covenant by the conduct of the covenantee. The covenant may be modified or extinguished if the conduct can be seen as amounting to an implied agreement to do so. An example of such conduct would be a clear breach of the covenant over a substantial period of time which is inconsistent with the survival of the covenant, or which the covenantee and his or her successors in title have ignored. In Chatsworth Estates [page 670] Co v Fewell,112 the plaintiffs’ predecessors in title sold a house and land to the defendant’s predecessor in title, who covenanted not to use it ‘otherwise than as a private dwelling-house’. Other purchasers also bought land from the plaintiffs and their predecessors, but breached a covenant expressed in the same terms. The defendant, without consent, opened a guest house. His defence was that the covenant was not enforceable for two reasons: first, that a change in the neighbourhood had been brought about by the conduct of the plaintiffs and their predecessors in title in not enforcing the covenants, so that the covenant had not survived; and second, that they had by their conduct impliedly released the defendant from his obligation. The court held that the covenant was still enforceable. To succeed on the basis of a change in neighbourhood, the defendant had to show that the covenant was completely valueless, which it clearly was not here, given that the estate was largely residential. In order for the defendant to establish an implied release, he had to establish that the plaintiffs and their predecessors had, ‘by their acts or omissions represented to the defendant that their covenants are no longer enforceable’.113 The doctrine is analogous to estoppel. The breaches allowed

were not so extensive and widespread to amount to such a representation in this case. The owner of the burdened land may also seek an order of the court if the benefit is waived. By s 89(1)(b) of the Conveyancing Act, the court may make an order modifying or extinguishing a covenant where those ‘entitled … to the benefit of the restriction … by their acts or omissions may reasonably be considered to have … waived the benefit of the restriction wholly or in part’.

Merger 13.45 When ownership and possession of both the dominant and servient tenements pass to one person, the covenant will be extinguished.114 It follows that, if the land is subsequently severed, the common owner must require an incoming purchaser to enter into a new covenant to retain the original benefit. The doctrine of merger does not apply to covenants over Torrens title land where those covenants are noted on the title.115 Nor does it apply to restrictive covenants created by the registration of a s 88B plan.116 Building schemes are an exception to the general rule, so that where a person acquires both benefited and burdened land, the covenant is suspended until resale.117 The suspension does not affect the rights of holders of other lots in the scheme.118 [page 671]

Statutory extinguishment under s 89(1) of the Conveyancing Act 13.46 By s 89(1) of the Conveyancing Act, the Supreme Court is given power to modify or wholly or partially extinguish a restriction as to user. The power under s 89(1) can be exercised if the court is satisfied that: there has been a change in the user of any dominant land, or in the character of the neighbourhood, or other circumstances renders the easement obsolete; or

that the continued existence of the easement would impede the reasonable user of the land subject to the easement, without securing practical benefit to the persons entitled to the easement; or that the persons entitled to the easement have agreed to the easement being modified or wholly or partially extinguished, or by their acts or omissions may reasonably be considered to have abandoned the easement; or that the proposed modification or extinguishment will not substantially injure the persons entitled to the easement. These provisions apply to both old system and Torrens title land.119 The grant of relief under s 89 grounds is discretionary. The court may look at matters such as the: history of the property; conduct of the owners of both the dominant and servient tenements; acts of a prior registered proprietor; and state of the Register.120 13.47 The court’s power to order the modification or extinguishment of covenants also extends to covenants created under s 88B of the Conveyancing Act. In Pike v Venables,121 a prohibition on installing corrugated iron roofs was imposed in an instrument registered under s 88B of the Conveyancing Act. It was held that this should be modified given that parts of the roofs in question had always been in this form, and that the defendants had not objected in the past and did not stand to suffer loss as a result of the modification.

Covenants that are ‘obsolete’ 13.48 Obsolescence is established if the original purpose of the covenant is incapable of continued fulfillment, or the right of way currently serves no useful purpose.122 This involves identification of the relevant neighbourhood and an examination of the evidence in order to determine whether there has been a change between the date of the grant and the time of the application.123 ‘Neighbourhood’ has been held to mean the ‘immediately surrounding area of the dominant and servient tenements’.124 Thus, a covenant has [page 672]

been held to be obsolete where land originally planned to be agricultural has become residential.125 If some benefit accrues to the covenantee from the continued enforcement, the covenant is not obsolete.126

Covenants that impede reasonable use without ‘practical benefit’ 13.49 The second basis involves an assessment of whether or not the continued user would impede the reasonable user of the servient tenement without securing practical benefit to the dominant tenement. In order to establish that the covenant impedes the reasonable user, it must be shown that no reasonable use of the land is possible unless the covenant is modified or extinguished.127 Whether a covenant impedes reasonable use is tested by examining the proposed use of the burdened land by reference to its situation and its surrounding land. Where a covenant restricted building to a height of 33 feet, yet the surrounding land in the central business district had multistorey office buildings on it, any reasonable use of the land would require building beyond this height.128 A covenant will be held to be without practical benefit if there is no present benefit for the dominant owner.129 Examples of practical benefit are: the retention of privacy and seclusion (a covenant prohibiting residential development in a green-belt area);130 and the protection of a view and prevention of traffic increase (a covenant prohibiting the building of more than one single-storey house on land).131 Practical benefit can be shown even if the dominant owner who objects to the application does not directly benefit, as where the retention of a good view over a neighbouring landscape would primarily be enjoyed by others.132

Substantial injury 13.50 A separate basis for an application to the court is that the modification or discharge will not cause substantial injury to the owner of the dominant land.133 A substantial injury is one that has real and present substance, but it need not necessarily be large or considerable.134 In Webster v Bradac,135 McLelland CJ in Eq described the extent of this ground as follows: [page 673]

The kind of injury contemplated in para (c) is injury to the relevant person in relation to his ownership of (or interest in) the land benefited. The injury may be of an economic kind, eg reduction in the value of the land benefited, or of a physical kind, eg subjection to noise or traffic, or of an intangible kind, eg impairment of views, intrusion upon privacy, unsightliness, or alteration to the character or ambience of the neighbourhood. … [I]t is clear that a person may be “substantially injured” within the meaning of para (c) notwithstanding that the value of his land would be unaffected or even increased by the proposed modification.

In Levi v Spicer,136 the court refused to modify a covenant that prohibited the construction of a colourbond structure on a part of the burdened land visible from the street on the basis that to do so would cause substantial injury to the owner of the benefited land. Palmer J held137 that ‘[i]njurious affectation to the appearance of the streetscape in which one’s house is seen’ can come within the concept of injury as outlined in Webster v Bradac.

Suspension of covenants 13.51 Section 28(2) of the Environmental Planning and Assessment Act allows covenants to be overridden by, among other things, a council’s local environmental plan or development consent (in combination with a local environmental plan) to the extent that this is necessary to allow the development of land. However, the covenant is only suspended and not extinguished in this context.138

Reform Positive covenants and freehold land 13.52 There appears to be no compelling reason why positive covenants over freehold land should not be enforceable in the same way as negative covenants. Whatever the original reasons for the rule, no plausible rationale has been advanced for distinguishing between positive and negative obligations in this area of law and not in the law of contracts, for example. There are no sound public policy reasons why an obligation to keep freehold property in a satisfactory state of repair should be enforceable only in contract, while an obligation not to use the land for commercial purposes should have all the legal protection of property. Other areas of land law disregard such a distinction with no apparent negative results. For example, under the Strata

Schemes Management Act 2015 (NSW), positive obligations may be imposed under by-laws enacted by the owners corporation, and the Act itself provides many positive obligations on owners of units.139 Also, as we have seen, in landlord and tenant law the burden of positive covenants passes with the land on assignment of the lease and the reversion, with no apparent problems.140 An additional consequence of the failure of the burden of positive covenants to run in either law or [page 674] equity is that an unfortunate and unjustifiable asymmetry exists in relation to the running of the benefit and burden, in a way that does not happen with easements, for example. The differential regimes for the passing of benefit and burden, in law and equity, add unnecessary complexity to this area of law. Furthermore, to allow positive obligations to run with the land would be consistent with the modern ‘property relativism’ that characterises the contemporary law, whereby landowners are subject to widening obligations in relation to their land in the public interest. Kevin Gray and Susan Gray emphasise that: … a creative tension exists between the need to render land alienable and the need to allow private ordering by consensual arrangement. The stability and convenience of land use secured by durably binding covenants, far from “clogging” or sterilising title, operate to enhance the market value of both the benefited and burdened land.141

One way of achieving this objective would be to allow the burden of covenants, both positive and negative, to run at common law. One simple way of doing so is by means of a reinterpretation or amendment of s 70A(1) of the Conveyancing Act 1919 (NSW). As Turano has recently argued in relation to the equivalent provision in the English legislation,142 to interpret that provision as involving a substantive change in the law so as to annex all burdens to the land — in a way analogous to the recent interpretation of s 70(1) in relation to benefit — would be a simple and effective reform. As a number of law reform proposals have urged, although ignored by legislators, this reform is a pressing, yet simple, one to engineer.

Section 36C of the Conveyancing Act 13.53 Arguably, the doctrine of privity of contract casts too dark a shadow over this area of property law, and so functions to impede the enforceability of covenants after assignment. Given the limited and uncertain ambit of s 36C of the Conveyancing Act, the analogous provision in Queensland appears preferable to assist successors in title of the original covenantee to sue on the covenant. By s 13(1) of the Property Law Act 1974 (Qld), a successor in title may receive the benefit even if he or she was not in existence or not identifiable when the covenant was made. Section 55 of the Queensland Act is also drafted more broadly than s 36C of the Conveyancing Act. Under s 55 of the Property Law Act, as long as the covenant was made for the benefit of any other person, that person may sue on it on acceptance of the promise. It would appear that this provision potentially gives rights to successors in title of covenantees for all covenants relating to land, whether they ‘touch and concern’ the land or not.143 Once it is recognised that it is appropriate for private individuals to reach such agreements, they should be allowed to alter the character of the land, and not to have this [page 675] objective frustrated by restrictive rules of property that allow a later purchaser to take free of the burden. Reasons for preventing such agreements should be based on the public interest, as expressed in environmental, heritage and planning legislation. Moreover, to the extent that statutory mechanisms exist for extinguishment and modification of covenants on the basis of obsolescence, where they cause unreasonable inconvenience to landholders, or where they cease to have any practical benefit, adequate remedies exist to protect successors in title of the original parties to the covenant from covenants that unreasonably hamper use of the land. The familiar, and reasonable, objection — no less relevant to the running of the burden of positive covenants — that more expansive protection of covenants after assignments might lead to more complex conveyancing searches, can be

countered by the argument that with the almost uniform spread of the Torrens system, prospective purchasers can readily examine the benefits and burdens affecting the land. Also, they take free from covenants not noted on the title in the absence of fraud, and so are protected from unregistered covenants. Another useful model for any reform in this area is the Contracts (Rights of Third Parties) Act 1999 (UK). Section 1 of that Act provides that a person may sue on a contract ‘in his own right’ if the contract expressly provides that he or she may do so, or if it ‘purports to convey a benefit on him’. Furthermore, if the contract expressly identifies the third party either by name, or as a ‘member of a class or as answering a particular description’, he or she may sue.144 Importantly, s 1(3) of the UK Act goes well beyond s 36C of the Conveyancing Act in allowing persons so identified to sue even if they are ‘not … in existence when the contract is entered into’.

1.

See 1.56–1.58.

2.

Spencer’s Case (1583) 5 Co Rep 16a; 77 ER 72.

3.

See 13.51.

4.

See 9.101–9.106. C Sherry, ‘The Legal Fundamentals of High Rise Buildings and Master Planned Estates: Ownership, Governance and Living in Multi-owned Housing with a Case Study on Children’s Play’ (2008) 16 APLJ 1.

5.

See Nature Conservation Trust Act 2001 (NSW).

6.

London County Council v Allen [1914] 3 KB 642.

7.

Rogers v Hosegood [1900] 2 Ch 388.

8.

Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500.

9.

Rogers v Hosegood [1900] 2 Ch 388 at 407.

10.

Rogers v Hosegood [1900] 2 Ch 388 at 408.

11.

Renals v Cowlishaw (1878) 9 Ch D 125.

12.

A Bradbrook and M Neave, Easements and Restrictive Covenants in Australia, 2nd ed, Butterworths, Sydney, 2000, pp 291–2.

13.

Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 All ER 371.

14.

Law of Property Act 1925 (UK) s 78.

15.

Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154 at 171.

16.

See, eg, Crest Nicholson Residential (South) Ltd v McAllister [2004] 1 WLR 2409.

17.

Roake v Chadha [1984] 1 WLR 40.

18.

Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154.

19.

Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500.

20.

See 13.20.

21.

Rogers v Hosegood [1900] 2 Ch 388.

22.

Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500.

23.

Shropshire County Council v Edwards (1982) 46 P & CR 270.

24.

Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154.

25.

Lane Cove Municipal Council v W & H Hurdis Pty Ltd (1955) SR (NSW) 434.

26.

Re Ballard’s Conveyance [1937] Ch 473.

27.

Marquess of Zetland v Driver [1939] Ch 1.

28.

Ellison v O’Neill [1968] 2 NSWR 246; Re Roche and the Conveyancing Act (1960) 77 WN (NSW) 431.

29.

Gyarfas v Bray (1989) 4 BPR 9736.

30.

Application of Fox (1981) 2 BPR 9310.

31.

McGuigan Investments Pty Ltd v Dalwood Vineyards Pty Ltd [1970] 1 NSWR 686. See also Clem Smith Nominees Pty Ltd v Farrelly (1978) 20 SASR 227.

32.

Newton Abbot Co-op Society Ltd v Williamson & Treadgold Ltd [1952] Ch 286.

33.

This provision is discussed in 13.22.

34.

A similar question arises as to the effect of these provisions on transfer of the reversion of a leasehold estate, or the leasehold estate itself. See 11.52 and 11.55.

35.

Kumar v Dunning [1989] QB 193.

36.

By analogy, it has also been found that only rights that touch and concern the land will pass under s 68: Harbour Estates Ltd v HSBC Bank plc [2005] 2 WLR 67. For a full discussion, see P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, pp 521–2, 546–7; D Hayton, ‘Restrictive Covenants as Property Interests’ (1971) 87 LQR 539 at 567 and 570.

37.

See Registrar-General v Cleaver (1996) 41 NSWLR 713.

38.

Beswick v Beswick [1968] AC 58. This is so despite repeated attempts by Lord Denning to interpret the then English provision (s 56(1) of the Law of Property Act (UK)) as abrogating the common law rule: Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500 at 517; Beswick v Beswick [1966] Ch 538 at 556–7.

39.

See, eg, Dalton v Ellis; Estate of Bristow (2005) 65 NSWLR 134 at [43]–[44], in which the party who was intended to benefit under a covenant in a deed was not able to enforce it under s 36C of the Conveyancing Act as the covenant did not purport to have been made with her.

40.

Re Ecclesiastical Commissioners for England’s Conveyance [1936] Ch 430.

41.

Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 12 above, pp 279–80.

42.

Austerberry v Oldham Corp (1885) 29 Ch D 750. For the doctrine of privity of estate, see 11.45.

43.

Tophams Ltd v Earl of Sefton [1967] 1 AC 50; Rhone v Stephens [1994] 2 AC 310. Compare the interpretation of s 70(1) of the Conveyancing Act, which is discussed at 13.4.

44.

For a comprehensive list, see Butt, Land Law, note 36 above, pp 497–502.

45.

For the position in equity, see 13.15–13.28.

46.

Halsall v Brizell [1957] Ch 169.

47.

E R Ives Investment Ltd v High [1967] 2 QB 379.

48.

Thamesmead Town Ltd v Allotey (2000) 79 P & CR 557.

49.

Rhone v Stephens [1994] 2 AC 310 at 322; Thamesmead Town Ltd v Allotey (2000) 79 P & CR 557. The operation of the benefit and burden principle, in particular in relation to positive covenants associated with easements, has been doubted in Clifford v Dove (2003) 11 BPR 21,149 at 21,164.

50.

Now, for example, there must be nothing in the instrument creating the covenant that would rebut the presumption in s 70A of the Conveyancing Act.

51.

Tulk v Moxhay (1848) 41 ER 1143.

52.

Rhone v Stephens [1994] 2 AC 310; Clifford v Dove (2003) 11 BPR 21,149 at 21,163.

53.

Tulk v Moxhay (1848) 41 ER 1143 at 1144.

54.

Haywood v Brunswick Building Society (1881) 8 QBD 403. For a thorough discussion of the various theoretical analyses of the Tulk v Moxhay doctrine, see K Gray and S Gray, Elements of Land Law, 4th ed, Oxford University Press, Oxford, 2005.

55.

Re Nisbet and Potts’ Contract [1905] 1 Ch 391, affirmed [1906] 1 Ch 386.

56.

Haywood v Brunswick Building Society (1881) 8 QBD 403.

57.

Tulk v Moxhay (1848) 41 ER 1143.

58.

In Westpoint Corporation Pty Ltd v Registrar of Titles [2004] WASC 189, a covenant not to develop land further, except to the same standard as and complementary with previous development, was held to be negative.

59.

Re Nisbet and Potts’ Contract [1906] 1 Ch 386.

60.

Wilkes v Spooner [1911] 2 KB 473.

61.

See further, 13.36.

62.

For all of these requirements, see 13.5–13.6. In New South Wales, this principle has been partly modified by statutory reform in the shape of ss 88D and 88E of the Conveyancing Act, which confer on ‘prescribed authorities’ the right to enforce ‘public positive covenants’ regardless of whether the covenant benefits land of the authority.

63.

London County Council v Allen [1914] 3 KB 642.

64.

Kerridge v Foley (1964) 82 WN (NSW) 293. See also Hosking v Haas [2009] NSWSC 624.

65.

See 13.30–13.35.

66.

Re Louis and the Conveyancing Act 1919 [1971] 1 NSWLR 164; Hosking v Haas (No 2) [2009] NSWSC 1328.

67.

For further discussion see Butt, Land Law, note 36 above, pp 548–51.

68.

Rogers v Hosegood [1900] 2 Ch 388.

69.

Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 All ER 371. See 13.4.

70.

Rogers v Hosegood [1900] 2 Ch 388. In Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154 at 170, the High Court said: ‘In dealing with restrictive covenants, equity stipulates that the question whether benefited land is touched and concerned is answered by asking

whether there is the necessary benefit’. See 13.5–13.6. 71.

See 13.22.

72.

See 13.20.

73.

Formby v Barker [1903] 2 Ch 539.

74.

Formby v Barker [1903] 2 Ch 539 at 554 per Romer LJ.

75.

See 13.30–13.35.

76.

Re Louis and the Conveyancing Act [1971] 1 NSWLR 164. See Kerridge v Foley (1964) 82 WN (NSW) 293 at 13.20.

77.

Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 12 above, p 306.

78.

Newton Abbot Co-op Society v Williamson & Treadgold Ltd [1952] Ch 286.

79.

Elliston v Reacher [1908] 2 Ch 374 at 384.

80.

Re Dolphin’s Conveyance [1970] Ch 654.

81.

See 13.35.

82.

Re Dolphin’s Conveyance [1970] Ch 654.

83.

Re Mack and the Conveyancing Act [1975] 2 NSWLR 623 at 630.

84.

Baxter v Four Oaks Properties Ltd [1965] Ch 816.

85.

Re Dolphin’s Conveyance [1970] Ch 654.

86.

Hosking v Haas [2009] NSWSC 1328.

87.

Baxter v Four Oaks Properties Ltd [1965] Ch 816.

88.

Eagling v Gardner [1970] 2 All ER 838.

89.

Texaco Antilles Ltd v Kernochan [1973] AC 609.

90.

See 13.45.

91.

Re Naish and the Conveyancing Act [1960] 77 WN (NSW) 892.

92.

Ferella v Otvosi (2004) 12 BPR 22,191.

93.

Ferella v Otvosi (2004) 12 BPR 22,191 at [17].

94.

See 13.22.

95.

Re Louis and the Conveyancing Act [1971] 1 NSWLR 164 at 180 per Jacobs JA.

96.

The difficulties posed by building schemes and the Torrens system are discussed at 13.37.

97.

See, eg, Ryan v Brain [1994] 1 Qd R 681.

98.

Re Martyn (1965) 65 SR (NSW) 387.

99.

For details of this principle, see 8.21.

100. Re Louis and the Conveyancing Act [1971] 1 NSWLR 164. See also Hosking v Haas (No 2) [2009] NSWSC 1328. 101. See Westpoint Corporation Pty Ltd v Registrar of Titles [2004] WASC 189 at [58]–[61] and [92]. 102. For a discussion of this provision, see 6.22–6.24. 103. Conveyancing Act 1919 (NSW) s 23E(d).

104. Newton Abbot Co-operative Society v Williamson & Treadgold Ltd [1952] Ch 286. 105. Butt, Land Law, note 36 above, p 548, noting Baalman and Wells, Land Titles Office Practice, looseleaf, 5th ed, Lawbook Co, [490,100]. Section 46A of the Real Property Act (NSW) provides that a restrictive covenant can be created by the registration of an instrument, even though the land to be benefited and the land to be burdened are owned by the same person. 106. Blacks Ltd v Rix [1962] SASR 161. 107. For recent cases in which a mandatory injunction was issued, requiring the covenantor to demolish structures, see Evans v Miller [2011] WASCA 89; Wakeham v Wood (1982) 43 P & CR 40. See also P Butt, ‘Demolition of Building Erected in Breach of Covenant’ (2006) 80 ALJ 12, noting the grant of a mandatory injunction by the English Court of Appeal in Mortimer v Bailey [2005] 2 P & CR 9. 108. Supreme Court Act 1970 (NSW) s 68. 109. Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287 at 322–3 per A L Smith LJ. 110. Wakeham v Wood (1982) 43 P & CR 40. 111. Conveyancing Act 1919 (NSW) s 23C(1). 112. Chatsworth Estates Co v Fewell [1931] 1 Ch 224. 113. Chatsworth Estates Co v Fewell [1931] 1 Ch 224 at 233 per Farwell J. 114. Kerridge v Foley (1964) 82 WN (NSW) (Pt 1) 293. 115. Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598. The general law position has been confirmed in relation to restrictive covenants created after the commencement of the Property Legislation Amendment Act 2005 (NSW). Section 47(7) of the Real Property Act now includes restrictive covenants among the registered interests that are not extinguished by the same person becoming the owner of both the benefited and burdened parcels of land. 116. Conveyancing Act 1919 (NSW) s 88B(3)(c)(iii). 117. Texaco Antilles Ltd v Kernochan [1973] AC 609. 118. Texaco Antilles Ltd v Kernochan [1973] AC 609 at 625–6. 119. Conveyancing Act 1919 (NSW) s 89(8). 120. Pieper v Edwards (1982) 1 NSWLR 336 at 340 per Hutley JA; Mamfredas Investment Group Pty Ltd (formerly known as MAM Marketing Pty Ltd) v Property IT and Consulting Pty Ltd [2013] NSWSC 929 at [42] per Slattery J. 121. Pike v Venables (1984) NSW ConvR ¶55-170. 122. Chatsworth Estates Co v Fewell [1931] 1 Ch 224. 123. Mamfredas Investment Group Pty Ltd (formerly known as MAM Marketing Pty Ltd) v Property IT and Consulting Pty Ltd [2013] NSWSC 929 at [35] per Slattery J. 124. Markos v O R Autor (2007) 13 BPR 24,487 at [88]. 125. Re Truman, Hanbury, Buxton and Co Ltd’s Application [1956] 1 QB 261. 126. Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925. 127. Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke [2008] NSWSC 743 at [14] per Brereton J; Mamfredas Investment Group Pty Ltd (formerly known as MAM Marketing Pty Ltd) v Property IT and Consulting Pty Ltd [2013] NSWSC 929 at [38] per Slattery J. The Victorian Supreme Court proffered a more

liberal interpretation of ‘reasonable use’ in Stanhill Pty Ltd v Jackson (2005) 12 VR 224. However, this has been doubted in recent cases and the interpretation of the Victorian provisions would seem to have returned to that adopted in New South Wales: Prowse v Johnstone [2012] VSC 4 at [99]; Grant v Preece [2012] VSC 55 at [67]. 128. Coles Myer NSW Ltd v Dymocks Book Arcade Ltd (1996) 7 BPR 14,638. 129. Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke [2008] NSWSC 743 at [17] per Brereton J. 130. Re Page’s Application (1996) 71 P & CR 440. 131. Re Lee’s Application (1996) 72 P & CR 439. 132. Gilbert v Spoor [1983] Ch 27. 133. Conveyancing Act 1919 (NSW) s 89(1)(c). 134. Frasers Lorne Pty Ltd v Joyce Goldsworthy Burke [2008] NSWSC 743 at [24] per Brereton J. 135. Webster v Bradac (1993) 5 BPR 12,032 at 12,035. 136. Levi v Spicer (2003) 11 BPR 20,927. 137. Levi v Spicer (2003) 11 BPR 20,927 at [23]. 138. For examples of conflicts between Local Environment Plans and restrictive covenants, see Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd [2011] HCA 27; Lennard v Jessica Estates Pty Ltd (2008) 71 NSWLR 306. This provision has previously been dealt with in the context of easements: see further, 12.64. 139. For an overview of this legislation generally, see 9.66–9.128. 140. See 11.47–11.55. 141. See Gray and Gray, Elements of Land Law, note 54 above, p 1353. 142. L Turano, ‘Intention, Interpretation, and the “Mystery” of s 79 of the Law of Property Act 1925’ [2000] Conv 377. 143. For a discussion of the possible effect of s 55 of the Property Law Act (Qld), see Bradbrook and Neave, Easements and Restrictive Covenants in Australia, note 12 above, p 282. 144. Contracts (Rights of Third Parties) Act 1999 (UK) s 1(3).

[page 677]

Chapter 14

Mortgages Introduction Nature of a mortgage 14.1 A mortgage is a type of security interest. Security interests can be divided into three main categories — that is, security by way of: 1.

ownership;

2.

charge; and

3.

possession.1

Security by way of ownership involves the security holder gaining title to the property, but promising to reconvey it when the debt is repaid. Security by way of charge results in the security holder gaining rights over the property, such as the right to sell the property, but it does not give rise to the acquisition of title. Security by way of possession involves the security holder taking possession of the property while the debtor retains title.2 An example of a security by way of ownership is a mortgage of old system title land, while a mortgage of Torrens title land is an example of a security by way of charge. Land sold by instalment reflects the indicia of security by way of possession. Clearly, though, mortgages are not the only types of securities. Pledges, hire-purchases, possessory liens and charges are examples of other securities, but they do not vest property rights in the party to whom the debt

is owed, and they certainly do not transfer title.3 By comparison, the equitable lien, another type of security, vests (equitable) property rights in the relevant party, but does not transfer title. At times the distinction between mortgages and other forms of securities may be muddied, particularly when the term ‘mortgage’ is used so as to include a charge, as it is in the Real Property Act 1900 (NSW). [page 678] 14.2 This chapter will begin by briefly examining securities over chattels, because the legislation that grew out of this area eventually came to impact on certain mortgages over land. The main focus, however, is on mortgages over land, and in that regard the chapter will deal with topics including the history and creation of mortgages, as well as the rights and remedies of the mortgagee, and priorities.

Securities over chattels, hire-purchase, consumer credit law and the PPSA 14.3 Historically, the common law acknowledged security interests over chattels as well as land, but security interests over chattels became less common following the advent of rather complex bills of sale legislation.4 Bills of sale legislation was introduced in England in 1854. It sought to address fraud. Its objective was to prevent a creditor from advancing money to a party who, although purporting to own goods that could provide security, had in fact secretly transferred those goods to another.5 The legislation, therefore, required that transactions which transferred title without possession be recorded publicly. It was complex and unwieldy legislation, particularly as it related to conditional bills (ie, bills used as security).6 The requirement of a public record also led to resistance, because borrowing money against chattels was thought to indicate severe financial embarrassment and many borrowers did not wish such information to be publicly available.7 Nevertheless, despite the difficulties in dealing with mortgages over goods, this type of mortgage came to operate in Australia too, and legislation reflecting the English bills of

sale legislation was introduced in all Australian jurisdictions. Unfortunately, the Australian legislation was both ‘cumbersome’ and ‘unworkable’ from the creditor’s point of view.8 The old Bills of Sale Act 1898 (NSW) was later repealed and replaced by the Security Interests in Goods Act 2005 (NSW). This legislation regulated agricultural mortgages (in Pt 2) and also security interests in other forms of personal property, although it left in place existing schemes for registration of security interests in motor vehicles and boats.9 A major difference from the previous legislation was that it was no longer compulsory to [page 679] register a security interest in goods for the security arrangement to be valid. However, registration did confer priority over unregistered interests in the same goods, or those registered later in time.10 An unregistered security interest might still take priority over one that was registered, if the holder of the unregistered security interest took possession of goods before the registered security interest was registered. Parties could also agree between themselves about priorities.11 This legislation, and much other state legislation regulating security interests in goods, was phased out following the commencement of the new national Personal Property Securities Act 2009 (Cth) (PPSA).12 14.4 The PPSA, which commenced operation on 30 January 2012, is a radical reformulation of the rules governing all personal property interests used as security.13 It was modelled, in part, on similar legislation from the United States (Article 9 of the Uniform Commercial Code (US)), Canada (mostly uniform separate provincial laws), and New Zealand (Personal Property Securities Act 1999 (NZ)).14 The PPSA is federal legislation, constitutionally supported by a reference of powers from all of the individual states.15 Ward JA in Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd)16 described the general nature of the legislation as follows: [T]he “mischief” that the PPSA was intended to address was the uncertainty and complexity of the various statutory and common law regimes applicable to security interests in personal property. The legislature sought to ameliorate this by providing a new national system of

registration of interests of that kind and introducing a system of default rules to determine, among other things, priorities in respect of interests in personal property.17

[page 680] 14.5 The PPSA is challenging for the casual user, as it introduces very specific terminology that is not always consistent with prior usage. The concept of a ‘security interest’ is reasonably clear (though, as noted below, extended in some slightly unexpected ways). The party who has sought the benefit of funds, who might elsewhere be called a ‘debtor’, is usually described as the ‘grantor’ under the PPSA, as they will have ‘granted’ a security interest to the ‘secured party’ (who would previously have been called the ‘creditor’). The personal property the subject of the interest is described as ‘collateral’ when a security interest has been ‘attached’ to it. At that stage, it is enforceable as against the grantor.18 If the security interest is to be enforced against a third party, not the grantor, then the provisions of s 20 of the PPSA must be satisfied, which broadly requires either possession, control or a written security agreement. If the secured party wishes to ensure high priority in any subsequent dispute, it may then ‘perfect’ the security interest in accordance with s 21 of the PPSA. ‘Perfection’ requires that the interest has been attached, that it is enforceable against third parties, and that further steps spelt out in s 21(2) have been taken. The most common of these will be the registration of a ‘financing statement’ on the Personal Property Securities Register (PPSR).19 While the PPSA itself prescribes no time limits for registration, it should be noted that in the case of a corporation seeking to perfect a security interest, s 588FL of the Corporations Act 2001 (Cth) gives companies only 20 days after entry into the arrangement to register it. If registration does not take place in 20 days, the company risks the security interest vesting in the grantor on insolvency, under s 588FL(4).20 Another feature of the legislation is that s 55 of the PPSA sets out the priority to be afforded to competing claims in security interests, which will be relevant in cases of insolvency. In particular, under s 55(3) a ‘perfected’ interest will have priority over one that is unperfected. In Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services

Pty Ltd,21 three large construction vehicles were being leased by Maiden Civil from Queensland Excavation Services (QES).22 In need of finance, Maiden Civil then borrowed funds from a finance company and granted it a security interest, including the machines. (Despite only having a leasehold interest in the property, Brereton J noted that, under s 19(5) of the PPSA, Maiden Civil had ‘rights’ to which a security interest could attach.)23 The finance [page 681] company, Fast, registered its agreement in the PPSR. On Maiden Civil’s insolvency, Fast’s registered security interest was found to take priority over QES’s ownership of the goods. The fact that legal title was still with QES did not overcome the PPSA scheme for priority set out in s 55 of the Act.24 14.6 There are a number of important features of the PPSA regime that impact on the traditional rules relating to property. Perhaps the most significant feature is that security arrangements over goods are covered by the PPSA if the granting of security is the underlying purpose or ‘substance’ of a dealing, even if the form of the dealing does not resemble arrangements previously used for such purposes. The PPSA contains a wide definition of ‘security interest’ in s 12(1) of the Act, referring to ‘a transaction that, in substance, secures payment or performance of an obligation’. Whether or not someone has ‘title’ to property is explicitly said not to be significant.25 But the Act goes even further, by deeming certain transactions to be ‘security interests’ whether or not they are even ‘in substance’ intended to function as security. In particular, under s 12(3)(c) of the PPSA, ‘the interest of a lessor or bailor of goods under a PPS lease’ is deemed to be a security interest. A ‘PPS lease’ includes, under s 13 of the PPSA, a lease or bailment of goods for a term of more than two years or an indefinite term, which actually extends beyond two years.26 (Note that there are some arrangements of this description that are deemed not to be PPS leases. These include where the lessor or bailor is not ‘regularly engaged in the business’ of leasing or bailment, under s 13(2)(a), or where the bailment is not for value, under s 13(3).) 14.7

The impact of s 12(3)(c) of the PPSA can be quite serious, when the

effect of s 267 of the PPSA is taken into account. Under s 267, presumably in order to provide a strong incentive for the use of the PPSA scheme, when the ‘grantor’ of a security interest is wound up, liquidated or becomes bankrupt, and that security interest is not ‘perfected’, it is deemed to ‘vest’ in the grantor immediately before the relevant insolvency event. The effect is that the relevant personal property will become available for distribution in [page 682] the insolvency to creditors, and the secured party will lose the benefit of their security. This is an understandable outcome in the case of a ‘genuine’ security interest, but it seems to have operated oddly in cases where there has been a ‘deemed’ security interest created by the PPS lease provisions noted above in 14.6. In Power Rental,27 the equipment leasing company GE had intended to lease some mobile gas turbines for a period exceeding one year (the then-relevant time limit). When Forge Group, the lessor, became insolvent, the operation of s 267 was to deem the turbines to have become the property of Forge, with the consequence that the successor of GE lost its security in the turbines altogether. 14.8 The PPSA is a replacement for a range of separate schemes that governed security interests over different forms of personal property. It covers both tangible and intangible interests.28 It does not cover interests in land, of course, which are still regulated by the law on real property mortgages that we will be discussing in the rest of this chapter.29 However, a number of personal property interests are excluded from the operation of the Act under s 8 of the PPSA, including ‘fixtures’.30 The term ‘fixtures’ is defined in s 10 as ‘goods, other than crops, that are affixed to land’. In Power Rental, the New South Wales Court of Appeal had to determine whether the term as defined was intended to bear its general common law meaning (for a discussion of the general law of fixtures, see 2.16ff), or a narrower meaning simply based on some form of physical ‘affixation’. Ward JA, for the court, held that Parliament had intended to pick up the common law definition.31 As a result,

applying the common law principles, it was held that the turbines in question were not ‘fixtures’; the result was that the PPSA applied to the transaction, and for the reasons noted above (in 14.7), Power Rental lost its priority in the relevant insolvency process. 14.9 One issue that has seen some confusion has been the proper identification of parties for the purposes of the PPSR. In Re OneSteel Manufacturing Pty Ltd (admins apptd),32 Brereton J held that where the registration of a security interest had been made using the ‘Australian Business Number’ (ABN) of the grantor, rather than its ‘Australian Company Number’ (ACN), the registration was ineffective. As the interest of a leasing company in expensive crushing equipment had not been ‘perfected’ (due to this defective registration), prior to the insolvency of OneSteel, the equipment vested in the liquidators and the [page 683] leasing company lost its security pursuant to s 267 of the PPSA (see 14.7).33 His Honour also rejected a wider argument that this vesting amounted to an ‘acquisition of property’ on unjust terms contrary to s 51(xxxi) of the Commonwealth Constitution.34 14.10 The PPSA sets out a number of situations where a third party acquiring personal property may ‘take free of’ any relevant security interests, in Pt 2.5 s 42ff. Some of the main situations are where a purchaser of an ‘unperfected’ security interests takes for value (s 43), where property items required to be described by a serial number are misdescribed and would not be discovered on a search (s 44), or a sale of a chattel in the ordinary course of business (s 46). Reference should also be made to the enforcement provisions of the PPSA contained in Ch 4 (ss 107–144). Enforcement mechanisms include notice provisions, seizure and disposal of chattels, or retention and purchase in appropriate cases. The enforcement mechanisms are only available in the case of ‘true’ security arrangements, however, and are not applicable to PPS leases that do not actually secure payment or performance of an obligation (see s 109(1)(c)).

14.11 In the consumer credit sphere, in the early to mid-1800s, both in Europe and the United States of America, the hire-purchase agreement gained a foothold. It became the most common form of purchasing chattels for those without immediate funds to cover the total purchase price. Interestingly, however, the hire-purchase arrangement did not have its genesis in providing the opportunity for the poor to purchase goods in a more flexible way. Instead, its roots lay in the activities of the European nobility.35 14.12 The popularity of the hire-purchase arrangement spread to Australia. Hire-purchase agreements became and remained popular for the best part of a century, but their popularity declined, particularly after the introduction of discriminatory stamp duties legislation.36 The result of this legislation was to push lenders into other forms of credit, one of which was the unregistered chattel mortgage.37 Further, largely as a result of the work of the Rogerson and Molomby Committees — and inspired by the United States’ Consumer Protection Act 1968, known as the ‘Truth in Lending’ Act — changes [page 684] to consumer credit law were recommended and took place.38 For example, the Credit Act 1984 (NSW) broadly incorporated many of the recommendations contained in these reports. Although the Credit Act was part of a positive attempt to develop a uniform credit code, the legislation had its weaknesses and in 1993 New South Wales, along with the other states and territories, entered into the Australian Uniform Credit Law Agreement. The aim of this agreement was to introduce uniform credit legislation based on a template. As a result, in most Australian jurisdictions, uniform consumer credit legislation was in place from 1 November 1996. In New South Wales, the relevant legislation was the Consumer Credit (New South Wales) Act 1995 (NSW). It incorporated the Consumer Credit Code contained in an appendix to the Consumer Credit (Queensland) Act 1994 (Qld) and the Regulations. More recently, however, there has been a further shift that has seen consumer credit regulated since 1 July 2010 under federal law, the National

Consumer Credit Protection Act 2009 (Cth), which contains the ‘National Credit Code’ (NCC) in a Schedule. In particular, there are now a number of rules governing common forms of lending that have seen consumers take on obligations without properly understanding them.39 Since 1 January 2012, there are now also obligations on both credit card providers and those providing home loan mortgages to provide a ‘Key Facts Sheet’ before the transaction is entered into.40 The NCC applies to chattels and mortgages over land, where the mortgagor (the person taking out the loan) is a person or a strata corporation, and where the mortgage secures obligations under a credit contract or guarantee.41 The loan must be made in the course of the lender’s business in order to come under the NCC, which applies where the loan is wholly or predominantly for personal, domestic or household purposes.42 Unlike the previous Code, the NCC will also apply to loans for purchase, renovation [page 685] or improvement of residential investment properties.43 The NCC, therefore, will extend to the mortgage (or guarantee) for a loan if the loan is secured by a domestic residence or vacant block of land that is purchased for residential occupation, or for investment purposes. The mortgage will also need to be in writing and signed by the mortgagor if the NCC is to apply.44 Further, it is possible for it to cover both fixed mortgages and reducible loans. The NCC is applicable where the lender is a party who operates as a business, even though the consumer or borrower does not. There may be situations where the NCC applies to a ‘security interest’ covered by the PPSA. Note that arrangements previously described above as ‘hire purchase’ are now regulated as ‘security interests’ under the PPSA.45 The interaction between the NCC and the PPSA is governed by s 119 of the PPSA, which provides that the Regulations may deem certain requirements of Ch 4 of the PPSA to have been satisfied by compliance with equivalent provisions of the NCC.46 The NCC will be relevant to consumer mortgages of real estate in various ways, which will be briefly noted in the remainder of this chapter.

Mortgages over land History 14.13 The term ‘mortgage’ derives from Old French, where ‘mort’ meant dead and ‘gage’ meant pledge. Early forms of mortgages were known as ‘pledges’ or ‘gages’.47 They pledged land to the creditor, who went into possession. Under some pledges, the creditor was obliged to remit the income from the land in order to pay off the principal that was owed. Under other pledges, the creditor in possession was entitled to retain the income as a form of interest payment. This latter method meant that the principal under the debt was never reduced, and the arrangement was known by the Latin phrase mortuum vadium. In essence, this meant a ‘dead pledge’.48 By the mid-13th century, the pledge often took the form of the creditor leasing the land. If the debt were not repaid on expiration of the lease, the creditor acquired the fee simple estate. Of course, this meant that while the lease was in operation, the creditor did not hold seisin, because he or she was merely a lessee. Without seisin, he or she did not have access to the real actions.49 There was also further dispute about whether, by virtue [page 686] of a mortgage, a leasehold could blossom from a lease into a fee simple estate.50 These disadvantages were overcome when the mortgage was refined so that it operated as a form of conveyance that, on payment of the debt by the debtor, permitted the debtor a right of re-entry. Further refinement took place, so that, by the 17th century, the property was conveyed to the creditor but with a right to reconveyance, on repayment of the debt, on the due date. The conveyance to the creditor was defeasible by the condition subsequent relating to repayment. The mortgage had been shaped into a conveyance, with a proviso for reconveyance or a proviso for redemption. As a result, the basis for old system mortgages was formed. The old system mortgage that was popular in Australia now, in the main, has been replaced by mortgages operating under the Torrens system.51 Where land has not yet been brought under the Torrens scheme, old system mortgages may still operate.

It is also vital to understand old system mortgages as part of the background to those under the Torrens system. It has been suggested, for example, that where unregistered mortgages of Torrens system land are involved, the court may need to look to the ‘practice and principles which were developed in accordance with old system land’ to find appropriate remedies.52

Old System Title Mortgages Creation of legal and equitable mortgages over freehold land 14.14 A mortgage of land under old system title may be either legal or equitable. If it is an equitable mortgage, it may in turn be either an equitable mortgage of legal property or an equitable mortgage of equitable property. These different scenarios are explored below. 14.15 Under old system title, a legal mortgage involves the mortgagor (borrower) conveying his or her legal estate in land to the mortgagee (lender) as security for money borrowed. As part of the arrangement, the mortgagee agrees to reconvey the mortgagor’s title to the property when the debt is repaid in full, including any interest and charges owed. The key sections of the Conveyancing Act 1919 (NSW) are s 7 (which defines a conveyance as including ‘any assignment, appointment, lease, settlement, or other assurance by deed of any property’) and s 23B (which sets out the requirement of a deed). Section 38 (which relates to the signature and attestation of deeds) and s 46 (which provides that the word ‘grant’ is unnecessary to convey land) are also relevant. Historically, it was quite usual for the repayment date to be set very soon after the loan had been granted (eg, six months later). Not surprisingly, few mortgagors could repay so quickly and hence they fell into default (and breach). Such circumstances were advantageous to the [page 687]

mortgagee because, at law, the mortgagor lost the right to have his or her title reconveyed. In these circumstances, equity would intervene in order to temper the rigours of the common law. Its approach was to see the transaction as one by which security was provided to the mortgagee. Once the debt had been repaid, the security was no longer necessary, and the mortgagee had to release his or her hold over title to the mortgagor’s land. 14.16 As an old system legal mortgage requires the mortgagor to pass legal title in the property to the mortgagee, no second mortgage of the legal estate is possible, because of the principle nemo dat non quod habet: the mortgagor, having transferred his or her legal estate, has nothing left to transfer except his or her equity of redemption. Hence, that is all that can be mortgaged under a second or subsequent mortgage. The mortgagor retains an equity of redemption, subject to the first (legal) mortgage and subject to the second (equitable) mortgage. The second mortgage is an example of an equitable mortgage of equitable property. It is also possible for the mortgagor to create a third or subsequent (equitable) mortgage, because the original mortgagor retains an equity of the equity of redemption, albeit one that is diminished or charged by earlier mortgages. The earlier mortgages do not result in the complete loss of the equity of redemption. Where the conveyance of the legal interest is incomplete, the mortgagee can, at best, acquire rights in equity, also known as an ‘equitable mortgage’. For example, if a deed has not been properly executed, but writing exists in the form of an express or implied contract signed by the party to be charged, an equitable mortgage may be found, on the basis of sufficient intention to create a security over legal property.53 If there is an express agreement to create a mortgage, evidenced in writing and accompanied by consideration, equity will uphold the agreement as a mortgage — applying the Walsh v Lonsdale54 principle, which enforced the maxim that equity looks on that as done which ought to be done.55 This situation provides an example of an equitable mortgage of legal property. A mortgage by deposit of title deeds is another example of an equitable mortgage. It arises, however, by virtue of part performance.56 If there is a debt and the borrower hands over title deeds to a lender, an equitable mortgage will be created, subject to evidence of any contrary intention. This is the case

despite the fact that the handing over of the title deeds may well be intended as a step preliminary to the creation of a legal mortgage. The result is that the equitable mortgage secures the existing debt.57 [page 688] Redemption is another concept imperative to an understanding of old system mortgages. It is the right of the mortgagor to redeem his or her interest from the mortgagee. Foreclosure is a related concept and is discussed later in this chapter. It extinguishes the right of redemption.

Mortgage of leasehold 14.17 A mortgage of leasehold land may arise by virtue of an assignment of the whole unexpired term of the lease, combined with a proviso for redemption, or it may arise by virtue of a sublease. The first method has the effect of imposing restrictions on the mortgagee, because it makes the mortgagee the assignee of the mortgagor’s leasehold interest. A mortgage by this method requires a deed and binds the mortgagee to the covenants in the original lease.58 Some of the disadvantages that flow as a result of this have been tempered by the operation of s 78(1)(D) of the Conveyancing Act, which implies a series of covenants, such as those stating the lease is valid, all rents have been paid and all other covenants performed. Despite the improvements achieved by s 78(1)(D), the latter method of creating a mortgage of leasehold land (ie, by sublease) has remained more popular than a mortgage by way of assignment. Mortgages by sublease operate by way of grant to the mortgagee of a term, just short of the residue, of the lease. The sublease usually also contains a proviso, the effect of which is to cause a surrender by the mortgagee on repayment of the debt. The benefit of this method is that the mortgagee, in obtaining a sublease, is not liable for the covenants in the original headlease. Although there are some disadvantages as well (not the least of which is that, if the headlease is forfeited because a covenant has been breached, the sublease will fall with it), these have largely been overcome by statute.

For example, s 130 of the Conveyancing Act mitigates the problems concerning forfeiture of the headlease by granting the court a discretion to grant relief, while s 112(2) overcomes another disadvantage where, in the case of breach, the mortgagee wishes to exercise the power of sale but is impeded by his or her inability to pass the whole leasehold interest to the purchaser. This latter section allows the mortgagee to convey the reversion that is in the mortgagor’s hands.59

Torrens Title Mortgages Creation of registered and unregistered mortgages over freehold land 14.18 A mortgage under the Torrens system of land-holding operates by way of a statutory charge or security for the debt being entered into, and must be executed in [page 689] an approved form.60 It does not operate as a transfer of the land mortgaged or charged. However, once registered, the mortgagee receives all the benefits of indefeasibility of title, despite the fact that the charge does not amount to an estate in land.61 A registered mortgage of Torrens title land is not the equivalent of a legal mortgage of old system land, because the mortgagee does not acquire the mortgagor’s legal title to the land, but rather acquires a legal interest in the form of a charge.62 That a mortgagor under the Torrens scheme does not transfer his or her title to the mortgagee means that there is nothing preventing him or her from creating a string of subsequent registered or unregistered mortgages. Subsequent mortgages under the Torrens scheme are not limited to mortgages of a mere equitable interest, as they are under old system title. Instead, a subsequent mortgage under the Torrens scheme operates by way of a charge over the registered interest in the same way as the original mortgage operates.

However, express terms in the original mortgage may prohibit the creation of subsequent mortgages. A breach of such a prohibition would not result in the subsequent mortgage being invalid but, rather, in a breach of the terms of the original mortgage, with all the consequences of that breach.63 Further, it is also the case that an equitable mortgage of Torrens title land can still be created. It can be in the form of an equitable mortgage of a registered interest in property, or an equitable mortgage of equitable property. Equitable mortgages are governed by the provisions of the Conveyancing Act 1919 (NSW) while registered mortgages are governed by the Real Property Act 1900 (NSW). 14.19 Equitable mortgages of registered interests in Torrens title property may be created by various methods. Sometimes (incorrectly) called ‘equitable mortgages of legal estates’, these methods include: the completion and execution of a mortgage instrument in statutory form that is not registered;64 an implied agreement to give a mortgage, such as a deposit of the Folio of the Torrens Register as security for money advanced;65 and the express but informal agreement to give a mortgage.66 [page 690] An example of an equitable mortgage of an equitable interest in Torrens title property would be the mortgage of a beneficiary’s interest in Torrens title property held under a trust. An equity of redemption also exists under the Torrens system, although this is technically an incorrect use of the term imported from old system title, as the position of the Torrens title mortgagor is not really analogous to the position of the old system title mortgagor.67 For example, as noted previously, on entering into a mortgage, the mortgagor of Torrens title land does not convey his or her title, so he or she never has to redeem that title on repayment of the debt.68 Unlike the mortgagor of old system land, the Torrens mortgagor is effectively left with more than an equity of redemption. He or she is left with a title over which there is a charge. Of course, to the

extent that the Torrens mortgagor is able to seek the assistance of equity in enforcing rights similar to those held by a mortgagor of old system title land, such as the right to redeem after the passing of the contractual date for payment, the term ‘equity of redemption’ is appropriate. 14.20 As is the case under old system title, it is possible to execute a registered transfer of Torrens title land with the intention of merely securing a debt. This is the case because equity looks beyond form to the intention of the parties and, where the intention to create a security, rather than an absolute transfer, is evident, equity will uphold that intention. Hence, the transaction may be held to amount to a security only; albeit a security which vests an equity of redemption in the mortgagor.69 Such a security can be protected by an injunction or caveat.70 Given that the Real Property Act requires that mortgages are executed and registered in the approved form, it is somewhat surprising that securities by way of absolute transfer of Torrens land are upheld.71 One explanation for this is that a failure to uphold them would usually serve only to disadvantage the mortgagor.

Creation of mortgage of leasehold 14.21 Although the above discussion focused on freehold land, it is possible to mortgage leasehold land under the Torrens scheme, because the definition of ‘land’ in s 3 of the Real Property Act includes ‘any estate or interest’ in land, and ‘mortgage’ is defined as [page 691] ‘any charge on land … created merely for securing the payment of a debt’.72 If leasehold land is mortgaged, the mortgage takes effect as a statutory charge, and the usual remedies (such as the power of sale and foreclosure) are available to the mortgagee.73 Section 64 of the Real Property Act deals with the issue of the liability of the mortgagee in possession to the lessor. It provides that the mortgagee in receipt of rents and profits is subject and liable to the lessor.74

Crown land mortgages 14.22 Crown land that has not been alienated can be held in three ways. It can be: (i) purchased; (ii) held under a lease in perpetuity; or (iii) held under a fixed-term lease. Where Crown land is purchased, it will, on completion, be regulated by the Real Property Act.75 Once a certificate of title has been issued, the land can be disposed of and mortgaged like any other land falling under the Torrens scheme; that is, pursuant to the Act.76 Where the Crown land is land that has not been the subject of a grant, the position is rather complex. Clearly, ss 145A(6A), 261A, 270(3) and 274(3) of the Crown Lands Consolidation Act 1913 (NSW) accepted that such mortgages existed, as did the case of Hayward v Smith,77 but the Act did not provide for a statutory mortgage. The result is that these non-statutory mortgages operate by way of transfer.78

Clogs on the Equity of Redemption79 Introduction 14.23 The mortgagor’s right to have his or her property returned unburdened, after the amount owing under the mortgage has been paid, is a key aspect of a mortgage. The court will not permit this fundamental principle to be subverted. It protects the right by not tolerating clogs or fetters on the equity of redemption.80 Hence, if mortgage [page 692] instruments contain terms that deny a mortgagor the right to redeem his or her property on repayment of the debt, set the redemption date so far into the future that redemption becomes illusory, or fetter the property with oppressive collateral terms that extend beyond redemption, they will be held void.81 Such terms are known as ‘clogs on the equity of redemption’ and, where they are found, equity will ignore the formal terms of the agreement and permit the mortgagor to redeem on repayment.82

Naturally, in protecting the position of the mortgagor, equity will not disregard the rights of the mortgagee by permitting the mortgagor to repay the debt at any time. Nor will equity simply accelerate the redemption date to suit the mortgagor. For example, the right to redemption may be postponed, even for a reasonably long period, provided the essential nature of the mortgage remains intact and the mortgagor does not serve to acquire some collateral advantage, such as an exclusive dealership or the advantage of becoming an exclusive supplier.83 The following sections discuss some of the circumstances in which clogs on the equity of redemption have been held to arise. As is noted below, however, there has in recent years been a move in Australia away from the somewhat formalistic approach adopted in earlier cases, towards a position that ‘unconscionability’ is the essence of equity’s jurisdiction in this area.84

Extinguishment of the right to redeem 14.24 A mortgage will not be valid if it contains terms, the effect of which is to deny the mortgagor the opportunity to redeem. Neither will equity countenance a mortgage that impedes or is designed to prevent redemption.85 Hence, a term in a mortgage permitting the mortgagee the right to purchase the property before the date on which the mortgagor’s right to redeem is reached will not be valid. A term that reserves an interest in the property to the mortgagee after the exercise of the right to redeem will also be invalid.86 A phrase that is commonly used to explain this approach is ‘once a mortgage, always a mortgage’. It means that if the agreement has been construed as a mortgage, equity will not abide any provision which is inconsistent with that, particularly any provision that prevents or restricts the right to redeem.87 [page 693]

Postponement of the right to redeem 14.25 It is acceptable for the mortgagee to impose terms denying a right of redemption before a certain date, but this date must be reasonable. Factors

such as the nature of the security, the accepted practice for mortgages of the particular type and the reasonable expectation of the mortgagor all contribute to determining what is a reasonable time.88 For example, it may be unreasonable for the mortgagee to set a very early date by which the debt has to be repaid and also set a date to redeem which is a very long way into the future. However, the dates alone will not be determinate, as can be seen by comparing the cases of Morgan v Jeffreys89 and Davis v Symons.90 In the former, a preclusion of redemption for 28 years was held void; in the latter, a preclusion of redemption for 20 years was found to be valid. Where postponement of the right to redeem is so far into the future that it is illusory, equity will hold the provision invalid. In Fairclough v Swan Brewery,91 the mortgagor had a lease with 17 years to run, and entered into a mortgage which permitted only monthly instalments for the next 17 years. To all intents and purposes the lease would expire when the mortgage did. The court found that the right to redeem was nugatory because the mortgagor had the property returned to him only when his interest in the property had all but expired. The court did not find the whole mortgage invalid. Instead, it dealt with the problem by bringing forward the date of redemption. Yet this area of law is not renowned for its consistency, and it is notable that in Santley v Wilde92 a covenant which stipulated payments to be made after the date of redemption, and thus precluded return of the property in its unfettered pre-mortgage state, was held valid. 14.26 Knightsbridge Estates Trust Ltd v Byrne,93 another key case in the area, sought to clarify some of the uncertainty surrounding clogs. In that case, the mortgagor was effectively required to pay off the debt over 40 years (80 halfyearly instalments). The English Court of Appeal held that a provision that attempts to postpone the contractual right for redemption is void, as a clog, only where this results in redemption becoming illusory or it is oppressive or unconscionable to do so.94 On the facts of this case, the requirement did not amount to a clog. The 40-year period was not regarded by the court as oppressive or unreasonable. Merely postponing the right to redeem does not amount to a clog. [page 694]

14.27 It should also be noted that statute today may regulate the question as to whether a mortgagor may redeem their loan before a certain date. A residential mortgage may be governed by the National Credit Code (NCC), and Regulations made under the NCC now forbid the charging of ‘termination fees’ except in carefully defined circumstances.95

Collateral advantages 14.28 A collateral advantage is an advantage that is part of the mortgage but extends beyond the repayment of the loan including interest. An agreement to purchase goods from the lender as a designated supplier, or an agreement to sell only to the lender after the loan has been repaid, are examples of agreements that could amount to collateral advantages arising out of mortgages. This is because their effect potentially is to burden the property after it has been returned to the mortgagor. Historically, all collateral advantages were void, but since changes to the usury laws in the 19th century, some have been permitted.96 If the collateral advantage is only operational until the date of redemption, it will not act to burden the equity of redemption and, therefore, it may be valid.97 Collateral advantages that are regarded as unreasonable will not be permitted.98 14.29 Kreglinger v New Patagonia Meat and Cold Storage Co Ltd99 is a key case in the area. It concerned a lender (Kreglinger) agreeing to lend money to a meat company for a period of five years. The loan was repaid within two and a half years, which was permissible under the agreement, but the issue was whether a trade tie between the lender and the borrower, expressed in the agreement to extend beyond the date of repayment of the debt, was valid. The trade tie was to remain effective until the end of the stated five-year period. It meant that the borrower was to supply the lender with sheepskins at the best price offered by other potential purchasers of skins; if the lender did not wish to purchase any skins, they could be sold to others, but the lender became entitled to a commission on each sale. The borrower objected to the operation of these provisions after the debt had been repaid, but the House of Lords found that there was no clog on the equity of redemption and that the agreement pertaining to the skins was a separate agreement from the loan. Although they may have been contemporaneous, by reference to their

substance rather than form they were found to be independent of each other. The relevant question was, were they ‘in substance a single and undivided contract or two distinct contracts’?100 [page 695] A similar issue, but in reverse, was raised in Toohey v Gunther,101 where the High Court held that if separate documentation existed, but in substance it formed the one agreement, equity would treat the documents as forming part of the one transaction. 14.30 Noakes & Co Ltd v Rice102 also dealt with collateral advantages. There, a holder of a leasehold ‘public house’ mortgaged the lease to a brewery for 26 years, and also agreed to purchase his malt from the brewer while the lease remained on foot, even if the mortgage had been repaid. The House of Lords found, in these circumstances, that a clog on the equity of redemption did exist. The interest in the land the mortgagor received on repayment of the debt was fettered. In the words of Lord Halsbury, the equity of redemption was clogged: … by the continuance of an obligation which would render this [public house] less available in the hands of the [tenant] during the whole period and beyond the whole period of the term.103

Lord Macnaghten spoke similarly. He said: … when the money secured by a mortgage of land is paid off, the land itself and the owner of the land in the use and enjoyment of it, must be as free and unfettered to all intents and purposes as if the land had never been made the subject of the security.104

Biggs v Hoddinott105 involved another trade tie. There, a publican also mortgaged his property to a brewery. The mortgage was for a period of five years and the mortgagor was precluded from paying out the loan earlier. One of the provisions of the mortgage was that the brewery would supply all beer sold on the premises. Unlike Noakes’ case, this was not held to be a clog on the equity of redemption because the trade tie did not extend beyond the time by which the debt had to be repaid; that is, five years. 14.31 The operation of the clog on the equity of redemption was more subtle in the case of Bradley v Carritt.106 That case did not concern a mortgage

over land, but a mortgage over shares. In the context of collateral advantages, the principles apply equally to shares as land. In this case, the mortgagor was the majority shareholder in a tea company. He mortgaged his shares, agreeing to use his best endeavours to persuade the tea company to use the mortgagee as the company’s broker for selling its tea. It was also agreed that, where the company used another broker, the mortgagor would himself pay a commission to the mortgagee in lieu of the earnings lost to the mortgagee because another broker was chosen. The House of Lords held that this amounted to a clog on the equity of redemption, and that it could not be enforced beyond the date of repayment of the debt. Clearly, the mortgagor’s obligation to use his best endeavours was a personal and not a proprietary obligation, and hence did not overtly reduce the value of the shares; but, in practical terms, the mortgagor could uphold his agreement to use his best endeavours only [page 696] if he remained the majority shareholder. The effect was to limit his ability to alienate his shares freely. Such an interpretation of events would suggest that the law on collateral agreements was back in the pre-usury law days, those laws being repealed in 1854.107 That is, virtually no collateral agreements will be tolerated. The law on collateral agreements was somewhat inconsistent and unpredictable until recent developments noted below.108 It seems to be established, however, that if a transaction is in substance not a mortgage, but something else, then the ‘collateral agreements’ rule will not operate.109 In Wily as Administrator of Macquarie Medical Holdings Pty Ltd v Endeavour Health Care Services Pty Ltd,110 it was held that the mortgage in question was secondary to the ‘real purpose’ of a transaction, which provided an option to purchase. It was relevant that the mortgagee was not a financial institution but a company involved in running medical practices. Hence, the option was not a ‘clog’ on the equity of redemption. In fact, it seems that in more recent years in New South Wales the courts have moved away from the old rules about ‘clogs’ to a different approach recognising changed circumstances. Where Kreglinger v New Patagonia Meat and

Cold Storage Co Ltd111 suggested that there were three circumstances in which a ‘collateral benefit’ obtained by a mortgagor would be regarded as an invalid clog on the equity of redemption, a series of decisions stemming from dicta of Young J in Westfield Holdings Ltd v Australian Capital Television Pty Ltd112 seem to have now moved the law to the position that such a benefit will only be regarded as invalid in the first of those circumstances, where the collateral advantage is ‘unconscionable’.113 In Lift Capital Partners Pty Ltd v Merrill Lynch International,114 Barrett J reviewed the recent history of decisions and concluded that: [page 697] It cannot be said today that a contractual provision freely assented to by a mortgagor is void or unenforceable just because it allows the mortgagee to acquire the mortgaged property or to resist that mortgagor’s attempt to redeem. The susceptibility of such a provision to equitable intervention is, however, well established. In a given case, equity will prevent reliance on the provision by the mortgagee if that reliance is unconscientious because of some factor associated with the formation of the contract or something distinct from mere changed circumstances or supervening event operative at the time of reliance.115

However, it should be noted that in a recent Queensland decision, the move towards ‘unconscionability’ being the sole criterion to be used in judging whether a collateral agreement amounts to a ‘clog’ was doubted. In Sun North Investments Pty Ltd (as Trustee of Sun Development Trust) v Dale,116 Henry J reviewed the New South Wales decisions noted above, but took the view that there was still binding authority from the Privy Council in Fairclough v Swan Brewery Co,117 which had not been overruled by the High Court, requiring the courts to recognise certain types of arrangements as ‘clogs’ even in the absence of a separate examination of unconscionability. In the Sun North case, the relevant contract, as an option to purchase given as part of a mortgage transaction, was inconsistent with the mortgagor’s equity of redemption under previous authority.118 Nevertheless, it seems clear that in New South Wales the views of Young J in Westfield Holdings are preferred on this question at the moment: see Re Funds in Court; Application of Mango Credit Pty Ltd.119

Other covenants 14.32 A covenant that requires the mortgagor to pay, on default, an amount greater than the usual amount (consisting of the money borrowed plus interest and other charges) is not enforceable because it is construed as a penalty.120 However, if the extra amount is not linked to a default, the court will characterise it as a bonus or a premium that remains valid.121 Agreements such as these must not be unreasonable, unfair or unconscionable.122 Further, it is acceptable to link the interest repayments to an external index, such as the consumer price index. In this way, the purchasing power of the money lent is better [page 698] retained.123 It is even acceptable to require the mortgagor to repay in a foreign currency, if that has been agreed, despite the fact that alterations to the exchange rate might mean the mortgagor has to repay more than he or she expected.124 Where the amount to be repaid becomes oppressive or unreasonable, equity will intervene, but it will do so only if there is evidence of conduct that is ‘morally reprehensible’.125 Generally speaking, equity will not countenance a mortgage covenant which requires a defaulting mortgagor to repay a higher rate of interest than would usually be due.126 For example, equity will reject a covenant that attaches a higher interest rate to any late instalment. Again, this is because the additional interest is regarded as a penalty. Yet this principle seems not to be breached if the arrangement is reversed and a rate of interest is set which may be reduced on compliance with the terms of the mortgage. Presumably, this is because the arrangement is construed as an incentive rather than a penalty. For example, if a mortgagor punctually repays his or her instalments and is not in breach of any other provisions of the mortgage, the mortgagee may reduce the instalment interest rate as a reward.127 As both these methods result in the mortgagor paying a higher rate of interest if he or she is late in meeting an instalment, it is surprising that equity, a jurisdiction concerned with substance

rather than form, has been prepared to tolerate these seemingly irreconcilable positions.128 14.33 Equity permits a mortgagee to impose an additional fee on a tardy mortgagor, but this fee (fashioned in terms of a higher interest rate) is calculated only from the date of default to the date when the money is paid. It is not a sum arrived at by taking the amount already owed up until the date of default and attaching an extra amount. It follows that it is not a penalty. The interest rate up until the late payment remains the same.129 Another covenant that is sometimes used is one that makes the whole amount owing due when a default occurs. If this requirement of accelerated payment results in the mortgagee being unfairly rewarded, equity will intervene.130 Finally, in dealing with late repayments, the issue of the ‘six-month rule’ sometimes arises. This simply means that, where a mortgagor wishes to redeem after the contractual [page 699] date to redeem has passed, he or she must give the mortgagee six months’ notice of his or her intention to redeem.131 By contrast, sometimes a mortgagor will seek to repay his or her mortgage earlier than the due date. As noted earlier, the general position is that this is not permitted, but there are exceptions. For example, if the terms of the agreement itself (express or implied) permit early repayment, it is acceptable. It is also acceptable if the mortgagee is in breach of the general rules regarding undue suspension of the right to redeem or, more specifically, is in breach of s 93 of the Conveyancing Act. This section provides a statutory right to redeem prior to the contractual date and has in-built protections for the mortgagee who might otherwise be disadvantaged by an early repayment.132

Statutory intervention133 14.34

As can be seen from the discussion above, many of the key cases in

this area of law arose in the early part of last century. Those cases often reflect equity’s attempt to temper the harshness associated with freedom of contract. Nowadays, freedom of contract has also been tempered by common law and statute, including the Competition and Consumer Act 2010 (NSW), Fair Trading Act 1987 (NSW), Contracts Review Act 1980 (NSW), Industrial Relations Act 1996 (NSW), and National Consumer Credit Protection Act 2009 (Cth) that adopts the National Credit Code (the NCC). An example of the intervention of statute into the law of mortgages is the application of Pt 2 Div 2 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).134 Section 12DA(1) prohibits a person in trade or commerce from engaging in conduct ‘in relation to financial services that is misleading or deceptive, or is likely to mislead or deceive’. If a mortgage offends this section, it may be set aside pursuant [page 700] to s 12GM or varied pursuant to the reasoning in Kennard v AGC (Advances) Ltd;135 in addition, damages could flow pursuant to s 12GF. For a case where a breach of s 12CB, ‘unconscionable behaviour’ in relation to financial services, was found to have been committed in relation to a residential mortgage, see Australian Securities and Investments Commission v Skeers [2007] FCA 1551.136 The Competition and Consumer Act (CCA) may also have a role to play in terms of restraint of trade. This would be additional to the common law doctrine of restraint of trade and would arise by operation of ss 45 and 45B of the CCA. For example, s 45B applies to any covenant attached to or running with the land.137 Mortgages contain covenants, and hence it would appear to be applicable, but the question to bear constantly in mind is whether the undertaking has had the effect of seriously reducing competition. 14.35 The Contracts Review Act is designed to prevent the unfairness that flows from a contract being created in unjust circumstances. A mortgage created in unjust circumstances would potentially be affected by the operation of this Act. The key sections of relevance are s 7(1), which defines ‘unjust’; s

9(1) and (4), which require the courts to have regard to the public interest and all the circumstances; and s 9(2), which delineates particular matters that the court should consider when coming to a conclusion, including inequality of bargaining power, any negotiation that took place between the parties, and whether any terms are unreasonably difficult to fulfil. It should be noted that the Act operates to exclude relief for the Crown, corporations, public and local authorities, as well as any parties who have entered into a contract for the purpose of trade, business or profession. It does, however, include farming contracts within its ambit.138 The Act is clearly able to reach into some of equity’s traditional domains and extend rights and remedies to parties suffering a clog on the equity of redemption, for example. However, the underpinning principle of equity is unconscionability. This Act is anchored in the unjust nature of the contract.139 Since its inception it has been applied to mortgages on a number of occasions. At times, mortgages have been varied, as in the case of Toscano v Holland Securities Pty Ltd,140 while at other times the mortgagor’s obligations have been altered by the Act. Such a case was Perpetual Trustee Co Ltd v Khoshaba,141 where a mortgage contract was varied under the Act, despite the fact that the lender was not guilty [page 701] of any conscious fraud. In circumstances where the loan was secured over the sole place of residence of parties of modest means, and no proper inquiry was made as to the purpose of the loan, the Court of Appeal found that the loan contract was unjust.142 In Provident Capital Ltd v Papa,143 the court was dealing with a similar loan arrangement, where a mother had given a mortgage over her family home and business to provide a large business loan to her son, and it was not clear how she was going to make repayments. But, in the circumstances, she had been advised to get independent advice from a lawyer, which she had done, and hence the loan was found not to be ‘unjust’. Macfarlan JA took the opportunity to suggest that ‘asset lending’ alone would not necessarily make a loan agreement unjust.144 However, these comments

were not agreed with by Allsop P and Sackville JA, who were content to note that the circumstances of this particular loan were not unjust.145 In serious cases, the terms of the mortgage have been found to be void.146 It is worth noting, though, that the Act will probably not be applicable where it is claimed that a mortgage has been forged, as in that case there would be no ‘contract’ for it to operate upon.147 The problem of forged mortgages has been a major issue, especially where a forged signature of a spouse may lead to an indefeasible mortgage being registered against their property without their knowledge.148 A recent attempt to deal with this problem has been the introduction of s 56C of the Real Property Act, which requires a mortgagee to confirm the identity of the putative mortgagor, and to keep a record of steps taken to do so. If this is not done, then the Registrar-General may remove the mortgage from the Register, and s 129A(2)(j) of that Act removes the ability of the mortgagee to recover compensation from the Torrens Assurance Fund for any loss they may suffer as a result.149 14.36 The National Credit Code (NCC), as noted previously, also embraces mortgages by virtue of the definition contained in ss 5 and 7. The loan may be for predominantly [page 702] ‘personal, domestic or household purposes’, or to ‘purchase, renovate or improve residential property for investment purposes’, or for refinancing.150 The NCC requires that the mortgage be in writing and signed by the mortgagor, pursuant to s 42(1). If the mortgage comprises several documents and only one of these contains the mortgagor’s signature, the NCC can still operate.151 Accordingly, a registered memorandum (which would typically contain most of the mortgage covenants) would be viewed as a mortgage under this legislation. Where the NCC applies, as under the previous Consumer Credit Code, a court may provide relief to a mortgagor if it finds that the mortgage was ‘unjust’.152 An example of a case dealing with these issues under the previous

legislation can be seen in Fast Funds Pty Ltd v Coppola; Coppola v Hall.153 A case where the NCC was said to be applicable at first instance was Karamihos v Bendigo and Adelaide Bank Ltd.154 However, on appeal the Court of Appeal held that there was no need to decide if the NCC applied, as it seemed clear that the Contracts Review Act was applicable. An evaluation of the ‘justice’ of the contract would be the same under both pieces of legislation.155 A first instance decision that the loan was unjust was overturned, on the basis that the borrowers were experienced business owners who were able to make their own decision about whether to borrow the money or not. It is not entirely clear whether, where a joint mortgage has been forged by one of the parties, the other party may rely on the NCC or not. In a case under the previous Consumer Credit Code, Credit Connect v Carney,156 Macready AJ noted that there were conflicting opinions on the question offered in the previous Court of Appeal decision in Van den Heuvel v Perpetual Trustees Victoria Ltd.157 14.37 Finally, the Industrial Relations Act and its predecessors have been held to apply to mortgages in some circumstances. For example, in Morgan v Coulson,158 a mortgage given to an employee by his employer provided for an interest-free loan if the employee remained working for the employer for more than 20 years. If the employee left before the 20 years had elapsed, he had to repay all of the advance at current bank interest rates for the whole period the mortgage had run. He also had to offer to sell the property to the employer at the price of the original purchase. Not surprisingly, the mortgage was found to be unfair and against public policy. Unfairness is one of the reasons for which s 106 of [page 703] the present Act permits contracts under which people work in an industry to be varied or declared void.159 The court held that, when the mortgagor had repaid the principal that was outstanding, the mortgage had to be discharged by the employer. As employment trends change to accommodate a move towards salary packages that include the provision of company-financed home

mortgages and car purchases, the impact of this Act on the law of mortgages may increase.

Relationship Debt and Mortgages 14.38 The issue of relationship debt is one that often arises in the context of mortgages.160 Typically, it involves a mortgagor’s property being burdened by a mortgage that he or she either did not intend to create at all, or intended to create under different terms. Sometimes relationship debt will relate to the mortgagor, and at other times it will relate to third-party guarantors, a topic that was the subject of a New South Wales Law Reform Commission Report.161 The concept of relationship debt has sometimes been known by the narrower term ‘sexually transmitted debt’, a term that had its origins in feminist discourse but subsequently gained currency more widely.162 Sexually transmitted debt is now recognised as a subcategory of relationship debt. ‘Relationship debt’ is a term used to describe the accumulation of debt by virtue of an emotional attachment that is often, but not always, gendered. Put in the language of a recent government publication, it occurs ‘where someone becomes involved in another person’s loan or debt because of an emotional attachment rather than obtaining any benefit themselves’.163 For example, it has been used to describe the kind of debt women accrue when, as a result of their husband’s, partner’s or boyfriend’s persistence, they enter into mortgages or guarantees without proper knowledge, which in turn has the effect of encumbering them with financial liability.164 As the term ‘relationship’ suggests, the principles are equally applicable to parent–child relationships when one of the parties uses pressure to encourage the other to enter the [page 704] arrangement.165 It may also be applicable, at times, in relation to business associates. The following discussion focuses on man–woman and parent–child relationships.166

14.39 In situations such as these, it is possible that the ill-informed mortgagor or guarantor could bring a claim of undue influence, mistake, misrepresentation or duress, or an action based on an unconscionable transaction. It is also possible that an action could be brought pursuant to the Contracts Review Act 1980 (NSW), Fair Trading Act 1987 (NSW), uniform Australian Consumer Law or the National Credit Code (NCC). In all these circumstances, the clarity of the language used in the documents, as well as the nature and degree of explanation that was given to the mortgagor or guarantor before the mortgage or guarantee was signed, will have a bearing on the outcome. 14.40 The starting point of case law discussion in this area is Yerkey v Jones.167 In that case, the husband wished to purchase a house and three acres that operated as a poultry farm, but he had very little money to finance the purchase. He, therefore, signed a document in which he agreed to procure a second mortgage over another property owned by his wife.168 After the purchase of the poultry farm, the husband told his wife that he ‘might get into trouble if she did not give the mortgage over [her] Walkerville property’.169 She subsequently obliged, but in evidence claimed that she did not know that she might be called on personally to pay a share of what was owing. On appeal to the High Court, Dixon J found that in some circumstances a wife’s guarantee of her husband’s debt could be rendered void.170 These circumstances included the situation where a husband exerted actual undue influence over his wife, causing her to execute the guarantee. In such cases, the creditor would not be able to rely on the guarantee unless it could be demonstrated that the wife had received independent legal advice that properly explained the consequences of entering into such an arrangement. Another circumstance where the surety would be set aside, according to Dixon J, was where the wife consented to becoming a surety for her husband’s debts but the bank did not deal directly with the wife, and the wife did not understand ‘the effect in essential respects’ of the instrument she executed.171 However, where the creditor had [page 705]

taken reasonable steps to inform the wife but she had failed to understand, according to Dixon J an equity to have the document set aside would not exist. In some circumstances, it was regarded as enough for the creditor to ‘superintend’ the execution of the document itself by asking questions and providing explanations, but in other circumstances that perhaps would not be enough, particularly where the deception was great and the wife’s intelligence and business understanding was more limited.172 14.41 Garcia v National Australia Bank Ltd173 also involved relationship debt in the form of a mortgage with an all moneys clause.174 In 1979, the Garcias entered into a mortgage with the Commercial Banking Company of Sydney (which later merged to become National Australia Bank). The mortgage secured $5000, which was a business loan for the husband, a foreign exchange broker. Later, the mortgage secured more debt in the form of a personal loan for both the Garcias. The mortgage contained an ‘all moneys’ clause, and although the loan was repaid, the mortgage was not discharged. The wife later signed four guarantees in respect of advances for her husband’s business. Almost three years after the last guarantee became effective, the bank demanded the sum of $327,189.69 from the wife. At trial,175 by applying Yerkey v Jones, Young J found that the wife was not liable to repay the money, because she did not essentially understand that the guarantee was in any way linked to the ‘all moneys’ clause in the 1979 mortgage. Certainly, she understood what a mortgage was, and understood more generally what she was doing, but she did not understand the effect of the instruments she had executed. This view was upheld by the High Court, which also restated that Mrs Garcia was entitled to rely on Yerkey v Jones. Kirby J did, however, register his distaste for an interpretation of the law that based rights and remedies, at least partially, on the basis of marital status.176 That the principles of Garcia and Yerkey continue to be applied can be seen in the decision in Agripay Pty Ltd v Byrne,177 where a fairly well-educated and informed wife was nevertheless found not to be bound by a guarantee she had given for her husband’s debts, as she did not properly understand the nature of the obligations she was undertaking, and the lender made no effort to ensure that she did.178 In Amtel Pty Ltd v Ah Chee,179

[page 706] however, while other elements of ‘Garcia unconscionability’ were established where a wife signed a guarantee of her husband’s debts, the fact that the wife was not a ‘volunteer’, in that she gained a personal benefit from the transaction, meant that the doctrine was not applicable.180 14.42 Commercial Bank of Australia v Amadio181 also dealt with the matter of relationship debt, where a son burdened his parents with debt. In this case, aged parents with limited English mortgaged their property and provided their son with a guarantee for a loan he was taking out. Unfortunately, the parents believed that the guarantee was for about six months and was for an amount of around $50,000. It turned out that the amount due under the guarantee was $239,830.85. Ultimately, the parents were held to be under a disability and were held not to understand the implications of the documents they executed. Eventually, it was found that the bank should not have relied on the son’s word that he had explained the effect of his parents’ signatures to them, if the bank wished to rely on the guarantee. 14.43 In cases of relationship debt, the equitable remedies of undue influence and unconscionable dealing have proved very useful, but the more pressing issue is to devise a method to reduce or prevent parties being lured into mortgages or guarantees because of their emotional relationships.182

Rights and Remedies of the Mortgagee 14.44 The mortgagee is entitled to various rights and remedies as a result of having entered into the mortgage. Indeed, a mortgagee ‘may employ every possible remedy given him by his contract [of mortgage] and put them all in motion at the same time’.183 Put another way, the mortgagee is entitled to pursue a range of remedies at any one time. Hence, a mortgagee in possession could have a receiver appointed184 and sue on the personal covenant as well. But it is not possible for the mortgagee to pursue a range of remedies if he or she has foreclosed. A selection of the rights and remedies regarded as particularly germane is discussed below.

Personal covenant 14.45 Although a mortgage operates to secure a loan, it is also a contract between the mortgagor and mortgagee. As such, there are some fundamental covenants contained in the mortgage, one of which is the covenant to repay the sum borrowed (the principal) [page 707] and the interest on that sum. This is known as the ‘personal covenant’, and the right to sue on it is an important form of recourse. Where for some reason this covenant has not been included in the mortgage, it will be implied.185 In either case, the personal covenant can be enforced by suing on the contract.186 If the mortgagor dies before the sum is repaid, the mortgagee is able to claim against the estate, suing the personal representatives. In those circumstances, the maximum for which the personal representatives will be liable is the extent of the estate itself, and not beyond it.187 The mortgagee can also enforce the personal covenant against anyone joined with the mortgagor in the covenant or anyone who has given an independent covenant as surety. Section 102 of the Conveyancing Act 1919 (NSW) prevents the mortgagee being able to purchase the mortgagor’s interest as a result of successfully suing on the personal covenant and enforcing the judgment order through a sale of the mortgagor’s interest in favour of the mortgagee. This section has the effect of ensuring that there is no anomaly between the restrictions imposed on the purchase of the mortgaged property by the mortgagee pursuant to an exercise of the power of sale, and enforcement of the personal covenant through a judgment order.188 14.46 Another covenant usually found in a mortgage is one that deals with the date on which the sum secured must be repaid. If this is absent, payment on demand will be implied. Such an outcome may be avoided by very clear evidence to the contrary.189 The right to enforce the covenant arises on the date that the sum is not repaid, and if the covenant is one which requires payment on or after a set date, the right to enforce arises after the mortgagee has demanded payment.190

Where the mortgagor is unable to meet repayments of the principal, but is able to meet interest repayments, s 92(1) of the Conveyancing Act provides that if the mortgagor does not pay the principal but does make the interest payments after the set date for payment, and those interest payments continue for a period of greater than three months, and the mortgagee accepts them, the mortgagee is precluded from commencing proceedings to enforce the repayment of the principal, foreclose, enter into possession or exercise the power of sale unless three months’ notice is given. This stay is not available to the mortgagor if he or she has defaulted on any other covenants. Further, where there is an [page 708] exercise of the power of sale on default, the purchaser is not required to investigate the issue of whether interest payments were accepted.191 The parties cannot opt out of these provisions by agreement.192 14.47 It is also important that, on repayment of the set sum, the mortgagee be able to return the property to the mortgagor. Hence, the mortgagee must treat the property in a way that allows this to occur; otherwise he or she will not be able to sue on the personal covenant.193 The exception is if the property has been sold by virtue of an exercise of the power of sale and there is a balance still owing after the proceeds of sale have been taken into account.194 In that case, there is an obligation on the mortgagor to make up the deficit. However, it is possible to contract out of this obligation, so that the mortgagor does not have to cover any shortfall.195 It is also possible to avoid the obligation to reconvey the property to the mortgagor if the mortgagor himself or herself has colluded in the alienation of the property.196 If the mortgage does not set a date for repayment but, rather, stipulates payment on demand, the mortgagor must be given a reasonable time in which to repay.197 Where mortgages are silent on the issue of interest, equity will usually imply such an obligation;198 where interest is not paid, s 43 of the Limitation Act 1969 (NSW) becomes relevant because it imposes a six-year period in which the mortgagee can bring an action. Section 42 of the same

Act imposes a 12-year period for actions seeking to recover the unpaid principal, foreclose or recover possession in regard to the principal. 14.48 Section 76 of the Real Property Act 1900 (NSW) prevents the mortgagor simply conveying his or her equity of redemption and ignoring the obligation to repay. Section 76 is designed to protect the mortgagee, and provides that, where an interest in land subject to mortgage has been conveyed subject to mortgage, the transferee must pay the interest or other charges secured by the mortgage, as well as indemnifying the transferor against the principal sum secured by the mortgage.199 Section 79 of the same Act implies a covenant requiring the person to whom mortgaged property has been conveyed to pay moneys or perform obligations secured by the encumbrance, as well as to perform and observe the covenants and provisions of the encumbrance. [page 709]

Possession of the mortgaged property Old system title 14.49 Possession and legal mortgages As we have seen, under old system title the mortgagee becomes the holder of the legal estate, and hence is entitled to possession of the property at common law. This right to possession exists even if the mortgagor is not in default. Using the language of Four Maids Ltd v Dudley Marshall (Properties) Ltd,200 ‘the mortgagee may go into possession before the ink is dry on the mortgage’, unless the mortgage precludes this. In Quennell v Maltby,201 the English Court of Appeal modified this position somewhat by imposing an ethical gloss on the position taken in Four Maids. It restricted the mortgagee from ‘getting possession of a house contrary to the justice of the case’; or, put another way, from taking possession if he or she were not acting ‘bona fide and reasonably for the purpose of enforcing’ the security. Hence, if the mortgagor were not in default, it would be somewhat difficult to satisfy this restriction. It is a little uncertain if Quennell v Maltby applies in Australia. Some

commentators are of the view that it does not.202 Irrespective of whether it applies, Australian law has proceeded on the basis that, if the mortgagee takes possession, it is for the purpose of a security, and any rents and profits collected by the mortgagee must be accounted for. In some circumstances, the mortgagee will be able to terminate the tenancies and bring an action for recovery of land. The apparent imbalance in favour of the mortgagee is partially addressed by the requirement that a mortgagee must ultimately account for use of the mortgaged property; in assessing this, the court will have regard to the actual receipts of the mortgagee, as well as any moneys which the mortgagee would have received but failed to receive because of his or her wilful default.203 14.50 If the mortgagee does go into possession, he or she is neither in a position synonymous with a trustee,204 nor an owner in possession,205 with regard to the level of care he or she needs to demonstrate towards the property. For example, if the property is in need of repair, the mortgagee in possession need only repair it to the extent of the funds gained from receipt of rents and profits. There is no expectation that he or she should use his or her own funds to supplement. Where the mortgagee does make repairs, however, he or she may be reimbursed for repairs and renovation expenditure — but only in relation to reasonable spending. In regard to damage to the property caused by the mortgagee’s gross negligence, the mortgagee will be held responsible. [page 710] 14.51 Possession and equitable mortgages The position of an equitable mortgagee may be different regarding the issue of possession. It is not entirely clear. In regard to the equitable mortgage of a legal estate, the starting point is that the equitable mortgagee does not acquire the legal interest which gives rise to a right of possession. The equitable mortgagee only acquires a right in equity and a promise of an estate in land. Sykes and Walker suggest that to leave matters there would be to take only a superficial approach, and add that ‘the point … has never been squarely decided’.206 Garfitt v Allen207 and Vacuum Oil Co Ltd v Ellis,208 the two cases on which the proposition rests, are

not exactly on point.209 According to Sykes and Walker, the problems an equitable mortgagee faces revolve around his or her having insufficient title to support an action for possession.210 They also argue, by way of analogy and in reliance on the Walsh v Lonsdale doctrine,211 that an agreement to mortgage may be likened to an agreement to lease, in so far as the equitable mortgagee holds under the same terms as if a (legal) mortgage had been granted. That being so, an equitable mortgagee, whose interest arose pursuant to an agreement to mortgage, may have a right to possession in the same way as a legal mortgagee. Against this view is one that suggests that the simple equation of a legal mortgage with an equitable one is unacceptable. Bearing the different views in mind, Sykes and Walker’s final conclusion is that an equitable mortgagee has a right to possession ‘in a passive sense’.212 This approach has considerable merit. Although there is some uncertainty surrounding the equitable mortgagee’s position where it is not specifically mentioned in the mortgage, there is nothing preventing the equitable mortgagee being given the power to take possession by the mortgage instrument itself. However, there is some doubt as to whether the equitable mortgagee can actually bring an action for possession.213 In King Investment Solutions Pty Ltd v Hussain,214 Campbell J held that even if an equitable mortgagee had the benefit of a covenant for possession on default, this would not justify an order for possession as a matter of property law. 14.52 In regard to an equitable mortgage of equitable property, it would appear that the mortgagee is entitled to possession, although that possession will be limited by the degree of possession the nature of the property permits. For example, when dealing with competing equitable assignments of pure personalty, Lyndhurst LC in Dearle v Hall215 [page 711] stated that the act of giving the trustee notice was the ultimate act of equitable possession. Applying this reasoning to mortgages, it could be said that a mortgagee of an equitable interest who gave notice was a mortgagee in

possession.216 Yet Re Pawson’s Settlement217 suggests that the proposition is not so easily transferred. There it was found that one became an equitable mortgagee, not when notice of the assignment was given, but rather when notice was given to pay the income over. 14.53 Attornment clauses An attornment clause is a clause whereby the mortgagor declares that he or she is a tenant of the mortgagee. By establishing a lessor–lessee arrangement, the mortgagor hopes to secure his or her possession.218 Under such an arrangement, the rent owed is usually the same as the instalments due under the mortgage. In turn, both the mortgagor and mortgagee are afforded protections; the mortgagor against the mortgagee exercising his or her right of possession, and the mortgagee against the nonpayment of instalments (or rent), for example. Further, if the mortgagor assigns the lease, the mortgagee can enforce any covenants that touch and concern the land. Whether a tenancy by estoppel can be raised is a moot point and there is no uniformity of view on the question.219 Further, if the effect of an attornment clause were construed as giving rise to distress for rent, that would be a distinct problem, because the remedy of distress is not permitted in New South Wales.220 Nevertheless, attornment clauses provide a better way of protecting the mortgagor’s interest than the inclusion of an express provision permitting the mortgagor to remain in possession until default.221 The disadvantage with possession-until-default clauses is that, while they create contractual rights and obligations, they do not override the right of entry of the mortgagee that arises from his or her holding of the legal estate. The point is that both approaches have their weaknesses.222

Torrens title 14.54 As a mortgage of Torrens title land operates by way of a charge over the land, rather than conveyance, there is no title to the land in the hands of the mortgagee on which a claim to possession can be based. At common law, this is the case even if the mortgagor defaults in payment of the principal and interest. Section 60 of the Real Property Act 1900 (NSW) alters this position, creating a statutory right to possession (by receiving the rents and profits) where there is a breach of the covenant to pay principal or interest. Section 60

cannot be invoked for breaches of other covenants. Under this section, subsequent registered mortgagees are able to seek possession if the [page 712] prior mortgagees have not.223 As s 60 relates to the taking of possession, rather than an exercise of the power of sale, no notice under s 57 of the Real Property Act is required. Where there is an equitable mortgage under the Torrens scheme, the right of the mortgagee to possession is very weak. It would seem that the right is once again dependent on the application of the Walsh v Lonsdale doctrine and the kind of reasoning discussed above in reference to an equitable mortgage under old system title.224 14.55 Attornment clauses Attornment clauses may be used in relation to Torrens title land. The common view is that they create a tenancy by estoppel,225 although this view has its critics.226

Right to assign 14.56 It is possible for the mortgagee to assign his or her interest. That interest is usually thought to comprise the: interest in the land; and right to sue on the personal covenant for the debt. These two component parts are not automatically assigned together. Hence, an assignment of the interest in land does not automatically carry with it an assignment of the right to sue on the debt. Nevertheless, s 91(1) of the Conveyancing Act permits a mortgage to be assigned by a registered ‘memorandum indorsed on or annexed to the mortgage, and signed by the persons to be bound’. Such a memorandum operates ‘as a deed of assignment of the mortgage debt and as a deed of conveyance of the estate and interest of the mortgagee of and in the mortgaged property’ pursuant to s 91(4). It is possible for the mortgagee to assign under both old system and Torrens title.227

Where the mortgagee of Torrens title land assigns, the transferee is able to step into the mortgagee’s shoes and sue on the mortgage to recover the debt, pursuant to s 52 of the Real Property Act. This was the situation in PT Ltd v Maradona Pty Ltd.228 However, personal rights are not transferred under this section, only rights affecting the mortgage. Hence, the benefit of a guarantee does not pass under this section.229 Section 52 does [page 713] not permit the mortgagee to sue for breaches of covenants that occurred prior to the assignment — unless, of course, they are continuing breaches.230 Once the transferee registers his or her mortgage, the transferee acquires an indefeasible interest according to the relevant indefeasibility provisions of the Real Property Act.231 Those provisions make it clear that the title the transferee takes on registration will not be burdened by any personal equities or fraud that may have burdened the title of the transferor.232 In this sense, the indefeasibility provisions temper s 51 of the Real Property Act, which states that the transferee takes ‘all rights, powers and privileges’ of the transferor and that the transferee becomes ‘subject to and liable for all and every [one of] the same requirements and liabilities to which the transferee would have been subject and liable if named in such instrument originally as mortgagee’.

Right to improve property 14.57 Having entered into a mortgage, the mortgagee will be keen to ensure that the property that provides the security for his or her loan is not diminished in value. As a result, the law permits the mortgagee to protect and maintain the property, at times even going as far as upholding a right allowing a second mortgagee to buy in and be reimbursed for a first mortgage.233 A mortgagee may also be reimbursed for expenditure made in preparation for sale.234 Naturally, this does not mean that the mortgagee is able to improve the property to the extent that an owner might. Their objectives are different. For example, it would be usual for a mortgagee wishing to sell property, pursuant to an exercise of a power of sale, to be keen to recoup the sum owed

to him or her under the mortgage, whereas an owner wishing to sell property may regard the sale as a potential profit-making exercise and an opportunity to capitalise on improvements. As a result of these differences, the mortgagee is restricted in how far he or she is able to alter the nature of the property. This can also be seen as another way of saying that the mortgagor should be able to have returned to him or her essentially the same property that he or she mortgaged in the first place.235 Yet, where the mortgagee does expend excessively, he or she will not be reimbursed and the mortgagor will also have property returned to him or her which is dissimilar (by being better) to that which the mortgagor mortgaged in the first place.236 [page 714]

Power to lease Old system title 14.58 Mortgagee-granted leases At common law, historically, a mortgagee could grant a lease of the mortgaged land. This was because the mortgagee held the legal estate and was, thereby, entitled to possession of the land. However, as it would have been unconscionable to make those leases binding on the mortgagor after discharge of the mortgage, equity intervened to prevent a clog on the equity of redemption.237 The common law position concerning the power to lease is affected by s 106 of the Conveyancing Act. That section provides a mortgagee of land with the power to make a lease of the mortgaged land, but only pursuant to the conditions imposed by the section. Basically, those conditions are that the lease: will not exceed five years (s 106(3)); will be at the best rent that can reasonably be obtained (s 106(6)); must contain a condition of re-entry if the rent is not paid within a specified time (s 106(7)); and if it is of old system title land, is registered according to the deeds registration scheme (s 106(8A)).238

The section does not extend to oral leases.239 Section 106(7) of the Conveyancing Act applies to all leases, and states that the covenants implied by s 84 of the same Act shall not be excluded. Those covenants relate to the payment of rent and the yielding up of the property in good and tenantable repair. Yet it is possible, according to s 106(11), to exclude the operation of s 106. This can be done either by incorporating an exclusion in the mortgage itself or by other writing. It is not possible to exercise the statutory leasing powers after a receiver has been appointed by the mortgagee. 14.59 Where the position at common law is operative, it would seem that, in the absence of agreement, old system title does not give the mortgagor a right to possession. Hence, it is impossible for him or her to create a lease binding on the mortgagee. As a result, where a tenant does go into possession, while he or she will be estopped from denying the lessor’s title, the arrangement between mortgagor and so-called tenant will not be binding on the mortgagee. The situation is different if, as is usual, the terms of the mortgage give the mortgagor a right to possession. In that case, the mortgagor becomes the mortgagee’s tenant and is able to carve out an interest from his or her own, in favour of another tenant. Such an arrangement will be characterised as a subtenancy. Where a mortgage creates an express right to lease on the part of the mortgagor, the mortgagee’s consent is usually also required. [page 715] 14.60 Mortgagor-granted leases If a lessor creates a lease and later borrows money using his or her property as security for the loan, the mortgagee will be bound by the pre-existing lease in accordance with the general priority rules. This will result in the mortgagee’s security being limited to the reversion rather than the fee simple.240 The situation is potentially different when the lease is equitable, because then it is open to the mortgagee to demonstrate that he or she is a bona fide purchaser for value without notice of a prior equitable interest.241

Historically, if a lessor mortgagor created a lease after a mortgage of the relevant property had been created, the mortgagee was not bound by the lease.242 Hence, the mortgagee could bring an action in trespass against the lessee. For a case on whether a mortgagee who has the right to immediate possession can evict a residential tenant who has taken a lease from the mortgagor, see O’Neill v Commonwealth Bank of Australia.243 Under s 106 of the Conveyancing Act, a mortgagor can now grant leases after the creation of a mortgage. The conditions applicable to these are the same as those applicable to a lease created by a mortgagee pursuant to s 106. Where there is non-compliance with s 106 of the Conveyancing Act, the lessor mortgagor will be bound by the lease, but not the mortgagee.

Torrens title 14.61 Mortgagee-granted leases Section 106(17) of the Conveyancing Act permits mortgagees of Torrens title land to create leases in compliance with s 106.244 The types of leases permitted by that section are dealt with above. Where there is non-compliance with s 106, it is possible for the lease to be valid if the written mortgage agreement permits the mortgagee to create leases. Further, it is also possible for the mortgagee to create a lease if the mortgagor has defaulted and the mortgagee has gone into possession. This is because the mortgagee in possession of Torrens title land is treated ‘in the same manner’ as a mortgagee of the legal estate pursuant to s 60 of the Real Property Act; a section that relates to leases of mortgaged property when the mortgagor defaults and the mortgagee enters possession. A mortgagee of old system title land could, as noted above at 14.58, grant a lease. 14.62 Mortgagor-granted leases As we already know, the mortgagor of Torrens title land does not part with his or her title when entering into a mortgage. That being the case, he or she is able to enter into a lease of mortgaged land to the extent that he or she still has a title to mortgage.245 However, s 106 of the Conveyancing Act extends to Torrens title land by virtue of s 106(17). Section 106(1) expressly speaks of the [page 716]

mortgagor’s right to create a lease, and the section operates in conjunction with the other subsections of the provision to diminish the broad right of the mortgagor to lease. For example, among other restrictions, the duration of the lease is limited by this section to a period not exceeding five years. Additionally, best rent must be reserved and the lease must take effect in possession no later than three months after its date. A lease that does not comply with s 106 of the Conveyancing Act will not bind the mortgagee, unless he or she has consented to it before it is registered,246 as Australia & New Zealand Bank Ltd v Sinclair demonstrated.247 The rationale for the consent requirement is the achievement of a balance between the potential detrimental effect of a lease on the mortgagee’s powers, on the one hand, and the rights of the mortgagor, as owner of the property, to deal with that property in ways that benefit him or her, on the other. By contrast, if the lease is registered before the property is mortgaged, the mortgagee takes his or her interest subject to the lease. Where the pre-existing lease is unregistered, the mortgagee will still be bound by it if it is a lease for less than three years. This is because the lease would be protected by the operation of s 42(1)(d) of the Real Property Act.

Rights to fixtures 14.63 As fixtures become part of the land to which they are annexed, a mortgage over land includes the fixtures on that land.248 Hence, the mortgagee, exercising the power of sale, can sell the land including the fixtures, and he or she can restrain a party from removing fixtures if the removal would unduly reduce the value of the security.249 This position may be altered if the mortgagee has given permission for the fixtures to be removed.250 Once the mortgagee is in possession, the mortgagor’s right to remove the fixture is lost unless agreement to do so exists.251

Appointment of a receiver 14.64 A receiver is a person who manages property by taking income from the property and paying off the debt, with a view to preserving the security. Most mortgages of property which generate an income contain provisions

allowing the mortgagee to appoint a receiver if there is a default in payment. Appointment of a receiver relieves the mortgagee of the burdensome task of collecting money and, where the receiver is also appointed as an agent of the mortgagor (which is the usual position), there are collateral advantages to the mortgagee. For example, the mortgagee will not be liable for those rents and profits which, but for wilful neglect and default, he or she would have received. [page 717] If the mortgagee interferes in the receiver’s management of the property, the position could alter dramatically, resulting in the receiver being characterised as agent of the mortgagee, not mortgagor.252 Consequently, the protection from liability described above would be lost. 14.65 Statute confers a power to appoint a receiver both in relation to old system title land and Torrens title land.253 It is activated by an exercise of the statutory power of sale, and an appointment under this power must be registered.254 Where there is an express power in the mortgage to appoint a receiver, there is no need to rely on statute. The right to appoint a receiver can also arise by virtue of application to the court. Such a receiver will be the agent of neither the mortgagee nor the mortgagor, but of the court. His or her duties remain much the same, but when payments are collected they are paid into the court. The powers of the receiver are set out in s 115(3), (6), (7) and (8) of the Conveyancing Act. Even a legal mortgagee, who has a power of possession, is able to invoke the right to appoint a receiver, but because the alternative of retaking possession is still available to him or her, the legal mortgagee must demonstrate good reason for the appointment of a receiver.255 An equitable mortgagee is able to appoint a receiver without application to the court if a deed or written instrument creating the mortgage exists.256 This power is like the power available to a legal mortgagee. Irrespective of a deed, the equitable mortgagee can always apply to the court to appoint a receiver.257 14.66

Finally, it can be noted that Australian courts, unlike some English

courts, have not seen the receiver’s liability as resting in negligence, except where the mortgagor is a corporation.258 The court in Expo International Pty Ltd v Chant259 stated that ‘in the administration of the receivership, the receiver is not liable to answer to the mortgagor for losses caused by negligent performance of bona fide acts’. Instead, it has been held that a receiver has a duty to act in good faith and, if this is done, the mortgagor has no remedy in respect of the receiver’s decisions with which he or she disagrees.260 [page 718]

Foreclosure Introduction 14.67 Foreclosure is another of the remedies available to the mortgagee, but it is rarely used today. Historically, it had greater significance, because the power of sale was not employed very often. Foreclosure operates where an equitable right to redeem exists after the contractual right has been extinguished. Foreclosure puts a bar on redemption by the mortgagor by extinguishing the mortgagor’s rights. It requires an application to the court and a two-step process follows. The first stage is that an interim order is made (decree nisi). It is followed with a final order (decree absolute). The final outcome of the process is that the interest of the mortgagor is transferred to the mortgagee.261 Section 103(2) of the Conveyancing Act creates a statutory discretion for the court to order a judicial sale instead of foreclosure.

Old system title 14.68 At law, under old system title a mortgagor has a contractual right to redeem. Therefore, if a mortgagor repays his or her debt within, say, the set six-month period after the execution of the mortgage, then he or she can seek the assistance of the common law if the mortgagee refuses to reconvey title. Traditionally, enforcement of a strict time frame for repayment of the debt (such as six months) offended the court of equity and it found itself upholding the right to have title reconveyed, even when the set date for repayment had passed. This was achieved by equity recognising a right in favour of the

mortgagor; a right which came to be known as the ‘equity of redemption’. Both the contractual right and the equitable right were enforced by a court exercising its equitable jurisdiction against everyone except a bona fide purchaser of the legal estate, for value, without notice.262 Ultimately, the term ‘equity of redemption’ came to embody both the contractual right to redeem and the right exercisable in equity to redeem after the date for payment had elapsed.263 Further, the equity of redemption was treated as an equitable proprietary right. 14.69 Equity’s concern to protect the interests of the borrower can be seen in its willingness to construe agreements between borrowers and lenders as securities wherever possible, which may mean that equity has to look beyond the agreement itself.264 Sometimes it is difficult to distinguish between a right to redeem and a right to repurchase. In order to differentiate, the court may look to the intention of the parties. [page 719] In Gurfinkel v Bentley Pty Ltd,265 the court examined the intention of the parties in order to discern whether the transaction was a security transaction or a transfer with an option to repurchase. The majority found that there was insufficient evidence to overturn the view that the agreement was prima facie a purchase with an option to repurchase. Barwick CJ, in dissent, said: The lands having been found to have been conveyed so as to form a security for money lent, the transfers, though absolute in form and though expressed to be executed for a price paid as distinct from money lent, will be regarded in equity as mortgages of the land. Thus, though there be no contractual right to redeem at all, the borrower will have in equity a right of redemption.266

14.70 While the equity of redemption exists, the mortgagee’s position is uncertain because title can be redeemed on repayment of the debt. Hence, it is in the mortgagee’s interest to block redemption. In theory, this can be achieved by gaining an order for foreclosure.267 Historically, once the contractual date to redeem had passed, the mortgagee could apply to the court for such an order. It was usual for the court to grant a conditional order providing an extra six months in which the mortgagor had to repay the debt.

If the debt were not repaid in the extended time, the title held by the mortgagee became absolute. Yet, there is evidence that equity did all it could to forestall foreclosure, presumably being mindful of the dire consequences for the mortgagor. For example, Campbell v Holyland268 suggests that, although a foreclosure order may have been granted, such an order did not necessarily absolutely block redemption as long as the mortgagor remained innocent of unconscionable delay, the mortgagee had not acted to his or her detriment as a result of the foreclosure order, and no innocent third party had gained an interest. The decision to re-open a foreclosure was discretionary, except where the foreclosure had been obtained by fraud, in which case it would be automatic.269 14.71 Prima facie, it would appear that re-opening of foreclosure is not available in New South Wales. Section 100 of the Conveyancing Act appears to extinguish the mortgagor’s right to redeem permanently. The operation of s 100 means that the result of an order absolute for foreclosure is to cause the mortgage debt to be fully satisfied by the mortgagee taking the property itself. The section also has the effect of: [page 720] causing the mortgagee to lose all his or her rights to bring any actions or take proceedings to recover mortgage moneys; and releasing all collateral forms of security. As the New South Wales statutory position is that foreclosure automatically discharges the debt under the mortgage, there is no issue around the need to keep open the right to redeem in case the mortgagee sues for the contractual debt. Yet it is perhaps possible, with the assistance of the court, for the foreclosure order to be re-opened by reliance on the personal covenant.270 14.72 The Conveyancing Act allows the mortgagee to either sell the land or, alternatively, foreclose. Under s 102 of the Act, it is not open to the mortgagee to do neither of these acts and then merely sue on the personal covenant, taking the equity of redemption in execution.271 The remedy of foreclosure is available when a mortgagor defaults, even if the default pertains

only to interest, and not the principal itself.272 To explain, in some cases the mortgage makes the right to redeem conditional on payment of interest by the due date. Where that is the case, the equitable right to redeem and the right to foreclose arise on default of an interest payment, not on default of a payment of the principal.273 14.73 Foreclosure is possible in relation to both legal and equitable mortgages. If a legal interest in land is the subject of an equitable mortgage, foreclosure will result in the mortgagee acquiring a legal title. Further, where the mortgagor is not in court for the proceedings, the court can, by reliance on s 77 of the Trustee Act 1925 (NSW), make a judgment that vests the legal title in the mortgagee.

Torrens title 14.74 In some ways, it is unusual that the Torrens system permits foreclosure at all when the basis of the mortgage under the Torrens system is a charge, rather than a conveyance of the fee simple. The issue of barring the re-transfer to the mortgagor of the interest in land would seem somewhat irrelevant when the interest was not transferred from the mortgagor to the mortgagee in the first place. Nevertheless, history and practice dictate that foreclosure is a remedy under the Torrens system. Perhaps not surprisingly, its operation is somewhat restricted by statute, but those statutory provisions are relevant [page 721] only to registered mortgages.274 In the case of unregistered mortgages under the Torrens scheme, the mortgagee must apply to the court seeking foreclosure. 14.75 In New South Wales, registered mortgagees seeking foreclosure must apply to the Registrar-General, and not the court. Applications will be accepted only where the default in payment, either of the principal or the interest, has exceeded six months and the relevant land has not sold as a result of a public auction.275 Further, the mortgagee must serve notice of intention

to apply for a foreclosure order.276 The Registrar-General then may issue a foreclosure order, or alternatively may require a further attempt at sale to be made. The actual foreclosure occurs when the Registrar-General issues a foreclosure order and records it in the Register.277 Van den Bosch v Australian Provincial Assurance Association Ltd278 suggests that, until both these acts have been performed, the mortgagor’s right to redeem will not be extinguished. That case also establishes that the right is also exercisable by anyone claiming through the mortgagor.279 Section 100(1) of the Conveyancing Act also extends to Torrens title land by virtue of s 100(2). Further, s 62 of the Real Property Act confirms that the effect of foreclosure is to vest the property in the mortgagee. It seems doubtful whether a court would allow the re-opening of foreclosure in the absence of fraud.280

Discharge of mortgage 14.76 On payment of the mortgage and fulfilment of the provisions and covenants contained in it, the mortgagor will usually wish to hold the property free from the restrictions of the mortgage, and hence will seek a discharge of mortgage. This applies to both old system and Torrens title land. The terms of the discharge dictate whether there is also a release from the personal covenant or whether it remains in force.281 The words used in Grundy v Ley282 serve to demonstrate this point. The discharge in that case stated that money had been received from the mortgagor in full satisfaction and [page 722] discharge of the mortgage ‘so far as it affects the land’. These words were held to relate to the charge over the land and consequently the mortgage over the land was discharged; however, they were held not to relate to the personal covenant. It remained on foot.

The means of discharging a mortgage under old system and Torrens title land are different, as described below.

Old system title 14.77 The reconveyance of old system title land is effected by an indorsed or annexed memorandum of discharge pursuant to s 91(1) and (3) of the Conveyancing Act. It must be registered to be effective283 and, when registered, also serves to discharge the mortgage debt.284 If the mortgagor prefers that a formal reconveyance is executed, rather than merely a memorandum of discharge, s 91(5) provides for this. Further, where there are subsequent mortgagees, the effect of a discharge is to vest legal title in the subsequent mortgagee who has priority.285 If there is only one subsequent mortgagee, then legal title vests in him or her on discharge of the earlier mortgage. In some circumstances, it may be more convenient for a mortgagor who is able to redeem to have legal title directly conveyed to a third party, instead of requiring a discharge of mortgage, return of the title to the mortgagor and reconveyance to a third party. This is possible according to s 94(1) of the Conveyancing Act, in circumstances where the mortgagee has not taken possession of the relevant property.

Torrens title 14.78 Under a mortgage of Torrens title land, the mortgagor is also entitled to discharge the mortgage if the mortgage debt has been repaid on or after the due date.286 The right to discharge after the passing of the contractual date to redeem is regarded as one existing in all mortgages. When the contractual date to redeem has passed, the issue of whether the right to discharge arises by virtue of a legal or equitable right has drawn attention. Logic would suggest that if the contractual date to redeem has passed, the right cannot be legal, and hence is equitable; it is not statutory because the Real Property Act fails to confer any such express right. The statute merely states that the mortgage is to be discharged whenever it ‘is intended to be discharged wholly or partially’.287 Clearly, the mortgagor under the Torrens system cannot redeem his or her interest according to the procedures and methods

available to the mortgagor under old system title, because the Torrens mortgagor does not [page 723] convey his or her ‘legal’ title to the mortgagee in the first place. Yet the language of old system title, as we have discovered earlier, pervades this area of law and, quirkily, we still tend to speak of an equity of redemption when we really mean discharging of the mortgage.288 Under the Torrens system, the only method of discharging a mortgage is by registration of a discharge of mortgage. This can be a total or partial discharge. In some circumstances, a discharge will have the effect of preventing a mortgagee from suing on the personal covenant. For example, in Groongal Pastoral Co Ltd v Falkiner,289 the High Court held that the memorandum of discharge, if registered, had the effect of a deed and, as the instrument contained an acknowledgment that the discharge was in full satisfaction of the debt, it was impossible for the mortgagee to sue on the personal covenant. Further, if the discharge has been registered there is no mechanism permitting it to be cancelled leaving the mortgage on foot.290 14.79 Another issue that is relevant in this context is: who has the right to discharge a Torrens title mortgage? Section 93 of the Conveyancing Act suggests that neither an assignee of the mortgagor nor a subsequent mortgagee is able to redeem or discharge the mortgage. However, the reasoning in Van den Bosch v Australian Provincial Assurance Association Ltd291 suggests that, at least after default, the position is different. The court held that a purchaser of the mortgaged land, who acquires an equitable interest in the land by virtue of having entered into a contract of sale, together with the personal representatives of the mortgagor, could discharge the mortgage, but a guarantor, who acquires only a personal right, could not. Where the mortgagee is out of the jurisdiction, cannot be found or is unknown, it is still possible for the mortgagor to gain a discharge of mortgage pursuant to s 98 of the Conveyancing Act. 14.80

Finally, it is uncertain whether many of the rules pertaining to the

redemption of title under old system land are applicable to the discharging of a Torrens title mortgage. For example, while it is clear under old system title that if a mortgagor does not pay the mortgage debt by the contractual date for repayment, he or she must give the mortgagee six months’ notice of his or her intention to redeem, it is less clear whether under the Torrens scheme such a rule is applicable.292 [page 724]

Power of sale293 Introduction 14.81 The power of sale is the most commonly used remedy where the mortgagor defaults under the mortgage. It applies equally in the commercial and domestic arenas, but it is not always the most appropriate remedy, particularly when the real estate market is in decline. At times, it might be more appropriate for the mortgagee to assist the mortgagor to refinance. At other times, the mortgagee might consider the following options: assigning the mortgage; permitting a sub-mortgage; recouping from a guarantor, if there is a guarantor; improving the property so it might yield more rent for the mortgagor to use as instalment payments on the mortgage; leasing; or appointing a receiver.294 It is possible that, in some circumstances, these alternatives might better safeguard the money lent and have less dire consequences for the mortgagor. Nevertheless, there are times when opting to use the power of sale is the most effective means of dealing with a default under the mortgage. Where the mortgagee does opt to exercise the power of sale, it is necessary for him or her to follow strictly a range of procedural requirements which are basically designed to give the mortgagor notice that he or she is about to lose the

property and to ensure that a reasonable price is procured on sale. If the sale does not yield sufficient funds to cover the mortgage debt, the mortgagee is able to sue on the personal covenant for the remainder. This is but one way in which the power of sale differs from foreclosure. 14.82 It is usual for the mortgage itself to contain a clause permitting the mortgagee the right to sell the mortgaged property if there is a default. If the instrument is silent on this issue, a clause permitting sale arises by implication (if there is no contrary intention)295 pursuant to s 109(1) of the Conveyancing Act. It is not mandatory that the sale be by public auction, but in practice this is the most common method of exercising a power of sale, because it generally involves fewer disputes about whether due regard has been paid to the mortgagor’s interests and whether the property has been sacrificed.296 At times, the mortgagee may wish to sell the fixtures separately, and this is permissible under s 109(1)(e) of the Conveyancing [page 725] Act. Section 109(1)(f) also provides that the mortgagee has a power to sell any easements, profits à prendre, rights or privileges of any kind over the mortgaged property. Section 110 of the Conveyancing Act outlines some of the powers incidental to an exercise of the power of sale, and s 110(4) specifically points out that these provisions are equally applicable to Torrens title land and old system title land. Where the land in question is subject to the Torrens legislation, s 111 of the Conveyancing Act spells out that compliance with ss 57, 58 and 58A of the Real Property Act is necessary. These latter sections in the Real Property Act set out the procedure on default and the restrictions and boundaries of the power of sale itself, as well as setting out requirements for dispensing with notice or lapse of time.

Old system title 14.83 Default by mortgagor Pursuant to s 111(2) of the Conveyancing Act, under old system title there must be a default by the mortgagor before the

mortgagee can validly exercise the power of sale. Section 111(2)(a) provides that the power of sale can be validly exercised where the mortgagor has defaulted in: the observance of a covenant, agreement or condition expressed or implied in the mortgage; the payment, in accordance with the terms of the mortgage, of any part of that principal, interest or other money, the payment of which is secured by the mortgage; or the payment, in accordance with the terms of the mortgage, of any part of that principal, interest or other money. 14.84 Notice As the effect of an exercise of the power of sale can be quite harsh on the mortgagor, statute dictates some quite stringent notice requirements that must be satisfied before the property can be sold.297 Sections 109(2), 111(2)(a), (b1) and (c), and 113(3) of the Conveyancing Act set out the key notice requirements. 14.85 The situation is different according to whether the default under the mortgage is monetary in nature or not. In short, if the default is monetary in nature, the mortgagee cannot validly exercise the power of sale, even if the mortgagor has defaulted in the payment of the whole or part of the principal, interest or other money secured by the mortgage, unless the mortgagee serves written notice on the mortgagor requiring that the mortgagor repay the money within one month. The notice must say that a failure to pay will result in the exercise of the power of sale. In cases of monetary defaults, the written notice requirement cannot be dispensed with, nor can the duration of the notice be reduced, although it is possible to extend the period of notice beyond one month if the terms of the mortgage permit it. If the default is not monetary in nature, but arises from a failure to observe a ‘covenant, agreement or condition’, expressed or implied in the mortgage, written notice must [page 726]

also be served and that notice must require the mortgagor to remedy the default by compliance with the covenant, agreement or condition within one month, or otherwise the power of sale will be exercised. Only where the breach is non-monetary can the notice requirement be reduced or dispensed with if the provisions of the mortgage permit it. Commonwealth Bank of Australia v Tugvale298 demonstrates this proposition. 14.86 Section 111(2)(b) of the Conveyancing Act requires that written notice be served on the mortgagor if the default relates to the payment of money or if the fault does not relate to the payment of money but notice or lapse of time has not been dispensed with by agreement.299 The notice must state that it is a notice pursuant to s 111(2)(b),300 and must set out the default. This latter point is necessary in order to allow the mortgagor the opportunity to remedy the default before sale.301 The notice must also state that the mortgagor has one month (or a longer period if a longer period is spelled out in the mortgage itself) after the service of the notice to remedy the default.302 It must require the remedying of the mortgagor’s default by observation of ‘the covenant, agreement or condition’ in respect of which he or she is in default,303 or by the payment of ‘the principal, interest or other money in respect of the payment of which the mortgagor or person made default’, depending on which is relevant.304 The notice must also make it plain that, if the default is not remedied satisfactorily, the power of sale will be exercised. Further, each mortgagee or chargee ‘under a mortgage or charge to which the land is subject registered in the General Register of Deeds’ must be served with a copy of the notice.305 If the costs and expenses of preparing and serving the notice are to be claimed, the notice must set out a reasonable amount for those costs and expenses and must specify the amount.306 The situation is slightly different where the mortgagor has committed a monetary default but has complied with all other covenants, and the mortgagee has continued to accept the payment of interest for a period of not less than three months. In those circumstances, pursuant to s 92 of the Conveyancing Act, the mortgagee must give three months’ notice of his or her intention to exercise the power of sale. 14.87

Where notice is to be dispensed with validly, it must be clear that

the exclusion of notice was given in relation to the operation of s 111 of the Conveyancing Act. A general [page 727] notification that notice has been excluded is insufficient; but, on the other hand, it is not necessary to go as far as naming the sections of the Act to which the notice is linked. Where notice pursuant to s 111(3) of the Conveyancing Act is defective, the position is the same as if the notice were defective pursuant to s 57(3) of the Real Property Act.307 14.88 Service of notice Section 111(2)(b) of the Conveyancing Act is relevant to the service of notice. It incorporates s 170 of the same Act by reference. The circumstances set out in s 170 can be extended, as demonstrated by Ex parte Dally-Watkins; Re Wilson308 (which widens the circumstances that amount to sufficient notice), or ignored if the mortgage instrument expresses an intention contrary to s 170. Where there is compliance with s 170 in the case of a mortgagor in possession, service of notice can be effected by leaving or sending notice by post to any occupied house or building comprised in the mortgage.309 If there is a failure to give notice, the consequences are the same for old system and Torrens title, as described below.310 If the mortgagor complies with the notice requirement and remedies the default, it is as though the default never occurred.311 14.89 Where the power of sale is exercised, the source of that power is s 109(1)(a) of the Conveyancing Act, and the mortgagee, in the appropriate circumstances, is able to exercise the power in relation to the mortgaged land or any part of it. Further, it may be sold by auction or private treaty, but it is necessary that the mortgage is in the form of a deed if the power of sale is to be exercised pursuant to the statute. 14.90 Where there is no deed of mortgage, an equitable mortgage may still exist, but the conditions under which the power of sale exists and is exercisable are different. As we have noted, an equitable mortgage may arise if there is an express or implied agreement to create a security. Where the

contract that has given rise to an equitable mortgage includes a power of sale, the mortgagee is able to rely on the contents of the contract to exercise that power. Issues arise in regard to the exercise of the power of sale where there is an equitable mortgage of a legal estate. Clearly, in those circumstances the mortgagee has never been in receipt of the legal title, so when he or she exercises the power of sale we must ask what interest he or she has to pass to a purchaser. In the English case of Re Hodson & Howes’ Contract,312 the court found that the mortgagee could not pass the legal estate because it remained with the mortgagor. By contrast, the court found in Re White Rose Cottage313 that the mortgagee could pass the legal estate because the ‘subject of the mortgage is the property itself [a legal interest] and not an equitable interest in it’. [page 728] If an equitable mortgage is created by the deposit of title deeds, it would seem that although the mortgagor must put the equitable mortgagee in the same position as the legal mortgagee would be in, there is no source for a valid exercise of the power of sale unless the contract underpinning the equitable mortgage and the deposit of title deeds actually spells out that the mortgagee has a power of sale. Without the inclusion of such a power, the equitable mortgagee would be thrown back on the remedy of foreclosure rather than sale.314 Where the equitable mortgage in question involves the mortgage of an equitable estate rather than a legal one, the equitable mortgagee can exercise the power of sale pursuant to s 112(1) of the Conveyancing Act as long as the mortgage is contained in a deed. If there is no deed, but the contract on which the mortgage is based grants the mortgagee a power of sale, then the position is the same as if there were an equitable mortgagee of a legal estate seeking to exercise a power of sale pursuant to a term contained in the contract on which the mortgage is based.

Torrens title

14.91 Notice and default The exercise of the power of sale in relation to registered mortgages under Torrens title land is primarily governed by ss 57 and 58 of the Real Property Act, in conjunction with ss 109 and 110 of the Conveyancing Act. The power of sale cannot be validly exercised unless there is a default, and proper written notice is served demanding that the default be rectified. The written notice must be served on the mortgagor and a copy served on each mortgagee or chargee under a registered mortgage who has a lower priority than the mortgagee activating the power of sale. Notice also needs to be served on each caveator claiming an interest in the mortgaged property by way of an unregistered mortgage or charge.315 Clearly, the security of these parties would be affected by any sale. Section 57(2)(a) of the Real Property Act sets out the types of default that permit the mortgagee to exercise the power of sale. It states that: 57 (2) A registered mortgagee, chargee or covenant chargee may, subject to this Act, exercise the powers conferred by section 58 if: (a)

in the case of a mortgage or charge, default has been made in the observance of any covenant, agreement or condition expressed or implied in the mortgage or charge or in the payment, in accordance with the terms of the mortgage or charge, of the principal, interest, annuity, rent-charge or other money the payment of which is secured by the mortgage or charge or of any part of that principal, interest, annuity, rent-charge or other money, …

[page 729] Written notice is always required in the case of a monetary default relating to the payment of any principal, interest, annuity, rent-charge or other money in accordance with the mortgage, but it can be dispensed with under s 58A of the Real Property Act by agreement, where the default is non-monetary in nature.316 Where a provision dispensing with the need to give notice or reducing the amount of notice for a non-monetary default has been included, it must be plain that the dispensation is linked to s 57 of the Real Property Act. As the consequences of default are potentially very serious, it is important that the mortgagor is alerted to clauses that might impact upon him or her in that regard. Nevertheless, the dispensation of the notice provision does not

have to go as far as actually reciting the relevant sections, but it cannot be a general dispensation provision either.317 14.92 In some circumstances, discussed below, the requirement of notice can be dispensed with.318 Where notice is either required or not dispensed with, some elements must be included in the notice for it to be valid. Section 57(3) of the Real Property Act sets out the required elements; they include specifying that the notice is given in relation to s 57(2)(b).319 Generally, omission of this element renders the notice invalid,320 but if the mortgagor does not seek injunctive relief and the purchaser had no knowledge of the absent section references at the date of entering into the contract, the purchaser is able to seek the assistance of equity through an order for specific performance of the contract.321 At other times, delay by the mortgagor in objecting to the inadequacies of a notice may also cause the doctrine of laches to be invoked. This doctrine prevents the mortgagor from relying on his or her strict legal rights, because his or her own delay in objecting to the invalid notice would result in unconscionability to the mortgagee.322 Further, as Mir Bros Projects Pty Ltd v 1924 Pty Ltd323 suggests, the purpose of notice is to allow the mortgagor the opportunity to remedy the breach or default before sale and, therefore, according to the reasoning in Mediservices International Pty Ltd v Stocks and Realty (Security Finance) Pty Ltd,324 the mortgagee is required to particularise and specify the way in which default is to be remedied. A failure to particularise the breach or default will render the notice defective. Where a default is alleged to have occurred but this did not actually occur, the notice will be rendered defective. This was the position in Websdale v S & J D Investments Pty Ltd.325 However, the court did not require that the particularisation of the [page 730] default extend to specifying the exact amount owed by the defaulting mortgagor. As an extension of this logic, an incorrect specification of the amount owed does not invalidate the notice either.326 Hence, the inclusion of an amount greater than that owed will not invalidate the notice, as Campbell v

Commercial Banking Co of Sydney demonstrated.327 There, it was made plain that, although the amount was overstated in the notice, that did not relieve the mortgagor from the obligation to pay the correct amount. Yet, if the overstatement of the amount in default is of ‘enormous scope’, as it was in Clarke v Japan Machines (Australia) Pty Ltd,328 the court will disallow the notice and deviate from the position taken in Mir Bros Projects Pty Ltd v 1924 Pty Ltd and Campbell v Commercial Banking Co of Sydney.329 The court may also disallow the notice if an excessive sum is stated as owing and the mortgagee refuses to accept any amount less than the excessive (and wrong) amount.330 14.93 The doubts expressed about the validity of the notice in Segulin v Car Owners’ Mutual Insurance Co Ltd331 suggest that it would be prudent for the notice to separate the amount of principal from the amount of interest which is due. However, the requirements regarding the signature on the notice are relatively liberal by comparison, in that it is unnecessary for the mortgagee himself or herself to sign. It is enough that the mortgagee’s solicitor signs the notice.332 Further, the notice does not have to be executed under seal.333 If the mortgagee wishes to claim the costs and expenses involved in preparing and serving the notice, he or she must require payment of those costs and expenses in the notice. The required amount must also be reasonable and specified in the notice. Another key issue in relation to notice is the duration of the period that the mortgagor has in which to rectify the default. In that regard, the mortgagee must state in the notice that unless the requirements set out in it are adhered to within one month of service (or a period longer than one month), that the mortgagee plans to proceed in exercising the power of sale. 14.94 If notice is not given in compliance with s 57(3) of the Real Property Act, quite simply the mortgagee is not permitted to exercise the power of sale.334 The situation [page 731] can be further complicated where the Real Property Act is not the only

legislation that the credit provider is bound by in regard to the mortgage. If, for example, the National Credit Code (NCC) also governs the mortgage, the credit provider must first issue a default notice under s 88(2) of the Code before the power of sale is exercised. Such a notice gives the borrower 30 days in which to rectify the default. The credit provider must also comply with requirements in other provisions of the legislation but, pursuant to s 88(4) of the NCC, it is possible to combine the notice concerning the mortgage with notice concerning another debt. 14.95 Where the mortgagee waives the right to exercise his or her power of sale after proper notice has been served, new notice is needed if the mortgagee later wishes to exercise the power of sale.335 Where the mortgagor remedies the default by paying the outstanding amount in the notice, the slate is wiped clean and any new default requires new notice.336 It is common for a mortgage to contain a clause making the whole of the debt immediately payable on any default in payment under the mortgage.337 However, such a clause cannot be upheld until the mortgagee is able to exercise the power of sale in respect of a particular default. Further, that power of sale arises only after the mortgagee first properly satisfies the notice provisions in the Act. All of the above notice requirements are relevant only where the power of sale is exercised pursuant to statute. If the sale is the result of a mortgagee suing on the personal covenant, these notice requirements are unnecessary and the mortgagee must comply only with the notice requirements set out in the mortgage instrument.

Exercise of the power of sale 14.96 It is usual for a mortgage to contain an express provision empowering the mortgagee to sell the mortgaged property on default by the mortgagor. Alternatively, the power can be implied.338 If the mortgagee of old system or Torrens title land has complied with the prerequisites to the exercise of the power of sale, he or she is able to exercise that power by selling the property either by auction or private contract.339 The mortgagee is also able to impose whatever restrictions he or she thinks fit,340 to sever fixtures,341 and

[page 732] to sell any easement, profit à prendre, right or privilege over the land.342 The provisions governing the aforementioned rights are applicable to both old system and Torrens title land pursuant to ss 108(1), 109(5) and 110(4) of the Conveyancing Act.343 If the sale proceeds, the purchaser will take a title free from all interests over which the mortgage has priority, but bound by those over which the mortgage does not have priority.344 It should be noted that other interests in the property are capable of arising because the mortgagor is permitted to deal with the land after a mortgage has been created. Therefore, he or she may create further interests in that land that are subject to the mortgagee’s interest. These further interests will only be defeated if the mortgagee exercises the power of sale. Clearly, if the further interests are registered, the purchaser is not protected from them; but if they are unregistered, the situation is less certain. If the further interest holders have lodged caveats, then it seems likely that the transfer to a purchaser cannot proceed until the caveats are dealt with.345 In the light of this, and for other reasons too, it is very important to examine the conduct and manner of the sale. 14.97 Under no circumstances at common law can the mortgagee sell the property to himself or herself. This prohibition exists even if the mortgagee is prepared to pay a very generous price for the mortgaged property.346 Therefore, it is somewhat surprising to see that s 109(1)(a) of the Conveyancing Act permits the mortgagee of old system title land to ‘buy in’ the property at auction, while s 109(5) of the same Act permits the mortgagee of Torrens title land to do the same. Section 58(1) of the Real Property Act expands the instances in which ‘buying in’ can occur in relation to Torrens title land by not restricting them to auctions only. Perhaps these provisions exist to prevent the property being sold at a ridiculously low price, but if that were the case it is difficult to see why the mortgagee would not simply set a sensible reserve in the first place.347 14.98 The sale must constitute a genuinely independent bargain.348 Therefore, a mortgagee in the form of a corporation cannot sell the mortgagor’s property to another corporation that is effectively controlled by

the same mortgagee. Such a sale would lack the necessary independence. In that regard, Australia and New Zealand Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd held that ‘the closer the association the greater the conflict and the greater the possibility of unconscious preference’.349 Hence, officers, solicitors or agents of the mortgagee have been ruled out as purchasers of the property that is being [page 733] sold pursuant to an exercise of the power of sale,350 but exceptions to this position do exist.351 That the sale is independent and genuine is important, although what will constitute a genuine sale may at times appear inconsistent. For example, a sale where the mortgagee lends the purchase price to the purchaser and then arranges to buy the property from that purchaser within a specified period will not preclude it from being regarded as genuine if it is, in all other respects, genuine. In some ways this may seem anomalous with the law that prevents a corporation in which the mortgagee has shares from purchasing the relevant property. Despite this seeming inconsistency, other restrictions designed to lead to a genuine sale have been upheld. These include preventing the mortgagee from simply exchanging the property for another352 or making a gift of the property to some third party.353 14.99 Unusual as it may seem, it is possible for the mortgagee to sell to the mortgagor. One may be led to wonder why the mortgagor does not simply repay the debt owed under the mortgage, instead of purchasing the property. The answer is often because the mortgagor does not have sufficient funds to repay the debt, but he or she does have the funds to cover a purchase price that is lower than the debt secured by the mortgage. Pursuing such a course of action does not relieve the mortgagor from being bound by mortgages ranking behind that of the mortgagee who is selling. Equity intervenes to ensure that mortgagees ranking behind the selling mortgagee remain protected,354 whereas, in circumstances where the purchaser is not the mortgagor, the purchaser will take free of later-ranking mortgages.

Negligence or good faith test? 14.100 When exercising the power of sale, the mortgagee must adhere to a standard of conduct that has the effect of balancing his or her own interests against those of the mortgagor. Historically, there has been judicial and academic debate about whether the correct standard was to be found through an application of the ‘reasonable care’ standard, otherwise known as the ‘negligence’ standard, or alternatively through the ‘good faith’ standard.355 The first test clearly results in a standard that is stricter than the latter. In Australia, the issue is still unresolved. Therefore, it is useful to examine both these tests briefly.356 However, as noted below, in New South Wales now the question has to some extent been clarified by statutory amendment. [page 734] 14.101 Negligence standard McHugh v Union Bank of Canada,357 Standard Chartered Bank Ltd v Walker358 and Cuckmere Brick Co Ltd v Mutual Finance Ltd359 are all examples of the negligence test in operation. In McHugh v Union Bank of Canada,360 Lord Moulton described the duty as one requiring the mortgagee to behave ‘as a reasonable man would behave in the realisation of his own property’, while in Standard Chartered Bank Ltd, Lord Denning stated that: This duty is only a particular application of the general duty of care to your neighbour which was stated by Lord Atkin in Donoghue v Stevenson … and applied in many cases since.361

In Cuckmere Brick Co Ltd,362 the court found the duty of the mortgagee was to take reasonable steps to obtain ‘the true market value’ of the property when selling it. In this case, the mortgagee’s duty also extended to obtaining a ‘proper price for the land in the interest of the mortgagor’.363 The relevant date for judging if such a standard has been adhered to is the date of sale. On the basis of this requirement, it is easy to see why many mortgagees favour selling by public auction. That method allows them to argue that the property is worth what somebody is prepared to pay for it on the given day. It can be argued that that price constitutes the property’s market value.364 14.102

Parker-Tweedale v Dunbar Bank plc,365 China and South Sea Bank Ltd

v Tan Soon Gin366 and Mailman v Challenge Bank Ltd367 are cases that all represent a retreat from the negligence standard. Downsview Nominees Ltd v First City Corp Ltd368 continued the retreat by stating that the mortgagee did not owe the mortgagor a duty of care, in negligence, in the exercise of the power of sale. That meant that there was no requirement to use reasonable care in the exercise of the power of sale. In so doing, the Privy Council veered away from the common law negligence standard towards an equitable duty, and found that to rely on the common law standard would cause ‘confusion and injustice’. Yorkshire Bank plc v Hall369 and Medforth v Blake370 have followed. The equitable duty with which [page 735] these cases have been concerned ‘takes account of the interest of the mortgagor and others interested in the equity of redemption’.371 14.103 Good faith standard Kennedy v De Trafford372 represents the ‘good faith’ line of authority. In that case, Lord Herschell LC stated that a mortgagee would not be in breach of his or her duty if the power of sale were exercised in ‘good faith, without any intention of dealing unfairly’.373 Lord Macnaghten, in the same case, stated that if a mortgagee ‘takes pains to comply with the provisions of that power and acts in good faith’, then the mortgagee would not be judged as having fallen short of the minimum standard.374 As will be seen below, some Australian cases have fleshed out the meaning of the good faith standard, although it has not been conclusively resolved which standard should prevail. Indeed, some cases have suggested that both tests should apply. For example, Hodgson CJ stated in Stone v Farrow Mortgage Services Pty Ltd (in liq)375 that to demonstrate a breach of duty, the mortgagor ‘must show at least that the [mortgagee] failed either to act in good faith or to act with reasonable skill and care or to take reasonably adequate steps to ensure a fair price in relation to the sale’. 14.104 Which standard in Australia? In the Australian context, the issue of which is the appropriate standard at common law has been raised in a number of cases, but notably in Barns v Queensland National Bank Ltd376 and Pendlebury

v Colonial Mutual Life Assurance Society Ltd.377 In the latter case, the court accepted the view that the mortgagee could not recklessly or wilfully sacrifice the mortgagor’s interests.378 Accordingly, a failure to adhere to this standard would amount to a failure to exercise good faith. However, Isaacs J, a member of that court, pointed out that a lack of good faith did not extend to mere negligence or carelessness. Among the court in Pendlebury, his was a singular view, when he found that a duty to act in good faith was the only standard by which the mortgagee’s actions should be judged. On the other hand, Barton J saw fairness as a part of good faith, and he found it necessary for the mortgagee to take reasonable precautions in obtaining a proper price. With a slightly different take on the issue, Griffith CJ, quoting Kennedy v De Trafford, stated that if a mortgagee ‘omits to take obvious precautions to ensure a fair price, and the facts show that he was absolutely careless [about] whether a fair price was obtained or not’ the mortgagee will have acted recklessly.379 Forsyth v Blundell380 picked up on these issues, but the court in that case did not categorically decide the matter either. The majority based its decision on the fact that the [page 736] trial judge had found that in selling the property the mortgagee had exhibited calculated indifference to the mortgagor and recklessly sacrificed the mortgagor’s interests. As a result it became unnecessary to answer the question of whether the mortgagee, in selling the property, had to act in a manner which was not negligent. Neither Walsh J nor Mason J was prepared to deal more specifically with the status of the negligence standard in regard to the power of sale. However, Menzies J, who was in dissent, did take the issue further, positioning himself very close to Barton J in Pendlebury, saying that ‘tak[ing] reasonable precautions to obtain a proper price is but a part of the duty to act in good faith’.381 He would have found that the mortgagee on the facts of the case had acted in good faith. Australia and New Zealand Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd382 also failed to resolve the issue. It was unnecessary for the court in that case to choose between the two standards, but Jacobs J did state that good

faith amounted to the mortgagee both gaining the best price obtainable and simultaneously exercising his or her rights to realise the security.383 Similarly, Commercial and General Acceptance Ltd v Nixon384 did not take the matter further because it dealt with a Queensland provision which expressly stated that in exercising the power of sale the mortgagee needed to ‘take reasonable care’. Interpretation of the relevant statutory provision did not affect the common law position that applies in New South Wales. Nevertheless, the court did make some general comments on what should be considered in ascertaining if the power had been properly or improperly exercised.385 Gibbs CJ seemed to sum up the position when he said that authorities dealing with the relevant standard were ‘conflicting’ and ‘irreconcilable’.386 Australia and New Zealand Banking Group Ltd v Pola387 also dealt with the Queensland duty to take ‘reasonable care’, and found that the bank in that case had breached the provision in its sale process. 14.105 Where the mortgagor is a corporation, the position is a little clearer, because it is regulated by s 420A of the Corporations Act 2001 (Cth). That section sets a negligence-style standard when a ‘controller’ exercises a power of sale over a corporation’s property. The section requires the controller to ‘take all reasonable care’ to sell the property for not less than its market value; where no market value exists, the property is to be sold for ‘the best price that is reasonably obtainable, having regard to the circumstances existing when the property is sold’. 14.106 Outside the area of corporations, however, the position in Australia has been unclear. One standard does not yet hold a position of pre-eminence over another, but [page 737] the practice of the courts has been to apply the good faith test, often on the basis of the dicta in Pendlebury’s case.388 While English movement away from the negligence standard, coupled with the application in some circumstances of the good faith test in Australia, suggests the two jurisdictions are coming together on this issue, cases such as Inkhorn Pty Ltd v Herbert389 suggest that

this is far from the case. There it was said that the difference in positions between the jurisdictions remained ‘marked’.390 In MBF Investments Pty Ltd v Nolan,391 the Victorian Court of Appeal revisited the issue and noted that, in that state, s 77(1) of the Transfer of Land Act 1958 (Vic) requiring that a mortgagee act ‘in good faith’ had previously been held to mean that ‘the mortgagee is obliged to obtain the best price consistent with its entitlement to realise its security’.392 But as noted there, recent New South Wales decisions have tended to regard the question as one to be resolved on the basis of ‘unconscionability’ in all the circumstances — see, for example, Hawkesbury Valley Developments Pty Ltd v Custom Credit Corp Ltd393 and Ultimate Property Group Pty Ltd v Lord.394 In the Nolan case, the question was whether a mortgagee, who had the option to sell three blocks of land to satisfy the debt, but who had chosen to sell one on which the mortgagor’s family home was located rather than, as would have been possible, two vacant blocks, had breached its duty under s 77 of the Victorian legislation. In the end, the Court of Appeal ruled that there was a broader concept of ‘unconscionability’ that applied to a mortgagee’s power of sale, but that in the circumstances of the particular sale, the mortgagee had not acted unconscionably.395 Clearly, resolution of these questions is long overdue.396 [page 738] 14.107 The matter has now been given more certainty in New South Wales with the commencement of s 111A of the Conveyancing Act.397 The section provides that: 111A (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.

This requirement is not one that can be waived by the mortgagor.398 The question remains, however, as to whether this rule is intended to completely replace the previous common law approaches, or to supplement them. It seems most likely that s 111A(6), which preserves the operation of ‘any rule of

law relating to the duty of the mortgagee …’ is intended to preserve the operation of the previous rules. On the basis of the decisions noted above, mortgagees may still have an obligation not to behave ‘unconscionably’ in exercising their power of sale, even if they comply with s 111A. Still, it seems that in most cases an approach of ‘reasonable care’ would satisfy the requirements of ‘conscionability’.

Conduct of the sale — practical aspects to consider 14.108 While the standard for deciding whether the power of sale has been exercised properly or improperly remains somewhat uncertain, it is impossible to predict confidently what conduct would or would not be found lacking. Nevertheless, the following aspects of the exercise of the power of sale have been known to be the subject of litigation and, hence, are worthy of consideration. 14.109 The timing of the sale For the mortgagee, the main object of the sale is to recoup as much of the debt as possible. Any sale price achieved in excess of this is helpful to the mortgagor but does not advantage the mortgagee. He or she is not a trustee for the mortgagor, but rather is ‘entitled to think of himself first’.399 This being the case, the mortgagee can usually sell the property at a time that suits him or her rather than the mortgagor.400 This is the case even if waiting until later might well produce a better financial result for the mortgagor. Such a principle has been followed in Reliance Permanent Building Society v Harwood-Stamper,401 Pendlebury v Colonial Mutual Life Assurance Society Ltd402 and China and South Sea Bank Ltd v Tan Soon Gin.403 It was not followed in Dimmick v Pearce Investments Pty Ltd,404 where it was found that a mortgagee may have to wait to sell if there is evidence that the market is clearly improving. [page 739] 14.110 Appointing an agent If the mortgagee appoints an agent who is regarded as reputable, but the agent’s conduct lets the mortgagee down because it does not meet the requisite standards for the exercise of the power,

the mortgagee still remains liable. The mortgagee is expected to ‘exercise some surveillance over the contractor’.405 14.111 The advertisement To ensure the mortgagee cannot be held to have wilfully and recklessly sacrificed the property, it is necessary to advertise it widely.406 In that way, the broadest number of prospective buyers can be reached. According to Griffith CJ in Pendlebury’s case: … the object of giving public notice of a sale by auction, whether by advertisement, bellman, posters or otherwise, is to bring the subject of the sale to the notice of such probable purchasers, and so to induce such competition as will be likely to secure a fair price.407

Although Griffith CJ was referring only to auctions in this case, it is also the position that a property being sold by private treaty needs to be advertised properly. In all cases the property needs to be described satisfactorily so that any prospective buyer understands how the property could be used. Hence, it is important to make it clear if it could be used as a development site408 or a caravan park.409 Whether the advertisement should state that it is a mortgagee sale is a moot point. If the property sells well, nothing further would be likely to come of including this information; but if it does not sell well, the sale may be criticised on the basis that the value of the property was depressed by the fact that it was a mortgagee sale, prospective buyers being of the view that a sale might be completed below market value as long as the purchase price was enough to cover the debt. Highly valuable commercial property might be expected to be advertised interstate or even overseas, and additional marketing, beyond mere advertising, would also be expected.410 Notably, in Pendlebury’s case, advertising the property in Melbourne newspapers was not considered adequate. It should also have been advertised in the locality in which the land was situated in order to increase the pool of prospective buyers.411 14.112 Requirement to spend money on the property There is no blanket requirement that demands that the mortgagee spend money on the property to prepare it for sale. However, the mortgagee must ensure that the property is presented in such a way that it will not be sacrificed. The result of this is that if the expenditure of certain funds would [page 740]

definitely improve the sale price obtainable, and the expenditure would be recouped in the sale itself, it is not justifiable for the mortgagee to avoid the expenditure.412 14.113 Setting the reserve As noted previously, it is important that the reserve is not set at a very low price compared with the value of the property.413 The mortgagee needs to bear in mind the objective of securing a proper price for the property, and this may not be achieved if the reserve is very low. By contrast, the mortgagee cannot set the reserve unrealistically high so that the property is passed in and sold later by private treaty at a deflated price.414 14.114 Compulsion to sell The mortgagee has a right not to sell the property when the time comes.415 This does not represent a breach of duty unless s 103(2) of the Conveyancing Act is invoked.416 That section gives the court the power to order a sale on application by certain parties.

Restraining the sale 14.115 Power of sale is exercisable It is possible to restrain the sale up until very late stages in the exercise of the power of sale. The restraint may be achieved by virtue of an injunction. Where the power of sale has arisen, the usual practice is that the mortgagor must pay into court the amount of money he or she still owes before the court will grant an injunction.417 This requirement is grounded in the maxim that one must come to equity with clean hands. Further, where the amount outstanding under the mortgage is less than the amount the mortgagor seeks as unliquidated damages against the mortgagee, by way of a set-off, this requirement of payment into court will not be reversed; neither will a set-off permit an alteration to the requirement of payment into court.418 In cases where the mortgagor disagrees with the amount being claimed by the mortgagee, the money must still be paid into court, but if the amount is regarded by the court as excessive, it may require a lesser amount to be paid in.419 These requirements are enforced because the court is concerned that the mortgagee’s power [page 741]

of sale should not be tampered with without some form of protection being provided as a quid pro quo.420 14.116 Improper exercise of power of sale An improper exercise of the power of sale may occur because no power of sale has arisen or, the power having arisen, involves some impropriety in its exercise. If the mortgagor alleges that no power of sale is exercisable at all, the grant of an injunction is not conditional on payment into court. Nowadays, in practice, the position is the same where the power of sale has arisen but the mortgagor is claiming that its exercise has involved some impropriety.421 This applies a fortiori in the case of an allegation based on non-compliance with the notice provisions.422 In such circumstances, the requirement for payment into court is usually waived, because the mortgagor is being asked to redeem the mortgage before the statute requires payment. Of course, although the mortgagee in the above situation is left without the protection of funds having been paid into court, the mortgagor must still give an undertaking as to damages.423 Where the court — and the mortgagee — are concerned that the damages undertaking may not be sufficient to protect the mortgagee, the mortgagor may be required to pay into court enough money to guarantee ‘justice between the parties’.424 In other words, the mortgagee must be properly protected and, in some cases, this may mean paying into court the amount at which the property is valued.425 At other times, it may mean that nothing extra has to be paid into court.426 One of the situations in which damages may be thought to be insufficient is where the exercise of the power of sale ultimately is found to be proper.427 14.117 Purchaser involved — proper exercise The situation regarding restraining the sale is more complicated if a purchaser is involved. If the mortgagee has entered into a contract for sale of the property as a consequence of the power of sale having been exercised properly, the court will not grant an injunction to restrain the sale. The logic behind this outcome is that, having consented to the mortgage in the first place, the mortgagor has also consented to the power of sale as part of the mortgage. The sale to a [page 742]

purchaser is itself quite naturally part of a valid exercise of the power. It, therefore, should not be restrained.428 14.118 Purchaser involved — improper exercise In cases where the power of sale has not arisen or has been exercised improperly and a purchaser is also involved, the situation is as follows. Where the contract has not actually been entered into, an injunction may be successfully sought to prevent the contract from being formed. (As an injunction is an equitable remedy, it is always granted subject to the discretion of the court.) It also appears that an injunction will be granted where the contract has been entered into but has not been completed. Such an injunction would prevent completion of the contract. In New South Wales, if the land in question is old system title land and the contract has been completed, but the purchaser gained notice of the impropriety before completion, the sale can be set aside. Finally, if the purchaser did not gain notice of the impropriety before completion, the view set out in Forsyth v Blundell429 is that the sale will not be set aside after completion. However, in New South Wales Forsyth v Blundell does not appear to have application to Torrens title land after completion. Its ambit appears to be limited to old system title, because the Australian Capital Territory provision under which the case was decided430 is a provision similar to s 112(3) of the Conveyancing Act — a provision governing old system title and not Torrens title. The legislation that impacts on the exercise of the power of sale is discussed more fully below. It should be noted that Forsyth v Blundell was distinguished in Emerald Securities Pty Ltd v Tee Zed Enterprises Pty Ltd.431 Forsyth v Blundell concerned a mortgagor, Blundell, who entered into a mortgage with Associated Securities for $125,000. A second mortgage was also entered into between the same parties for the sum of $10,000. When Blundell defaulted, the mortgagee exercised the power of sale. The mortgagee accepted $120,000 for the sale of the property, although previously another purchaser, an oil company, had indicated a willingness to pay $150,000. The mortgagee did not follow up with the party prepared to pay the higher price. The argument against the mortgagee included the allegation that it, in accepting the lower price and not re-investigating the position of the earlier and higher bidder, had exercised the power of sale improperly. On this basis, the mortgagor sought to redeem.

The majority of the High Court accepted the trial judge’s finding that the mortgagee had recklessly disregarded the rights of the mortgagor and, as a result, did not act in good faith. It also found that Blundell had not acted in any way to make the purchaser think that the mortgagee was acting bona fide. The purchaser was, however, held not to be aware of the mortgagee’s impropriety. The court went on to find that there was no general starting point that the rights of a mortgagor had priority over the rights of a purchaser, but as it turned out on the facts of this case, the mortgagor did prevail. The court read down the [page 743] relevant provisions of the Australian Capital Territory provisions, bringing them into line with s 112(3) of the Conveyancing Act. The court applied the usual priority rules to the case. Here, there were two equitable interests in conflict: the prior equitable interest of Blundell, and the later equitable interest of the purchaser, Shell.432 Blundell’s interest prevailed. While inappropriate notice or a lack of notice has been sufficient to protect the purchaser in some circumstances,433 this case did not revolve around notice, but instead hinged on the issue of the lack of bona fides demonstrated by the mortgagee. The court went on to deal with the situation by granting an injunction to restrain the purchaser, Shell, from completing. The court found there was no need to set the contract of sale aside as a preliminary step. Hence, if there exists an equity to impeach the sale, however arising, Forsyth v Blundell is authority in New South Wales that this equity will generally be preferred to the equitable interest of a purchaser before completion. This proposition applies to both old system and Torrens title land. 14.119 Although not at issue in Forsyth v Blundell, another method of protection open to the mortgagor who wishes to prevent a purchaser from registering (on the grounds of an improper exercise of the power of sale) is to lodge a caveat.434 14.120 Statute and protection of the purchaser As observed above, the position of a purchaser who buys pursuant to an exercise of the power of sale

is affected by statute.435 Section 112(3) of the Conveyancing Act governs the position of the purchaser after completion if the land is old system title, while the purchaser’s position after completion under Torrens title is governed largely by s 58(2) of the Real Property Act.436 14.121 Old system title As noted above, Forsyth v Blundell437 informs our understanding of s 112(3) of the Conveyancing Act. Section 112(3)(a) affords protection to the purchaser by removing any liability for him or her both before and on conveyance to ‘be concerned to see or inquire whether a case has arisen to authorise the sale, or due notice has been given, or the power is otherwise properly and regularly exercised’. Section 112(3)(b) also provides that ‘the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised’. It goes on to state that an irregular use of the power of sale will sound in damages against the person who irregularly exercised that power. While the section affords extensive protection to the purchaser, it is notable [page 744] that the section is only operative in cases involving a conveyance. Therefore, a contract for sale must have already been completed.438 Section 112(3) operates in conjunction with s 113(3) of the same Act. The effect of the latter provision is to liberate the purchaser from liability for any money arising under the power of sale once a receipt has been issued by the mortgagee. There is no obligation on the purchaser to inquire into whether any money remains due under the mortgage or to see that the money paid is correctly applied. 14.122 Torrens title In regard to Torrens title land, the position of the purchaser after completion but before registration may be affected by s 58(2) of the Real Property Act. Unfortunately, the ambit of this section is not settled and, for the reasons explained above, Forsyth v Blundell439 does not inform an interpretation of it. How far s 58(2) extends protection to a purchaser taking from a mortgagee who did not have a power of sale to

exercise in the first place, or who, having a power, improperly exercised it, remains unclear. The limited wording of the section, which fails to state that the purchaser’s title is unimpeachable,440 compares miserably with the clear wording of s 112(3) of the Conveyancing Act. Indeed, the restricted wording of s 58(2) makes it seemingly impossible to ‘read up’ the section so as to provide similar protection for the purchaser as is provided under s 112(3) of the Conveyancing Act. Therefore, s 58(2) of the Real Property Act appears to do little more than absolve the purchaser from constructive notice of any default or of notice having been served. Further, it may be the case that in some circumstances protection is afforded to the purchaser by other, more effective provisions. For example, in the interregnum between completion and registration, it may be possible for the purchaser taking from a mortgagee to invoke the protection of s 43A of the Real Property Act. Such protection will depend on whether the transfer from the mortgagee is registrable. Registrability, in turn, is determined by compliance with s 57(2). Section 57(2) needs to be read in conjunction with s 58(1) and, most significantly, s 59 of the Real Property Act. Where either the power of sale has not arisen because there is no default triggering the power or because there has been a failure to comply with s 57(2), then the dealing is simply not registrable. Thus, the purchaser will not be granted protection pursuant to s 43A of the Real Property Act. It would seem that s 58(2) cannot cure this difficulty. In cases where the power of sale has arisen but has been improperly exercised, the purchaser has the protection of s 43A from this equity. Finally, it would seem that s 58(2) operates only in the period before the purchaser becomes registered. After registration, the purchaser is able to rely on s 42, which offers indefeasibility of title on registration in the absence of the purchaser’s fraud or other known exceptions.441 [page 745]

Proceeds of sale 14.123

If the power of sale is exercised and there is a surplus, the

mortgagee is a trustee for that surplus.442 His or her obligation goes beyond a debt.443 The following discussion examines the positions under old system and Torrens title separately. 14.124 Old system title The key provision regarding the proceeds of sale in relation to old system title land is s 112(4) of the Conveyancing Act. This section requires that the mortgagee acts as trustee of any surplus in the absence of any contract to the contrary. It also requires that the surplus be applied for the: discharge of any prior encumbrances to which the sale is not made subject; payment of all costs, charges and expenses properly incurred by the mortgagee incidental to the sale or any attempted sale; and discharge of any moneys secured by the mortgage. Once these payments have been made, any surplus is to be paid to the subsequent mortgagees, and then finally to the mortgagor.444 Unregistered subsequent mortgagees are included in the list of those who must be paid out before the mortgagor.445 Where the mortgagee is uncertain of the priority order of the subsequent mortgagees, he or she is at liberty to pay the surplus into court and seek a direction from the court as to the priority. Should the mortgagee simply pay the surplus to the mortgagor, and later find that some or all of it should have been paid to a subsequent mortgagee, he or she will be liable for the loss.446 On the other hand, should the money be paid to a subsequent mortgagee and it later be determined that it was not in fact owing, the earlier mortgagee will be required to account for the funds if they cannot be recovered from the subsequent mortgagee.447 If a building is incomplete on land the subject of the mortgage, it may be the case that the mortgagee is able to complete it and claim the costs as ‘costs, charges and expenses’ pursuant to s 112(4) of the Conveyancing Act.448 This is because a completed building may result in a more successful sale and, consequently, a better realisation of the security. 14.125 Torrens title Section 112(9) of the Conveyancing Act clearly states that s 112 of that Act does not apply to Torrens title land. Instead, the application of the proceeds of sale of Torrens title land is governed by s 58(3)

of the Real Property Act. That section states that the proceeds of sale must be applied in payment of: [page 746] the expenses occasioned by the sale; the moneys due or owing to the mortgagee or chargee; and subsequent mortgages or charges. It also states that any surplus must be paid to the mortgagor or charger but, unlike the old system legislation on the same subject, it does not first require the discharge of ‘prior incumbrances to which the sale is not made subject’.449 Where the selling mortgagee has notice of subsequent mortgagees, he or she must distribute in favour of them if there is a surplus from the sale. There has been a question as to whether or not s 58(3) of the Real Property Act applies to unregistered mortgages.450 Re Murrell451 and Beeby v Official Assignee of Pickering452 both support the view that, once the property has been sold, the subsequent unregistered charge of a later mortgagee will be converted into an equitable charge over the surplus sale moneys that are payable to the mortgagor.453 The charge over the surplus sale moneys ranks higher than the claim by the mortgagor himself or herself to the surplus sale moneys, because the mortgagor created the (unregistered) charge over the land in the first place.454 14.126 It seems that a charge that is created to secure payment of a debt does not come within s 58(3) of the Real Property Act. The definition of ‘charge’ in s 3 of that Act excludes it. If that is the case, those kinds of charges cannot be considered when the issue of distribution is being worked out in relation to s 58(3). However, if we are able to claim that an unregistered mortgage is converted into an equitable charge over the surplus sale moneys, it must also be arguable that a chargee’s interest in land is likewise converted into an interest over the surplus sale moneys. Again it would rank higher than the mortgagor’s own interest in the surplus.455 Although the selling (first) mortgagee is permitted to deduct his or her legal

costs before any surplus is applied in favour of the second mortgagee, there are some important [page 747] practical limitations on this process. For example, if the amount of the surplus would not cover the amount owing to the second mortgagee if costs were deducted first, the second mortgagee can require the costs to be taxed.456

Priorities Competition between mortgages 14.127 Where there is both a primary mortgage and a subsequent mortgage, the question of priorities arises whenever there is a default in payment and the consequent sale of the secured property is insufficient to pay out all the mortgagees. The circumstances in which the mortgages were created primarily determine the nature of the interests in competition, at least in regard to whether they are legal or equitable; generally, the usual rules of priority determine the result of any competition.

Old system title 14.128 The old system rules are discussed in detail in Chapter 7. In short, they state that as between two competing legal interests, the first in time prevails;457 and as between a prior legal interest and a later equitable interest, the prior legal interest prevails.458 However, this latter rule will be overturned if it can be demonstrated that the prior legal mortgagor was responsible for fraud that led to the creation of the later equitable interest,459 or if the prior legal-interest holder was grossly negligent and his or her negligent conduct led to the creation of the later equitable interest.460 The position will be the same if the legal mortgagor committed a fraud that led to the creation of the later equitable interest. Where the competition is between a prior equitable mortgage and a later

legal interest, the later legal-interest holder will prevail if he or she is a bona fide purchaser for value without notice of the prior interest.461 Where the competition is between two competing equitable interests, the rule is that if the merits are equal, the first in time prevails.462 If the mortgage has been registered pursuant to the deeds registration scheme in the Conveyancing Act 1919 (NSW), the relevant date will not be the creation of the instrument, but rather the date of registration.463

Torrens title 14.129 As between competing registered mortgages, the priority is determined according to the dates of registration. Earlier registration has priority over later registration. [page 748] The date of registration is determined according to the date of lodgment of the mortgage for registration.464 Where the competition is between a registered mortgage and an unregistered mortgage, the former takes priority, because it will be indefeasible pursuant to the indefeasibility provisions of the Real Property Act 1900 (NSW).465 Where both mortgages are unregistered, it is possible for equity to recognise the interests and decide the priority issue on the basis of two competing equitable interests.466 Under the Torrens scheme, it is also possible for the holder of an unregistered interest to have a caveat placed on the relevant property that prevents the property in question being dealt with.467 In regard to equitable interests, one of the key issues is what will amount to postponing conduct as between two competing equitable mortgages. This in turn prompts the question, is the term ‘equitable mortgage’ really appropriate to a mortgage under the Torrens scheme at all, or is it more appropriate simply to speak of registered and unregistered mortgages? Noting that the fee simple estate does not leave the hands of the mortgagor under the Torrens scheme, some commentators suggest that consequently mortgages under that

scheme should be regarded as registered or unregistered, rather than legal or equitable.468 Others claim that this distinction is merely a matter of terminology, and that the fact that different incidents attach after registration is immaterial, because ultimately both the terms ‘legal interest’ and ‘registered interest’ are referring to the same thing; that is, the fullest quality of enjoyment permitted.469 If it is possible for an equitable interest to exist under the Torrens scheme, that would be because it conforms with equitable doctrines, not merely because it is unregistered. It seems preferable to preserve the distinction by claiming that a legal title is not synonymous with a registered one; although the terms both describe the fullest quality of enjoyment available, they are different beasts. Not only do different requirements apply when they come into existence, but the fact that the Real Property Act refers to ‘legal estates’, on the one hand, and either the ‘registered proprietor of an estate’ or ‘registered dealings’, on the other, suggests that a distinction between them was intended.470

Tacking 14.130 Tacking is a principle by which the order of expected priority may be altered in special circumstances.471 Three types of tacking are discussed below: [page 749] 1.

tabula in naufragio;

2.

tacking of advances by calling in the legal title; and

3.

tacking of advances by contract.

Tabula in naufragio 14.131 One application of tacking is based on tabula in naufragio. This phrase translates as ‘a plank in a shipwreck’, and has been said to be suggestive of ‘drowning equitable owners struggling for the lifebelt of the legal estate’.472 14.132

Old system title Application of the tabula in naufragio doctrine gives

priority to an equitable mortgagee who, not knowing of any other prior equitable interests, also acquires the legal mortgage over the same property to which he or she previously held only the equitable mortgage. When in the position of holding only an equitable mortgage, this later equitable-interest holder would have been postponed in favour of any pre-existing equitableinterest holder (assuming the merits were equal); but, having later acquired the legal mortgage, the later equitable-interest holder is able to rely on the legal interest to catapult up the priority ladder and displace the other earlier equitable-interest holder. In Bailey v Barnes,473 the claimant purchased an equity of redemption, as the property was already the subject of a mortgage. At the time of purchase, he did not have notice of a prior equitable interest, but subsequently he gained notice of it. Later, the claimant approached the legal mortgagee and paid off the legal mortgage, giving him the legal estate. The court held that the claimant’s interest (now legal) defeated the prior equitable interest arising by virtue of the improper exercise of sale. 14.133 Where the grant of a subsequent mortgage is a breach of trust, the tabula in naufragio doctrine does not apply.474 The case of Mumford v Stohwasser475 deals with the exception involving a trustee. The prior equitable interest in that case was an informal sublease. It was in competition with an informal mortgage of leasehold property. Although the mortgagee took a legal mortgage and so took in the legal title, the court found that there had been a breach of trust by the lessee and no priority was gained through acquiring the legal mortgage and title. It is somewhat difficult to see how these facts give rise to a trust.476 The facts suggest that if a party directly creates an equitable interest, the creator becomes a trustee in relation to the grantee of that interest, provided he or she retains the legal estate.477 This would suggest a fairly liberal interpretation of a trust. [page 750] 14.134 Torrens title In Matzner v Clyde Securities Ltd,478 Holland J found that the tabula in naufragio type of tacking does not apply to Torrens title land.

Commentators are divided on the correctness of this view.479 In its favour are the considerations that priority among mortgages necessarily depends on registration, and that under the Torrens system the first mortgagee does not acquire a legal interest that would permit him or her to invoke the rule favouring a good faith purchaser without notice. Against the position is the view that where there are second and third mortgages that are created informally and not registered, in principle the tabula in naufragio type of tacking would be possible under the Torrens scheme. There is, however, no case law to support this proposition.480

Tacking of advances by calling in the legal title 14.135 Old system Another application of tacking relates to further advances.481 This kind of tacking permits a first legal mortgagee to gain priority for subsequent advances over later equitable mortgagees of which the legal mortgagee has no notice.482 The subsequent advances, although being made after the formation of the equitable mortgage, are tacked on to the prior legal mortgage, and it is from that attachment that they gain their priority. It is the possession of the legal estate that permits the right to tack by this method. The effect is that the advance catapults its way up the priority line, displacing the equitable mortgages. 14.136 Torrens title Tacking of further advances is permitted in regard to mortgages under the Torrens system.483 Further, the rule against tacking of further advances after knowledge of a later mortgage does apply. At first blush this may seem a little unusual, because an earlier registered mortgage containing provisions for further advances is granted priority by virtue of s 36(9) of the Real Property Act, and indefeasibility is established on registration by virtue of s 42 of the Real Property Act. This is because the rule takes account of what would be fair and just as between the competing mortgagees.484 On one analysis, knowledge of a later mortgage should not affect the rights (to further advances) contained in an earlier registered mortgage. [page 751]

In Matzner v Clyde Securities Ltd, Holland J found that exceptions to the above rule were possible and that priority for any further advances could be maintained if those advances were to improve the property or enhance the value of the property. Such advances are sometimes said to arise under a ‘building mortgage’. The same approach concerning exceptions for building mortgages was taken in Central Mortgage Registry of Australia Ltd v Donemore Pty Ltd.485 There it was also held that actual, rather than constructive, notice was necessary. This position was taken, in part, because of the commercial hardship that would be suffered if companies were forced to investigate constructive notice. In contrast, the dicta in Sibbles v Highfern486 suggested that constructive notice was sufficient.

Tacking of advances by contract 14.137 Old system title Yet another form of tacking relates to contract and advances. This form permits a prior mortgagee (without notice of a subsequent mortgage) who has a contract that specifically provides for special advances, to tack those advances onto the prior mortgage.487 The effect is to displace the priority of the subsequent mortgagee. As the basis of this type of tacking is contract and not the holding of the prior legal title, this kind of tacking is applicable to both prior legal and equitable mortgages.488 If the prior mortgagee receives notice of the subsequent mortgagee, he or she is given the option to pay further advances.489 Finally, the rule permitting the tacking of further advances by contract will be subject to Pt 23 Div 1 of the Conveyancing Act. This Division is relevant in relation to notice of later mortgages and express clauses in the earlier mortgage securing present and future advances.490

Death and Mortgages 14.138 The death of the mortgagor does not bring the mortgage to an end.491 Further, the mortgaged property of the deceased can be passed by virtue of testamentary disposition or on intestacy. On the mortgagor’s death, the property is first passed into the hands of the executor or administrator pursuant to s 44 of the Probate and Administration Act 1898 (NSW).492

[page 752]

Reform Accurate nomenclature 14.139 The law of mortgages is steeped in historical understandings, often reflected in terminology and nomenclature. Where modern concepts are not simply derivative of traditional ones, it is suggested that attempts be made to jettison terminology that does not truly represent the concept it labels. For example, the terms ‘equity of redemption’ and ‘redemption suit’, fitting as they are to mortgages of old system land, are not really appropriate for mortgages of Torrens title land where the mortgage operates by way of a charge and there is no interest to redeem from the mortgagee. Latec Investments Ltd v Hotel Terrigal Pty Ltd493 provides an example where the term ‘equity of redemption’ was used inappropriately, while Fullagar J in Perry v Rolfe494 embarked on a discussion about why an old system rule relating to costs of a suit of redemption was not applicable in regard to a mortgage under Torrens title. It is suggested that those drafting legislation, the judiciary, academics and practitioners would all assist clarity if they made conscious efforts to use accurate terminology and, in particular, confined terms such as those mentioned above to discussion of old system title.

Internet advertising 14.140 In our discussion of the practical aspects concerning the conduct required in the exercise of the power of sale, mention was made of the need to advertise sufficiently so that the market is made aware that the property is available for sale.495 It is, therefore, suggested that it may be useful for legislation to require internet advertising in these circumstances and in the circumstances of foreclosure. It is true that many newspapers are available online and internet advertising forms part of the service they offer, but perhaps this requirement could be extended to advertising on real estate agents’ websites. As most real estate agents today have websites and many sell Australian property to both Australian residents and overseas buyers through internet viewings, this form of advertising would be a fairly simple and cost-

effective way to increase the pool of potential purchasers and so help avoid the property being sacrificed. It is envisaged that this form of advertising would operate alongside traditional forms. As we have become familiar with the idea of advertising media being specified (eg, the government Gazette or daily newspapers), this suggestion is not a great leap from that position.496 One of its benefits is that it addresses the fact that law and technology have become increasingly interwoven. [page 753]

Sureties and sexually transmitted debt 14.141 The problem of sexually transmitted debt is still great because, although banks and other lending agencies are now in the habit of asking guarantors and mortgagors if they have sought independent legal advice before entering into such agreements, the lending agencies do not necessarily verify the validity of the answers.497 While it is not being suggested that banks assume the role of interrogators, it does seem important to acknowledge that the party taking on debt because of emotional attachment might possibly fabricate an affirmative answer to the question of whether he or she has sought legal advice, if failing to do so would result in domestic disharmony and the proposed borrowing or guarantee not going ahead.498 Placing the onus on the weaker party (whoever that is) and requiring the weaker party simply to confirm that independent legal advice has been received may not yield the desired result.499 It may simply result in absolution of responsibility by the lender. Perhaps it would be useful to think about banks and other lending agencies being required to demand a solicitor’s letter confirming that recent independent advice has been given. The problem with this approach is, however, that the cost is borne by the mortgagor or guarantor. An alternative approach is described as ‘alternate control’. This approach prevents lenders from enforcing the guarantee if the terms of the guarantee are unfair and shifts the onus away from the individual, weaker party. The European Community Directive on Unfair Terms in Consumer Contracts

(EC Directive 93/13) is an example of such an approach.500 This approach may well be an appropriate course for New South Wales to take. The 2006 Report on this subject by the New South Wales Law Reform Commission (NSWLRC), Guaranteeing Someone Else’s Debts, made a number of sensible recommendations on this topic. These recommendations note that many of the provisions that currently protect debtors in relation to lending, should also be applied to guarantors. However, the National Credit Code (NCC) currently does not apply to many guarantors, as the majority of ‘domestic’ guarantees are given by relatives for the purposes of a small business [page 754] operated by the borrower.501 While Pt 3 Div 2 of the NCC provides some protection for guarantors, it does so only in relation to a guarantee given for a credit contract. The word ‘credit’ is defined in s 5 of the NCC to exclude small business purposes. The NSWLRC recommended model legislation that could be enacted on the topic of guarantors by the various jurisdictions (Recommendation 4.1). While initially it may seem that the recommendations could be implemented by amendment to the NCC, that may not be possible due to the limited nature of the reference of powers contained in the Credit (Commonwealth Powers) Act 2010 (NSW), which allowed the NCC to be enacted as Commonwealth law.502 It is recommended that state and territory governments develop model laws in line with the NSWLRC recommendation to deal with this important issue that, in times of economic constraint, is likely to impact on more and more families.

Transfers as mortgages 14.142 Another area ripe for reform is where a transfer is entered into solely for the purposes of security.503 In such circumstances, it might be advantageous to have the Registrar-General deny registration of an absolute transfer where it is evident that the transfer is intended to act as a security only. In the Victorian jurisdiction, registration of a transfer designed to operate

as a mortgage was denied in Putz v Registrar of Titles.504 There it was found that if the transfer were absolute, it did not comply with the statutory requirements that dealt with transfers because the true consideration was not spelled out, while if it were a mortgage, it did not comply with the requirements for registration either.505 Central to the discussion, however, is the issue of whether the mortgage has been created by way of absolute transfer accompanied by a separate instrument providing for reconveyance on repayment, or whether the transfer itself has made it plain that it is operating by way of mortgage. (An example of the latter might be a transfer that includes a recital that states that the consideration is the money lent.506) The Victorian, Queensland and Tasmanian titles offices apparently refuse to register a transfer that, on the face of it, reveals the arrangement is actually one of mortgage rather than transfer.507 These states seem to take the approach that the titles offices are not expected to go beyond the instruments in deciding whether to register the transfer but, where the instrument actually flaunts its non-compliance, the offices will act accordingly. It is suggested that New South Wales should follow the lead of these states in order to [page 755] prevent some of the problems that potentially arise from the misuse of transfers. Perhaps it would also be prudent to extend this practice of denying registration to transfers intended to act as mortgages, to cases where — although there is nothing on the face of the transfer itself to suggest this is the position — the Registrar has knowledge that the transfer is to act as a mortgage.508 In this way, substance, not form, would be emphasised.

Resolution of negligence and good faith test with regard to power of sale 14.143 In a previous edition of this text, reference was made to the introduction of a Private Member’s Bill to increase clarity in the test to be used to judge whether a power of sale has been exercised properly (discussed above at 14.100–14.106). It is encouraging to note that this amendment, in

the form of s 111A of the Conveyancing Act, was eventually introduced as a government measure (see discussion at 14.107). While the concept of market value and the lack of it may still leave some uncertainty,509 and questions remain as to application of common law rules in addition to the statutory rule, the step of spelling out which standard should apply is most welcome.

1.

E Sykes and S Walker, The Law of Securities, 5th ed, Law Book Co, Sydney, 1993, pp 14–20.

2.

Note that Wappett and Allan argue that the categories of securities are not closed: C Wappett and D Allan, Securities Over Personal Property, Butterworths, Sydney, 1999, p 2. They favour a ‘functional’ view of a security. See the listing of four categories of ‘proprietary interest by way of consensual security’ in Beconwood Securities Pty Ltd v Australia and New Zealand Banking Group Ltd (2008) 246 ALR 361 at [36].

3.

In Santley v Wilde [1899] 2 Ch 474 at 474, Lord Lindley MR refers to a mortgage as a conveyance or transfer of property as security for the payment of debt or the discharge of an obligation.

4.

See Sykes and Walker, The Law of Securities, note 1 above, Ch 12; W D Duncan and L Willmott, Mortgages Law in Australia, 2nd ed, The Federation Press, Sydney, 1996, Ch 9. The first relevant legislation in New South Wales of this nature was the Sale of Goods Act 1898 (NSW). See also Monsell v Team Link Management Pty Ltd (1997) 8 BPR 15,401, which discusses the bills of sale legislation.

5.

A Duggan and E Lanyon, Consumer Credit Law, Butterworths, Sydney, 1999, p 5.

6.

Although a bill of sale was originally a document evidencing an absolute transfer, the term came to include a transaction permitting a secured party to seize the chattel.

7.

See V Corr and S Begg, ‘Legal Aspects of Credit Plans of Financiers and Retailers’ (1964) 38 LIJ 366 at 367 for a detailed account of bills of sale legislation.

8.

Duggan and Lanyon, Consumer Credit Law, note 5 above, p 4, outline the legislation’s shortfalls. See also K Sutton, Sales and Consumer Law in Australia and New Zealand, 3rd ed, Law Book Co, Sydney, 1983, pp 330–53; A Moore, S Grattan, and L Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, 6th ed, Lawbook Co, Sydney, 2016, pp 401–2.

9.

See the Registration of Interests in Goods Act 1986 (NSW). Under s 3 of that Act, motor vehicles were ‘prescribed goods’, and, in combination with cl 10 of the Registration of Interests in Goods Regulation 2004 (NSW), so were boats. Section 5(3) of the Security Interests in Goods Act provided that that Act did not apply to ‘prescribed goods’ within the meaning of the 1986 legislation.

10.

Security Interests in Goods Act 2005 (NSW) s 31(1), (2).

11.

Security Interests in Goods Act 2005 (NSW) s 31(3), (4).

12.

The Security Interests in Goods Act 2005 (NSW) was repealed by s 4 of the Personal Property Securities (Commonwealth Powers) Amendment Act 2009 (NSW) with effect from 30 January 2012.

13.

For extended comment, see A Duggan and D Brown, Australian Personal Property Securities Law, 2nd ed, LexisNexis Butterworths, Australia, 2016; C Wappett, Essential Personal Property Securities Law in Australia, 3rd ed, LexisNexis Butterworths, Australia, 2015. See also V Barns-Graham and L Gullifer, ‘The Australian PPS Reforms: What Will the New System Look Like?’ (2010) 4(4) Law and Financial Markets Review 394; J G H Stumbles, ‘The PPSA: the Extended Reach of the Definition of the PPSA Security Interest’ (2011) 34(2) UNSWLJ 448; A Bradbrook, S MacCallum, A Moore, S Grattan and L Griggs, Australian Property Law: Cases and Materials, 4th ed, Lawbook Co, Pyrmont, 2011, pp 210–16. There are detailed explanations of the system linked at Australian Financial Security Authority, About the PPSR (accessed 4 June 2017),

. For a judicial overview, see the comments of Ward JA in Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] NSWCA 8 at [41]–[56]. 14.

Hence, interpretation of provisions in similar legislation in those jurisdictions is likely to influence the Australian courts in their reading of the PPSA: see, eg, comments by Brereton J in one of the first substantial judicial comments on the legislation, Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337 at [32]. See also, on interpretation of the legislation generally, S McCracken, ‘Personal Property Securities Legislation: Analysing the New Lexicon’ (2014) 35 Adelaide LR 71–95.

15.

For New South Wales, eg, see the Personal Property Securities (Commonwealth Powers) Act 2009 (NSW).

16.

Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] NSWCA 8.

17.

Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] NSWCA 8 at [83].

18.

For conditions to be satisfied for attachment to occur, see s 19(2) of the PPSA. In brief, the grantor must have rights in the collateral and value must be given for the security interest, or the grantor must do an act by which it arises.

19.

See Pt 5.3 of the PPSA.

20.

For a case where these provisions operated, see Re Kaizen Global Investments Ltd v Australia New Agribusiness & Chemical Group Ltd (in liq) [2017] FCA 431. An application under s 588FM of the Corporations Act to extend the time for registration of the security interest was refused in that case — although it was accepted that the failure to register in time was due to ‘inadvertance’, the company had gone into liquidation and making an order for late registration would adversely affect the interests of unsecured creditors: see Kaizen Global Investments at [93]. See also Re Appleyard Capital Pty Ltd (2014) 101 ACSR 629, where Brereton J dealt with an earlier application under the same provision.

21.

Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337.

22.

Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337 at [32].

23.

Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337 at [26].

24.

QES also argued that it had the benefit of a ‘transitional security interest’ under provisions designed to temporarily allow recognition of arrangements made prior to commencement of the PPSA. See PPSA ss 308, 311 and 320. However, it failed on this argument because Brereton J ruled that there was a prior registration scheme in place that QES could have used to record its interest, and failure to use that scheme meant that it did not have a recognised transitional interest. See PPSA s 322(3), picking up reg 9.2 of the Personal Property Securities Regulations 2010 (Cth) (noted in Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337 at [48]).

25.

See Brereton J’s comment in Re Maiden Civil (P&E) Pty Ltd; Albarran v Queensland Excavation Services Pty Ltd (2013) 277 FLR 337 at [35], adopting similar remarks from Canadian cases: the ‘dispute cannot be resolved through the determination of who has title to the collateral, because the dispute is one of priority, not ownership’.

26.

Note that, for leases or bailments entered into prior to 20 May 2017, the term that led to the arrangement being a deemed security interest was only one year. The relevant amendment was made by the Personal Property Securities Amendment (PPS Leases) Act 2017 (Cth), which commenced operation on 20 May 2017. The second reading speech for the amending legislation indicated that concerns had been raised that the shorter period created a serious burden on small equipment hire businesses, for reasons discussed below when considering the impact of s 267 of the PPSA and related provisions. See Commonwealth of Australia, Parliamentary Debates, House of Representatives, 1 March 2017, 1883–4 (Hon Michael Keenan).

27.

Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] NSWCA 8.

28.

While there is no separate definition of ‘property’ in the PPSA, various provisions of the Act assume that ‘intangible property’ can be the subject of a security arrangement. See, eg, s 6(2) of the PPSA, which defines the relevant connection with Australia required for such property.

29.

See the definition of ‘personal property’ in s 10 of the PPSA: ‘property … other than (a) land’. It should also be noted that in general interests created by way of seeking equitable relief from a court will not be regulated by the Act. See National Australia Bank Ltd v Garrett [2016] FCA 714 at [32].

30.

PPSA s 8(1)(j).

31.

Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] NSWCA 8 at [103]–[105].

32.

Re OneSteel Manufacturing Pty Ltd (admins apptd) [2017] NSWSC 21.

33.

A similar result followed in Re Production Printing (Aust) Pty Ltd (in liq) [2017] NSWSC 505. Note that after the trial decision in OneSteel, and before a foreshadowed appeal could be heard, the parties settled their dispute by agreeing to enter into a new arrangement whereby the OneSteel business would re-transfer the crushing plant, take a new lease, and the leasing company would gain a new, valid, security interest. See Alleasing Pty Ltd; Re OneSteel Manufacturing Pty Ltd v OneSteel Manufacturing Pty Ltd [2017] FCA 656, where a judge of the Federal Court approved an extension of time for registration of the relevant security interest to allow these arrangements to proceed.

34.

See the detailed consideration of this argument in Re OneSteel Manufacturing Pty Ltd (admins apptd) [2017] NSWSC 21 at [42]–[64]. A similar argument was rejected by Le Miere J in White v Spiers Earthworks Pty Ltd (2014) 99 ACSR 214 at [39]–[40].

35.

Sykes and Walker, The Law of Securities, note 1 above, pp 539–45. The origins of hire-purchase date back to country-based European nobility, who leased furniture in their town homes. By 1800, they were also given the opportunity to purchase the furniture instead of merely leasing it. This rentalpurchase arrangement was the beginning of hire-purchase. See the Report of the Committee on Consumer Credit, Command 4596, OHMS, London, 1971, known as the ‘Crowther Committee Report’.

36.

Duggan and Lanyon, Consumer Credit Law, note 5 above, p 10.

37.

See Roberts v IAC (Finance) Pty Ltd [1967] VR 231.

38.

Committee of the Adelaide Law School, Report to the Standing Committee of State and Commonwealth Attorneys-General on the Law Relating to Consumer Credit and Money Lending, South Australian Government Printer, Adelaide, 1969 (known as the ‘Rogerson Report’); Committee of the Law Council of Australia, Report to the Attorney-General for the State of Victoria on Fair Consumer Credit Laws, Victorian Government Printer, Melbourne, 1969 (known as the ‘Molomby Report’);

Committee of the Law Council of Australia, Supplementary Report on Fair Consumer Credit Laws to the Attorney-General for the State of Victoria, Mineo, 1973 (known as the ‘Molomby Committee Supplementary Report’). 39.

For an overview, see B Taylor, ‘New Responsible Lending Requirements’ (2011) 26(10) Australian Banking and Finance Law Bulletin 158.

40.

See Pts 3-2A and 3-2B of the National Credit Code, inserted by the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011 (Cth).

41.

See NCC s 5. For comment see Bradbrook, MacCallum, Moore, Grattan and Griggs, Australian Property Law: Cases and Materials, note 13 above, p 207; P Butt, Land Law, 6th ed, Lawbook Co, Sydney, 2010, pp 590–92; E Webb, ‘The Response of the Australian Legislature and Courts to Predatory Lending and Other Unconscionable or Oppressive Practices Involving Real Property Mortgages’ in L B Moses, B Edgeworth and C Sherry, Property and Security: Selected Essays, Lawbook Co, Pyrmont, 2010, pp 89–126 (an overview of the previous law and comments on the then draft NCC).

42.

NCC s 5(1)(b)(i), (d).

43.

NCC s 5(1)(b)(ii), (iii).

44.

NCC s 14(1). Although, note that under s 15 of the NCC the Regulations may provide that the Code will apply to other forms of credit agreement. If a mortgage is not signed and in writing, s 42 of the NCC means that it cannot be enforced by the mortgagee.

45.

See PPSA s 12(2)(e).

46.

See Personal Property Securities Regulations 2010 (Cth) Pt 4.

47.

For a detailed account of the mortgage and its development from a pledge or ‘gage’ into a mortgage, see T F T Plucknett, A Concise History of the Common Law, 5th ed, Little, Brown & Co, Boston, 1956; Bracton, The Laws and Customs of England, circa 1256, cited in Butt, Land Law, note 41 above, p 578; Sir Thomas Littleton, Les Tenures de Monsieur Littleton, 1621; Edward Coke, The First Part of the Institutes of the Laws of England or A Commentary upon Littleton, 19th ed, in the possession of the Bodleian Law Library, Oxford.

48.

A W B Simpson, A History of Land Law, 2nd ed, Clarendon Press, Oxford, 1986, p 141.

49.

See 3.40ff for discussion of the difference between leasehold and freehold estates.

50.

H G Hanbury and C H M Waldock, The Law of Mortgages, Stevens, London, 1938, p 23, cited in Butt, Land Law, note 41 above, p 578.

51.

See Chapter 8.

52.

Campbell J in King Investment Solutions v Hussain [2005] NSWSC 1076 at [44].

53.

National Provincial and Union Bank of England v Charnley [1924] 1 KB 431.

54.

Walsh v Lonsdale (1882) 21 Ch D 9.

55.

See, eg, Allen’s Asphalt Pty Ltd v SPM Group Pty Ltd [2010] 1 Qd R 202 per Muir JA at [47].

56.

Sporle v Whayman (1855) 20 Beav 607; 52 ER 738 suggests that a mortgagee whose mortgage has been acquired by virtue of deposit of title deeds can require that a memorandum also be created for the purposes of evidence. See Russel v Russel (1783) 1 Bro CC 269; 28 ER 1121. Section 23C of the Conveyancing Act requires writing for the creation of an equitable mortgage. An exception is where there are sufficient acts of part performance to create an equitable mortgage pursuant to ss 23E and 54A(2) of the same Act. See ANZ Banking Group Ltd v Widin (1990) 26 FCR 21; Drulroad

Pty Ltd v Gibson (1992) 5 BPR 11,878 at 11,882. 57.

For discussion of equitable mortgages created by deposit of title deeds, see the High Court decision in Theodore v Mistford Pty Ltd (2005) 221 CLR 612. Hepburn explores the complications involved when the title deeds are those of a third party: S Hepburn, ‘Reconsidering the Scope of the Equitable Mortgage Arising from Deposit of Title Documents’ (2006) 80 ALJ 121. It should be noted, however, that where the NCC applies, an enforceable mortgage must be in writing signed by the debtor — see s 42(4) of the NCC. The courts are yet to consider whether equity would deem there to be a mortgage contrary to the NCC. M Bransgrove and M Young, The Essential Guide to Mortgage Law in New South Wales, 2nd ed, LexisNexis Butterworths, Australia, 2014, [1.38], note that it is also not clear whether indefeasibility of a registered Torrens system mortgage would override s 42(4) of the NCC or not.

58.

See the reasoning in Spencer’s Case (1583) 5 Co Rep 16a; 77 ER 72.

59.

Another disadvantage relating to the disclaimer of the lease in the case of bankruptcy has now been overcome by the operation of s 133(9) of the Bankruptcy Act 1966 (Cth).

60.

Real Property Act 1900 (NSW) ss 56(1), 57. Butt suggests querying whether a Torrens title transfer, in absolute form but intended to be by way of mortgage only, is registrable, it not being in the approved form: Butt, Land Law, note 41 above, p 589, n 115. See 14.142.

61.

Lyons v Lyons [1967] VR 169.

62.

Real Property Act 1900 (NSW) ss 56(1), 57(1). See also E S & A Bank v Phillips (1937) 57 CLR 302; King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076 at [52]–[53].

63.

For a consideration of this issue in the context of tacking and advances, see Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 and Hopkinson v Rolt (1861) 9 HL Cas 514; 11 ER 829.

64.

Barry v Heider (1914) 19 CLR 197; J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546; Windella (NSW) Pty Ltd v Hughes (1999) NSW ConvR ¶55–926. Note that this type of equitable mortgage requires the mortgage to be in registrable form and any muniments of title to be handed over.

65.

Generally, the Folio of the Register will be deposited with the title deeds. See New South Wales Conveyancing Law and Practice, CCH, looseleaf, ‘Mortgages’, [32-055]. The principles applicable to old system title also apply here.

66.

See New South Wales Conveyancing Law and Practice, CCH, looseleaf, ‘Mortgages’, [32-055].

67.

The wording of s 60 of the Real Property Act (which, for the purposes of that section, equates a mortgage of a legal interest in land with a mortgage of a Torrens interest) indirectly recognises a distinction between a legal mortgage of old system land and a registered mortgage of Torrens system land. Yet it is worth noting that Kitto J in Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265 consistently uses the term throughout his judgment.

68.

In Forsyth v Blundell (1973) 129 CLR 477, Walsh J discusses how the mortgagor’s rights under the Torrens scheme, although greater than an equity of redemption, can be burdened by the mortgage provisions which relate to the power of sale.

69.

It would be usual for a separate agreement to re-transfer the land to be executed at the same time as the absolute transfer. The former cannot be registered, but the mortgagor’s interest can be subject to a caveat.

70.

Sander v Twigg (1877) 13 VLR 765; Watson v Royal Permanent Building Society (1888) 14 VLR 283; Richmond City Local Board of Health v Victorian Permanent Building and Investment Society (1890) 16

VLR 845; Lapin v Abigail (1930) 44 CLR 166 at 193–4; Gurfinkel v Bentley Pty Ltd (1966) 116 CLR 98 at 107 and 115–16; Sykes and Walker, The Law of Securities, note 1 above, pp 236–43. 71.

Real Property Act 1900 (NSW) ss 39, 39C and 57(1). See also 14.142.

72.

It is possible to create an equitable mortgage of leasehold land under both the Torrens scheme and old system title. See Sykes and Walker, The Law of Securities, note 1 above, p 340.

73.

Real Property Act 1900 (NSW) ss 57, 64.

74.

For a discussion of the operation of this section, see Tooheys Ltd v Municipal Council of Sydney (1946) 71 CLR 407 at 412 per Rich J; 416 per Starke J.

75.

Real Property Act 1900 (NSW) s 13.

76.

For a discussion of Crown land over which grants have not yet issued, see New South Wales Conveyancing Law and Practice, Lawbook Co, looseleaf, [32-075].

77.

Hayward v Smith (1887) 9 LR (NSW) Eq 11. The Crown Land Consolidation Act was repealed in 1989, but its effect continues; see Sykes and Walker, The Law of Securities, note 1 above, p 342.

78.

For further analysis, see Sykes and Walker, The Law of Securities, note 1 above, pp 342–54.

79.

For general comment on this area, see F Burns, ‘Clogs on the Equity of Redemption: A Story of Changing Equitable Intervention’ in J Glister and P Ridge (eds), Fault lines in Equity, Hart Publishing, Oxford, 2012, Ch 3.

80.

Noakes & Co Ltd v Rice [1902] AC 24 at 30. For a general discussion of the area, suggesting the doctrine may now be redundant given the protection afforded by other remedies dealing with ‘unconscionable’ conduct, see L Willmott and B Duncan, ‘Clogging the Equity of Redemption: An Outmoded Concept?’ [2002] QUTLJJ 2. For a general overview of the law on this area, see Sun North Investments Pty Ltd (as Trustee of Sun Development Trust) v Dale [2014] 1 Qd R 369at [74]–[75] per Henry J.

81.

Although the instrument may be called a contract of sale, equity will construe it as a mortgage if, having regard to its intention and substance, it is found to be one. Note there are other circumstances that equity has construed as a clog on the equity of redemption; these, however, are the main ones.

82.

Hanbury and Waldock, The Law of Mortgages, note 50 above, p 87. Noakes & Co Ltd v Rice [1902] AC 24 at 30 stresses the importance that is placed on redemption.

83.

In requiring that Tooheys Brewery be the sole supplier to the defendant, the case of Toohey v Gunther (1928) 41 CLR 181 offers an example of a trade tie. Such a tie might now fall foul of s 47 of the Competition and Consumer Act 2010 (Cth).

84.

For an overview, see Bransgrove and Young, The Essential Guide to Mortgage Law in New South Wales, note 57 above, pp 156–7. However, as noted below, there may be a difference of approach on this matter emerging between courts in different states.

85.

Fairclough v Swan Brewery Co Ltd [1912] AC 565 at 570.

86.

See Samuel v Jarrah Timber and Wood Paving Corp Ltd [1904] AC 323 at 326 for a discussion of these issues.

87.

Seton v Slade (1802) 7 Ves 265 at 273; 32 ER 108 at 111.

88.

See Duncan and Willmott, Mortgages Law in Australia, note 4 above, p 69.

89.

Morgan v Jeffreys [1910] 1 Ch 620.

90.

Davis v Symons [1934] Ch 442.

91.

Fairclough v Swan Brewery Co Ltd [1912] AC 565.

92.

Santley v Wilde [1899] 2 Ch 474. This case was criticised by the House of Lords in Noakes & Co Ltd v Rice [1902] AC 24 at 31–2 and 34.

93.

Knightsbridge Estates Trust Ltd v Byrne [1939] Ch 441. Affirmed (on different grounds) in Knightsbridge Estates Trust Ltd v Byrne [1940] AC 613.

94.

Knightsbridge Estates Trust Ltd v Byrne [1939] Ch 441 at 456.

95.

See reg 79A of the National Consumer Credit Protection Regulations 2010 (Cth). The exceptions allowed are, broadly speaking, fees that allow the lender reasonable recovery of costs. Note that in some cases termination fees in relation to contracts entered into prior to 1 July 2011 may be subject to challenge as ‘unconscionable’ under other provisions of the NCC. See ASIC, Early Termination Fees for Residential Loans: Unconscionable Fees and Unfair Contract Terms, Regulatory Guide RG 220, August 2011. See also s 82 of the NCC.

96.

On usury, see Duggan and Lanyon, Consumer Credit Law, note 5 above, p 2.

97.

Biggs v Hoddinott [1898] 2 Ch 307.

98.

Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269.

99.

Kreglinger v New Patagonia Meat and Cold Storage Co Ltd [1914] AC 25 at 61.

100. Kreglinger v New Patagonia Meat and Cold Storage Co Ltd [1914] AC 25 at 39. 101. Toohey v Gunther (1928) 41 CLR 181. 102. Noakes & Co Ltd v Rice [1902] AC 24. 103. Noakes & Co Ltd v Rice [1902] AC 24 at 29. 104. Noakes & Co Ltd v Rice [1902] AC 24 at 30. 105. Biggs v Hoddinott [1898] 2 Ch 307. 106. Bradley v Carritt [1903] AC 253. 107. By 17 & 18 Vic, c 90: see Sykes and Walker, The Law of Securities, note 1 above, p 74. To explain, ‘usury’ originally ‘meant simply the loan of money in return for the payment of interest’, and there was an absolute ban on the practice. However, as societies became more trade focused a greater leniency towards usury developed, and the practice was redefined as a ban on the charging of excessive interest, rather than a ban on any interest at all. In England, usury laws set the interest rate, but by the early 19th century those laws contained many exceptions and were so widely avoided that pressure developed for their repeal. In 1854, the usury laws were repealed and the result was that interest rates were left to market forces. See Duggan and Lanyon, Consumer Credit Law, note 5 above, pp 2–3. 108. For further discussion, see J Nestel, ‘Banks’ Liability to Foreign Currency Borrowers’ (1990) 64 ALJ 776; J Thurston, ‘Equity or Index-linked Mortgages’ (1989) 133(11) Sol Jo 349–50. 109. As it is put in E Tyler, P Young and C Croft, Fisher and Lightwood’s Law of Mortgage, 2nd Aust ed, LexisNexis Butterworths, Sydney, 2005, p 710: The special rules relating to collateral advantages do not apply, and the validity of the stipulation must be determined on general principles, if the provision is contained in an agreement forming a separate transaction from the mortgage. 110. Wily as Administrator of Macquarie Medical Holdings Pty Ltd v Endeavour Health Care Services Pty Ltd (2003) 12 BPR 22,447.

111. Kreglinger v New Patagonia Meat and Cold Storage Co Ltd [1914] AC 25. 112. Westfield Holdings Ltd v Australian Capital Television Pty Ltd (1992) 32 NSWLR 194. 113. For decisions adopting or approving this approach, see also Re Modular Design Group Pty Ltd (1994) 35 NSWLR 96; the decision of the Full Court of the Supreme Court of SA in Epic Feast Pty Ltd v Mawson KLM Holdings Pty Ltd (1998) 71 SASR 161. 114. Lift Capital Partners Pty Ltd v Merrill Lynch International (2009) 73 NSWLR 404. 115. Lift Capital Partners Pty Ltd v Merrill Lynch International (2009) 73 NSWLR 404 at [91]. For further comment, see L Aitken, ‘Share Trading and the “Clog” on the Equity of Redemption’ (2009) 83 ALJ 237. 116. Sun North Investments Pty Ltd (as Trustee of Sun Development Trust) v Dale [2014] 1 Qd R 369, especially at [113]. 117. Fairclough v Swan Brewery Co [1912] AC 565. 118. Sun North Investments Pty Ltd (as Trustee of Sun Development Trust) v Dale [[2014] 1 Qd R 369 at [84]. 119. Re Funds in Court; Application of Mango Credit Pty Ltd [2016] NSWSC 199 per Lindsay J at [98]– [105]. The difference of opinion between New South Wales and Queensland courts on the issue was noted in Amcor Ltd v Barnes [2016] VSC 707 at [1250]–[1254], but did not need to be resolved in that case. 120. See Circuit Finance Pty Ltd v Glenauchen Pty Ltd [2001] SASC 41 for an application of this principle. In Mango Credit, note 119 above, it was held that there was an arguable case that the provisions of the mortgage in question amounted to a penalty of the relevant sort: see [84]–[97], citing the High Court decision in Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205. 121. Potter v Edwards (1875) 26 LJ Ch 468. 122. Cityland Property (Holdings) Ltd v Dabrah [1968] Ch 166. 123. Stanwell Park Hotel v Leslie (1952) 85 CLR 189 at 201. 124. Multiservice Bookbinding Ltd v Marden [1979] Ch 84. 125. Multiservice Bookbinding Ltd v Marden [1979] Ch 84. 126. Booth v The Salvation Army Building Association Ltd (1897) 14 TLR 3. 127. Strode v Parker (1694) 2 Vern 326; David Securities Pty Ltd v Commonwealth Bank of Australia (1990) 93 ALR 271; Nadrak Pty Ltd v Permanent Custodians Ltd (1994) 6 BPR 13,344 at 13,350; Smith v Miller (Bryson J, 23 April 1993, unreported, BC9301695), noted in D Moore, ‘Are High Interest Rates in Mortgages a Penalty?’ (1993) 1 APLJ 177. 128. For comments to this effect, see King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076 at [138] per Campbell J, who commented, however, that ‘the law in this respect has been settled for too long for a first-instance judge to give effect to those views’. 129. For a discussion of these issues, see C J Belmore Pty Ltd v AGC (General Finance) Ltd [1976] 1 NSWLR 507 at 509. 130. Wanner v Caruana [1974] 2 NSWLR 301. 131. Smith v Smith [1934] Ch 322. This rule applies to Torrens land as well as old system title land. 132. See Butt, Land Law, note 41 above, pp 612–14.

133. For a general review of the area, see G Pearson, ‘Regarding Unfair Terms in Financial Services Contracts’ (2013) 37(1) UWALR 216. 134. Misleading and deceptive conduct in other consumer transactions is dealt with by s 18 of the Australian Consumer Law (now contained in Sch 2 of the Competition and Consumer Act). But by virtue of s 131A of that Act, the general consumer protection provisions of the Act are not applicable to ‘financial services’. (Nor, it would seem, by virtue of the same provision, are the provisions of Pt 2-2 of the ACL relating to ‘unconscionable conduct’ applicable to such services.) However, Pt 2-3 of the ACL prohibiting ‘unfair contract terms’ may be applicable to some ancillary provisions of mortgage agreements: see ACL s 23(3)(b), which defines ‘consumer contract’ to include one for the ‘sale or grant of an interest in land’. Still, these provisions could not be used to challenge the main provisions of principal and interest under a mortgage: see ACL s 26(1). It seems likely that mortgages of land are ‘financial products’ within the meaning of the Australian Securities and Investments Commission Act. Finkelstein J in Australian Securities & Investments Commission, Re Money for Living (Aust) Pty Ltd (admins apptd) v Money for Living (Aust) Pty Ltd (admins apptd) (No 2) (2006) 24 ACLC 1240 had some difficulty with the application of the definition. But that case involved an unusual sale and lease-back arrangement; it seems that a standard mortgage would be encompassed in s 12BAA(7)(a), which specifically declares that ‘a security’ is a financial product. If this is the case, then the provisions relating to ‘unfair contracts’ in Pt 2 Div 2 Subdiv BA of the ASIC Act are also applicable to mortgages. 135. Kennard v AGC (Advances) Ltd (1987) V ConvR 54-210; Money v Westpac Banking Corp (1988) ANZ ConvR 553. 136. See also Credit Connect v Carney [2010] NSWSC 910 where Macready AJ accepted (at [36]ff) that the definition of ‘financial product’ in s 12BAA of the ASIC Act included a residential mortgage. 137. See the definition of ‘covenant’ in s 4 of the Act. 138. Contracts Review Act 1980 (NSW) s 6(1), (2). 139. See West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 611–12 and 615–31 for a discussion of remedies and relief under the Act. 140. Toscano v Holland Securities Pty Ltd (1985) 1 NSWLR 145. See also Clark v Baker (1987) 4 BPR 9476. 141. Perpetual Trustee Co Ltd v Khoshaba (2006) 14 BPR 26,639. See also Permanent Mortgages Pty Ltd v Cook [2006] ASC 155-082 where, following Khoshaba, a mortgage was varied under the relevantly similar provisions of s 70 of the Consumer Credit Code (in force then under the Consumer Credit (New South Wales) Act 1995 (NSW)). The mortgage was found to be ‘unjust’ as it should have been clear from the outset that the mortgagors would not be able to keep up payments. 142. See Kowalczuk v Accom Finance (2008) 77 NSWLR 205 and Commonwealth Bank of Australia v Serobian [2009] NSWSC 302 for cases where it was (unsuccessfully) claimed that a mortgage agreement was unjust for the purposes of the Contracts Review Act. 143. Provident Capital Ltd v Papa (2013) 84 NSWLR 231. 144. Provident Capital Ltd v Papa (2013) 84 NSWLR 231 at [113]. 145. Provident Capital Ltd v Papa (2013) 84 NSWLR 231 at [8], [119]. 146. Cook v Bank of New South Wales (1982) 2 BPR 9580 at 9587; No Fuss Finance Pty Ltd v Miller [2006] NSWSC 630. See also National Australia Bank Limited v Smith [2014] NSWSC 1605. 147. Permanent Trustee Co Ltd v Frazis [1999] NSWSC 319 at [17]; noted, though not necessarily

adopted, by Basten JA in dissent in Van den Heuvel v Perpetual Trustees Victoria Ltd [2010] NSWCA 171 at [75]. See also Ford v Perpetual Trustees Victoria Ltd [2009] NSWCA 186 where the Act could not apply in a case of non est factum (where the borrower did not know the nature of the document he was signing). 148. See the cases in Chapter 8 dealing with the ‘fraud’ exception to indefeasibility under the Torrens system, and the effect of forgeries at 8.61ff. 149. Section 56C was introduced by the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW) with effect from 1 November 2011. See also amendments to s 117 of the Real Property Act 1900 (NSW) from the same date, requiring increased efforts by witnesses to verify the identity of persons whose signatures they are attesting. 150. NCC ss 5(1)(b), 7. 151. NCC s 42(2)(b). 152. NCC s 76. 153. Fast Funds Pty Ltd v Coppola; Coppola v Hall [2010] NSWSC 470. 154. Karamihos v Bendigo and Adelaide Bank Ltd [2013] NSWSC 172. 155. See Bendigo and Adelaide Bank Ltd v Karamihos [2014] NSWCA 17 at [32]. 156. Credit Connect v Carney [2010] NSWSC 910. 157. Van den Heuvel v Perpetual Trustees Victoria Ltd; Registrar General of NSW v Van den Heuvel [2010] NSWCA 171. For comment on Van den Heuvel and forgery issues, see S Schroeder, ‘Forged Mortgages and Indefeasibility: A Minefield for Mortgagees’ (2011) 85 ALJ 75. 158. Morgan v Coulson [1981] 2 NSWLR 801. 159. In Morgan v Coulson [1981] 2 NSWLR 801, the relevant section was actually s 88F of the Industrial Arbitration Act 1940 (NSW), a predecessor of s 106 of the Industrial Relations Act 1996 (NSW). 160. B Fehlberg, Sexually Transmitted Debt: Surety Experience and English Law, Oxford University Press, New York, 1997. 161. See New South Wales Law Reform Commission, Guaranteeing Someone Else’s Debts, Report No 107, November 2006. 162. K Dunn, ‘Yakking Giants: Equality Discourse in the High Court’ (2000) 24 MULR 427; A Duggan, ‘International Perspectives: UCC Influences on the Development of Australian Commercial Law’ (1996) 29 Loy LA LR 991; D Otto, ‘A Barren Future? Equity’s Conscience and Women’s Inequality’ (1992) 18(4) MULR 808. 163. Department of Fair Trading, Love and Loans: What Every Woman Needs to Know About Relationship Debt, April 2000, p 1. 164. Department of Fair Trading, Love and Loans: What Every Woman Needs to Know About Relationship Debt, note 163 above; A Duggan, ‘International Perspectives: UCC Influences on the Development of Australian Commercial Law’, note 162 above. 165. New South Wales Law Reform Commission (NSWLRC), Guaranteeing Someone Else’s Debts, note 161 above. A 2003 research report carried out for the purposes of this inquiry (J Lovric and J Millbank, Darling, Please Sign This Form: A Report on the Practice of Third Party Guarantees in New South Wales, Research Report 11, NSWLRC, 2003) reported a high percentage of guarantees given by parents supporting the borrowing of adult children. In this context, it is worth noting that the granting of ‘reverse mortgages’, where equity in a home is used to provide an income stream,

will raise many of the same issues as guarantees: see J Pascoe, ‘Reverse Mortgages — The “Guarantee Problem” Revisited?’ (2008) 15 APLJ 199. 166. Lovric and Millbank, Darling, Please Sign This Form: A Report on the Practice of Third Party Guarantees in New South Wales, note 165 above, provides important empirical research on the incidence of guarantees by related parties. 167. Yerkey v Jones (1939) 63 CLR 649. 168. Yerkey v Jones (1939) 63 CLR 649 at 650. 169. Yerkey v Jones (1939) 63 CLR 649 at 650. 170. A guarantee adds another personal obligation to the debt already owed. The obligation is enforceable by an action of debt. Where a guarantor gives a mortgage, the guarantee is enforceable as a proprietary interest. 171. Yerkey v Jones (1939) 63 CLR 649 at 685. 172. Yerkey v Jones (1939) 63 CLR 649 at 685. Yerkey v Jones has been applied in Bawn v Trade Credits (1986) NSW ConvR ¶55–290; Borg-Warner Acceptance Corporation (Australia) Ltd v Diprose (1987) 4 BPR 9408; NSW ConvR ¶55–364; Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420; NSW ConvR ¶55–342; Peters v Commonwealth Bank of Australia (1992) NSW ConvR ¶55–629; (1992) ANZ ConvR 497. 173. Garcia v National Australia Bank Ltd (1998) 194 CLR 395. For a discussion of this line of cases in the context of gender, see J Gray et al, ‘Men’ in the Oxford Companion to the High Court, Oxford University Press, South Melbourne, 2001, p 474. 174. That is, a clause providing that the mortgage secured all moneys that the mortgagors might owe the mortgagee, not just the debt over the specific property the subject of the mortgage. 175. Garcia v National Australia Bank Ltd (1993) 5 BPR 11,996; (1993) NSW ConvR ¶55–662. 176. As to whether the principle in Yerkey ought to be extended to relationships outside formal marriage, see the discussion by McCallum J in Australian Regional Credit Pty Ltd v Mula [2009] NSWSC 325 at [134]–[139]. 177. Agripay Pty Ltd v Byrne [2011] 2 Qd R 501. 178. For comment, see L Aitken, ‘The “Sophisticated Surety” and Garcia v National Australia Bank’ (2011) 27(1) BLB 2. 179. Amtel Pty Ltd v Ah Chee [2015] WASC 341. 180. See Amtel Pty Ltd v Ah Chee [2015] WASC 341 at [271], where Pritchard J cites State Bank of New South Wales Ltd v Chia (2000) 50 NSWLR 587 at 601 [169] per Einstein J, and other decisions to the effect that the wife must be a ‘volunteer’ and receive no personal benefit from the transaction, for the doctrine to apply. This issue is discussed in more detail in Y N Vrodos, ‘Revisiting the ‘Wives’ Special Equity’: An Exploration of the Volunteer Requirement’ (2015) 40(1) UWALR 244. 181. Commercial Bank of Australia v Amadio (1983) 151 CLR 447. 182. See 14.141. 183. Everett v Bayliss (1881) 2 LR (NSW) (Eq) 66 at 70. 184. Refuge Assurance Co Ltd v Pearlberg [1938] Ch 687. 185. Sutton v Sutton (1883) 22 Ch D 511; NZI Capital Corp Pty Ltd v Child (1991) 23 NSWLR 481.

Subsequent mortgagors are not liable for the personal covenant because the covenant does not run with the land, and so the obligations are not passed to them. 186. A mortgagor cannot extinguish the obligations created by the personal covenant by assigning his or her equity of redemption. See West Bromwich Building Society v Bullock [1936] 1 All ER 887. 187. Kennewell v Dye [1949] Ch 517. 188. As noted in P Young, T Cahill and G Newton, Annotated Conveyancing and Real Property Legislation NSW 2012–2013, LexisNexis, Australia, 2012, p 185: ‘The mortgagee must either elect to sell the land or else to foreclose, he cannot elect to take neither course, sue the mortgagor on the personal covenant and then take the equity of redemption in execution’. 189. Hopkins v Worcester and Birmingham Canal Proprietors (1869) LR 6 Eq 437. 190. Bolten v Beckenham [1981] 1 QB 278; Re Tewkesbury Gas Company [1911] 2 Ch 279. For further discussion of the mortgagee’s rights on default, see Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage, note 109 above, pp 384–5. 191. Conveyancing Act 1919 (NSW) s 92(2). 192. Conveyancing Act 1919 (NSW) s 92(4). Section 92(3) extends this provision to mortgages governed by the Real Property Act. 193. Palmer v Hendrie (1859) 27 Beav 349; 54 ER 136; Cheah Theam Swee v Equiticorp Finance Group Ltd [1992] 1 AC 472 (PC). 194. Commonwealth Bank of Australia v Buffett (1993) 114 ALR 245 at 252. 195. Mercantile Credits Ltd v Comblas (1982) 56 ALJR 499. 196. Re Burrell (1869) LR 7 Eq 399. 197. A ‘reasonable time’ is interpreted as reasonable enough to facilitate a transfer of funds. It does not mean time enough to organise a loan: Bond v Hong Kong Bank of Australia Ltd (1991) 25 NSWLR 286 at 295, 316–19. 198. Carey v Doyne (1856) I Ch R 104; Natwest Markets Australia Ltd v Mannix (1995) NSW ConvR ¶55–743; Ingram v Mohren (1993) 10 WAR 497. 199. Application of this section reduces the privity of contract problem because an indemnity is implied from transferee to transferor. 200. Four Maids Ltd v Dudley Marshall (Properties) Ltd [1957] Ch 317 at 320. 201. Quennell v Maltby [1979] 1 WLR 318 at 322. 202. See Butt, Land Law, note 41 above, p 638; Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 8 above, p 426. 203. See Sykes and Walker, The Law of Securities, note 1 above, p 106. 204. Deputy Commissioner of Taxation (Vic) v General Credits Ltd (1983) 82 ALR 101. 205. Kennedy v General Credits Ltd (1982) 2 BPR 9456. 206. Sykes and Walker, The Law of Securities, note 1 above, p 161. 207. Garfitt v Allen (1888) 37 Ch D 48. 208. Vacuum Oil Co Ltd v Ellis [1914] 1 KB 693. 209. Sykes and Walker state that the proposition rests on dicta in Garfitt v Allen (1888) 37 Ch D 48 at 50 and Vacuum Oil Co Ltd v Ellis [1914] 1 KB 693 at 703, but that neither case raised this specific

point: Sykes and Walker, The Law of Securities, note 1 above, p 161. For example, Garfitt v Allen concerned a charge, rather than a mortgage. 210. Sykes and Walker, The Law of Securities, note 1 above, p 161. 211. Walsh v Lonsdale (1882) 21 Ch D 9 at 14. 212. Sykes and Walker, The Law of Securities, note 1 above, p 162. The authors point out that, once in possession, the equitable mortgagee’s rights as against third parties would be the same as those of an ordinary person in possession. 213. Ocean Accident and Guarantee Corporation Ltd v Ilford Gas Co [1905] 2 KB 493 at 497. 214. King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076 at [129]. For comment on this case, see L Aitken, ‘Position of the Unregistered Mortgagee’ (2006) 44(4) LSJ 49. 215. Dearle v Hall (1823) 3 Russ 1; 38 ER 475. 216. See Sykes and Walker, The Law of Securities, note 1 above, p 163. 217. Re Pawson’s Settlement [1917] 1 Ch 541. 218. See Chapter 11. 219. W N Harrison, ‘Attornment Clauses in Torrens System Mortgages’ (1942) 16 ALJ 64. 220. See Butt, Land Law, note 41 above, p 394, n 1192, referring to s 177A of the Conveyancing Act. 221. Birmingham Citizens Permanent Building Society v Caunt [1962] Ch 883 at 890. 222. See Australian Express Pty Ltd v Pejovic [1963] NSWR 954 in relation to another disadvantage of attornment clauses — rent instalments and the court’s jurisdictional limits. 223. Croft v Kennaugh [1945] VLR 40; Zanzoul v Westpac Banking Corp (1995) NSW ConvR ¶55–749. But compare ANZ Banking Group Ltd v Comer (1993) NSW ConvR ¶55–668. 224. See 14.51. For the weakness of an unregistered mortgagee’s right to possession, see King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076 at [127]–[129]. 225. Paterson v McCarthy (1892) 18 VLR 133; Ex parte Wilson; Re Bannister (1925) 25 SR (NSW) 375; Ex parte Jackson; Re Australasian Catholic Assurance Co Ltd (1941) 41 SR (NSW) 285 at 289–90; Permanent Finance Corp Ltd v Flavel [1968] Qd R 84; Jellicoe v Wellington Loan Co (1886) 4 NZLR 330. 226. See Harrison, ‘Attornment Clauses in Torrens System Mortgages’, note 219 above. For further discussion of the issue, see Sykes and Walker, The Law of Securities, note 1 above, pp 250–2. 227. Conveyancing Act 1919 (NSW) s 91(6). 228. PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643 at 679. 229. Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423 at 435; Long Leys Co Pty Ltd v Silkdale Pty Ltd (1991) 5 BPR 11,512. See also Queensland Premier Mines Pty Ltd v French (2007) 235 CLR 81, which held that ‘collateral’ agreements are not given the benefit of indefeasibility on transfer of a mortgage. 230. Measures v McFadyen (1910) 11 CLR 723. 231. These include s 42 of the Real Property Act. See Chapter 8. 232. See 8.25. 233. Re Mangan (1983) 123 ALR 633 at 640.

234. Sandon v Hooper (1843) 6 Beav 246; 49 ER 820. Note that injunctive relief is also available to prevent damage to the property: Votrubec Investments Pty Ltd v Hospital Foods and Services Pty Ltd (1981) 5 BPR 11,712. 235. Southwell v Roberts (1940) 63 CLR 581. 236. Southwell v Roberts (1940) 63 CLR 581. 237. See 14.23. 238. Pursuant to s 106(8) of the Conveyancing Act, if the lease is of Torrens title land it must be registered in accordance with the provisions of the Real Property Act. 239. Daniher v Fitzgerald (1919) 19 SR (NSW) 260. 240. Although of course the mortgagee will retain a right to sue the mortgagor on the personal covenant to repay. 241. See Chapter 7 on old system and priorities, especially 7.10ff. 242. Commonwealth v Orr (1981) 37 ALR 653 at 655. 243. O’Neill v Commonwealth Bank of Australia [2013] NSWSC 836. 244. Despite the fact that under the Torrens system the mortgagee does not have the fee simple in the land. 245. Commonwealth v Orr (1981) 37 ALR 653. 246. Section 53(4) of the Real Property Act, in conjunction with s 106(17) of the Conveyancing Act. 247. Australia & New Zealand Bank Ltd v Sinclair [1968] 2 NSWR 26. For a detailed treatment of this and the right to lease mortgaged property more generally, see Sykes and Walker, The Law of Securities, note 1 above, p 256. 248. Meux v Jacobs (1875) LR 7 HL 481; Queensland National Bank Ltd v MacBriar [1902] St R Qd 268 at 281–3. 249. Usborne v Usborne (1740) Dick 75; 21 ER 196. 250. Gough v Wood [1894] 1 QB 713. 251. Hobson v Gorringe [1897] 1 Ch 182. See this case also for a discussion of fixtures and mortgages in relation to third parties. 252. American Express International Banking Corporation v Hurley [1985] 3 All ER 564 at 568; National Bank of Greece SA v Pinios Shipping Co (No 1) [1989] 3 WLR 185 at 193–6. 253. Conveyancing Act 1919 (NSW) s 109; see especially s 109(1)(c). The powers relating to s 109 come into force only if the mortgage is in a deed. Note also that this provision operates subject to any contrary provisions in the mortgage: see s 109(3). Section 36(11) of the Real Property Act indirectly provides a similar right where mortgages are of Torrens title land, because it causes a dealing on registration to have the same effect as a deed. Further, see s 109(5) of the Conveyancing Act. 254. Conveyancing Act 1919 (NSW) s 115A(2)(c). 255. See Sykes and Walker, The Law of Securities, note 1 above, p 130, where examples of good reasons are discussed. 256. Sykes and Walker, The Law of Securities, note 1 above, p 160. 257. Sykes and Walker, The Law of Securities, note 1 above, p 160.

258. Expo International Pty Ltd v Chant [1979] 2 NSWLR 820 at 834; MacIntosh v Lobel (1993) 30 NSWLR 441 at 466. See also L Aitken, ‘The Receiver’s Duty in Equity: The Impact of Statute and the Privy Council’ (1993) 1 Insolv LJ 118; S Dukeson, ‘Receiver’s Duties: Tort or Equity’ (1993) 3 C & SLJ 362. 259. Expo International Pty Ltd v Chant [1979] 2 NSWLR 820 at 835. 260. Downsview Nominees Ltd v First City Corp Ltd [1993] 2 WLR 86. 261. Heath v Pugh (1881) 6 QBD 345 at 360; Conveyancing Act 1919 (NSW) s 100. Extinguishment also means the loss of the right to sue on the personal covenant. See Lloyds and Scottish Trust Ltd v Britten (1982) 44 P & CR 249. 262. Moore, Grattan, and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 8 above, p 404. See also discussion in Sykes and Walker, The Law of Securities, note 1 above, pp 51–4. 263. Sykes and Walker, The Law of Securities, note 1 above, p 52. 264. The court will look to substance rather than form in deciding if a mortgage has been created. 265. Gurfinkel v Bentley Pty Ltd (1966) 116 CLR 98. This is a case dealing with Torrens title land, but by parity of reasoning with old system title the same principle applies. 266. Gurfinkel v Bentley Pty Ltd (1966) 116 CLR 98 at 107. 267. For further discussion see Sykes and Walker, The Law of Securities, note 1 above, pp 53–4 and 130– 4. Jurisdiction to grant an order for foreclosure is part of the general equitable jurisdiction exercised by the Supreme Court of New South Wales in accordance with ss 23 and 58 of the Supreme Court Act 1970 (NSW). 268. Campbell v Holyland (1877) 7 Ch D 166. The process involves an order nisi in which an extended time to repay is given; if payment is not made in that time, the order becomes absolute. Section 100 of the Conveyancing Act operates to preclude the mortgagor suing on the personal covenant once the court has made an absolute order for foreclosure. 269. Campbell v Holyland (1877) 7 Ch D 166. 270. Historically, it was possible to re-open a foreclosure even though an absolute order had been granted. Sykes and Walker suggest that in New South Wales it may still be possible to reopen a foreclosure order where it is found that it was obtained by actual fraud, or in other cases where the court chooses to exercise a discretion to re-open it: Sykes and Walker, The Law of Securities, note 1 above, pp 132–3. Butt states that whether a foreclosure order in New South Wales can be reopened is ‘open to debate’: Butt, Land Law, note 41 above, p 652. See also the reasoning in Campbell v Holyland (1877) 7 Ch D 166. 271. There is a similar provision in s 97 of the Property Law Act 1974 (Qld), but, as noted by the High Court in Simpson v Forrester (1973) 132 CLR 499, there is no such protection in other jurisdictions. See Young, Cahill and Newton, Annotated Conveyancing and Real Property Legislation NSW 2012– 2013, note 188 above. 272. Twentieth Century Banking Corporation Ltd v Wilkinson [1976] 2 WLR 489. 273. Twentieth Century Banking Corporation Ltd v Wilkinson [1976] 2 WLR 489. 274. Real Property Act 1900 (NSW) s 61. 275. A public auction can take place only after appropriate notice is given under s 57 of the Real Property Act. The property might not be sold because there is no interested purchaser or, when the property is put to auction, the highest bid is rejected on the grounds that it is insufficient to cover

the mortgage debt and costs of selling. See Real Property Act 1900 (NSW) s 61(2)(c). 276. Sections 61 and 62 of the Real Property Act set out the procedures and list all the parties on whom notice must be served. These include the mortgagor, relevant caveators, and mortgagees with lesser priority. 277. Real Property Act 1900 (NSW) s 62(3). 278. Van den Bosch v Australian Provincial Assurance Association Ltd (1968) 88 WN (Pt 1) (NSW) 357 at 361–2. 279. Van den Bosch v Australian Provincial Assurance Association Ltd (1968) 88 WN (Pt 1) (NSW) 357 at 361–2. 280. In the Queensland case of W R Carpenter Australia v Ogle [1999] 2 Qd R 327, the court found that it could re-open a foreclosure when the mortgagor’s failure to appear was not attributable to himself or herself. It did this by exercise of its inherent jurisdiction. 281. Groongal Pastoral Co Ltd v Falkiner (1924) 35 CLR 157 at 164–5. See also Grundy v Ley [1984] 2 NSWLR 467. 282. Grundy v Ley [1984] 2 NSWLR 467. 283. Presumably, for old system land, the ‘registration’ referred to in s 91(3)(a) is registration in the General Register of Deeds established by Pt 23 of the Conveyancing Act: see s 184D(1). Subsection 91(6) refers to registration of Torrens system land. 284. Conveyancing Act 1919 (NSW) s 91(5). 285. Conveyancing Act 1919 (NSW) s 91(3); Hosking v Smith (1888) 13 App Cas 582; Crosbie-Hill v Sayer [1908] 1 Ch 866 at 873–4. 286. Real Property Act 1900 (NSW) s 65. 287. Real Property Act 1900 (NSW) s 65(1). 288. The Real Property Act even employs the language of ‘the equity of redemption’ in s 62(3). 289. Groongal Pastoral Co Ltd v Falkiner (1924) 35 CLR 157. 290. State Bank of New South Wales v Berowra Waters Holdings Pty Ltd (1986) 4 NSWLR 398. Yet, where the discharge was registered when a caveat was supposed to prevent it from being registered, the court found it could be reversed, as the registration took place by error. See FNCB-Waltons Finance Pty Ltd v Crest Realty Pty Ltd (1987) 10 NSWLR 621. 291. Van den Bosch v Australian Provincial Assurance Association Ltd (1968) 88 WN (Pt 1) (NSW) 357. 292. Cape v Trustees of the Savings Bank of New South Wales (1893) 14 LR (NSW) Eq 204; McColl v Bright [1939] VLR 204. See also P M Fox, ‘The Redemption of Torrens System Mortgages after Default’ (1950) 24 ALJ 311, and the discussion in Sykes and Walker, The Law of Securities, note 1 above, pp 243–4. 293. For more detailed discussion, see C Croft and R Hay, The Mortgagee’s Power of Sale, 3rd ed, LexisNexis Butterworths, Sydney, 2011. 294. New South Wales Conveyancing Law and Practice, CCH, looseleaf, ‘Mortgages’, [34–860]. Historically, even if the mortgagee was selling the property out of malice and did not actually need the property, the court would not prevent the exercise of the power of sale. See Nash v Eads (1880) 25 Sol Jo 95. This approach may need to be adjusted now in light of more recent decisions on the duty owed by a mortgagee such as MBF Investments Pty Ltd v Nolan (2011) 37 VR 116, discussed below at

14.106. 295. Conveyancing Act 1919 (NSW) s 109(3). 296. Conveyancing Act 1919 (NSW) s 109(1)(a). 297. In Hunter v Hunter [1936] AC 222 at 247, Viscount Hailsham LC states ‘the right of sale is a very drastic remedy’. 298. Commonwealth Bank of Australia v Tugvale Pty Ltd (1993) NSW ConvR ¶55–687. See also s 109(2) of the Conveyancing Act. 299. Hoole v Smith (1881) 17 Ch D 434 demonstrates that notice should be served on the mortgagor, any person taking title to the equity of redemption or any person in the position to redeem. ANZ Banking Group Ltd v Devine Holdings Pty Ltd (1991) ANZ ConvR 526 demonstrates that the term ‘mortgagor’ also extends to lessees of old system title land. 300. Conveyancing Act 1919 (NSW) s 111(3)(a). 301. Mir Bros Projects Pty Ltd v 1924 Pty Ltd [1980] 2 NSWLR 907 at 925. Although this case is a Torrens title case, the point is equally relevant. 302. Conveyancing Act 1919 (NSW) s 111(2)(d). 303. Conveyancing Act 1919 (NSW) s 111(3)(b)(i). 304. Conveyancing Act 1919 (NSW) s 111(3)(b)(ii). 305. Conveyancing Act 1919 (NSW) s 111(2)(b1). 306. Conveyancing Act 1919 (NSW) s 111(3)(c). 307. See 14.91–14.95 for the situation in relation to Torrens title land and notice. 308. Ex parte Dally-Watkins; Re Wilson (1955) 72 WN (NSW) 454. 309. Conveyancing Act 1919 (NSW) s 170(1)(b1). 310. See 14.94. 311. Conveyancing Act 1919 (NSW) s 111(4). 312. Re Hodson & Howes’ Contract (1887) 35 Ch D 668 (CA). 313. Re White Rose Cottage [1964] Ch 483 at 496 per Wilberforce J. This view has been followed by the English Court of Appeal, but is disputed by Khan in relation to New South Wales (see New South Wales Conveyancing Law and Practice, looseleaf, CCH, [35–140]). Khan argues that the wording of s 112(1) of the Conveyancing Act leaves no room for it to extend to the property subject to the mortgage and not the nature of the security itself. Even if this were the case, the equitable mortgagee would be entitled to enforce the contract by virtue of an order for specific performance, and it is probable that a term could be implied into the contract to the effect that the mortgagor in default would do all in his or her power to vest the legal estate in the mortgagee. 314. See National Bank of Tasmania Ltd v McKenzie [1920] VLR 411 at 425; Ryan v O’Sullivan [1956] VLR 99. 315. Real Property Act 1900 (NSW) s 57(2)(b1). 316. Real Property Act 1900 (NSW) s 57(2)(b)(ii). 317. For diverging positions on dispensation of notice provisions, see Farrow Mortgage Services Pty Ltd v Ragata Developments Pty Ltd (1993) 32 NSWLR 333 at 340–1; Topfelt Pty Ltd v State Bank of New South Wales (1993) NSW ConvR ¶55–676 (CA), noted in Butt, Land Law, note 41 above, p 656, n

718. 318. See Real Property Act 1900 (NSW) s 57(2)(b); Carr v Finance Corp of Australia (No 2) (1982) 150 CLR 139 at 141–52. 319. Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361. 320. In circumstances where the relevant section is not cited, the mortgagor may restrain a sale by injunction. See Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 at 376–7. 321. Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 at 376–7. 322. Websdale v S & J D Investments Pty Ltd (1991) 24 NSWLR 573. 323. Mir Bros Projects Pty Ltd v 1924 Pty Ltd [1980] 2 NSWLR 907 at 925. 324. Mediservices International Pty Ltd v Stocks and Realty (Security Finance) Pty Ltd [1982] 1 NSWLR 516. 325. Websdale v S & J D Investments Pty Ltd (1991) 24 NSWLR 573 at 578. 326. Mir Bros Projects Pty Ltd v 1924 Pty Ltd [1980] 2 NSWLR 907 states that a notice will be effective, notwithstanding the fact that it demands more money than is actually due. Note also that in Websdale’s case the court drew a distinction between a mistake that demands more money than that which is due (Mir Bros Projects) and a notice which, instead of merely overstating the debt, asserts wrongly that the debt is due. The latter will not be valid notice. 327. Campbell v Commercial Banking Co of Sydney (1879) 2 LR (NSW) 375. 328. Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404. 329. Mir Bros Projects Pty Ltd v 1924 Pty Ltd [1980] 2 NSWLR 907 at 925; Campbell v Commercial Banking Co of Sydney (1879) 2 LR (NSW) 375. 330. See Campbell v Commercial Banking Co of Sydney (1879) 2 LR (NSW) 375; Clare Morris Ltd v Hunter BNZ Finance Ltd (1988) 4 BPR 9609; Diera Pty Ltd v Grover (1990) ASC 55-974; Krey v National Australia Bank Ltd (1992) NSW ConvR ¶55–653. 331. Segulin v Car Owners’ Mutual Insurance Co Ltd (1984) NSW ConvR ¶55–191. 332. Hallifax Property Corporation Pty Ltd v GIFC Ltd (1987) NSW ConvR ¶55–361. 333. Hallifax Property Corporation Pty Ltd v GIFC Ltd (1987) NSW ConvR ¶55–361. 334. Bevham Investments Pty Ltd v Belgot Pty Ltd (1982) NSW ConvR ¶55–088. 335. Barns v Queensland National Bank Ltd (1906) 3 CLR 925; Hallifax Property Corporation Pty Ltd v GIFC Ltd (1987) NSW ConvR ¶55–361. 336. Conveyancing Act 1919 (NSW) s 111(4). See also Morton v Suncorp Finance Ltd (1987) 8 NSWLR 325 at 335. 337. Section 57(5) of the Real Property Act governs acceleration clauses. Turnbull v National Mutual Royal Bank (1992) 26 NSWLR 361 at 370 supports the proposition that this section applies only to an acceleration clause in the registered mortgage itself, and not one in a collateral agreement. 338. Conveyancing Act 1919 (NSW) s 109(1)(a). 339. Conveyancing Act 1919 (NSW) s 109(1)(a); Real Property Act 1900 (NSW) s 58(1). Sale by private contract, auction or a combination of both is permitted. Sales on credit are also permitted. See Wright v New Zealand Farmers Co-operative Association of Canterbury Ltd [1939] AC 439. 340. Conveyancing Act 1919 (NSW) s 109(1)(a). 341. Conveyancing Act 1919 (NSW) s 109(1)(e). However, the right to sever does not exist at common

law (as opposed to statute) unless it is expressly included in the mortgage. See Kay’s Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429. 342. Conveyancing Act 1919 (NSW) s 109(1)(f). 343. ANZ Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 195 at 227. 344. The exception to this is if the mortgagee sells to the mortgagor. Then, the mortgagor is still bound by the other estates or interests that have been created in the land. See 14.99. 345. See Forster v Finance Corp of Australia Ltd [1980] VR 63. 346. Farrar v Farrars Ltd (1888) 40 Ch D 395 at 409; Williams v Wellingborough Borough Council [1975] 1 WLR 1327. 347. See Wynne v Moore (1870) 1 AJR 156; Henderson v Astwood [1894] AC 150. 348. ANZ Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 195 at 227. 349. ANZ Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd at 201–2. The position is the same regarding both old system and Torrens title mortgages on this point. 350. See Martinson v Clowes (1882) 21 Ch D 857 at 860. 351. Sewell v Agricultural Bank of Western Australia (1930) 44 CLR 104. 352. Taylor v Parkinson (1911) 31 NZLR 354. 353. Davey v Durrant (1857) 1 De G & J 535; 44 ER 830. 354. Otter v Lord Vaux (1856) 6 De GM & G 638. 355. P Butt, ‘The Mortgagee’s Duty on Sale’ (1979) 53 ALJ 172; E Tyler, ‘Enforcing Mortgage Securities’ (1981) 55 ALJ 559. 356. For a New Zealand perspective on this issue, see P Devonshire, ‘The Mortgagee’s Power of Sale: New Perspectives on an Old Theme’ (1995) 16 NZULR 251. 357. McHugh v Union Bank of Canada [1913] AC 299 per Lord Moulton. 358. Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410. 359. Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949. 360. McHugh v Union Bank of Canada [1913] AC 299 per Lord Moulton at 311. 361. Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410 per Lord Denning at 1415, referring to Donoghue v Stevenson [1932] AC 562. 362. Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949 at 966. 363. Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949 at 978. 364. Even when an auction is used, difficulties can still arise; eg, in setting the reserve price. See General Credits Ltd v Southern Goldfields Ltd (1991) ANZ ConvR 40, where the defendant received valuations for $715,000, $675,000 and $730,000, but set the reserve at $360,000. The court held the mortgagee was liable for wilfully and recklessly sacrificing the property. 365. Parker-Tweedale v Dunbar Bank plc [1991] Ch 12 concerned a mortgagee as trustee. 366. China and South Sea Bank Ltd v Tan Soon Gin [1990] 1 AC 536. 367. Mailman v Challenge Bank Ltd (1991) 5 BPR 11,721 considered whether the mortgagee owed a duty of care to the guarantor when exercising the power of sale. 368. Downsview Nominees Ltd v First City Corp [1993] 2 WLR 86. This case went to the Privy Council

on appeal from New Zealand. 369. Yorkshire Bank plc v Hall [1999] 1 All ER 879. 370. Medforth v Blake [2000] Ch 86 at 98–102. 371. Medforth v Blake [2000] Ch 86 at 101–2. 372. Kennedy v De Trafford [1897] AC 180. 373. Kennedy v De Trafford [1897] AC 180 at 185. 374. Kennedy v De Trafford [1897] AC 180 at 192. 375. Stone v Farrow Mortgage Services Pty Ltd (in liq) (1999) 12 BPR 22,175 at [3]. 376. Barns v Queensland National Bank Ltd (1906) 3 CLR 925. 377. Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676. 378. Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676 at 680 per Griffith CJ. 379. Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676 at 680, quoting Kennedy v De Trafford [1897] AC 180. 380. Forsyth v Blundell (1973) 129 CLR 477. 381. Forsyth v Blundell (1973) 129 CLR 477 at 481. 382. ANZ Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 195. 383. ANZ Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 195 at 201. 384. Commercial and General Acceptance Ltd v Nixon (1981) 152 CLR 491. The court applied a reasonable care test because that was what the relevant Queensland statute dictated, but Aickin J expressed concern with any test that focused attention exclusively on the mortgagee’s interest in recovering the security. 385. Commercial and General Acceptance Ltd v Nixon (1981) 152 CLR 491 at 494 per Gibbs CJ; at 504 per Mason J; at 515 per Aickin J. 386. Commercial and General Acceptance Ltd v Nixon (1981) 152 CLR 491 at 494. 387. Australia and New Zealand Banking Group Ltd v Pola [2013] NSWSC 1801 at [256]. 388. Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676. For cases that have broadly applied the Pendlebury good faith test, see Citycorp Australia Ltd v McLoughney (1984) 35 SASR 375; Expo International Pty Ltd v Chant [1979] 2 NSWLR 820; Commonwealth Bank of Australia v Richards (1987) ANZ ConvR 82; and Hawkesbury Valley Developments Pty Ltd v Custom Credit Corp Ltd (1995) NSW ConvR ¶55–731. 389. Inkhorn Pty Ltd v Herbert [2000] WASCA 333. 390. Inkhorn Pty Ltd v Herbert [2000] WASCA 333 at [21]. See also Florgale Uniforms Pty Ltd (rec & mgr apptd) (in liq) v Orders (2004) 11 VR 54 at [341] per Dodds-Streeton J: ‘The predominant approach of Australian courts to the general law duty has been to adhere to the “good faith” test enunciated in Pendlebury’. For a decision discussing the issues in the Federal Court, see Apostolou v VA Corp Aust Pty Ltd [2010] FCA 64. 391. MBF Investments Pty Ltd v Nolan (2011) 37 VR 116. 392. MBF Investments Pty Ltd v Nolan (2011) 37 VR 116 at [74], the court citing its previous decisions in Kravchenko v Rock Building Society [2010] ANZ Conv R 10-005; Vasiliou v Westpac Banking Corp (2007) 19 VR 229 at 242.

393. Hawkesbury Valley Developments Pty Ltd v Custom Credit Corp Ltd [1995] NSW Conv R ¶55-731. 394. Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646. 395. MBF Investments Pty Ltd v Nolan (2011) 37 VR 116 at [86]. In the circumstances, there were ‘genuine doubts’ about whether two of the blocks would be sufficient to meet the required amount. It should be noted that the Court of Appeal also rejected the trial judge’s attempt to find that there was a ‘home occupation interest’ which should have been taken into account based on an implication from international human rights instruments: see Nolan at [93]–[99]. For comment on the trial judge’s decision, see G Taylor and M Ziemer, ‘Justice vs Certainty: International Law and the Mortgagee’s Power of Sale’ (2010) 18 APLJ 245. 396. For further reading on this topic, see P Butt, ‘The Mortgagee’s Duty on Sale’ (1979) 53 ALJ 172; P Butt, ‘More on Sales by Mortgagees’ (1983) 57 ALJ 238; H W Wilkinson, ‘Mortgage Arrears — Playing for Extra Time’ (1996) 70(6) ALJ 438; T Petherick, ‘Can a Mortgagee Simply Decide if and When to Sell?’ [1996] NZLJ 173; New South Wales Department of Information Technology and Management (Legal Services), Mortgagee’s Power of Sale, Discussion Paper, April 2002. 397. Inserted by the Real Property and Conveyancing Legislation Amendment Act 2009 (NSW) Sch 2 cl 4, with effect from 1 November 2011. For brief comment on the legislation when first enacted (though before its commencement), see E Hodgman, ‘New Laws in NSW to Impact on Mortgagees’ (2009) 20(2) JBFLP 168. 398. See Conveyancing Act 1919 (NSW) s 111A(5). 399. Reliance Permanent Building Society v Harwood-Stamper [1944] Ch 362 at 372. 400. Porter v Associated Securities Ltd (1976) 1 BPR 9279 per Needham J at 9287. 401. Reliance Permanent Building Society v Harwood-Stamper [1944] Ch 362. 402. Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676. 403. China and South Sea Bank Ltd v Tan Soon Gin [1990] 1 AC 536. 404. Dimmick v Pearce Investments Pty Ltd (1980) 43 FLR 235 at 243. 405. Commercial and General Acceptance Ltd v Nixon (1981) 152 CLR 491 per Mason J. See also Pendlebury v Colonial Life Assurance Society Ltd (1912) 13 CLR 676 at 684. 406. This is the language of Pendlebury v Colonial Life Assurance Society Ltd (1912) 13 CLR 676 at 684. 407. Pendlebury v Colonial Life Assurance Society Ltd (1912) 13 CLR 676 at 683. 408. Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949. 409. Commercial and General Acceptance Ltd v Nixon (1980) ANZ ConvR 306 at 307–8. 410. On the issue of further marketing, see Tse Kwong Lam v Wong Chit Sen [1983] 3 All ER 54; (1983) ANZ ConvR 520. 411. For other cases on the nature and extent of advertising, see ANZ Banking Group Ltd v Bangadilly Pastoral Co Pty Ltd (1978) 139 CLR 185; Commercial and General Acceptance Ltd v Nixon (1981) 152 CLR 491; McKean v Maloney (1988) ANZ ConvR 31. 412. Bourke v Beneficial Finance Corp Ltd (1991) ANZ ConvR 473. 413. General Credits Ltd v Southern Goldfields Ltd (1991) ANZ ConvR 40. 414. This occurred in Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265, where the later sale was to a wholly owned subsidiary of the mortgagee.

415. Countrywide Banking Corp v Robinson [1991] 1 NZLR 75 at 77. 416. China and South Sea Bank Ltd v Tan Soon Gin [1990] 1 AC 536. 417. Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 at 164; Altarama Ltd v Camp (1980) 5 ACLR 513 at 518. See S Rodrick, ‘The Response of Torrens Mortgagors to Improper Mortgagee Sales’ (1996) 22 Mon LR 289; J Bryson, ‘Restraining Sales by Mortgagees and a Curial Myth’ (1993) 11 ABR 1; P Young, ‘A Mortgagor’s Right to Approach the Court’ (1993) 1 APLJ 61; L Aitken, ‘Injunctive Relief to Prevent Enforcement of a Mortgage’ (1992) 30 LSJ 58. See also Mattie v Edwards (1847) 16 LJ Ch 405, Allfox Building Pty Ltd v Bank of Melbourne Ltd (1992) NSW ConvR ¶55–634 and the cases listed in note 421 below, which spell out a qualification to this rule. 418. Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161; Cunningham v National Australia Bank Ltd (1987) ATPR ¶40–826. 419. Hickson v Darlow (1883) 23 Ch D 690; Allfox Building Pty Ltd v Bank of Melbourne Ltd (1992) NSW ConvR ¶55–634 at 59,627. 420. Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 at 165. 421. Harvey v McWatters (1948) 49 SR (NSW) 173; Brutan Investments Pty Ltd v Underwriting and Insurance Ltd (1980) 39 ACTR 47 at 56; Town and Country Sports Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) ATPR ¶40–911; Harris v Western Australian Exim Corp (1994) 129 ALR 387. These cases follow the modern trend, but there are exceptions to this position; eg, Patterson v Mortgage Finance Australia (Securities) Ltd (1991) ANZ ConvR 46. 422. Real Property Act 1900 (NSW) s 57; Conveyancing Act 1919 (NSW) s 111. 423. Chia v Rennie (1997) 8 BPR 15,601. See Butt, Land Law, note 41 above, pp 676–7, for elaboration of these points. 424. Forsyth v Blundell (1973) 129 CLR 477 at 505. 425. Harvey v McWatters (1948) 49 SR (NSW) 173. 426. Brutan Investments Pty Ltd v Underwriting and Insurance Ltd (1980) 39 ACTR 47; Ellison v Alliance Acceptance Ltd (1984) NSW ConvR ¶55–217. 427. Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd [1976] VR 309; Zeutmint Pty Ltd v Scottish Amicable Life Assurance Society [1984] 3 NSWLR 293. Note that paying money into court is not automatically required if the mortgagor is disputing the validity of the mortgage pursuant to a breach of the trade practices or fair trading legislation. See, eg, Town and Country Sports Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) ATPR ¶40–911. 428. Lord Waring v London and Manchester Assurance Co Ltd [1935] Ch 310; Forsyth v Blundell (1973) 129 CLR 477, particularly at 499. 429. Forsyth v Blundell (1973) 129 CLR 477 at 495–500. See also George v Commercial Union Assurance Co of Australia Ltd (1977) 1 BPR 9649 at 9652. 430. Real Property Ordinance 1925 (ACT) (later renamed the Land Titles Act 1925) s 94(2), (3). 431. Emerald Securities Pty Ltd v Tee Zed Enterprises Pty Ltd (1981) 28 SASR 214. 432. In fact, Walsh J in Forsyth v Blundell (1973) 129 CLR 477 acknowledged that, as this was a Torrens system mortgage, the mortgagor Blundell was the registered proprietor and could be said to have a ‘legal’, as opposed to a merely equitable, interest. However, his Honour considered that Blundell’s interest would have priority even if it were regarded as a competing equitable interest. 433. Emerald Securities Pty Ltd v Tee Zed Enterprises Pty Ltd (1981) 28 SASR 214.

434. Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317. 435. See, eg, Forsyth v Blundell (1973) 129 CLR 477. 436. Real Property Act 1900 (NSW) s 58(2) needs to be read in conjunction with ss 42, 43A, 57(2) and 59 of that Act. 437. Forsyth v Blundell (1973) 129 CLR 477 at 505. 438. Jenkins v Jones (1860) 2 Giff 99; 66 ER 43 also found that if the purchaser had notice of impropriety in the sale, he or she would lose any protection afforded by the section. 439. Forsyth v Blundell (1973) 129 CLR 477 at 505. 440. Or some such similar phrase. 441. Real Property Act 1900 (NSW) s 42. See also 8.15 and 8.29–8.35. 442. Prosser v Rice (1859) 28 Beav 68 at 74; 54 ER 291 at 294; Hodson v Deans [1903] 2 Ch 647 at 652; Chant v Deputy Commissioner of Taxation (1994) 15 ACSR 184 at 188. 443. Lloyds Bank NZA v National Safety Council of Australia (1993) 115 ALR 93 at 98–9 and 102–3. 444. West London Commercial Bank v Reliance Permanent Building Society (1885) 29 Ch D 954; Ex parte Australian Co-operative Development Society Ltd [1978] Qd 395. See also Re Thompson’s Mortgage Trusts [1920] 1 Ch 508. 445. Ex parte Australian Co-operative Development Society Ltd [1978] Qd R 395. 446. West London Commercial Bank v Reliance Permanent Building Society (1885) 29 Ch D 954; Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 at 228. 447. This was the result in Esber v Kimberley Securities Ltd [2009] NSWSC 1422, a case under the Torrens system but where the result would clearly have been the same under the old system. 448. Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 at 306; Southwell v Roberts (1940) 63 CLR 581. 449. Conveyancing Act 1919 (NSW) s 112(4). 450. Avco Financial Services Ltd v Commonwealth Bank (1989) 18 NSWLR 679. Compare C Croft, The Mortgagee’s Power of Sale, Butterworths, Sydney, 1980, [214]. See also M Rigotti and D Krutik, ‘Exercise of the Mortgagee’s Power of Sale’ (1999) 10(2) JBFL & P 170. On the issue of notice, see Re Murrell (1984) 57 ALR 85. Hammerschlag J in Esber v Kimberley Securities Ltd [2009] NSWSC 1422 said that, in his opinion, unregistered mortgages were not covered by s 58(3). However, his Honour as a matter of judicial comity declined to depart from the Victorian decision of Re S & D International Pty Ltd (in liq) [2009] VSC 225 to the contrary. Note, however, that his Honour commented that, even if his view were correct, a court of equity would nevertheless take into account such a mortgage on general principles where it would otherwise be given priority. On later appeal, in Residential Housing Corporation v Esber (2011) 80 NSWLR 69, the Court of Appeal confirmed Hammerschlag J’s view that s 58(3) only applied to registered mortgages: at [99] per Campbell JA; at [194] per Macfarlan JA (concurring); at [204] per Sackville J (declining to decide). 451. Re Murrell (1984) 57 ALR 85 at 91–2. 452. Beeby v Official Assignee of Pickering [1953] NZLR 832. 453. See also the discussion in Butt, Land Law, note 41 above, [18174], p 681. Note, however, that this comment, in an earlier edition, was one of those with which Hammerschlag J in Esber disagreed: see Residential Housing Corporation v Esber (2011) 80 NSWLR 69 at [30]. 454. Avco Financial Services Ltd v Commonwealth Bank of Australia (1989) 17 NSWLR 679.

455. See Avco Financial Services Ltd v Commonwealth Bank of Australia (1989) 17 NSWLR 679. 456. Debney v Semerdziev [1982] 2 NSWLR 391. 457. One argument supporting this conclusion is the doctrine of nemo dat non quod habet: No one can give what they do not have. 458. Northern Counties of England Fire Insurance Co v Whipp (1884) 26 Ch D 482. 459. Northern Counties of England Fire Insurance Co v Whipp (1884) 26 Ch D 482. 460. Walker v Linom [1907] 2 Ch 104. 461. Pilcher v Rawlins (1872) LR 7 Ch App 259. 462. Rice v Rice (1853) 2 Drew 73 at 78; 61 ER 646. 463. Conveyancing Act 1919 (NSW) Pt 23 Div 1, especially s 184G(1). 464. Real Property Act 1900 (NSW) s 36(5), (9). 465. Real Property Act 1900 (NSW) s 42. See also 8.130. 466. Rice v Rice (1853) 2 Drew 73; 61 ER 646. 467. See 8.131–8.156. 468. J Baalman, ‘Approach to the Torrens System’ (1956) 2 Syd LR 87 at 89–90. 469. Sykes and Walker, The Law of Securities, note 1 above, p 225. 470. Section 43A of the Real Property Act is one of the sections that makes reference to a ‘legal estate’, while other sections, such as ss 42 and 44, refer to the ‘registered proprietor’. 471. This doctrine is also mentioned in Chapter 7. See 7.31–7.32, 7.44. 472. Sykes and Walker, The Law of Securities, note 1 above, p 392. See also R H Maudsley, Modern Equity, 9th ed, Stevens, London, 1969, p 583. For a literal example in ancient literature, see Acts 27:44 in the New Testament. 473. Bailey v Barnes [1894] 1 Ch 25. 474. See 7.31–7.32. 475. Mumford v Stohwasser (1874) LR 18 Eq 556. 476. Sykes and Walker also comment that this is an ‘unsatisfactory aspect’ of the case: Sykes and Walker, The Law of Securities, note 1 above, p 392. 477. Sykes and Walker, The Law of Securities, note 1 above, p 392. 478. Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 at 304–5. 479. D J Whalan, The Torrens Scheme in Australia, Law Book Co, Sydney, 1982, p 170 (argues against the tacking of subsequent mortgages in the Torrens scheme on the basis that priority is determined by registration); Butt, Land Law, note 41 above, p 693 (describes how tacking of subsequent Torrens mortgages could be possible, but notes that Davidson v Registrar of Titles [2002] WASC 168 seems to decide to the contrary); Moore, Grattan and Griggs, Bradbrook, MacCallum and Moore’s Australian Real Property Law, note 8 above, pp 410–11. 480. For discussion of the issues, see Olympic Holdings Pty Ltd v Windslow Corp Pty Ltd (in liq) (2008) 36 WAR 342. 481. Part 23 Div 1 of the Conveyancing Act may affect tacking and advances in some situations.

482. West v Williams [1899] 1 Ch 132 requires that the legal mortgagee must have notice of the subsequent equitable mortgagee. Chase Corporation (Australia) Pty Ltd v North Sydney Brick and Tile Co Ltd (1994) 35 NSWLR 1 at 17 found that an equitable mortgagee has no similar right. See J Gray, ‘Chase Corporation (Australia) Pty Ltd v North Sydney Brick and Tile Co Ltd’ (1996) 4(2) APLJ 146. 483. Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293. 484. Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 at 299 and 305. 485. Central Mortgage Registry of Australia Ltd v Donemore Pty Ltd [1984] 2 NSWLR 128. 486. Sibbles v Highfern (1987) 164 CLR 214. 487. The provision for advances may give the mortgagee a discretion to advance, or it may compel him or her to do so. It seems that this type of tacking is not applicable to a bill facility. See R Edwards and Young, ‘Bill Rollovers and Tacking’ (1995) 3 APLJ 113. 488. The prior mortgagee can also tack the interest that accrues on the advances. See Philos Pty Ltd v National Bank of Australasia Ltd (1976) 5 BPR 11,810 at 11,815. 489. Hopkinson v Rolt (1861) 9 HL Cas 514 at 535 and 553; 11 ER 829 at 838 and 845; Bradford Banking Co Ltd v Henry Briggs, Son & Co Ltd (1886) 12 App Cas 29 at 37. Note that the right to tack is affected by actual knowledge. 490. For consideration of all moneys clauses and tacking, see J Kang, ‘All Moneys Clause Lives Again’ (1996) 10(4) Com LQ 4. 491. The only exception being a mortgage of Torrens system land given by one joint tenant who subsequently dies. See Butt, Land Law, note 41 above, at [1468], especially p 253. 492. See Sykes and Walker, The Law of Securities, note 1 above, p 140. The Probate and Administration Act was previously known as the Wills, Probate and Administration 1898, but was renamed by the Succession Act 2006 (NSW). Section 44 was, however, not otherwise amended. 493. See Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265. 494. Perry v Rolfe [1948] VLR 297. Note that an alternative view about what could constitute a suit to redeem was taken in Re Forrest Trust; Trustees, Executors and Agency Co Ltd v Anson [1953] VLR 246 at 268–9. 495. See 14.114. 496. Clearly, this form of advertising would need to act as a supplement to more traditional means. Although the New South Wales Government Gazette has historically been a useful venue for advertising, in some respects its coverage is hard to estimate. It is now published free online (see NSW Government Gazettes 2001–2017 (accessed 1 June 2017), ), and, as a result, the number of subscribers who receive a hard copy fell from 750 in 2001 to about 390 in 2007 (Dennis Helm, New South Wales Gazette office, personal communication, 22 January 2007). The remaining subscribers include members of the New South Wales Parliament, libraries, universities and solicitors. 497. See Australian Banking Industry Ombudsman Ltd, Report on Relationship Debt, Bulletin No 22, 1999, p 3. For an international comparison, see I Ramsay, ‘Results of Recent Canadian Empirical Studies: Individual Bankruptcy; Preliminary Findings of a Socio-Legal Analysis’ (1999) 37 Osgoode Hall LJ 15. 498. New South Wales Law Reform Commission, Guaranteeing Someone Else’s Debts, note 161 above, p

6, comments that: ‘The emotional relationship between the borrower and guarantor means that the guarantor is vulnerable to unfair conduct on the part of the borrower and/or lender’. See also the Research Report on this topic: Lovric and Millbank, Darling, Please Sign This Form: A Report on the Practice of Third Party Guarantees in New South Wales, note 165 above. 499. For an exploration of socio-legal issues related to this topic, see F Ryan, ‘Law at the Margins: The Displacement of Law as a Framework of Governance’ (2001) 19 Dick J Int’l L 407. 500. This directive is cited in New South Wales Law Reform Commission, Guaranteeing Someone Else’s Debts, note 161 above. 501. See New South Wales Law Reform Commission, Guaranteeing Someone Else’s Debts, note 161 above, [4.23], p 69. 502. The legislative powers referred were limited to credit to which the NCC applied at the time (see the definition of ‘referred credit matter’ in s 3(1) of the Credit (Commonwealth Powers) Act 2010 (NSW)). It seems that guarantees for small business purposes would not be covered. 503. Breskvar v Wall (1971) 126 CLR 376 is an example of this. 504. Putz v Registrar of Titles [1928] VLR 348. 505. Sykes and Walker, The Law of Securities, note 1 above, p 235. 506. Sykes and Walker, The Law of Securities, note 1 above, pp 235–6. 507. Sykes and Walker, The Law of Securities, note 1 above, p 235. 508. Such a case could arise where a transfer and reconveyance were simultaneously lodged. 509. In Jeogla Pty Ltd v ANZ Banking Group Ltd (1999) 150 FLR 359; [1999] NSWSC 563 at [418], Einstein J commented: ‘The concept of absence of a market value is difficult to grasp’.

[page 757]

Appendix A

A Notice of Adverse Possession App A Pursuant to ss 45E(2) and 12(1)(h) or (1A) of the Real Property Act 1900 (NSW), a claim of adverse possession must be advertised by public notice. The following sample is reproduced with permission of Land and Property Information New South Wales.1 Real Property Act Notice Application for Possessory Title to Land Application No 123456 by James Smith for a title pursuant to Part 6A of the Real Property Act in respect of the undermentioned land. Property situated at Sutherland being lot 16 Tacoma Street, Parish of Sutherland County of Cumberland and being the land comprised in Folio Identifier 2/2/823456 formerly being comprised in volume 4512 folio 251. The applicant is claiming possession adverse to Henry Bruce the registered proprietor and his successors and assigns. It is not proposed to grant the abovementioned application until the expiration of 35 days from the date of this notice. Any person who has an estate or interest in the land the subject of the application and who objects to the registration of the

application may lodge a caveat at Land and Property Information, 1 Prince Albert Road, Queens Square, SYDNEY. Enquiries: Darren White. Phone 9228 6666 or Fax 9228 6661.

1.

Permission obtained from Lyn Thomson, Administration and Policy Officer, Office of the General Manager, Land and Property Information Division, Department of Lands. Personal communications to Janice Gray, 1 November 2006. Permission re-affirmed by Daniella Tringalli, GIPA, Privacy Co-ordinator, Office of the Registrar General, Department of Finance, Service and Innovation, 26 July, 2017.

[page 759]

Appendix B

Dealing Lodgment Activity Dealings Lodged — Annual Averages App B Dealing lodgments remained steady between 2006–07 and 2011– 12, with between 700,000 and 800,000 land title transactions registered each year. For 2012–13 and 2013–14, the Registrar-General published no data on the number of lodgments received in those financial years. In the most recent two financial years, the number of lodgments has increased to more than 900,000, which the Registrar-General has attributed to high levels of activity in the New South Wales property market.

This material is compiled from New South Wales Government, Land and Property Management Authority, Annual Report 2010 (accessed May 2017), ; Department of Finance, Services and Innovation, Annual Report 2015–16 (accessed May 2017), .

[page 761]

Appendix C

Torrens Assurance Fund Payments Annual Assurance Fund Expenditure App C The Assurance Fund exists under s 134(1) of the Real Property Act 1900 (NSW). It compensates parties who have suffered losses because of the operation of the Torrens Title Register or because of errors made by the Registrar-General and his or her staff. The fund acquires revenue by way of a levy in two parts – a levy of $4.00 on every land transaction and an ad valorem levy on every transfer of land where the value of the transfer is more than $500,000. Between 2006–07 and 2015–16, total annual Assurance Fund payouts have continued to vary significantly as a result of one or two large claims. The following figure includes both compensation payments and legal costs.

This material is compiled from New South Wales Government, Department of Lands annual reports 2002–03 to 2009–10; Land and Property Management Authority, Annual [page 762] Report 2010; Department of Finance and Services, 2010/11 Annual Report (all accessed May 2017), ; Department of Finance, Services and Innovation, Annual Report 2015–16 (accessed May 2017), .

Index References are to paragraph numbers

A Abandoned goods …. 11.115 Abandonment adverse possession …. 5.137, 5.143–5.145 recovery by true owner …. 5.144 easements …. 12.56, 12.62 Abatement easements …. 12.44 profits à prendre …. 12.71 Aborigines see also Native title confidentiality of information …. 1.71 cultural knowledge …. 4.86 customary rights over land, whether property rights …. 1.8, 1.59 Indigenous rights …. 4.6 developments in recognition …. 4.8 judicial divergence …. 4.6 settlement, and …. 4.6, 4.7 terra nullius see Terra nullius Indigenous rights movement …. 4.10 relationship with land …. 4.2, 4.85 users as custodians …. 4.3

settlement …. 4.4, 4.5 Indigenous rights …. 4.6, 4.7 Access to neighbouring land …. 12.74 Administrative Decisions Tribunal see NSW Civil and Administrative Tribunal (NCAT) Adverse possession abandonment …. 5.137, 5.143–5.145 cause of action, life tenants …. 5.78, 5.79 claim, notice of …. App A consecutive periods …. 5.135–5.137 continuity …. 5.137, 5.138 successive possessors …. 5.136, 5.137 co-ownership …. 5.125–5.127 covenants …. 11.50 criteria for …. 5.81 factual possession …. 5.82–5.84, 5.121 intention to possess …. 5.110–5.121 Crown land …. 5.72–5.75, 5.153, 5.154 definition …. 5.49–5.51 documentation …. 6.6 effect of principle …. 5.50 examples …. 5.95–5.103 factual possession …. 5.82–5.84 evidence of possession …. 5.97, 5.101, 5.102, 5.105 examples of cases …. 5.87–5.92, 5.97, 5.98, 5.100–5.102 implied licence doctrine …. 5.106–5.109 inconsistent use of land …. 5.104, 5.105, 5.107, 5.109

indefeasibility of title …. 8.106 intention to possess …. 5.117, 5.121 knowledge of documentary holder …. 5.85 openness …. 5.85 permission …. 5.87–5.92 sections of land …. 5.99–5.101 use of force …. 5.86 variables …. 5.93, 5.94 human rights …. 5.60–5.69 Pye’s case …. 5.60–5.64, 5.66, 5.67 indefeasibility of title …. 8.106 intention to possess …. 5.81, 5.110–5.120 consecutive periods, adding …. 5.135–5.137 conveyance of intention …. 5.113 enclosure …. 5.118, 5.119 examples of cases …. 5.111–5.116, 5.118, 5.120 exclusively …. 5.115 factual possession …. 5.117, 5.121 peaceful …. 5.86 predecessors in title …. 5.120 rent or taxes …. 5.119 International Covenant on Economic, Social and Cultural Rights …. 5.68 judicial distaste for …. 5.59, 5.159 leases …. 5.80 life tenants …. 5.78, 5.79 limitation period …. 5.50–5.52, 5.58, 5.59, 5.72, 5.75, 5.76 delaying commencement …. 5.134

fraud …. 5.134 suspension …. 5.131–5.134 litigation versus negotiation …. 5.140, 5.152 mortgages …. 5.122–5.124, 5.140 notice of …. App A openness …. 5.85 overview …. 5.1, 5.50 peaceful …. 5.86 permission to possess …. 5.87–5.92 revocation …. 5.90 rationale for principle …. 5.52–5.59 acknowledgment of reality …. 5.55 hardship …. 5.57–5.59 sleeping on rights …. 5.53, 5.54 sustainability, and …. 5.54 recovery by owner …. 2.35, 5.79, 5.140, 5.144 paper dealings …. 5.140 physical entry to land …. 5.140 reform …. 5.157 abolition of doctrine …. 5.159–5.162 argument for preservation …. 5.160–5.162 rights of possessor …. 5.158 remainder interests …. 5.78, 5.79 rights arising from …. 5.146, 5.147 easements …. 5.147 Torrens title land …. 5.148, 5.158 sections of land …. 5.99–5.101

source of rights …. 5.70 Limitation Act 1969 (NSW) …. 5.71 statutory limitations …. 5.50–5.52, 5.58, 5.59, 5.72, 5.75, 5.76 delaying commencement …. 5.134 stopping time running …. 5.138–5.142 acknowledgment of title …. 5.139, 5.141, 5.142 action to recover land …. 5.140 interruptions in continuity …. 5.137 successive possessors …. 5.136, 5.137, 5.143–5.146 suspension of statutory period …. 5.132–5.134 Torrens title land …. 5.148–5.156, 5.158, 5.160, 5.162 caveats …. 5.155, 8.154 Crown land …. 5.153, 5.154 indefeasibility of title …. 8.106 occupational boundaries …. 5.150 possessory applications …. 5.148–5.150 recording possessors title …. 5.148, 5.149, 5.155 residue lots …. 5.151 rights of possessor …. 5.148 service lanes …. 5.151 trust property …. 5.128 beneficiary as possessor …. 5.131 stranger as possessor …. 5.130 trustee as possessor …. 5.129 Airspace aircraft …. 2.7, 2.9 land and …. 2.2, 2.6

owners’ rights …. 2.7 right of way …. 8.81 trespass …. 2.7–2.9 Allodial land native title, and …. 3.33, 3.34, 3.37 overview …. 3.12 tenurial land, and …. 3.19, 3.31, 3.33, 3.34, 3.37 Alternative dispute resolution Torrens Assurance Fund …. 8.200 Assignment freehold covenants …. 13.8, 13.9 equity, in …. 13.29 mortgagees …. 14.56 Assignment of leases continuing liability …. 11.44 covenants against …. 11.41 absolute covenants …. 11.42 qualified covenants …. 11.43 enforcement of covenants …. 11.47 adverse possession …. 11.50 benefit of covenants …. 11.47 burden of covenants …. 11.48, 11.49 informal transactions …. 11.51 no privity of estate …. 11.50, 11.51 past breaches …. 11.56 residential tenancies …. 11.113 right to new tenancy …. 11.114

retail leases …. 11.141 tenancy at will …. 11.16 Attornment clauses mortgagees …. 14.53 Torrens title …. 14.55 Auctions …. 6.9

B Bailments bailee’s rights …. 2.61, 2.62 conversion …. 2.50, 2.61, 2.62 gratuitous …. 2.47 overview …. 2.42, 2.46 reversionary interests …. 2.58, 2.59 types …. 2.46 will, at …. 2.47, 2.48 wrongful interference …. 2.48, 2.61, 2.62 Bankruptcy joint tenancies …. 9.52, 9.53 Beneficiaries adverse possession …. 5.131 equitable interest trusts …. 3.75, 6.3 priority disputes …. 7.30 Blackstone’s physicalist theory …. 1.4, 1.15, 1.22 Boarders and lodgers definition …. 11.92 residential tenancies …. 11.92, 11.134

Body parts Doodeward v Spence …. 1.63 excised cells …. 1.60, 1.61 human sperm …. 1.64, 1.65 human tissue …. 1.62 property rights, and …. 1.60–1.65 Broadcasting property rights, and …. 1.66–1.69 United States …. 1.66, 1.67 Building schemes freehold covenants …. 13.30–13.35 Conveyancing Act, applicability …. 13.35 intention of development …. 13.32 lay out in lots pre-sale …. 13.33 principle of mutuality …. 13.31, 13.34 requirements for establishment …. 13.31 Torrens title …. 13.37 unity of ownership …. 13.34

C Caveats caveatable interests …. 8.142–8.145 examples …. 8.145 delimitation plans …. 8.155 effect of …. 8.138, 8.139 extension …. 8.150–8.152 failure to lodge …. 8.140, 8.141, 8.164–8.168

lodgment by Registrar-General …. 8.132, 8.133 native title …. 8.156 non-caveatable interests …. 8.146 overview …. 8.131, 8.153 possessory applications …. 5.155, 8.154 prevention of dealings …. 8.135–8.137 lost title certificates …. 8.137 primary applications …. 8.134 priority disputes …. 8.164–8.168 purpose …. 8.138–8.141 removal of …. 8.136, 8.147–8.151 Chattels see also Fixtures annexation by mistake …. 2.30 reform …. 2.68 bailments …. 2.42 bailee’s rights …. 2.61, 2.62 gratuitous …. 2.47 reversionary interests …. 2.58, 2.59 types …. 2.46 will, at …. 2.47, 2.48 wrongful interference …. 2.48, 2.61, 2.62 conversion …. 2.49, 2.50 bailments …. 2.50, 2.61, 2.62 contractual rights …. 2.57 multiplicity of actions …. 2.70 overlapping torts …. 2.53 third party, right to implead …. 2.70

trespass, distinction …. 2.50 co-ownership …. 9.24 court order to divide …. 9.65 detinue …. 2.51 overlapping torts …. 2.53 fixtures, as …. 2.19–2.22 annexation by mistake …. 2.30, 2.68 hire-purchase agreements …. 2.42, 14.11, 14.12 jus tertii defence …. 2.45, 2.54 availability …. 2.55, 2.56 lost and found chattels …. 2.64 third parties …. 2.45, 2.54, 2.56 lost and found chattels …. 2.42, 2.64 agents …. 2.65 annexation to land …. 2.66 employees …. 2.65 fixtures …. 2.66 occupier’s rights …. 2.66, 2.67 mortgagees and …. 2.20 negligence …. 2.52 overview …. 2.40 ownership …. 2.45 possession …. 2.42 future possession rights …. 2.44 immediate possession rights …. 2.43, 2.48 ownership, and …. 2.45 seisin …. 5.15

proprietary interests actual possession …. 2.41, 2.42 contractual rights …. 2.57 custody of goods …. 2.42 hire-purchase …. 2.42 immediate possession rights …. 2.43, 2.48 lost and found chattels …. 2.42 ownership …. 2.45 possession …. 2.42 reversionary interests …. 2.44 bailments …. 2.58, 2.59 permanent loss or damage …. 2.59, 2.60 security interests …. 14.2 hire-purchase agreements …. 14.11, 14.12 historical background …. 14.3, 14.11 National Credit Code …. 14.12 self help …. 2.63 torts conversion …. 2.49, 2.53, 2.57 detinue …. 2.51, 2.53 negligence …. 2.52 overlapping torts …. 2.53 recaption …. 2.63 trespass …. 2.48, 2.57 lost or found chattels …. 2.67 overlapping torts …. 2.53 Chattels real see Leases

Choses in action …. 2.5 Choses in possession …. 2.4 Civil and Administrative Tribunal see NSW Civil and Administrative Tribunal (NCAT) Civil rights property rights, and …. 1.5, 1.74 determination of boundaries …. 1.5 Co-ownership adverse possession …. 5.125–5.127 chattels …. 9.24 court order to divide …. 9.65 company title …. 9.66, 9.67 co-owners’ rights and obligations …. 9.54–9.60 improvements …. 9.55–9.57 occupation fees …. 9.58, 9.59 possession right …. 9.54 rents and profits …. 9.60 creation …. 9.11 chattels …. 9.24 common law, at …. 9.12, 9.13, 9.22 co-owners’ differing contributions to purchase price …. 9.15–9.17 equitable interests …. 9.11, 9.22 equity, in …. 9.11, 9.14–9.19, 9.22 express words …. 9.12 legal interests …. 9.11, 9.22 money advanced on mortgage …. 9.18 partnership assets …. 9.19

statutory reform …. 9.20–9.24 Torrens title …. 9.23 words of severance …. 9.13 equitable interest …. 9.11, 9.22 equity, creation in …. 9.11, 9.14, 9.22 chattels …. 9.24 contributions to purchase price …. 9.15–9.17 money advanced on mortgage …. 9.18 partnership assets …. 9.19 statutory reform …. 9.21, 9.22 tenancy in common …. 9.11, 9.14–9.19 improvements …. 9.55–9.57 contributions from co-owners …. 9.55 limits to claims …. 9.56 reform …. 9.132 joint tenancies see Joint tenancies land, co-owners ordered to sell or partition …. 9.63, 9.64 legal interests …. 9.11, 9.22 mortgage, co-owners advancing money on …. 9.18 overview …. 9.2 rent …. 9.60 reform …. 9.132, 9.133 repairs …. 9.57 strata schemes see Strata schemes tenancy in common see Tenancy in common termination …. 9.61–9.65 action of parties …. 9.62

court orders …. 9.63–9.65 division of chattels …. 9.65 sale or partition of land …. 9.63, 9.64 Torrens title system …. 9.23 Common law see also Doctrine of estates; Doctrine of tenure; Legal interests; Old system title; Priority disputes colonies …. 3.4 applicability of English law …. 3.6, 3.7 divergence from English law …. 3.29 principles of reception …. 3.4–3.7 settlement principle …. 3.5 terra nullius …. 3.5 see also Terra nullius equity, and …. 3.74 perpetuities see Rule against perpetuities property doctrines …. 3.1, 3.3 Common property see also Co-ownership; Joint tenancies; Strata schemes; Tenancy in common overview …. 9.1 strata scheme, as part of …. 9.76–9.78 Company title …. 9.66, 9.67, 11.98 Compensation see also Torrens Assurance Fund constitutional compensation …. 4.50, 4.51, 4.70 native title …. 4.25, 4.33, 4.87 past acts …. 4.70 proprietary analysis …. 4.50–4.52 reform …. 4.87 restriction on quantum …. 4.79

Constructive trusts creation and transfer …. 6.31 common-intention trusts …. 6.32, 6.33 unconscionable conduct …. 6.34–6.36, 6.55 Consumer, Trader and Tenancy Tribunal see NSW Civil and Administrative Tribunal (NCAT) Contracts part performance …. 6.10–6.13 acts constituting …. 6.11, 6.12 mortgages …. 6.12 test …. 6.11–6.13 sale of land …. 6.8 auctions …. 6.9 constructive trust analogy …. 6.15–6.19 fixtures …. 2.16, 2.23 part performance …. 6.10–6.13 specific performance …. 6.14 specific performance …. 6.4 effect of remedy …. 6.14 Contractual rights overview …. 1.56 property rights and …. 1.56–1.58 remedies …. 2.57 Contributory negligence …. 8.195 Conversion bailments …. 2.50, 2.61, 2.62 chattels …. 2.49, 2.50

overlapping torts …. 2.53 contractual rights, and …. 2.57 multiplicity of actions …. 2.70 overview …. 2.49 reform …. 2.70 third party, right to implead …. 2.70 trespass, distinction …. 2.50 trover …. 2.49 Conveyancing electronic …. 8.17 Conveyancing Act 1919 (NSW) deeds …. 6.5 freehold covenants …. 13.53 building schemes …. 13.35 implied easements …. 12.27 leases …. 6.6 trusts …. 6.53 express trusts …. 6.22–6.24 Covenants assignment of lease …. 11.41 absolute covenants …. 11.42 benefit of covenants …. 11.47 burden of covenants …. 11.48, 11.49 continuing liability …. 11.44 informal transactions …. 11.51 no privity of estate …. 11.50, 11.51 past breaches …. 11.56

qualified covenants …. 11.43 assignment of reversion benefit of covenants …. 11.52 burden of covenants …. 11.53–11.55 past breaches …. 11.56 benefit …. 11.47, 11.52 breach …. 11.60 assignment …. 11.56 forfeiture of leases …. 11.62–11.66, 11.70–11.72 re-entry following breach …. 11.34, 11.63–11.65 remedies …. 11.59, 11.60, 11.78–11.82 burden …. 11.48, 11.49, 11.53–11.55 enforceability …. 11.44–11.56 adverse possession …. 11.50 assignment of lease …. 11.47–11.51 assignment of reversion …. 11.52–11.55 no privity of estate …. 11.50, 11.51 privity of contract …. 11.44, 11.45 privity of estate …. 11.45 touch and concern requirement …. 11.46, 11.55 express covenants assignment, against …. 11.41–11.43 repairs …. 11.39, 11.40 subletting, against …. 11.41–11.43 freehold see Freehold covenants implied see Implied covenants implied obligations …. 11.36

duty of care …. 11.37 waste …. 11.38 indefeasibility of title …. 8.40–8.46 mortgages …. 14.32, 14.33, 14.45–14.48 necessary implication, by …. 11.35 overview …. 11.21 rental covenants …. 11.31 non-payment of rent …. 11.33, 11.63, 11.71 repairs …. 11.30 breach of covenant …. 11.34 landlord’s duty …. 11.40 landlord’s right to inspect …. 11.32 tenant’s duty …. 11.39 repudiation …. 11.59, 11.60, 11.65 restrictive, distinguished from easements …. 12.13 subletting …. 11.41 absolute covenants …. 11.42 qualified covenants …. 11.43 Creation and transfer of interests see Equitable interests; Legal interests Critiques and theories ends-based theorists …. 1.21 labour theory …. 1.15, 1.22–1.28, 1.50 appropriation …. 1.24 basis …. 1.23 difficulties …. 1.25–1.27 inconsistencies …. 1.26

persons capable of ownership …. 1.27 substantive due process …. 1.16 means-based theorists …. 1.21 overview …. 1.5 physicalist theory …. 1.15 private property economic justification …. 1.32–1.35 function-based theory …. 1.38 justice and equality …. 1.36–1.40 pluralist approach …. 1.48, 1.49 utilitarian justifications …. 1.29–1.31 progressive property …. 1.40 thingification of property …. 1.17 thing–ownership …. 1.13, 1.14, 1.18, 1.21 historical criticism …. 1.19 values …. 1.40 women and property …. 1.27 feminist approach …. 1.41–1.47 functional approach …. 1.43 inequality …. 1.42 Crown land adverse possession …. 5.72–5.75 Torrens title …. 5.153, 5.154 colonial New South Wales …. 3.25, 3.26 Crown leaseholds …. 3.26 leases under Crown Land Acts …. 11.94 mortgages …. 14.22

old system title …. 5.2 Torrens title …. 5.2, 5.153, 5.154, 14.22

D Damages breach of contract …. 1.56 breach of covenant …. 11.79 easements …. 12.45 freehold covenants …. 13.41 property ownership rule …. 1.9, 1.10 Torrens Assurance Fund …. 8.195 De facto relationships constructive trusts …. 6.34–6.36 definition …. 6.48, 6.50 trusts …. 6.47 equitable doctrines …. 6.47 Family Law Act 1975 (Cth) …. 6.51, 6.52 Property (Relationships) Act 1984 (NSW) s 20 …. 6.48–6.50 relationship breakdown …. 6.48–6.50 Deeds easements …. 12.16, 12.19 leases …. 11.6 overview …. 6.5 profits à prendre …. 12.67 registration of deeds …. 7.36–7.41 bona fide requirement …. 7.39 priorities …. 7.38

valuable consideration …. 7.40 void instruments …. 7.41 requirements for validity …. 6.5 Defences see Jus tertii defence Determinable interest …. 3.80 boundaries …. 3.81 categorisation of interest …. 3.115, 3.116 effect of event …. 3.82, 3.83, 3.86 indicative words …. 3.84 reform …. 3.114–3.116 Detinue overlapping torts …. 2.53 overview …. 2.51 Doctrine of estates categories …. 3.40, 3.41 colonial Australia …. 3.7 establishment …. 3.11 estate, definition …. 3.39 freehold estates …. 3.40 conditional/determinable interests …. 3.80–3.93, 3.114–3.116 creation …. 3.41 fee simple …. 3.43 fee tail …. 3.44 life estates …. 3.45–3.50 life tenants …. 3.50–3.54 types …. 3.41, 3.42 future interests …. 3.94, 3.95

remainder …. 3.95, 3.97–3.104 reversion …. 3.95, 3.96 leaseholds …. 3.40 anomalies …. 3.56 fixed-term tenancies …. 3.58 historical development …. 3.55, 3.56 key aspects …. 3.57 periodic tenancies …. 3.59 tenancy at sufferance …. 3.60 tenancy at will …. 3.60 legal executory interests …. 3.106 current position …. 3.110–3.113 historical development …. 3.106–3.109 remainder rules, and …. 3.107, 3.109 overview …. 3.118 remainders …. 3.97 contingent remainders …. 3.100–3.104 current position …. 3.110–3.113 legal contingent remainder rules …. 3.104, 3.105, 3.109 legal executory interests, and …. 3.106, 3.107, 3.109 vested remainders …. 3.99, 3.103 types of estate …. 3.40, 3.41 Doctrine of notice …. 7.13–7.24 actual notice …. 7.16 constructive notice …. 7.17–7.23 determining equal equities …. 7.29

imputed notice …. 7.24 inspection of land …. 7.18–7.21 investigation of documents …. 7.22 notice, what constitutes …. 7.15 overview …. 7.13 timing of notice …. 7.14 Doctrine of paramount force …. 3.28 Doctrine of tenure allodial land, and …. 3.19, 3.31 native title …. 3.33, 3.34, 3.37, 4.9 tenurial land, distinction …. 3.19 Australian/English differences …. 3.30–3.32 fragmentation of rights …. 3.31 native title …. 3.32 copyhold tenure …. 3.16 establishment …. 3.11 feudalism …. 3.9 Domesday Book …. 3.11 enclosed lands …. 3.16 free tenures …. 3.12–3.15 lord of the manor …. 3.16 post-Norman redistributions …. 3.11 pre-Norman conquest …. 3.10 seisin …. 3.9 free tenures …. 3.12 categories of tenure …. 3.13 fealty and homage …. 3.15

frankalmoign tenure …. 3.13, 3.19 historical background …. 3.12–3.15, 3.17–3.19 incidents …. 3.14, 3.15 knight service …. 3.13, 3.18, 3.19 services …. 3.12, 3.13 socage tenure …. 3.13, 3.17–3.19 Statute of Quia Emptores …. 3.17 substitution system …. 3.17 tenure by serjeanty …. 3.13, 3.18, 3.19 tenurial pyramid …. 3.15 types of tenure …. 3.19 historical background …. 3.8 applicability of English law …. 3.5, 3.7 colonial Australia …. 3.5, 3.6 copyhold tenure …. 3.16, 3.19 divergence from English law …. 3.20, 3.25–3.29 feudalism …. 3.9–3.16 free tenures …. 3.12–3.15, 3.17–3.19 New South Wales see New South Wales below socage tenure …. 3.13, 3.17–3.19 villeinage …. 3.16 native title, and …. 3.32, 3.33, 3.38 allodial title …. 3.34, 3.37 co-existence of systems …. 3.36 terra nullius see Terra nullius New South Wales …. 3.20, 3.25 colonial development …. 3.23, 3.25

divergence from English law …. 3.20, 3.25–3.29 new forms of tenure …. 3.25, 3.26 occupation licences …. 3.24 pastoral leases …. 3.22, 3.23 quit rents …. 3.21 overview …. 3.8, 3.20, 3.39 ownership of chattels …. 2.45 pastoral leases …. 3.22, 3.26 reform …. 3.117 socage tenure …. 3.13, 3.17–3.20 terra nullius see Terra nullius Doctrine of waste leases …. 11.38 life tenants …. 3.50 ameliorating waste …. 3.53 equitable waste …. 3.54 permissive waste …. 3.51 voluntary waste …. 3.52 Domestic relationships close personal relationships …. 6.50 de facto see De facto relationships domestic labour and unconscionability …. 6.36, 6.55 trusts …. 6.47 equitable doctrines …. 6.47 Family Law Act 1975 (Cth) …. 6.51, 6.52 Property (Relationships) Act 1984 (NSW) s 20 …. 6.48–6.50 relationship breakdown …. 6.48, 6.49

Duty of care leases …. 11.37

E Easements adverse possession …. 5.147, 12.32 creation of easements …. 12.2, 12.3, 12.15 dominant tenements …. 12.4–12.6 express grants …. 12.16–12.18 express reservation …. 12.19–12.21 identification of tenements …. 12.23 implied easements …. 12.24–12.31 implied grants …. 12.24, 12.25 implied reservations …. 12.24, 12.29, 12.30 long user …. 12.32, 12.33 prescription …. 12.32, 12.33, 12.76 servient tenements …. 12.4–12.6 subdivision plan …. 12.22 subject matter of grant …. 12.7 substantive requirements …. 12.3–12.7 distinction from other rights …. 12.11 licences …. 12.14 natural rights …. 12.11 public rights …. 12.12 restrictive covenants …. 12.13 doctrine of lost modern grant …. 12.32, 12.33 dominant tenements …. 12.4

accommodation …. 12.5 alteration …. 12.57 identification …. 12.23 servient tenement held/occupied by same …. 12.6 unity with servient tenement …. 12.58 easements in gross …. 12.75 easements of necessity …. 12.29 reasonable necessity …. 12.34 essence …. 12.2 examples …. 12.8, 12.35 negative easements …. 12.10 positive easements …. 12.9 express grants old system …. 12.16, 12.17 Torrens system …. 12.18 express reservation old system …. 12.19, 12.20 Torrens system …. 12.21 extinguishment …. 12.55–12.64 abandonment …. 12.56, 12.62 alteration to dominant tenement …. 12.57 express release …. 12.55 no practical benefit …. 12.61, 12.62 obsolescence …. 12.60 statutory extinguishment …. 12.59–12.62 substantial injury …. 12.63 suspension …. 12.64

unity of tenements …. 12.58 features …. 12.2 fencing easements …. 12.41 implied easements …. 12.24 common intention …. 12.30 Conveyancing Act, under …. 12.27 description of land …. 12.31, 12.54 easements of necessity …. 12.29 implied grants …. 12.25 mutual cross-easements …. 12.30 Real Property Act, under …. 12.28 transfer of estate in land …. 12.28 Wheeldon v Burrows rule …. 12.26 implied grants …. 12.24, 12.25 implied reservations …. 12.24 common intention …. 12.30 easements of necessity …. 12.29 licences, distinguished …. 12.14 natural rights, distinguished …. 12.11 necessity for …. 12.29 reasonable necessity …. 12.34 negative easements …. 12.10 nuisance, rights to create …. 12.42 omitted or misdescribed …. 8.84, 8.85, 12.47–12.50 overview …. 12.1, 12.2 party walls …. 12.40 positive easements …. 12.9

public rights, distinguished …. 12.12 reform easements in gross …. 12.75 prescription …. 12.76 remedies …. 12.43 abatement …. 12.44 damages actions …. 12.45 nuisance actions …. 12.45 restrictive covenants, distinguished …. 12.13 rights of way …. 8.81, 12.9, 12.29, 12.36 change of use …. 12.38 extent of obligations …. 12.37 interference with …. 12.39 no practical benefit …. 12.61, 12.62 obsolescence …. 12.60 rights to create a nuisance …. 12.42 rights to support …. 12.10, 12.40 servient tenements …. 12.4 dominant tenement held/occupied by same …. 12.6 identification …. 12.23 unity with dominant tenement …. 12.58 suspension …. 12.64 Torrens system …. 12.46 express grants …. 12.18 express reservation …. 12.21 implied easements …. 12.54 in personam exception …. 12.51–12.53

omitted or misdescribed easements …. 8.84, 8.85, 12.47–12.50 Ejectment see Possessory title Equitable interests see also Legal interests beneficiaries …. 3.75 contracts for sale of land …. 6.8, 6.9 auctions …. 6.9 constructive trust analogy …. 6.15–6.19 part performance …. 6.10–6.13 specific performance …. 6.14 co-ownership …. 9.11, 9.22 creation and transfer …. 6.4, 6.21 constructive trusts …. 6.31–6.36 contracts for sale of land …. 6.8, 6.14 express trusts …. 6.20 formal requirements …. 6.22–6.24 non-express trusts …. 6.25 resulting trusts …. 6.26–6.30 domestic relationships …. 6.47 equitable estoppel …. 6.41–6.44 detriment …. 6.42 personal property …. 6.43 equity, distinction …. 6.44, 7.35, 7.45 freehold covenants …. 13.41 gifts …. 6.45 historical development …. 3.73, 6.2–6.4 common law and equity …. 3.74 fragmentation of rights …. 6.2, 6.3

overview …. 6.1, 6.4 personal property …. 6.43 gifts …. 6.45 priority disputes …. 7.1 earlier and later interests …. 7.26–7.35 earlier equity …. 7.33–7.35 earlier legal interest …. 7.5–7.8 later legal interest …. 7.9–7.25 unregistered interests …. 8.161, 8.162 proprietary estoppel …. 6.37 inducement by acquiescence …. 6.40 inducement by representation …. 6.38, 6.39 reform …. 6.53 rule against perpetuities …. 10.10 specific performance …. 6.4 effect of remedy …. 6.4, 6.14 Torrens title system, unregistered interests …. 8.129, 8.161, 8.162 transfer see creation and transfer above trusts …. 3.75, 6.2 beneficiaries …. 6.3 concurrent jurisdiction …. 6.4 constructive trusts …. 6.31–6.36, 6.55 contract for land sale as analogous to constructive trust …. 6.15–6.19 domestic relationships …. 6.47 express trusts …. 6.20 non-express trusts …. 6.25 resulting trusts …. 6.26–6.30, 6.54

words of limitation …. 3.72–3.79 Equities equitable interest, distinction …. 6.44, 7.35, 7.45 ‘mere’ equities …. 7.45 priority disputes …. 6.44, 7.1 later equitable/legal interest …. 7.33–7.35 problems with status …. 7.45 Equity concurrent jurisdiction …. 6.4 creation of co-ownership …. 9.11, 9.14, 9.22 chattels …. 9.24 contributions to purchase price …. 9.15–9.17 money advanced on mortgage …. 9.18 partnership assets …. 9.19 statutory reform …. 9.21, 9.22 tenancy in common …. 9.11, 9.14–9.19 easements express grants …. 12.16 express reservations …. 12.20 freehold covenants …. 13.15 benefit …. 13.23–13.29 burden …. 13.15–13.22 remedies …. 13.41 leases …. 11.7 part performance …. 6.10–6.13 acts constituting …. 6.11, 6.12 mortgages …. 6.12

test …. 6.11–6.13 profits à prendre …. 12.68 set-off …. 11.82 specific performance …. 6.4 Estates see Doctrine of estates; Freehold estates; Life estates Estoppel equitable estoppel …. 6.41 detriment …. 6.42 equity or equitable interest …. 6.44 personal property …. 6.43 leases …. 11.18 proprietary estoppel …. 6.37 inducement by acquiescence …. 6.40 inducement by representation …. 6.38, 6.39 tenancies by …. 11.18 Express trusts creation and transfer …. 6.20 formalities …. 6.22–6.24 overview …. 6.20

F Family Law Act 1975 (Cth) alteration of property interests …. 6.51, 6.52 Fee simple condition subsequent, defeasible by …. 3.87 determinable interest …. 3.80–3.83 boundaries …. 3.81

effect of event …. 3.82 historical background …. 3.43 native title …. 4.61 overview …. 3.43, 5.13 words of limitation …. 3.64–3.67 inter vivos dispositions …. 3.64 testamentary dispositions …. 3.67, 3.71 Fee tail determinable interest …. 3.80 historical background …. 3.44, 10.1 overview …. 3.44 words of limitation inter vivos dispositions …. 3.66, 3.68 testamentary dispositions …. 3.69 Feudalism Domesday Book …. 3.11 enclosed lands …. 3.16 free tenures …. 3.12 categories of tenure …. 3.13 fealty and homage …. 3.15 frankalmoign tenure …. 3.13, 3.19 incidents …. 3.14, 3.15, 6.3 knight service …. 3.13, 3.18, 3.19 services …. 3.12, 3.13 socage tenure …. 3.13, 3.17–3.19 Statute of Quia Emptores …. 3.17 substitution system …. 3.17

tenure by serjeanty …. 3.13, 3.18, 3.19 tenurial pyramid …. 3.15 types of tenure …. 3.19 lord of the manor …. 3.16 overview …. 1.18, 1.50, 3.9 post-Norman redistributions …. 3.11 pre-Norman conquest …. 3.10 seisin …. 3.9 writ system …. 5.18 Fiduciary relationships native title …. 4.24, 4.35 Finders see Lost and found chattels Fixed-term tenancies …. 3.58 Fixtures agricultural fixtures …. 2.17 tenancies …. 2.29 annexation by mistake …. 2.30 reform …. 2.68 annexation tests …. 2.18, 2.19 degree of annexation …. 2.18, 2.19 degree of attachment …. 2.19 object of annexation …. 2.18, 2.20–2.22 chattels as …. 2.19–2.22 general principles …. 2.17 intention of parties …. 2.17 quicquid plantatur solo, solo cedit …. 2.18 land, as part of …. 2.2, 2.16

lost and found chattels …. 2.66 mortgagee’s rights …. 2.20, 2.23, 2.24, 14.63 overview …. 2.16 sale of land …. 2.16, 2.23 tenants see Tenant’s fixtures third parties …. 2.24 wills or intestacy …. 2.23 Foreclosure mortgagees, by …. 14.67 old system title …. 14.68–14.73 Torrens title …. 14.74, 14.75 Forfeiture of leases breach of covenants …. 11.60, 11.62, 11.64 court proceedings …. 11.68 manner of forfeiture …. 11.67–11.69 non-payment of rent …. 11.63, 11.71 non-rental covenants …. 11.64, 11.72 physical re-entry …. 11.69 relief against forfeiture …. 11.70–11.74 sublessees …. 11.74 time limits on relief …. 11.73 waiver by landlord …. 11.66 Found chattels see Lost and found chattels Fraud adverse possession …. 5.134 definition …. 8.33, 8.65, 8.66

indefeasibility of title …. 8.30, 8.44–8.57, 8.61–8.79 actual fraud …. 8.66, 8.67, 8.74 equitable fraud …. 8.73, 8.75–8.77 forged instruments …. 8.44–8.57, 8.122 forged signature …. 8.26, 8.27, 8.29, 8.47–8.57, 8.78 immediate indefeasibility …. 8.203 kind …. 8.64–8.68 knowledge of fraud …. 8.69, 8.71, 8.72, 8.78 mortgagor’s identity, confirmation …. 8.79, 8.122 perpetrated in an earlier transaction …. 8.62 registered proprietor or agent, by …. 8.62, 8.63 statutory fraud …. 8.64, 8.66, 8.67, 8.69–8.73, 8.75, 8.76 unregistered interest of another, registration …. 8.68 volunteers …. 8.127 wilful blindness …. 8.69–8.72 Torrens Assurance Fund …. 8.192–8.194 fraud as compensation basis …. 8.188, 8.192 partial deprivation …. 8.192 Free alienability see Rule against perpetuities Freehold covenants see also Covenants benefit of covenant, enforceability …. 13.2, 13.3, 13.14 equity …. 13.23–13.29 express assignment …. 13.8, 13.9 identifiable land …. 13.7 intention to benefit land …. 13.4 touch and concern test …. 13.5, 13.6 benefit of covenant, equity …. 13.15, 13.23

annexation …. 13.24–13.28 express assignment …. 13.29 identifiable land …. 13.27 intention to annex …. 13.25 retention by covenantee …. 13.28 touch and concern test …. 13.26 building schemes see Building schemes burden of covenant, enforceability …. 13.2, 13.11, 13.52 common law …. 13.12–13.14 Conveyancing Act, under …. 13.12 equity …. 13.15–13.22 Tulk v Moxhay doctrine …. 13.15–13.17 burden of covenant, equity …. 13.15 benefit to land …. 13.20 intention to run with land …. 13.21 negative requirement …. 13.18 notice of covenant …. 13.19 positive covenants …. 13.52 successors in title …. 13.22 Tulk v Moxhay doctrine …. 13.15–13.17 creation old system title …. 13.38 plans of subdivision …. 13.40 Torrens title …. 13.39, 13.40 enforceability …. 13.10 benefit of covenant …. 13.2–13.9, 13.23–13.29 burden of covenant …. 13.2, 13.11–13.22

positive covenants …. 13.52 third parties …. 13.10 modification or extinguishment …. 13.42 court orders …. 13.46, 13.47 express agreement …. 13.43 impeding covenants …. 13.49 implied agreement …. 13.44 merger …. 13.45 obsolete covenants …. 13.48 statutory extinguishment …. 13.46, 13.47 substantial injury …. 13.50 suspension …. 13.51 overview …. 13.1, 13.2 reform positive covenants …. 13.52 successors in title …. 13.53 remedies …. 13.41 successors in title …. 13.11–13.14 burden, equity …. 13.22 privity of contract …. 13.12, 13.53 reform …. 13.53 suspension …. 13.51 Torrens title …. 13.36, 13.37, 13.39, 13.40 building schemes …. 13.37 restrictive covenant …. 13.36 tenancy at sufferance …. 3.60 tenancy at will …. 3.60

Freehold estates conditional interests …. 3.80, 3.85–3.89 categorisation of interest …. 3.115, 3.116 condition subsequent …. 3.85, 3.87, 3.89 effect of event …. 3.86 fee simple defeasible by condition subsequent …. 3.87 grantor’s re-entry right …. 3.87 indicative words …. 3.88 reform …. 3.114–3.116 creation …. 3.41 determinable interest …. 3.80 boundaries …. 3.81 categorisation of interest …. 3.115, 3.116 effect of event …. 3.82, 3.83, 3.86 indicative words …. 3.84 reform …. 3.114–3.116 fee simple …. 3.43 determinable interests …. 3.80–3.83 words of limitation …. 3.64–3.67 fee tail …. 3.44 words of limitation …. 3.68, 3.69 historical background …. 3.40 life estates …. 3.45 conditional interest …. 3.89 curtesy …. 3.49 doctrine of waste …. 3.50 dower estate …. 3.48

ordinary estates …. 3.46 pur autre vie …. 3.47 words of limitation …. 3.63, 3.70, 3.71 mortgages see Mortgages types of estates …. 3.41, 3.42 void limitations/conditions …. 3.90–3.93 words of limitation …. 3.61 equitable interests …. 3.72, 3.73, 3.76–3.79 fee simple …. 3.64–3.67 fee tail …. 3.68, 3.69 grants inter vivos …. 3.62 life estates …. 3.71 Torrens system …. 3.63 Frustration leases …. 11.77 residential tenancies …. 11.122

G Gifts see also Rule against perpetuities donatio mortis causa …. 8.126 land …. 6.46 Torrens title land gifted to volunteers …. 8.126 overview …. 6.45 personal property …. 6.45 series of gifts …. 10.33, 10.49 invalid followed by dependent but valid …. 10.35, 10.52 invalid followed by gift with vesting date …. 10.36, 10.51

invalid followed by valid …. 10.36, 10.51 valid followed by invalid …. 10.34, 10.50

H Hire–purchase agreements …. 2.20, 14.11, 14.12 Housing affordability issues …. 1.1 Human rights adverse possession …. 5.52, 5.60–5.69 property rights, and …. 1.76–1.78 Victorian Charter …. 1.78

I Implied covenants common law …. 11.22–11.28 cultivation of agricultural land …. 11.28 furnished habitable dwelling …. 11.25 non-derogation …. 11.24 quiet enjoyment …. 11.23 tenant-like use …. 11.26 vacant possession on lease expiry …. 11.27 necessity …. 11.35 obligations …. 11.36 duty of care …. 11.37 waste …. 11.38 statute …. 11.29–11.34 re-entry following breach …. 11.34

rent non-payment …. 11.33 rent payment …. 11.31 repairs …. 11.30, 11.32 Improvements see also Repairs co-ownership …. 9.55–9.57 contributions from co-owners …. 9.55 limits to claims …. 9.56 reform …. 9.132 mortgagee’s rights …. 14.57 In personam rights basis for right …. 8.92 easements …. 12.51–12.53 indefeasibility of title …. 8.92–8.105 application of exception …. 8.101 Bahr v Nicolay …. 8.97 easements …. 12.51–12.53 examples …. 8.95–8.99 Mercantile Mutual Life v Gosper …. 8.98, 8.99 proper conduct …. 8.94 receipt of trust property …. 8.102–8.105 unconscionability …. 8.94 known causes of action …. 8.93, 8.99–8.101 overview …. 8.92 registration …. 8.94 Indefeasibility of title collateral loan agreements …. 8.47 compensation see Torrens Assurance Fund

deferred indefeasibility …. 8.26–8.29, 8.32, 8.34, 8.35 reform …. 8.202, 8.203, 8.205 discretionary indefeasibility …. 8.205 easements …. 8.84, 12.46, 12.47, 12.50–12.53 in personam exception …. 12.51–12.53 omitted or misdescribed …. 8.84, 12.47, 12.50 exceptions …. 8.60–8.127, 8.129, 8.201 adverse possession …. 8.106 correction of Register …. 8.115–8.121 easements …. 8.84, 12.46, 12.47, 12.50–12.53 footnote analogy …. 8.82 fraud …. 8.44–8.57, 8.61–8.79 in personam rights …. 8.92–8.105 inconsistent statutes …. 8.107–8.114 other estates or interests …. 8.80–8.82 prior folio …. 8.83 profits à prendre …. 8.85, 8.86, 12.70 Register, rectification of …. 8.115–8.121 right of way …. 8.81 short-term tenancies …. 8.88–8.90 volunteers …. 8.123–8.127 wrong descriptions of parcels …. 8.87 fraud …. 8.30, 8.61–8.79 actual fraud …. 8.66, 8.67, 8.74 definition …. 8.33, 8.65, 8.66 equitable fraud …. 8.73, 8.75–8.77 forged instruments …. 8.44–8.57, 8.122

forged signature …. 8.26, 8.27, 8.29, 8.47–8.57, 8.78 immediate indefeasibility …. 8.27, 8.30, 8.32, 8.33, 8.203 kind …. 8.64–8.68 knowledge of fraud …. 8.69, 8.71, 8.72, 8.78 mortgagor’s identity, confirmation …. 8.79, 8.122 perpetrated in an earlier transaction …. 8.62 registered proprietor or agent, by …. 8.62, 8.63 statutory fraud …. 8.64, 8.66, 8.67, 8.69–8.73, 8.75, 8.76 unregistered interest of another, registration …. 8.68 volunteers …. 8.127 wilful blindness …. 8.69–8.72 immediate indefeasibility …. 8.26–8.29, 8.31–8.35, 8.202–8.205 affirmation …. 8.29 fraud …. 8.27, 8.30, 8.32, 8.33, 8.203 in personam rights …. 8.92–8.105 application of exception …. 8.101 Bahr v Nicolay …. 8.97 easements …. 12.51–12.53 examples …. 8.95–8.99 known causes of action …. 8.93, 8.99–8.101 Mercantile Mutual Life v Gosper …. 8.98, 8.99 receipt of trust property …. 8.102–8.105 unconscionability …. 8.94 leases …. 8.39–8.43, 8.57–8.59 mortgagee’s title …. 8.122 overview …. 8.24 reform

deferred indefeasibility …. 8.202, 8.203, 8.205 immediate indefeasibility …. 8.202–8.205 registration covenants …. 8.40–8.46 forged instruments …. 8.44–8.50, 8.53–8.57 in personam …. 8.94 indefeasibility, and …. 8.36–8.39 leases …. 8.39–8.43, 8.57, 8.58 short-term tenancies …. 8.88–8.90 unregistered interest of another …. 8.68 void or illegal instruments …. 8.44–8.46 short-term tenancies …. 8.88–8.90 criteria for exception …. 8.88 notice of tenant …. 8.88–8.90 options to renew …. 8.88, 8.91 registration …. 8.89 volunteers …. 8.123–8.127, 8.206 fraud …. 8.127 Victoria …. 8.124 Indigenous rights see Aborigines; Native title Information property rights, and certain forms of knowledge and information …. 1.70 Foster v Mountford …. 1.71 Intangible property …. 1.8, 1.70, 2.5

J Joint tenancies see also Co-ownership; Tenancy in common

chattels …. 9.24 contributions to purchase price …. 9.15–9.17 matrimonial relationship …. 9.17 rebuttable presumptions …. 9.16 co-ownership creation …. 9.11 chattels …. 9.24 common law, at …. 9.12 contributions to purchase price …. 9.15–9.17 equitable interests …. 9.11, 9.22 equity, in …. 9.15–9.20 express words …. 9.12 legal interests …. 9.11, 9.22 money advanced on mortgage …. 9.18 partnership assets …. 9.19 statutory reform …. 9.20–9.23 Torrens title …. 9.23 death of tenant …. 9.9 human rights of tenant …. 1.77 improvements …. 9.55–9.57 contributions from co-owners …. 9.55 limits to claims …. 9.56 reform …. 9.132 occupation fees …. 9.58 calculation …. 9.59 overview …. 9.2, 9.3, 9.9 reform …. 9.130 unilateral severance …. 9.130, 9.131

rent and profits …. 9.60 reform …. 9.132, 9.133 repairs …. 9.57 rights and obligations improvements …. 9.55–9.57 occupation fees …. 9.58, 9.59 possession right …. 9.54 rents and profits …. 9.60 severance …. 9.25–9.53 agreement not to sever …. 9.35 alienation of part of interest …. 9.36 alienation to self …. 9.40, 9.41 alienation to third party …. 9.28–9.39 bankruptcy …. 9.52, 9.53 course of dealing among tenants …. 9.45, 9.46 court order …. 9.47 example …. 9.25, 9.26 forfeiture rule …. 9.48–9.51 gifts in equity …. 9.31–9.34 grant of lease …. 9.39 means of effecting …. 9.27 mortgages …. 9.37, 9.38 mutual agreement …. 9.43, 9.44 reform …. 9.130, 9.131 subdivision of property …. 9.46 trust declaration …. 9.42 unilateral act by one tenant …. 9.28–9.42, 9.130, 9.131

unlawful killing …. 9.48–9.51 survivorship, right of …. 9.8, 9.9 termination of co-ownership …. 9.61–9.65 action of parties …. 9.62 court orders …. 9.63–9.65 division of chattels …. 9.65 sale or partition of land …. 9.63, 9.64 unities …. 9.4–9.7 interest …. 9.5 possession …. 9.4 time …. 9.7 title …. 9.6 Jus tertii defence Asher v Whitlock …. 5.37 chattels …. 2.45, 2.54 availability of defence …. 2.55, 2.56 lost and found …. 2.64 easements …. 12.45 overview …. 2.54, 5.47 possessory title …. 2.34, 5.47, 5.48 relevance of third party’s rights …. 2.56

L Land see also Equitable interests; Legal interests; Real property Aboriginal customary rights, whether property rights …. 1.8, 1.59 access to neighbouring land …. 12.74 airspace …. 2.2, 2.6

aircraft …. 2.7, 2.9 owners’ rights …. 2.7 trespass …. 2.7–2.9 boundaries …. 2.12 accretion and erosion …. 2.15 non-tidal waters …. 2.14 tidal waters …. 2.13 characteristics …. 2.2, 2.6 co-owners ordered to sell or partition …. 9.63, 9.64 compulsory acquisition …. 1.2 native title …. 4.59 corporeal and incorporeal realty …. 2.2 dealing lodgment activity …. App B definition …. 2.2, 2.6 deprivation remedy, historically …. 1.3 extent …. 2.6 fixtures see Fixtures gifts of …. 6.46 mortgages see Mortgages native title see Native title natural rights …. 2.11 neighbouring land, access to …. 12.74 old system title see Old system title rights in land …. 1.3, 4.1, 5.5 subsoil …. 2.6, 2.10 Torrens title system see Torrens title system trespass see Trespass

Leasehold land anomalies …. 3.56 fixed-term tenancies …. 3.58 historical development …. 3.55, 3.56 key aspects …. 3.57 mortgages …. 14.17 Torrens title …. 14.21 overview …. 3.40 periodic tenancies …. 3.59 tenancy at sufferance …. 3.60 tenancy at will …. 3.60 Leases see also Residential tenancies; Retail leases adverse possession …. 5.80 assignment of leases …. 11.16, 11.86 continuing liability …. 11.86 covenants against …. 11.41–11.43 enforcement of covenants …. 11.47–11.51 assignments of reversion …. 11.86 concurrent leases …. 11.19 covenants see Covenants creation …. 6.6, 11.3 certainty of duration …. 11.4 deeds …. 11.6 equity, in …. 11.7 exclusive possession …. 11.5 old system title …. 11.6, 11.7 Torrens title …. 11.8

Crown Land Acts, under …. 11.94 duration …. 3.57, 11.4, 11.84 estoppel tenancies …. 11.18 fixed-term tenancies …. 3.58, 11.9 forfeiture …. 11.59, 11.62 breach of non-rental covenants …. 11.64, 11.72 court proceedings …. 11.68 manner of forfeiture …. 11.67–11.69 non-payment of rent …. 11.63, 11.71 physical re-entry …. 11.69 re-entry, by …. 11.62–11.74 relief against forfeiture …. 11.70–11.74 sublessees …. 11.74 time limits on relief …. 11.73 waiver by landlord …. 11.66 fragmentation of interests …. 11.2 historical development …. 2.3, 3.55, 11.1 anomalies …. 3.56 implied obligations …. 11.36 duty of care …. 11.37 waste …. 11.38 implied periodic tenancies …. 11.12–11.15, 11.85 conduct of parties …. 11.15 yearly tenancies …. 11.13, 11.14 indefeasibility of title, and …. 8.39–8.43, 8.57–8.59 joint tenancies …. 9.39 key aspects …. 3.57

mortgagee-granted old system title …. 14.58, 14.59 Torrens title …. 14.61 mortgagor-granted old system title …. 14.60 Torrens title …. 14.62 no value, for …. 11.100 overview …. 2.3, 3.57, 11.2, 11.87 periodic tenancies …. 3.59, 11.10 determination …. 11.11 implied …. 11.12–11.15, 11.85 reform of common law …. 11.83 assignment of leases …. 11.86 duration requirement …. 11.84 implied tenancies …. 11.85 remedies …. 11.78 damages …. 11.79 injunctions …. 11.79 set-off …. 11.80–11.82 residential tenancies see Residential tenancies reversionary leases …. 11.20 right of renewal …. 8.40–8.43 set-off …. 11.80 common law …. 11.81 equitable …. 11.82 subleases see Subletting tenancy types

concurrent leases …. 11.19 fixed-term tenancies …. 3.58, 11.9 periodic tenancies …. 3.59, 11.10, 11.11 periodic tenancies, implied …. 11.12–11.15, 11.85 residential see Residential tenancies reversionary leases …. 11.20 tenancy at sufferance …. 3.60, 11.17 tenancy at will …. 3.60, 11.16 tenancy by estoppel …. 11.18 termination …. 11.57–11.77 breach of covenants …. 11.63–11.65 contractual remedies …. 11.59–11.61, 11.65 effluxion of time …. 11.58 forfeiture by re-entry …. 11.62–11.74 frustration …. 11.77 loss of bargain damages …. 11.61 mergers …. 11.75 notice, by …. 11.57, 11.64, 11.65 repudiation …. 11.59–11.61, 11.65 surrender …. 11.76 terminology …. 11.2 Torrens title …. 11.8 indefeasibility …. 8.39–8.43, 8.57–8.59 mortgagee-granted leases …. 14.61 mortgagor-granted leases …. 14.62 registration …. 8.39–8.43, 8.57, 8.58 types of …. 3.57 see also tenancy types above

Legal executory interests see also Legal interests current position …. 3.110 historical development …. 3.106–3.109 remainder rules, and …. 3.107, 3.109 rule in Purefoy v Rogers …. 3.109 Legal interests see also Equitable interests co-ownership …. 9.11, 9.22 creation and transfer …. 6.4 deeds …. 6.5 leases …. 6.6, 11.6 personal property …. 6.7 possessory titles …. 6.6 fragmentation of rights …. 6.2, 6.3 overview …. 6.1, 6.4 priority disputes …. 7.1 earlier and later interests …. 7.3, 7.4 earlier equitable interest …. 7.9–7.25 earlier equity …. 7.33–7.35 later equitable interest …. 7.5–7.8 unregistered interests …. 8.161 rule against perpetuities …. 10.10 Torrens title system, unregistered interests …. 8.129, 8.161 trusts …. 3.75, 6.2 trustees …. 3.75, 6.3 Licences easements, distinction …. 12.14 occupation licences …. 3.24

profits à prendre, distinction …. 12.65 Life estates conditional interest …. 3.80, 3.89 curtesy …. 3.49 determinable interest …. 3.80, 3.83 doctrine of waste …. 3.50 dower estate …. 3.48 ordinary estates …. 3.46 overview …. 3.45, 5.13 pur autre vie …. 3.47 words of limitation …. 3.63 inter vivos dispositions …. 3.70 testamentary dispositions …. 3.71 Life tenants adverse possession …. 5.78, 5.79 doctrine of waste …. 3.50 ameliorating waste …. 3.53 equitable waste …. 3.54 permissive waste …. 3.51 voluntary waste …. 3.52 fixtures …. 2.16, 2.26 Locke’s labour theory appropriation …. 1.24 limits …. 1.24 basis …. 1.23 difficulties …. 1.25–1.27 gender blindness …. 1.41

inconsistencies …. 1.26 influence …. 1.15 overview …. 1.23, 1.24, 1.28 persons capable of ownership …. 1.27 Lost and found chattels agents …. 2.65 annexation to land …. 2.66 employees …. 2.65 fixtures …. 2.66 occupier’s rights …. 2.66, 2.67 overview …. 2.64

M Mabo (No 2) background …. 4.13, 4.14 compensation …. 4.25, 4.33 connection with land …. 4.18, 4.27 continuing connection …. 4.28 physical connection …. 4.27 extinguishment of rights …. 4.20–4.23 appropriation …. 4.23 fee simple grant …. 4.61 inconsistent grants …. 4.22 leases …. 4.62 legislation …. 4.21 pastoral leases …. 4.62, 4.73 High Court decision …. 4.15

compensation …. 4.25 connection with land …. 4.18 extinguishment …. 4.20–4.23 fiduciary relationship …. 4.24 nature of native title …. 4.17 origin of native title …. 4.17 sovereignty …. 4.16 waters, title over …. 4.19 key issues and problems …. 4.26 nature of native title …. 4.17, 4.36 external/internal aspects …. 4.38 judicial divergence …. 4.36 proprietary interest, as …. 1.59, 4.36–4.40 overview …. 3.2, 3.35 radical/ultimate title …. 4.16 Supreme Court (Qld) …. 4.14 Mediation strata scheme disputes …. 9.113–9.116 Mergers freehold covenants …. 13.45 lease and reversion …. 11.75 Mortgagees assignment right …. 14.56 chattels …. 2.20 compliance with identity checks …. 8.197 fixtures …. 2.16, 2.20, 2.23, 2.24, 14.63 foreclosure …. 14.67

old system title …. 14.68–14.73 Torrens title …. 14.74, 14.75 improvements to property …. 14.57 indefeasibillity of title …. 8.122 leases old system title …. 14.58, 14.59 Torrens title …. 14.61 mortgagor’s identity confirmation duty …. 8.79, 8.122 overview …. 14.44 personal covenants …. 14.45–14.48 possession of mortgaged property attornment clauses …. 14.53 equitable mortgages …. 14.51, 14.52 legal mortgages …. 14.49, 14.50 old system title …. 14.49–14.53 Torrens title …. 14.54, 14.55 power of sale …. 14.81, 14.82 advertisement of sale …. 14.111, 14.140 agent appointment …. 14.110 compulsion to sell …. 14.114 conduct of sale …. 14.108–14.114 default by mortgagor …. 14.83, 14.91–14.95 deposit of title deeds …. 14.90 exercise of power …. 14.96–14.99 good faith standard …. 14.100, 14.103, 14.104, 14.106, 14.143 improper exercise …. 14.116, 14.118, 14.119 internet advertising …. 14.140

mortgagee’s right not to sell …. 14.114 negligence standard …. 14.100–14.102, 14.104–14.106, 14.143 notice requirements …. 14.84–14.87, 14.91–14.95 old system title …. 14.83–14.90 pre-sale expenditure …. 14.112 proceeds of sale …. 14.123–14.126 proper exercise …. 14.117 reasonable care …. 14.107 reserve, setting …. 14.113 restraint of sale …. 14.115–14.122 service of notice …. 14.88–14.90 timing of sale …. 14.109 Torrens title …. 14.91–14.95 power of sale, restraint availability …. 14.115 improper exercise of power of sale …. 14.116, 14.118, 14.119 old system title …. 14.121 proper exercise of power of sale …. 14.117 purchaser’s involvement …. 14.117–14.120 Torrens title …. 14.122 receivers …. 14.64–14.66 appointment …. 14.64, 14.65 liability …. 14.66 reform good faith test …. 14.143 internet advertising …. 14.140 negligence test …. 14.143

rights and remedies …. 14.44 Mortgages see also Mortgagees; Mortgagors adverse possession …. 5.122–5.124, 5.140 all moneys mortgages …. 8.47–8.56 attornment clauses …. 14.53, 14.55 chattels …. 14.3, 14.12 National Credit Code …. 14.12 clogs on equity of redemption …. 14.23 collateral advantages …. 14.28–14.31 covenants …. 14.32, 14.33, 14.45–14.48 extinguishment of right …. 14.24 industrial relations …. 14.37 leases …. 14.58 National Credit Code …. 14.36 postponement of right …. 14.25–14.27 statutory intervention …. 14.34–14.37 termination fees …. 14.27 unjust contracts …. 14.35, 14.36 co-owners advancing money on mortgage …. 9.18 Crown land …. 14.22 death of mortgagor …. 14.138 discharge of mortgage …. 14.76 old system title …. 14.77 Torrens title …. 14.78–14.80 equity of redemption …. 14.19, 14.23 clogs see clogs on equity of redemption above fixtures …. 2.16, 2.23, 2.24

freehold land, registered and unregistered mortgages over …. 14.18–14.20 historical development …. 14.13 joint tenancies …. 9.37, 9.38 leasehold land …. 14.17, 14.21 leases mortgagee-granted …. 14.58, 14.59 mortgagor-granted …. 14.60, 14.62 old system title …. 14.58–14.60 Torrens title …. 14.61, 14.62 National Credit Code …. 14.12, 14.36 old system title …. 14.13, 14.14 equitable mortgages …. 14.14, 14.16 leasehold land …. 14.17 legal mortgages …. 14.14–14.16 mortgagor-granted leases …. 14.60 repayment date …. 14.15 second mortgages …. 14.16 overview …. 14.1 part performance …. 6.12 priorities …. 14.127 advances by contract …. 14.137 calling in legal title …. 14.135, 14.136 competition between mortgages …. 14.127 old system title …. 7.7, 7.8, 14.128, 14.132, 14.133, 14.135, 14.137 tabula in naufragio …. 14.131–14.134 tacking …. 14.130–14.137 Torrens title …. 14.129, 14.134, 14.136

priority disputes …. 7.7 reform …. 14.139–14.143 accurate nomenclature …. 14.139 relationship debt …. 14.141 transfers for security …. 14.142 relationship debt …. 14.38 case law …. 14.40–14.42 equitable remedies …. 14.43 reform …. 14.141 sexually transmitted debt …. 14.38, 14.141 unconscionable transactions …. 14.39 residential tenancies …. 11.96 security, transfers for …. 14.20, 14.142 tacking …. 14.130–14.134 calling in legal title …. 14.135, 14.136 contract …. 14.137 Torrens title all moneys mortgages …. 8.47–8.56 Crown land …. 14.22 discharge of mortgage …. 14.78–14.80 equitable mortgages …. 14.18, 14.19 equity of redemption …. 14.19 forged mortgages …. 8.44–8.57 identity of mortgagor …. 8.79, 8.122 joint and several liability clauses …. 8.54 joint tenancies …. 9.38 leasehold land …. 14.21

leases …. 14.61, 14.62 priorities …. 14.129, 14.134, 14.136 registered and unregistered mortgages over freehold land …. 14.18–14.20 subsequent mortgages …. 14.18 transfers for security …. 14.20, 14.142 Mortgagors see also Mortgagees; Mortgages attornment clauses …. 14.53, 14.55 death of …. 14.138 identity confirmation duty …. 8.79, 8.122 leases granted by …. 14.60, 14.62

N National Credit Code mortgages …. 14.12 overview …. 14.12 Native title allodial title …. 3.33, 3.34, 3.37, 4.9 availability …. 4.15 bundle of rights, as …. 4.54, 4.55 extinguishment …. 4.58 caveats …. 8.156 compensation …. 4.25, 4.33, 4.87 constitutional compensation …. 4.50, 4.51, 4.70 past acts …. 4.70 proprietary analysis, and …. 4.50–4.52 reform …. 4.87 restriction on quantum …. 4.79

connection with land …. 4.18, 4.27, 4.85 continuing connection …. 4.28, 4.32 establishing connection …. 4.32 frozen rights approach …. 4.28, 4.29 normative frameworks/systems …. 4.30, 4.31 physical connection …. 4.27 traditional practices …. 4.28–4.30 definition …. 4.66, 4.84 determinations …. 4.67 doctrine of tenure, and …. 3.32, 3.35, 3.38 acceptance of doctrine …. 3.37 allodial title …. 3.33, 3.34, 3.37, 4.9 application of doctrine …. 3.38 co-existence of systems …. 3.36 terra nullius see Terra nullius extinguishment of rights …. 4.20–4.23, 4.57 appropriation …. 4.23, 4.59 competing interests …. 4.57 compulsory acquisitions …. 4.59 fee simple grant …. 4.61 inconsistent grants …. 4.22, 4.58 leases …. 4.62 legislation …. 4.21 past acts regime …. 4.68, 4.69 pastoral leases …. 4.62, 4.73, 4.77 permanent adverse dominion …. 4.58 reserved land …. 4.60, 4.77

short-term leases …. 4.76 features …. 1.59 fiduciary relationships …. 4.24, 4.35 historical background …. 4.1 Commonwealth legislation …. 4.11 developments in recognition …. 4.8 Gove case …. 4.10, 4.11 Indigenous rights …. 1.59, 4.6–4.9 Indigenous rights movement …. 4.10 New South Wales legislation …. 4.12 relationship with land …. 4.2, 4.3 settlement …. 4.4, 4.5 terra nullius see Terra nullius key issues and problems …. 4.26 Mabo (No 2) see Mabo (No 2) Native Title Act 1993 (Cth) see Native Title Act 1993 (Cth) Native Title Amendment Act 1998 (Cth) see Native Title Amendment Act 1998 (Cth) native title rights and interests …. 4.66 nature …. 4.17, 4.36, 4.40 bundle of rights, as …. 4.54, 4.55 external aspects …. 4.38 flexibility of characterisation …. 4.39 future directions …. 4.56 internal aspects …. 4.38 judicial divergence …. 4.36–4.40 proprietary interest, as …. 4.36–4.53

sui generis …. 4.49, 4.53 origin …. 4.17 overview …. 3.2, 3.3, 3.35, 4.1 pastoral leases …. 4.62, 4.73 Wik decision …. 4.74 possessory title and …. 5.1 proprietary interest, as …. 1.59, 4.36–4.40 alienation right …. 1.59, 4.43, 4.45 compensation …. 4.50–4.52 difficulties in approach …. 4.46–4.49 exclusion right …. 4.44 indicia of property …. 4.41–4.45 judicial support …. 4.37 use and enjoyment right …. 1.59, 4.42 reform …. 4.83 compensation …. 4.87 cultural knowledge …. 4.86 native title, definition …. 4.84 right to negotiate …. 4.72, 4.80 title, as not …. 5.13 Torrens Assurance Fund …. 8.207 waters, title over …. 4.19, 4.34 Native Title Act 1993 (Cth) see also Native title amendments see Native Title Amendment Act 1998 (Cth) recent …. 4.82, 4.83 compensation …. 4.70, 4.87 determining native title …. 4.67

effect of Act …. 4.64 extinguishment …. 4.69 past acts regime …. 4.68 pastoral leases …. 4.73 future acts …. 4.71, 4.82 right to negotiate …. 4.72 introduction …. 4.63 native title, definition …. 4.66 overview …. 4.63 past acts regime …. 4.68, 4.69 compensation …. 4.70 pastoral leases …. 4.73 Wik decision …. 4.74 preamble …. 4.64 future acts …. 4.71 validation of grants …. 4.65, 4.68, 4.69 past acts regime …. 4.68 Native Title Amendment Act 1998 (Cth) amendments to main Act, more recent …. 4.82, 4.83 compensation …. 4.79, 4.87 extinguishment …. 4.76–4.78 non-claimant applications …. 4.78 pastoral leases …. 4.77 reserved land …. 4.77 short-term leases …. 4.76 intermediate period acts …. 4.75 introduction of Act …. 4.74

reaction to Act …. 4.81 right to negotiate …. 4.80 Natural rights easements, distinction …. 12.11 land and …. 2.11 Locke’s theory …. 1.23 utilitarianism’s rejection of …. 1.29 NCAT see NSW Civil and Administrative Tribunal (NCAT) Negligence contributory …. 8.195 leases …. 11.37 mortgagee’s power of sale …. 14.100–14.102, 14.104–14.106, 14.143 overview …. 2.52 NSW Civil and Administrative Tribunal (NCAT) overview …. 9.117 residential tenancies …. 11.126 appeals …. 11.130 costs …. 11.128 dismissal …. 11.126 orders …. 11.129 priorities …. 11.131 questions of law …. 11.130 representation …. 11.128 vesting of tenancy …. 11.131 retail leases …. 11.144 strata title disputes …. 9.117 appeals …. 9.125, 9.127

applications …. 9.123 civil penalties …. 9.126 dismissal of application …. 9.119 jurisdiction …. 9.117, 9.121, 9.122, 9.124 orders …. 9.121–9.125 procedure …. 9.118–9.120 unit entitlements …. 9.122 Notice doctrine see Doctrine of notice

O Old system title see also Torrens title system adverse possession …. 5.55, 5.162 difficulties of system …. 7.43, 8.1 easements express grants …. 12.16, 12.17 express reservation …. 12.19, 12.20 freehold covenants …. 13.38 leases …. 11.6, 11.7 mortgages …. 14.58–14.60 mortgagees …. 14.49–14.53 attornment clauses …. 14.53 equitable mortgages …. 14.51, 14.52 foreclosure …. 14.68–14.73 leases …. 14.58, 14.59 legal mortgages …. 14.49, 14.50 power of sale …. 14.83–14.90, 14.121, 14.124 repairs …. 14.50

mortgages …. 9.37, 14.13, 14.14 discharge …. 14.77 equitable mortgages …. 14.14, 14.16 leasehold land …. 14.17 leases …. 14.58–14.60 legal mortgages …. 14.14–14.16 mortgagor’s grant of lease …. 14.60 priorities …. 7.7, 7.8, 14.128, 14.132, 14.133, 14.135, 14.137 repayment date …. 14.15 second mortgages …. 14.16 overview …. 5.2, 7.2 priority disputes …. 7.1 beneficiaries under trust …. 7.30 bona fide purchaser and for value …. 7.10–7.12 doctrine of notice …. 7.13–7.24, 7.29 earlier equitable later equitable …. 7.26–7.35 earlier equity later equitable/legal …. 7.33–7.35 earlier legal later legal …. 7.3, 7.4 mortgages …. 7.7, 7.8, 14.128, 14.132, 14.133, 14.135, 14.137 residential tenancies …. 11.131 successors in title …. 7.25 tabula in naufragio …. 7.31, 7.32 unregistered interests …. 8.171 profits à prendre …. 12.67, 12.68 reform …. 7.43 equities and ‘mere’ equities …. 7.45 equity or equitable interest …. 7.45

tabula in naufragio …. 7.44 registration of deeds and priorities …. 7.36 registration of instruments …. 7.36–7.41 bona fide requirement …. 7.39 priorities …. 7.38 valuable consideration …. 7.40 void instruments …. 7.41 seisin …. 5.30 Torrens title and …. 7.2 Ownership adverse possession, recovery by owner …. 2.35, 5.79, 5.140, 5.144 airspace, owners’ rights …. 2.7 chattel ownership …. 2.45 doctrine of tenure …. 2.45 possession and …. 2.45 proprietary interests …. 2.45 co-ownership see Co-ownership concept …. 5.11, 5.12, 5.14 damages and property ownership …. 1.9, 1.10 determination …. 5.12 doctrine of tenure and ownership of chattels …. 2.45 ejectment and …. 5.32 establishment necessity …. 5.32 freehold covenants, unity of ownership …. 13.34 land rights basis …. 5.4, 5.5 Locke’s labour theory, persons capable of ownership …. 1.27 meaning …. 5.14

possession, distinction …. 5.10 property distinction …. 5.10 ownership rules …. 1.9 thing-ownership …. 1.13, 1.14, 1.18, 1.19, 1.21 reversionary interests and ownership …. 2.45 strata schemes see Strata schemes subsoil, landowners’ rights …. 2.6, 2.10 thing-ownership …. 1.13, 1.14, 1.18, 1.21 historical criticism …. 1.19 Torrens title system, ownership under …. 5.2

P Paramount force doctrine …. 3.28 Part performance …. 6.10–6.13 acts constituting …. 6.11, 6.12 mortgages …. 6.12 overview …. 6.10 test …. 6.11–6.13 Pastoral leases concept of …. 3.23 doctrine of tenure …. 3.22, 3.23, 3.26 native title …. 4.62, 4.73 Wik decision …. 4.74 Native Title Amendment Act 1998 (Cth) …. 4.77 occupation licences …. 3.24 Periodic tenancies …. 3.59

Perpetuities see Rule against perpetuities Personal property categories …. 2.1, 2.3 choses in action …. 2.5 choses in possession …. 2.4 creation and transfer …. 6.7 equitable estoppel …. 6.43 equitable interests …. 6.45 estoppel …. 6.43 gifts …. 6.45 overview …. 2.3 securities see Personal property securities Personal property securities features of regime …. 14.6 fixtures …. 14.8 PPS lease …. 14.6 Personal Property Securities Register (PPSR) …. 14.5 identification of parties …. 14.9 security interest definition …. 14.6 third party acquisition without …. 14.10 vesting …. 14.7 terminology …. 14.5, 14.6 third party acquisition without security interest …. 14.10 Personal Property Securities Act 2009 (Cth) (PPSA) overview …. 14.4, 14.5 replacement, as …. 14.8

terminology …. 14.5 Personal rights right to work …. 1.52, 1.72, 1.73 Personalty see Personal property Possession behavioural reality …. 5.12 better right …. 5.4 chattels …. 2.42 future possession rights …. 2.44 immediate possession rights …. 2.43, 2.48 ownership, and …. 2.45 common law …. 5.4 concept …. 5.3, 5.7–5.9 examples …. 5.95–5.103 exclusive …. 5.8 historical development …. 5.6–5.30 better possession …. 5.24 ejectment …. 5.26–5.28 Grand Assize …. 5.20 possessory assizes …. 5.21–5.23 seisin …. 5.24, 5.26–5.30 writ system …. 5.17–5.20 writs of entry …. 5.25, 5.27 land rights basis …. 5.4, 5.5 England …. 5.7 meaning …. 5.3, 5.7, 5.8 occupation, distinction …. 5.9

peaceful …. 5.86 property, distinction …. 5.10 protection …. 5.14 seisin …. 3.9, 5.15, 5.16, 5.24, 5.26–5.30 title, distinction …. 5.10, 5.13, 5.14 Possessory title see also Adverse possession assizes …. 5.21–5.23 mort d’ancestor …. 5.23 claim, notice of …. App A documentation …. 6.6 ejectment …. 5.31–5.46 abolition …. 5.46 Allen v Roughley …. 5.38–5.45 Asher v Whitlock …. 5.34–5.37 better possession …. 5.33 historical development …. 5.26–5.28 ownership …. 5.32 England …. 5.7 historical development …. 5.6–5.30 better possession …. 5.24 ejectment …. 5.26–5.28 Grand Assize …. 5.20 possessory assizes …. 5.21–5.23 seisin …. 5.24, 5.26–5.30 writ system …. 5.17–5.20 writs of entry …. 5.25, 5.27 jus tertii defence …. 2.34, 5.47, 5.48

native title and …. 5.1 notice of …. App A overview …. 2.32, 5.1, 5.2 possession meaning …. 5.3, 5.7 property, distinction …. 5.10 seisin …. 5.15, 5.16 possessory actions …. 5.17–5.30 ejectment …. 5.26–5.28, 5.31–5.46 Grand Assize …. 5.20 real actions …. 5.17, 5.18 writ system …. 5.17–5.20 writs of entry …. 5.25, 5.27 possessory assizes …. 5.21–5.23 mort d’ancestor …. 5.23 seisin …. 5.24, 5.26–5.30 Torrens title land …. 5.1, 5.148–5.156 recording possessors title …. 5.148, 5.149, 5.155 trespass, and …. 2.32 stay of execution …. 2.36 title to sue …. 2.33, 2.34 Priority disputes doctrine of notice …. 7.13, 7.29 actual notice …. 7.16 constructive notice …. 7.17–7.23 imputed notice …. 7.24 inspection of land …. 7.18–7.21

inspection of title …. 7.23, 7.24 investigation of documents …. 7.22 notice, what constitutes …. 7.15 timing of notice …. 7.14 earlier equitable later equitable …. 7.26–7.28 beneficiaries under trust …. 7.30 better equity …. 7.27 doctrine of notice …. 7.29 tabula in naufragio …. 7.31, 7.32 earlier equitable later legal …. 7.9, 8.171 bona fide purchaser and for value …. 7.10–7.12 doctrine of notice …. 7.13–7.24 successors in title …. 7.25 earlier equity later equitable/legal …. 7.33–7.35 equity, distinction …. 7.35 earlier legal later equitable …. 7.5–7.8 failure to obtain title deeds …. 7.6–7.8 postponement …. 7.8 earlier legal later legal …. 7.3, 7.4 exception to rule …. 7.4 nemo dat rule …. 7.3 mortgages …. 14.127 advances by contract …. 14.137 calling in legal title …. 14.135, 14.136 old system title …. 14.128, 14.132, 14.133, 14.135, 14.137 tabula in naufragio …. 14.131–14.134 tacking …. 14.130–14.137

Torrens title …. 7.7, 7.8, 14.129, 14.134, 14.136 overview …. 7.1 registration of instruments …. 7.36–7.41 residential tenancies …. 11.131 unregistered interests …. 8.161, 8.162, 8.171, 8.176 arming conduct …. 8.163 dealing registrable …. 8.172–8.175 failure to caveat …. 8.164–8.168 general law notice …. 8.181 legal estate, interpretation …. 8.178–8.180 notice of prior interest …. 8.170 priority notices …. 8.157–8.160, 8.169, 8.182 successive effect doctrine …. 8.177 void dealings …. 8.174 Priority notices effect …. 8.159 failure to lodge …. 8.169 lapse …. 8.160 overview …. 8.182 purpose …. 8.158 regime establishment …. 8.157 removal …. 8.160 withdrawal …. 8.160 Private property conception of all property as …. 1.50 economic justification …. 1.32–1.35 common versus private …. 1.33–1.35

efficiency …. 1.32, 1.33 necessary conditions …. 1.33 privatisation …. 1.35 wealth maximisation …. 1.32, 1.33 function-based justification …. 1.38 justice and equality …. 1.36–1.40, 1.49 communism …. 1.36, 1.37 exploitation …. 1.36 passive property …. 1.39 overview …. 1.75 pluralist approach …. 1.48, 1.49 prioritisation over common/public property …. 1.54 ‘thingness’ …. 1.21 utilitarian justification …. 1.29–1.31 equality …. 1.30 Profits à prendre creation …. 12.66–12.70 deeds …. 12.67 equity, in …. 12.68 instrument, by …. 12.66 old system …. 12.67, 12.68 prescription …. 12.76 Torrens system …. 12.69 extinguishment …. 12.72 licence, distinguished …. 12.65 omitted or misdescribed …. 12.70 overview …. 12.1, 12.65

reform …. 12.76 remedies …. 12.71 Torrens system …. 12.69 exceptions to indefeasibility …. 8.85, 8.86, 12.70 Profits à rendre …. 12.73 Property see also Equitable interests; Land; Legal interests; Personal property; Property law; Property rights; Real property categories …. 2.1 character as physical or cerebral …. 5.11 concept …. 1.4 analytical dimension …. 1.4, 1.5–1.21 capitalism and …. 1.20 doctrinal dimension …. 1.4 historical changes …. 1.50–1.55 philosophical bases …. 1.4, 1.22–1.49 connections to …. 1.1 critiques and theories function-based theory …. 1.38 labour theory …. 1.15, 1.22–1.28, 1.50 physicalist theory …. 1.15 pluralist approach …. 1.48, 1.49 private property …. 1.29–1.35, 1.50 progressive property …. 1.40 substantive due process …. 1.16 thingification of property …. 1.17 thing–ownership …. 1.13, 1.14, 1.18, 1.19, 1.21 values …. 1.40

women and property …. 1.41–1.47 damages, and …. 1.9, 1.10 definition …. 1.4, 1.5 difficulties …. 1.3 dominion or control …. 1.6 elements, substantive …. 1.11 ends-based approach …. 1.21 exclusion of others …. 1.7, 1.52 historical development changes in concept of property …. 1.50–1.55 neo-liberal philosophy …. 1.54 welfare state …. 1.51, 1.52, 1.54 historical importance …. 1.3 importance …. 1.1, 1.3 intangible …. 1.8, 1.70, 2.5 issues involving …. 1.1, 1.2 land see Land law, necessity to …. 1.7 legal relationship, as …. 1.13, 1.14 liabilities, and …. 1.9 meaning variability …. 1.3 means-based approach …. 1.21 overview …. 1.1, 1.4 ownership rules …. 1.9 philosophical bases …. 1.22–1.49 physical thing, as …. 1.8, 1.13, 1.14, 1.21 critiques and theories …. 1.14, 1.15, 1.17, 1.19

dominion or control …. 1.6 historical criticism …. 1.14, 1.19 thing–ownership …. 1.13, 1.14, 1.18, 1.19, 1.21 political and philosophical justifications …. 1.20 possession, distinction …. 5.10 private property …. 1.75 economic justification …. 1.32–1.35 justice and equality …. 1.36–1.40, 1.49 pluralist approach …. 1.48, 1.49 utilitarian justifications …. 1.29–1.31 progressive property …. 1.40 protection …. 5.14 public interest, and …. 1.13, 1.75 punishment rules …. 1.9 real property see Land; Real property relationship, as …. 1.13, 1.14 rights as …. 1.52 sovereignty and …. 1.18 substantive elements …. 1.11 thing–ownership …. 1.13, 1.14, 1.18, 1.21 historical criticism …. 1.19 thingification …. 1.17, 1.21 values …. 1.40 welfare state, and …. 1.51, 1.52, 1.54 property rights …. 1.53 rights as property …. 1.52 women, and …. 1.27, 1.41–1.47

feminist approach …. 1.41–1.47 functional approach …. 1.43 inequality …. 1.42 Property law see also Common law divergence from English law …. 3.27, 3.28 High Court of Australia as highest court …. 3.29 overview …. 1.10, 3.118 sources of law …. 3.1, 3.3 Property (Relationships) Act 1984 (NSW) trusts and domestic relationships …. 6.48–6.50 Property rights see also Equitable interests; Legal interests Aboriginal customary rights over land, whether …. 1.8, 1.59 alienation rights …. 1.8, 1.59, 4.41 native title …. 4.43, 4.45 body parts …. 1.60–1.65 excised cells …. 1.60, 1.61 human sperm …. 1.64, 1.65 human tissue …. 1.62 broadcasting …. 1.66–1.69 United States …. 1.66, 1.67 civil rights, and …. 1.74 determination of boundaries …. 1.5 contractual rights, and …. 1.56–1.58 definition …. 1.5 determination of boundaries civil rights …. 1.5 spectacles …. 1.68

dominion or control …. 1.6 elements basic …. 1.5 substantive …. 1.11 exclusion right …. 1.7, 1.52, 4.41 native title …. 4.44 human rights …. 1.76–1.78 Indigenous rights, and …. 1.59 information …. 1.70 Foster v Mountford …. 1.71 legal relations, as …. 1.14, 1.17 list …. 1.11 native title …. 4.36 alienation right …. 1.59, 4.43, 4.45 compensation …. 4.50–4.52 difficulties in approach …. 4.46–4.49 exclusion right …. 4.44 indicia of property …. 4.41–4.45 use and enjoyment right …. 4.42 other rights, distinction …. 1.19, 1.56–1.78, 1.79 overview …. 1.5, 1.11, 1.12, 4.41 personal rights right to work …. 1.52, 1.72, 1.73 political and philosophical justifications …. 1.20 public rights, and …. 1.13, 1.75 spectacle, in …. 1.66–1.69 determination of boundaries …. 1.68

strata scheme reform …. 9.134 substantive elements …. 1.11 ‘thing’ …. 1.8 transfer of rights …. 1.73 transfer right …. 1.8 use and enjoyment …. 4.41 native title …. 4.42 welfare state …. 1.53 Proprietary estoppel inducement by acquiescence …. 6.40 inducement by representation …. 6.38, 6.39 overview …. 6.37 Public rights easements, distinction …. 12.12 property rights, and …. 1.13, 1.75

Q Quit rents …. 3.21

R Real property categories …. 2.1 enforceability …. 1.3 importance …. 1.3 land see Land remedies for breach of rights …. 1.3 r ight to repossession …. 2.3

Real Property Act 1900 (NSW) see Torrens title system Realty see Real property Relationship debt see also Women and property mortgages, and …. 14.38 case law …. 14.40–14.42 equitable remedies …. 14.43 reform …. 14.141 sexually transmitted debt …. 14.38, 14.141 unconscionable transactions …. 14.39 Remainders see also Rule against perpetuities adverse possession …. 5.78, 5.79 contingent remainders …. 3.100, 3.103, 10.1, 10.10, 10.11 divesting …. 3.102 identification of tenant …. 3.101 current position …. 3.110–3.113 legal executory interests, and …. 3.106, 3.107, 3.109 legal remainder rules …. 3.104, 3.105, 3.107 four rules …. 3.105 overview …. 3.97 vested remainders …. 3.99, 3.103 divesting …. 3.102 wording …. 3.103 Remedies see also Torts breach of covenant …. 11.78 damages …. 11.79 injunctions …. 11.79 set-off …. 11.80–11.82

easements …. 12.43 abatement …. 12.44 damages actions …. 12.45 nuisance actions …. 12.45 freehold covenants …. 13.41 mortgages and relationship debt …. 14.43 profits à prendre …. 12.71 Rent co-ownership …. 9.60 reform …. 9.132, 9.133 covenants to pay …. 11.31 non-payment …. 11.33, 11.63, 11.71 forfeiture of lease …. 11.63, 11.71 residential tenancies …. 11.116 increases …. 11.117 reductions …. 11.118 regulation …. 11.133 retail leases …. 11.140 Repairs see also Improvements co-ownership …. 9.57 covenants …. 11.30 breach of covenant …. 11.34 landlord’s duty …. 11.40 landlord’s right to inspect …. 11.32 tenant’s duty …. 11.39 mortgagees …. 14.50

residential tenancies …. 11.109 urgent repairs …. 11.110 strata schemes …. 9.84 common property …. 9.78, 9.84, 9.85 power to enter …. 9.85 Residential tenancies Act …. 11.87 agreements …. 11.88 exceptions …. 11.89–11.103 social housing tenancy agreements …. 11.88 assignment …. 11.113, 11.136 right to new tenancy …. 11.114 boarders and lodgers …. 11.92, 11.134 creation of tenancies …. 11.104–11.106 condition reports …. 11.105 fixed-term tenancies …. 11.106 formalities …. 11.104 periodic tenancies …. 11.106 defence personnel …. 11.88 dispute resolution see NSW Civil and Administrative Tribunal (NCAT) excepted residential agreements …. 11.89, 11.102, 11.103 boarders and lodgers …. 11.92 classes of agreements excluded …. 11.102, 11.103 company title schemes …. 11.98 holiday purposes …. 11.97 leases for no value …. 11.100

leases under Crown Land Acts …. 11.94 refuge or crisis accommodation …. 11.93 residential or holiday parks …. 11.90 retirement villages …. 11.91 sale or purchase agreements …. 11.95 shared households …. 11.101 tenancies in mortgage …. 11.96 terms of 99 years …. 11.99 fixed-term tenancies …. 11.106 habitable dwelling …. 11.25 obligations of parties …. 11.107 abandoned goods …. 11.115 alterations by tenant …. 11.111 assignment …. 11.113, 11.114 quiet enjoyment …. 11.108 repairs …. 11.109, 11.110 security and safety devices …. 11.112 subletting …. 11.113, 11.114 tenant’s fixtures …. 11.111 urgent repairs …. 11.110 overview …. 11.87, 11.131 periodic tenancies …. 11.106 priority disputes …. 11.131 reform of legislation …. 11.132 assigning and subletting …. 11.136 boarders and lodgers …. 11.134 reasonable security …. 11.135

rent regulation …. 11.133 share housing …. 11.134 rent …. 11.116 increases …. 11.117 reductions …. 11.118 regulation …. 11.133 residential premises …. 11.88 Residential Tenancies Act 2010 (NSW) …. 11.87 security and safety …. 11.112 reasonable security …. 11.135 social housing tenancy agreements …. 11.88 subletting …. 11.113, 11.136 right to new tenancy …. 11.114 tenant’s fixtures …. 11.111 termination of lease …. 11.119, 11.125 breach of agreement …. 11.121 fixed-term tenancies …. 11.106 frustration …. 11.122 notice …. 11.106, 11.120–11.122 notice not required …. 11.125 orders for …. 11.123, 11.124 possession order …. 11.123 recovery of possession …. 11.131 types fixed-term tenancies …. 11.106 periodic tenancies …. 11.106 Residential Tenancies Act 2010 (NSW) …. 11.87

Restrictive covenants see also Covenants; Freehold covenants easements, distinction …. 12.13 Resulting trusts see Trusts Retail leases assignment …. 11.141 dispute resolution …. 11.143 NSW Civil and Administrative Tribunal …. 11.144 excluded leases …. 11.138 legislation …. 11.137 overview …. 11.138 rent …. 11.140 retail shop lease …. 11.138 rights and obligations …. 11.139 subletting …. 11.141 termination …. 11.142 Reversionary interests bailments …. 2.58, 2.59 overview …. 2.44, 3.96 ownership, and …. 2.45 permanent loss or damage …. 2.59 nature of exception …. 2.60 Rights of way see Easements Rule against perpetuities see also Remainders abolition (SA) …. 10.62 accumulated amounts …. 10.56 age reduction …. 10.37, 10.45

class gifts …. 10.48 ‘wait and see’ rule …. 10.46–10.48 application of rule …. 10.40, 10.59 examples …. 10.40, 10.60 explanatory diagram …. 10.59 appointment powers …. 10.57 assistance of …. 10.2 breach of rule …. 10.39 class-closing rules …. 10.18–10.22 application …. 10.22 class gifts …. 10.16, 10.17 impact of rules …. 10.23, 10.24 no prior estate, contingency …. 10.20 no prior estate, no contingency …. 10.19 prior estate, no contingency …. 10.21 prior estate and contingency …. 10.22 ‘wait and see’ rule …. 10.48 class gifts …. 10.16, 10.17, 10.48 examples …. 10.17 common law …. 10.25–10.40 age reduction …. 10.37 application of rule …. 10.40, 10.59 breach of rule …. 10.39 conditions subsequent …. 10.38 contingencies, alternative …. 10.32 determinable interests …. 10.38 gifts in series …. 10.33–10.36

lives in being …. 10.27–10.29 perpetuity period …. 10.15, 10.26 statute, principles shared with …. 10.8–10.24 vesting, possibility of …. 10.30, 10.31 conditions subsequent …. 10.38, 10.54 contingent gifts …. 10.13, 10.14 alternative contingencies …. 10.32 examples …. 10.13 determinable interests …. 10.38, 10.54, 10.55 formulation of rule …. 10.8, 10.9 gifts breach of rule …. 10.39 class gifts …. 10.16, 10.17 see also class-closing rules above series see series of gifts below historical development …. 10.1, 10.3 affirmation of free alienability …. 10.4 modern rule …. 10.5, 10.6 old rule …. 10.4 lives in being …. 10.27–10.29 human life requirement …. 10.28 perpetuity period …. 10.27, 10.29 single life or class of lives …. 10.29 overview …. 10.1, 10.2 Perpetuities Act 1984 (NSW) …. 10.6, 10.7, 10.41 accumulated amounts …. 10.56 age reduction …. 10.45, 10.46–10.48 application of rule …. 10.59

class gifts …. 10.16, 10.17, 10.48 common law, principles shared with …. 10.8–10.24 conditions subsequent …. 10.54 determinable interests …. 10.54, 10.55 perpetuity period …. 10.8, 10.15, 10.43, 10.53, 10.64 powers of appointment …. 10.57 s 4(3) …. 10.53, 10.64 series of gifts …. 10.49–10.52 superannuation funds …. 10.58 ‘wait and see’ rule …. 10.44, 10.46–10.48 will execution …. 10.53, 10.64 perpetuity period …. 10.9, 10.15, 10.26, 10.43 estimation …. 10.9 execution of wills …. 10.53, 10.64 gestation period …. 10.26, 10.43 lives in being …. 10.27, 10.29 ‘wait and see’ rule …. 10.44 powers of appointment …. 10.57 reform …. 10.61, 10.63 abolition of rule (SA) …. 10.62 execution of wills …. 10.64 series of gifts …. 10.33, 10.49 invalid followed by dependent but valid …. 10.35, 10.52 invalid followed by gift with vesting date …. 10.36, 10.51 invalid followed by valid …. 10.36, 10.51 valid followed by invalid …. 10.34, 10.50 sources of law …. 10.6

common law …. 10.25–10.40 Perpetuities Act 1984 (NSW) …. 10.41–10.58 shared principles …. 10.8–10.24 South Australia, abolition …. 10.62 vested interests …. 10.12, 10.14 invalid gift followed by gift with own vesting date …. 10.36, 10.51 possibility of vesting …. 10.30 requirements for vesting …. 10.12 vesting, possibility of …. 10.30, 10.31 fertile octogenarian principle …. 10.31 magic gravel pits …. 10.31 unborn widower …. 10.31 ‘wait and see’ rule …. 10.44, 10.65 age reduction …. 10.46–10.48 class gifts …. 10.48 will execution …. 10.53, 10.64

S Security interests chattels …. 14.2 hire-purchase agreements …. 14.11, 14.12 historical background …. 14.3, 14.11 National Credit Code …. 14.12 definition under PPSA …. 14.6 mortgages see Mortgages overview …. 14.1, 4.3 personal property securities see Personal property securities; Personal

Property Securities Act 2009 (Cth) (PPSA) Seisin …. 3.9, 5.15, 5.16, 5.24, 5.26–5.30 Self-help chattels …. 2.63 recaption …. 2.63 trespass on land …. 2.37 Set-off breach of covenant …. 11.80 common law set-off …. 11.81 equitable set-off …. 11.82 Short-term tenancies exceptions to indefeasibility …. 8.88–8.90 criteria for exception …. 8.88 notice of tenant …. 8.88–8.90 options to renew …. 8.88, 8.91 registration …. 8.89 Specific performance contracts for sale of land …. 6.14 effect of remedy …. 6.14 overview …. 6.4 Spectacle property rights in …. 1.66–1.69 determination of boundaries …. 1.68 United States …. 1.66, 1.67 Statute of De Donis Conditionalibus …. 3.44, 3.68 Statute of Quia Emptores …. 3.17, 3.43, 10.3

Strata schemes adjudicators …. 9.116, 9.117 appeals District Court and Supreme Court …. 9.127 NSW Civil and Administrative Tribunal …. 9.125 by-laws …. 9.104–9.106 amendment …. 9.107–9.110 compliance …. 9.106, 9.111 enforcement …. 9.111 new by-laws …. 9.107–9.110 reform …. 9.134 repeal …. 9.107–9.110 restrictions …. 9.108, 9.109 special resolutions …. 9.110 capital works fund …. 9.87, 9.89–9.91 10-year plan …. 9.91 exception to requirement …. 9.89 purposes for payments from …. 9.90 Civil and Administrative Tribunal see NSW Civil and Administrative Tribunal below common property …. 9.76–9.78 maintenance and repair …. 9.78, 9.84, 9.85 selling or leasing …. 9.77 strata roll information …. 9.97 dispute resolution …. 9.69, 9.112 adjudicators …. 9.116, 9.117 mediation …. 9.113–9.116

NSW Civil and Administrative Tribunal …. 9.117–9.127 historical background …. 9.66–9.70 company title …. 9.66, 9.67 dispute resolution …. 9.69 introduction of legislation …. 9.68 recent reforms …. 9.70 initial period …. 9.74, 9.121 right to sue …. 9.75 insurance …. 9.93–9.95 large strata schemes …. 9.100 legislation introduction …. 9.68 maintenance and repair common property …. 9.78, 9.84, 9.85 power to enter …. 9.85 management …. 9.83 administrative fund …. 9.87–9.89 building defects bond scheme …. 9.86 capital works fund …. 9.87, 9.89–9.91 insurance …. 9.93–9.95 levy of contributions …. 9.92 maintenance and repair …. 9.78, 9.84, 9.85 records and accounts …. 9.96–9.100 sinking fund …. 9.87, 9.89 strata roll …. 9.96, 9.97 NSW Civil and Administrative Tribunal …. 9.117 appeals …. 9.125, 9.127 applications …. 9.123

civil penalties …. 9.126 dismissal of applications …. 9.119 jurisdiction …. 9.117, 9.121, 9.122, 9.124 orders …. 9.121–9.125 procedure …. 9.118–9.120 unit entitlements …. 9.122 overview …. 9.66–9.70 owners and occupiers’ responsibilities …. 9.101 notice of events …. 9.103 use of lot …. 9.102 owners corporation …. 9.79, 9.82 building manager …. 9.81, 9.124 caretaker …. 9.81 duty of maintenance …. 9.78, 9.84, 9.85 management responsibilities …. 9.83–9.100 managing agent …. 9.80, 9.124 property rights reform …. 9.134 records and accounts …. 9.96–9.100 common property information …. 9.97 inspection …. 9.99 large schemes …. 9.100 strata roll …. 9.96, 9.97 renewal process …. 9.129 sinking fund …. 9.87, 9.89 strata plans …. 9.73 structure common infrastructure …. 9.72

elements …. 9.71 initial period …. 9.74, 9.121 strata plans …. 9.73 structural cubic space …. 9.72 termination of schemes …. 9.128 unit entitlements …. 9.73, 9.122 Strata titles see Strata schemes Subletting covenants …. 11.41 absolute covenants …. 11.42 qualified covenants …. 11.43 forfeiture of lease …. 11.74 residential tenancies …. 11.113, 11.136 right to new tenancy …. 11.114 retail leases …. 11.141 Subsoil land owners’ rights …. 2.6, 2.10 Survivorship joint tenancies …. 6.3, 9.8

T Tabula in naufragio priority disputes …. 14.131 equitable interests …. 7.31, 7.32 mortgages …. 14.131–14.134 problems in doctrine …. 7.44 Tenancies

common see Tenancy in common fixed-term …. 3.58 joint see Joint tenancies leases see Leases periodic …. 3.59 Residential Tenancies Act 2010 (NSW) …. 11.87 short-term see Short-term tenancies Tenancy in common see also Co-ownership; Joint tenancies chattels …. 9.24 contributions to purchase price …. 9.15–9.17 matrimonial relationship …. 9.17 rebuttable presumptions …. 9.16 co-ownership creation …. 9.11 chattels …. 9.24 common law, at …. 9.12, 9.13 contributions to purchase price …. 9.15–9.17 equitable interests …. 9.11, 9.22 equity, in …. 9.14–9.19 express words …. 9.12 legal interests …. 9.11, 9.22 money advanced on mortgage …. 9.18 partnership assets …. 9.19 statutory reform …. 9.20–9.23 Torrens title …. 9.23 words of severance …. 9.13 death of tenant …. 9.10 improvements …. 9.55–9.57

contributions from co-owners …. 9.55 limits to claims …. 9.56 reform …. 9.132 mortgage, money advanced on …. 9.18 occupation fees …. 9.58 calculation …. 9.59 overview …. 9.2, 9.10 purchase price, different contributions to …. 9.15–9.17 matrimonial relationship …. 9.17 rebuttable presumptions …. 9.16 rent and profits …. 9.60 reform …. 9.132, 9.133 repairs …. 9.57 rights and obligations improvements …. 9.55–9.57 occupation fees …. 9.58, 9.59 possession right …. 9.54 rents and profits …. 9.60 survivorship right …. 9.10 termination …. 9.61–9.65 action of parties …. 9.62 court orders …. 9.63–9.65 division of chattels …. 9.65 sale or partition of land …. 9.63, 9.64 unity of possession …. 9.10 Tenant’s fixtures agricultural tenancies …. 2.29

annexation by tenant …. 2.16, 2.27 consent to annex …. 2.27, 2.69, 11.111 unreasonable refusal …. 2.27, 2.69 domestic fixtures …. 2.26 improvements …. 2.26, 2.27 life tenants …. 2.16, 2.26 ornamental fixtures …. 2.26 overview …. 2.25 removal …. 2.29 time for …. 2.28 residential tenancies …. 2.29 statute, governed by …. 2.29 trade fixtures …. 2.26 Tenure doctrine see Doctrine of tenure Terra nullius customary rights, and …. 4.9 doctrine of tenure …. 4.9 overview …. 3.5 Theories see Critiques and theories Title indefeasibility see Indefeasibility of title old system see Old system title overview …. 5.13 possession, distinction …. 5.10, 5.13, 5.14 privatisation …. 1.2 Torrens system see Torrens title system

Torrens Assurance Fund access to moneys …. 8.187 actions against Registrar-General …. 8.189 alternative dispute resolution …. 8.200 annual expenditure …. App C bases for compensation …. 8.188, 8.189, 8.191 fraud …. 8.188, 8.192 contributory negligence …. 8.195 costs award …. 8.190 damages …. 8.195 different assurance funds over time …. 8.187 exceptions to compensation …. 8.191, 8.195, 8.196, 8.197 expenditure, annual …. App C fraud …. 8.192–8.194 compensation basis …. 8.188, 8.192 immediate indefeasibility …. 8.203 partial deprivation …. 8.192 unregistered interests …. 8.197 general purpose …. 8.183, 8.186 interest in land …. 8.194 moneys …. 8.187 native title …. 8.207 overview …. 8.183–8.187 proceedings for recovery …. 8.198–8.200 alternative dispute resolution …. 8.200 initiating proceedings …. 8.188 limitation period …. 8.199

professional indemnity insurers …. 8.200 purpose …. 8.183, 8.186 reform …. 8.203–8.205, 8.207 Registrar-General, actions against …. 8.189 Torrens title system see also Old system title; Strata schemes adverse possession …. 5.55, 5.56, 5.148–5.156, 5.158, 5.160, 5.162 caveatable interests …. 8.142–8.145 examples …. 8.145 non-caveatable interests …. 8.146 caveats …. 8.131–8.156 delimitation plans …. 8.155 effect of caveat …. 8.138, 8.139 extension …. 8.150–8.152 failure to lodge …. 8.140, 8.141 lodgment by Registrar-General …. 8.132, 8.133 native title …. 8.156 possessory applications …. 5.155, 8.154 prevention of dealings …. 8.135–8.137 primary applications …. 8.134 priority disputes …. 8.164–8.168 purpose …. 8.138–8.141 removal …. 8.136, 8.147–8.151 certificate of title …. 8.16 electronic …. 8.18 priority notices replacing paper …. 8.158, 8.182 compensation see Torrens Assurance Fund computerisation

conversion to system …. 8.8, 8.11 electronic certificate of title …. 8.18 electronic conveyancing …. 8.17 conversion to system …. 8.6, 8.8 computerisation …. 8.8, 8.11 initial …. 8.8–8.10 ordinary folio …. 8.6 qualified folio …. 8.7 statistics …. 8.9–8.11 co-ownership …. 9.23 dealings …. 8.19 caveats preventing …. 8.135–8.137 lodgment activity …. App B priority notices …. 8.157–8.160, 8.182 easements …. 12.46 express grants …. 12.18 express reservation …. 12.21 implied easements …. 12.54 in personam exception …. 12.51–12.53 omitted or misdescribed …. 8.84, 8.85, 12.47–12.50 electronic certificate of title …. 8.18 electronic conveyancing …. 8.17 folios …. 8.13–8.15 ordinary folio …. 8.6 qualified folio …. 8.7 freehold covenants …. 13.36, 13.39, 13.40 building schemes …. 13.37

gifts to volunteers …. 8.126 historical background …. 8.1–8.4 introduction of scheme …. 8.5 Sir Robert Torrens …. 8.2–8.4 indefeasibility of title …. 8.24 covenants …. 8.40–8.46 deferred indefeasibility …. 8.26–8.29, 8.32, 8.34, 8.35, 8.202, 8.203, 8.205 easements …. 8.84, 12.46, 12.47, 12.50–12.53 exceptions to …. 8.60–8.127, 8.129, 8.201 forged instruments …. 8.44–8.57, 8.122 immediate indefeasibility …. 8.26–8.29, 8.31–8.35, 8.202–8.205 leases …. 8.39–8.43, 8.88–8.90 profits à prendre …. 8.85, 8.86, 12.70 registration, effect …. 8.39–8.43 void or illegal instruments …. 8.44–8.46, 8.57–8.59 introduction of scheme …. 8.5 joint tenants …. 9.23 severance …. 9.38, 9.130, 9.131 leases …. 8.39–8.43, 11.8 mortgagee-granted …. 14.61 mortgagor-granted …. 14.62 registration …. 8.39–8.43, 8.57, 8.58 mortgagees …. 14.54, 14.55 attornment clauses …. 14.55 foreclosure …. 14.74, 14.75 leases …. 14.61

power of sale …. 14.91–14.95, 14.122, 14.125, 14.126 mortgages all moneys mortgages …. 8.47–8.56 Crown land …. 14.22 discharge …. 14.78–14.80 equitable mortgages …. 14.18, 14.19 equity of redemption …. 14.19 forged mortgages …. 8.44–8.46 joint tenancies …. 9.38 leasehold land …. 14.21 mortgagor-granted leases …. 14.62 priorities …. 14.129, 14.134, 14.136 subsequent mortgages …. 14.18 transfers for security …. 14.20, 14.142 old system and …. 7.2 overview …. 8.6 ownership under scheme …. 5.2 possessory applications …. 5.148–5.150 caveats …. 5.155, 8.154 Crown land …. 5.153, 5.154 indefeasibility of title …. 8.106 occupational boundaries …. 5.150 residue lots …. 5.151 service lanes …. 5.151 possessory title …. 5.1, 5.2, 5.148 recording possessors title …. 5.148, 5.149, 5.155 principles underpinning …. 8.20–8.24

curtain principle …. 8.22, 8.23 insurance principle …. 8.24 mirror principle …. 8.21 priority in unregistered interests …. 8.161, 8.162, 8.171, 8.176 arming conduct …. 8.163 dealing registrable …. 8.172–8.175 failure to caveat …. 8.164–8.168 general law notice …. 8.181 legal estate, interpretation …. 8.178–8.180 meritorious and disentitling conduct …. 8.162 notice of prior interest …. 8.170 priority notices …. 8.157–8.160, 8.169, 8.182 successive effect doctrine …. 8.177 void dealings …. 8.174 priority notices …. 8.182 effect …. 8.159 failure to lodge …. 8.169 lapse …. 8.160 purpose …. 8.158 regime establishment …. 8.157 removal …. 8.160 withdrawal …. 8.160 privatisation …. 1.2 profits à prendre …. 12.69 omitted or misdescribed …. 8.85, 12.70 reform …. 8.201–8.207 deferred indefeasibility …. 8.202, 8.203, 8.205

immediate indefeasibility …. 8.202–8.205 overriding statutes …. 8.201 volunteers …. 8.206 Register …. 8.12 correction of …. 8.115–8.121 curtain principle …. 8.22, 8.23 mirror principle …. 8.21 noting of caveats …. 8.137 rectification of …. 8.115–8.121 registration …. 8.20, 8.23 covenants …. 8.41 forged instruments …. 8.44–8.46 indefeasibility of title, and …. 8.36–8.39 leases …. 8.39–8.43 short-term tenancies …. 8.89 void or illegal instruments …. 8.44–8.46, 8.57, 8.58 tenancy in common …. 9.23 unregistered interests …. 8.128–8.182 caveats …. 8.131–8.156, 8.164–8.168 competing interests …. 8.130, 8.161–8.171 priority notices …. 8.157–8.160, 8.169, 8.182 volunteers …. 8.123–8.127, 8.206 fraud …. 8.127 gifts …. 8.126 words of limitation …. 3.63 Torts see also Trespass bailments …. 2.61, 2.62

chattels …. 2.48–2.53 recaption …. 2.63 conversion …. 2.49, 2.50 bailments …. 2.61 contractual rights, and …. 2.57 multiplicity of actions …. 2.70 reform …. 2.70 third party, right to implead …. 2.70 trespass, distinction …. 2.50 detinue …. 2.51 negligence see Negligence overlapping torts …. 2.53 Trespass see also Possessory title adjacent property, observing from …. 2.7 airspace above land …. 2.7–2.9 chattels …. 2.48 lost and found chattels …. 2.67 overlapping torts …. 2.53 contractual rights, and …. 2.57 conversion, distinction …. 2.50 establishment …. 2.31 forcible entry …. 2.38 inclosed lands …. 2.39 jus tertii defence …. 2.34 overview …. 2.31 possessory title …. 2.32, 2.34, 5.1 stay of execution …. 2.36

title to sue …. 2.33, 2.34 recovery of possession …. 2.35 self-help …. 2.37 statutory penalties …. 2.38 forcible entry …. 2.38 inclosed lands …. 2.39 title to sue …. 2.33, 2.34 dispossessors …. 2.34 tree intrusion not …. 2.8 Trover see Conversion Trusts adverse possession …. 5.128 beneficiaries …. 5.131 strangers …. 5.130 trustees …. 5.129 constructive trusts …. 6.31 common-intention …. 6.32, 6.33 contract for land sale as analogous to …. 6.15–6.19 failure to pool earnings …. 6.36 unconscionable conduct …. 6.34–6.36, 6.55 domestic relationships …. 6.47 equitable doctrines …. 6.47 Family Law Act 1975 (Cth) …. 6.51, 6.52 Property (Relationships) Act 1984 (NSW) s 20 …. 6.48–6.50 relationship breakdown …. 6.48, 6.49 equitable interests …. 6.2 beneficiaries …. 3.75, 6.3

concurrent jurisdiction …. 3.74, 6.4 constructive trusts …. 6.31–6.36, 6.55 express trusts …. 6.20 non-express trusts …. 6.25 reform …. 6.53 resulting trusts …. 6.26–6.30, 6.54 express trusts …. 6.20 failed …. 6.27 formalities …. 6.22–6.24 historical development …. 6.3 legal interests …. 6.2 trustees …. 3.75, 6.3 non-express trusts …. 6.25 see also constructive trusts above; resulting trusts below overview …. 3.75 reform …. 6.53 constructive trusts …. 6.55 resulting trusts …. 6.54 resulting trusts …. 6.26, 6.54 contribution to purchase price …. 6.29 failed express trusts …. 6.27 presumption of advancement …. 6.30, 6.54 purchase in name of another …. 6.28 words of limitation …. 3.76–3.79

U United States

broadcasting rights …. 1.66, 1.67 critiques and theories labour theories …. 1.15 physicalist theory …. 1.15 substantive due process …. 1.16 thingification of property …. 1.17 Unregistered interests see Torrens title system

V Victoria human rights …. 1.78 volunteers’ indefeasibility of title …. 8.124 Volunteers indefeasibility of title …. 8.123–8.127 fraud …. 8.127 Victoria …. 8.124 reform …. 8.206 Torrens title system …. 8.123, 8.206 gifts of land …. 8.126

W Waste doctrine see Doctrine of waste Welfare state property, and …. 1.51, 1.52, 1.54 property rights …. 1.53 rights as …. 1.52 Wills see also Life estates; Rule against perpetuities

fixtures …. 2.23 Women and property see also Relationship debt feminist approach …. 1.41–1.47, 6.55 functional approach …. 1.43 inequality …. 1.42 Locke’s theory …. 1.27, 1.41 overview …. 1.27, 1.41

Related LexisNexis Titles Cameron-Dow, LexisNexis Questions and Answers: Property Law, 3rd ed, 2017 Edgeworth, Quick Reference Card: Real Property Law, 2nd ed, 2015 Edgeworth, Rossiter, O’Connor & Godwin, Sackville & Neave Australian Property Law, 10th ed, 2017 Hepburn, Australian Property Law: Cases, Materials & Analysis, 4th ed, 2018 Hepburn, Quick Reference Card: Personal Property, 2015 Jackman & Werren, LexisNexis Study Guide: Property Law, 2nd ed, 2015 Newton & Cheung, LexisNexis Case Summaries: Real Property, 4th ed, 2015 Viglianti-Northway, Understanding Real Property Law, 2015 Webb & Stephenson, Focus Land Law, 4th ed, 2015