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Property 2Torrens SystemDefects with old system (OS)Purchasers want to verify that vendor’s title is unencumbered in a simple, cost-effective manner CL requires verification of title, by tracing history of dealings, chain of title, title deedsProblems arise when documents have been removed, lost forged, are defective, affected by adverse possession and easements 30 yr period of commencement – prove good root of title for 30 years before contract date (s 53(1) CA)Purchaser deemed not to have notice of matters >30yrs prior, unless they made investigations (s 53(3))Deeds Registration (DR)Registered deeds prioritised over non-recorded/subsequently recorded deed (RDA 1825)Not compulsory, except when made condition precedent e.g. mortgageTorrens System (TS) - 1863Meant to be reliable, simple, cheap, speedy (intended by R Torrens)While DR = registration of instruments, TS = title by registration (Breskvar)Land alienated by Crown before TS can retain old system status, after TS = new system (s 13 RPA)RG to supply reasons for certain decisions e.g. application rejection (s 121)Qualified title (QT)Issued in doubtful case (where no detailed search of existing old system chain)Compulsory for subdivisions, otherwise voluntary (s 28C)Does not prevail over subsisting interests, caution recorded on title (s 28J)Can record additional interests any time before caution lapses after 12 yrs (s 28M(3)); or if there is a purchaser for valuable consideration without fraud after the creation of the QT, 6 yrs after the creation of the QT, or when the purchaser becomes registered, whichever is later (s 28M(2))Limited title (LT)Where boundaries are not sufficiently defined for an ordinary folio (s 28T)Incorrect boundary description - LT holder is defeasible to extent of error (s 28U)Can be removed once survey plan is lodged, adverse possession (s 28V), or at expiration of 30 yrs (Edgeworth 5.24)IndefeasibilityPrinciple of indefeasibility - RPARegistered certificate is conclusive evidence that person named is the Registered Proprietor (RP), no folio shall be defeasible on ground of want of notice (s 40 RPA) No dealing is effectual, unless registered (only creates equitable interest) (s 41)The estate of the RP is paramount i.e. free from all other unrecorded interests, except fraud, misdescription of easement/profit a prendre/boundaries, tenancy (s 42)Ejectment: Cannot eject RP, unless (s 118): Mortgagee against mortgagor in defaultChargee against charger in default (e.g. covenant) Lessor against lessee in defaultPerson deprived of land due to fraud against fraudulent RP, or person deriving land from fraudulent RP (other than bona fide transferee for value)Person claiming misdescription of boundaries/land against RPRP under earlier folio against RP of later folio Injunction can stop registration if forgery is detected prior to registration by action under s 42/118Purchaser from RP not affected by notice/duty to inquire; mere notice is not fraud (s 43)If suing for specific performance, folio is conclusive evidence that RP has good title (s 44)Innocent proprietor: bona fide purchaser/mortgagee is protected even if vendor/mortgagor was registered through fraud or error or under any void/voidable instrument (s 45) Deferred v Immediate IndefeasibilityDeferredStatic – if P1 registers forged instrument, title is defeasible & set aside at suit of O (5.32)Forger registering in name of fictitious person cannot acquire title in that fictitious person, but can pass valid title to bona fide 3rd parties for value (Gibbs)Notice section paramount over indefeasibility section, registration pursuant to avoid instrument does not carry the protection of the indefeasibility provision (Dixon J in Clements)ImmediateDynamic – good title conferred on P1 immediately on registration of forged instrument (5.32)Assets Co took narrowest interpretation of Gibbs – deferred indefeasibility only when registered in fictitious name only, immediate defeasibility applies to other forged/void instrumentsRegistration gives immediate indefeasibility, with exceptions e.g. in personam (Frazer) Priority goes to prior equitable interest (Rice) unless priority is lost by conduct by party with earlier interest that contributed to assumption upon which person with competing equitable interest acted (Breskvar)Where conduct of O allowed P1 to register forged instrument without notice, P1 gains immediate indefeasiblity and P2 gains priority (Breskvar re s 45)Rationale for immediate indefeasibilityTrade off between security of title and security of transaction (5.41)No purchaser of Torrens system should be required to investigate history of vendor’s title However, property is not fungible – security of titleRPA supports immediate indefeasibility (s 45)Alteration of documents @CL deed will be void if altered in a material way after execution (Pigot’s Case) – abrogated by s 184 CARegistration cures material alterations to deeds, unless instrument is ineffective, e.g. purporting to create interests not known to law or void for uncertainty (Karacominakis)RG can withhold rego of a resumption (compulsory acquisition), pending notification to person affected and giving opportunity to context (s 31A(5) RPA)Option to renew/purchase and covenantsAn option to purchase is a covenant that can be included in a registered lease (s 53(3) RPA), but cannot be registered separately (Mercantile Credits).Personal right created by a covenant, not affecting the interest in land is defeasible (Mercantile)However, a right of renewal is not personal and runs with the land, it is so intimately connected with the term of lease that is qualifies and defines the lease, therefore part of the interest that the lessee obtains and on title it is entitled to the same priority as the term itself (Mercantile)Restrictive covenant can be registered and is protected by s 42 (s 88(3) CA)Cannot register options deemed void under legislation (Travinto Nominees) An option to renew is a contingent interest that expires when lease ends (Caleo Bros)Option to renew is enforceable against an RP who obtained registration after the registration of the lease, despite the original lease’s expiration and the new lease created by exercise of option having not been registered yet (Re Eastdoro)A caveat lodged to protect an option in an unregistered lease will not protect a lessee against a proprietor who became registered before lodgement of caveat (Leros v Terara)MortgagesA forged mortgage when registered without fraud on the part of the mortgagee confers an indefeasible title on the mortgagee (Yazgi)Must examine terms of mortgage to determine the scope of indefeasible interest; explicit statement of amount lent is required as prima facie evidence of debt (Yazgi)While mortgage security is a prop right, the personal obligation to pay is contractual; thus indefeasiblity is limited to interests created by rego and collateral loans or facilities secured by a forged mortgage are defeasible (Qld Premier Mines)Where a mortgage is forged, the mortgagee can possess land and sell it in satisfaction of the debt, but cannot enforce void personal covenants, guarantees or indemnities (Vassos, Grgic)Volunteers @CL: volunteers subject to equities affecting donor regardless of notice (Re Nisbet), by contrast a bona fide purchaser for value without notice obtains indefeasible title (Pilcher v Rawlins)Arguments against volunteers obtaining indefeasiblity on registrationBefore Bogdanovic, volunteers acquiring Torrens title obtained title as good as, but no better than, the transferor e.g. resulting/constructive trust/defeasible for fraud (Smail)Although s 42 does not distinguish b/w purchaser for value and volunteers, other sections do (Rasmussen supporting Small)Arguments for volunteers obtaining indefeasibility on registrationS 42 makes no express distinction b/w volunteer and purchaser (Bogdanovic)Title derived from registration and a volunteer will be protected by indefeasibility doctrine unless s/he had noticeObject of register is to save persons dealing with RP expense/trouble of investigations (Gibbs)HC held in obiter that volunteers obtain indefeasibility on registration (Farah Constructions)Exceptions to IndefeasibilityFraud exceptionRP cannot rely on rego when seeking to enforce rights belonging to them by reason of their own fraud (Loke Yew)If dealing was void ab initio by fraud, order is a direct rectification of the registerWhat is fraudFraud includes actual, CL and legal deceit, excludes constructive/equitable fraud; dishonesty, wilful conscious disregard and violation of rights (Waimiha Sawmilling in Russo)Knowing falsity is not fraud, requires dishonesty, moral turpitude or wickedness (Russo)Fraud must be brought home to the RP or to his/her agents, mere possibilities of discovering the fraud by vigilance or inquires is insufficient (Assets Co)A person who believes he has a genuine document is not guilty of fraud Forged signature by bank officer is not fraud if not for purpose of ‘harming, cheating or otherwise being dishonest’ (Ferguson)Fraud must be operative, operate on the mind of the person and induced detrimental actionFraud may be a result of reckless indifference/wilful blindness but does not embrace negligence of want of due care in making inquiries (Pyramid Building Society)If mortgagee took reasonable steps to check ID but fails to detect fraud, loss may fall on RP (Russo)Fraud and agencyException found where fraud is committed by RP/agent, OR RP/agent has knowledge of fraud which deprives previous RP of some/all interest (Assets Co)Principle of respondeat superior applies: act of agent within scope of authority does not cease to bind his principal for his fraudulent acts Agent’s knowledge of fraud must be imputed to principal in order to find real over hypothetical involvement in the fraud by the RP If there is duty to communicate, irrebuttable presumption that agent communicated to the principal, but if agent is a party to the fraud, principal can give evidence to prove innocencebank officer witnessing signature w/o reckless indifference is not fraudulent (Grgic)bank officer falsely attesting to witnessing forged signature = fraud (Westpac v Sansom)Fraud against holder of prior unregistered interestMere knowledge of existence of prior interest is not fraud in itself (R M Hosking)Purchaser registering with knowledge that prior interest will be defeated upon rego is not fraud (Mills v Stockman, s 43 – notice), duty of inquiry not accepted in Aus (Farah Constructions)It is fraud to collude to cheat a person of known right or engage in deliberate, dishonest trick to cause person not to register interest (Efstratiou)In personamRights in personam encompass:Personal obligations voluntarily undertaken/ imposed by equity not denied by indefeasibility (Frazer)Known legal/equitable causes of action (Grgic v ANZ) Both personal conduct of RP and their agentsConduct antedate or postdate regoPersonal equities and noticeNotice of an unregistered interest is not fraud, however, if RP purchases on terms that he will be bound by the unregistered interest, then the RP is subject to that interest (Bahr v Nicolay No 2)Where the RP tries to deny unregistered interest unconscionably, he may be bound to honour the in personam obligation A purchaser who takes an interest, knowing that an unregistered interest affecting the land will be defeated upon registration, is distinct from one who has undertaken to be bound by the unregistered interest. P1 gazumped by rego of P2 with knowledge cannot compel P2 to transfer land to P1LimitationsBreach of duty of care may give rise to claim in damages but does not establish fraud by wilful blindness or a personal equity sufficient to set a mortgage aside (Pyramid Building Society)Where there is a pre-existing relationship, mortgagee’s breach of obligations as custodian of a certificate of title may give rise to a personal equity (Gosper)Decision in Gosper has been criticised: possession of a certificate of title in the absence of fraud should not give rise to a personal equity (Butt 1992)UnconscionabilityPossible requirement of unconscionable conduct by RP in acquiring title (Vassos)Equity may recognise misrepresentation, misuse of power, improper attempt to rely upon legal rights, knowledge of wrongdoing (Hayne J in Vassos) - not conclusive (White)Where a previous court order is reversed, RP who registers title unconscionably in reliance on previous court order falls within in personam exception (White v Tomasel)Some cases e.g. incomplete contract of sale, do not require unconscionability unless to say it was unconscionable to breach a contractual obligation or acquire the registered title itselfWife can set aside a surety given to 3rd party to secure husband’s debts with a requisite of element of unconscionability (Yerkey affirmed in Garcia)Special equity may arise where there is a special vulnerability/disability based on remedies to equitable unconscionable (Amadio)Breach of trustWhere RP breaches fiduciary duty (Tataurangi)/constructive trust (Bahr v Nicolay) in obtaining registration, their action gives rise to an element of unconsionability/equitable fraud required to bring an action in personam2 limbs of Barnes v Addy:Recipient liability: Stranger knowingly receives trust property in breach of trust – inconsistent with notice provisions, common knowledge insufficient and stranger is not liable as a constructive trustee (Farah v Say-Dee) Accessory liability: Stranger with knowledge assists in the fraudulent and dishonest design of plan on part of trustee, and takes property as constructive trustee – gives rise to action in personam where knowledge includes:Actual knowledgeWilful blindnessWilful/reckless failing to make inquiries that honest/reasonable person would makeKnowledge of circumstances that would indicate facts to honesty/reasonable personMistakeMistake alone is not an exception to indefeasibility and does not give rise to rectification.Personal equity arises where RP unconscionably takes advantage of transferor’s unilateral or mutual mistake to obtain a bargain for inadequate consideration:Insertion of option to renew by mistake (Majestic Homes v Wise)Transferred more land than contracted for (Tutt v Doyle)Transferred wrong lots (Lukacs v Moods) Unlawful action by public authoritiesCouncil’s breach of statutory duty does not create personal equity (Logue v Shoalhaven Council) e.g. unauthorised resumption by incompetent authority (Palais Parking v Shea)Criticism that this leads to the illegal and wrongful expropriation of property under purported statutory power (Hughson et al 1997)RG’s powers of correctionRG can correct errors (s 12(1)(d)) except bona fide errors that prejudice parties (s 12(3)(c) RPA)Can correct and supply omitted entries but cannot erase original RG may require production of documents to correct errors (s 136)Court may order RG to cancel/amend/create/issue certificates of title (s 138)Above sections give powers to correct in an action of ejectment, only when not barred by s 118, s 42Prior registered interests (s 42(1)(a))Prior registered interests over same land will have priority of later recorded interests Easements and profit a prendre (s 42(1)(a1) and (b))Omitted/misdescribed easements is an exception to indefeasibility, including interest existing before and created after registration Exception also exists for omission/misdescription of profit a prendre creating in or existing upon land Prescriptive easements by adverse possession enforceable in personam in SA, but not against successor in title (Golding v Tanner) – not available in NSW under s 42 RPANatural right to gain access to land/waters does forms part of fee simple and does not need to be expressly stated on certificate of tile (Jennings v Sylvania Waters)Misdescription of boundaries (s 42(1)(c))Exception to indefeasibility exists where claim made under prior certificate of title or misdescription of boundaries, bar when bona fide purchaser obtains land with error/misdescription in registerCan correct against purchaser for value for fraud and unconscionability on part of purchaser but NOT for mistake as to boundaries only Leases and short-term tenanciesRP subject to interest of short-term tenants in possession, protection is confined to leases/options of up to 3 years (s 42(1)(d) RPA)Adverse possessionRegistered titles not extinguished by limitation period expiration unless adverse possessor applies to RG to be recorded as RP (s 45C)Title of RP may be extinguished under limitations statutes as to whole parcels of land (s 45D(1))Applications cannot be made regarding sub-parcels of land, encroachments dealt with under Encroachment of Buildings Act Claim cannot be made regarding land of crown/statutory corp/Council (s 45D(3))Application cannot be made against RP for value without fraud, time starts afresh following registration of purchaser (s 45D(4))Contest between paper owner and adverse possessor decided by the courts (Bartlett v Ryan)Overriding statutes & Crown grantsTorrens statute can be repealed wholly/partly by later statute indicating express/implied statute (South-Eastern Drainage)Presumption that parl intends for new and Torrens legislation to not contradict (Butler in Horvath)New legislation is not inconsistent just because it depends a class of contracts void, this has no significance once the instrument has been registered, using narrow interpretation of ‘void’ (Horvath)Consistent with view that rego gives indefeasible title, even if instrument used to procure registration is void (Breskvar)Conflict may be avoided by reading later statute as giving rise to a right in personam that does not survive transfer to a new owner (Hillpalm v Heaven’s Door)Council may be stopped from asserting statutory title by conduct in accepting rates for land (Quach)Crown resuming land must notify RG, RG must record resumption (s 31A(3) RPA)RG can withhold rego of a resumption (compulsory acquisition), pending notification to person affected and giving opportunity to context (s 31A(5) RPA)Statutes providing that property in minerals has superseded reservations in Crown grants (5.22 t/b)Certificates are issued subject to reservations conditions in Crown grants, although reservations and exception may not be traceable by search of register (Pierce Bell Salves)Title insurance policiesPurchasers can buy owner’s policy to cover risks of unknown interests that are not disclosed on contract of sale/known at settlement date (O’Connor 2003)Used by mortgagees to insure against risks of unenforceability of mortgage through indefeasibility Statutory restrictionsRP for value holds free of statutory restrictions unless recorded on folio (s 43(2))Restriction narrowly defined to include restriction on alienation of Crown land (s 43B(1))Rates and taxes – no express provision, depends on interpretation of Act (South-Eastern Drainage)Equitable interests and caveatsConstructive notice of registered interestsIncludes everything that a ‘prudent’ purchaser would have had knowledge of if they made reasonable searches into interests appearing on the register (Bursill Enterprises)Scope of interest of fee simple holder include zone above and belowHowever, if the interest is not current, not required to search dealing (Toohey v Gunther) Equitable interests and unregistered instrumentsEquitable interests at general law: Acquired by purchaser upon entering enforceable agreement; interest derived from contract of sale (Cuthbertson v Swan)Equitable interests cannot be recorded on the Register, however a procedure exists for depositing declarations of trusts with RG for safekeeping (s 282 RPA)Unregistered interests may be defeated by registration of inconsistent dealing by bona fide purchaser, even if purchaser has notice/knowledge of unregistered interest (Barry v Heider)Where innocent parties have competing unregistered interests because of acts of rogue 3rd party, innocent party that ‘armed’ rogue party will bear lossCaveats Caveat may be lodged with RG to prevent registration by another transferee/proprietor, of unregistered interests in the same property (s 74F-74R)Once lodged, gives notice to all world that RP’s title is subject to equitable interest (Re Hitchcock)Process: When another party seeks to register caveated interests, caveator is notified: has specified period to consent/show cause why dealing should be registered; lapses if no action – no renewalIf voluntarily withdrawn, can be relodged in same form (Re Leighton Properties)Can be extended if claim has substance – balance of convenience (Re Jorss’ Caveat)Removal:Vendor obliged to remove caveat under contract of sale of land to make good title (Zanee)Can apply to court for removal (s 74MA) if no sufficient memorandum in writing is given and if no consideration for security over the property (Parker v Glennida)Requirements:Quantum of estate claimed by caveator and facts on which claim is based must be specified clearly (Kerabee Park v Daley)Must be specified and verified by statutory declaration (s 74F(5))If doubts re form are raised in court, should not be sole ground for defeat (s 74L; Kerabee)Does not need to be a registrable interest, so long as interest is one that equity would give specific relief against the land (Composite Buyers)Interest must exist at time of lodgement (Palmer v Wiley)Onus rests of caveator to prove (Re Little):S/he has a claim to an interest in property that raises a serious question ANDOn balance of probabilities better to maintain status quo by not disposing of interest to 3rd party (Re Jorss’ Caveat)Failure to sustain caveatFailure to sustain caveat does not necessarily = no reasonable ground for lodging (Savill v Chase)Entitlement to lodge does not necessarily = cause to lodge – depends on motive (Bedford)Cannot use test of foreseeability (Lee v Ross (No 2))CompensationMay be received if caveat was lodged wrongfully without reasonable cause (s 74P RPA)Caveator must accept risk of liability to compensate RP for loss realistically attributable to wrongful lodgement. (Lee v Ross (No 2))Caveatable interests:Interest of purchaser under conditional sale protectable through injunction (Jessica Holdings)Beneficiary’s interest in a unit trust (Cost & Duppe Gibson)Interest of builder during construction if contract provides for charge (Rising Developments)Unregistered profit a prendre (Building Services v Shand)Borrower who used their property as security for loan (Avco Financial Services)Claim to set aside transfer for fraud, resulting proprietary interest if claim succeeds (Valerica)Oral agreement for ext of easement supported by part performance (Deanshaw v Marshall)Option to acquire a lot in unregistered strata plan (Jessica Holdings)Interests that are not caveatable:Agreement to share profits on resale of lane (Simons v David Benge)Mere personal rights/interests (Midland Brick v Welsh) e.g. Where mortgagee fraudulently exercises power of sale/breaches statute - cannot be caveated until court orders sale to be set aside (Swanston Mortgage v Trepan)Mortgagor’s interest in property (mere equity) (Latec Investments)Claim for settlement under Family Law Act (Hayes v O’Sullivan)Claim barred by statute (Verebes)Co-ownershipTypes of co-ownershipCompany titleManagement of many units of title separated from rights to occupationShareholders do not own units - restrictions on right to sell/lease & difficult to use as security Strata title Common property collectly owned by ‘body corporate’ & individual title in own unitAllows for mortgages, leases, legislation imposes significant duties on body corp in insurance, repair, maintenance, sinking fund for extensive repair and restoration workRegulation by specific by-laws & information dispute resolutionsJoint tenancy & Tenancy in commonJoint tenancy (JT)Right of survivorship or jus accrescendi (NSWLRC 1994)When on JT dies, whole of estate remains with surviving tenant(s) Interest cannot disposed of by will or bequeathed, unless JT is severed in lifetime Order of death of JTs is important for right of survivorship, if uncertain, assume oldest died first (s 35 CA)The four unities (NSWLRC 1994)Unity of possession – whole property to be enjoyed togetherUnity of interest – same in nature, extent and durationUnity of title – derives from same document or actUnity of time – vest at same point in time except: Conveyance executed to trustee for beneficiaries & Disposition in a will giving rise to a JTWho can hold property in JT?Body corporate (s 25 CA); dissolution = deathTrustees normally hold property as JTsTenancy in common (TC)TC entitled to a distinct undivided share; can alienate share inter vivos, or by will/instestacyNo survivorship & only unity of possession; no unity of interest, title or timeDifferent proportions of land Life interest vs fee simpleDifferent contingent interest eg time when turns 21 (except when conveyed by trust or will)Severing by conveyanceCreation of co-ownership at CLCL presumption that an interest given to two or more persons by legacy or otherwise is JT unless there are words of severance (Morley v Bird) e.g. ‘in equal share’, ‘share and share alike’, amongst or respectively’:To ABC in fee simple equally/share and share alike (TC)To ABC in fee simple (JT)To such of my children who shall attain age of 21 (TC) – vesting in different pts in timeTo the children of x (JT) – intermediate giftTo be divided among my children (TC)Co-ownership may exist in chattels, co-owner cannot sue another co-owner in conversion where there has been a wrongful disposal of chattel, unless sale resulted in destruction of chattel (Barnardiston)Creation of co-ownership in equityEquity favours tenancies in common (although JT at law) in three situationsBusiness partners – investment intended to make profit, unfair to lose share in profit by death (Lake v Craddock); extended to business relations (Malayan Credit)Money advanced on mortgage in equal or unequal shares – lend money only as investment, unlikely to expect to forgo their money should they die before it was repaid (Re Jackson)Unequal contributions to purchase price – TC in proportion to respective contributions (Robinson v Preston); extended to joint liability under mortgage (Ingram)In contrast, where parties contribute equally, equity presumes JTReform of CL positionCL presumption has been reversed by legislation, followed by equity (s 26 CA): Co-owners shall be deemed as TC and not JT UNLESS:They are executors, administrators, trustees or mortgagees or express provision otherwiseGift to named persons ‘X & Y’ (Michell v Arblaster)Class gift – ‘children of X’ – assumes beneficiaries have to be alive when testator diesGift of residue – carries benefit of accruer by survivorship, whether death of other beneficiary occurred before or after death of testatorGift to named persons is not a class gift, lapsed share passes as a share of residueControversial results of s 26 CAOn death of man de facto wife receives only half share other going to his wife (Delehunt v Carmody)On death of mortgagor, principle of survivorship operated in favour of remaining mortgagor; held s 26 does not apply to equity of redemption (Schmeling)Presumption in s 26 can be rebutted by circumstances and construction (Hircock)Position under TorrensIf two or more persons are registered as joint proprietors, they are deemed to be entitled as joint tenants (s 100 RPA)Where memorandum of transfer is silent, presumed to take TC (s 26 CA); if specified as joint proprietors, presumed to take JT (s 100 RPA) – (Hircock)s 100 RPA does not prevent JTs establishing in equity that the parties hold as TC between themselves (Re Foley)Rights of enjoyment inter seRights of occupationEach co-owner has right to possess and enjoy the landOne co-owner cannot bring action in trespass against the other, except where one has excluded other from possession, or prevented the common enjoyment of land (Stedman)Right to possess/enjoy includes the right to invite someone to live on premises (Thrift)Occupation rentCo-owner who elects not to exercise their right of possession cannot claim compensation from the occupying co-owners, subject to exceptions (Luke v Luke):If one co-owner was ousted by the otherIf parties agreed on the payment of an occupation rent (Leigh v Dickson)TC cannot claim rent or sell and divide proceeds if life interest is found (Jones v Jones)OusterOusted party can sue for occupational rent in the nature of mesne profits (Chieco v Evans)‘Get out’ does not constitute ouster (Cardineaels-Hooper)Inconvenience caused by renovations to a driveway is not an ouster (Ferguson v Miller)Express denial of title and a right to possession of fellow tenants, brought home to the latter openly and unequivocally = denial of rights as co-tenant = ouster (Williams in Biviano)If leave voluntarily, no ouster (Biviano)Removal due to AVO is not a legal wrong (Luke v Luke in Biviano)Can include locked out, physical violence, threatening behaviour (constructive ouster for leaving with genuine fear of safety) (Dennis v McDonald in Biviano)Quantum of occupational rentIn a partition suit/related litigation: if there has been an exclusion, the tenant in occupation will be charged (Pascoe v Swan in Foregeard)Statutory trust for sale is preferred method over partition where co-owners want to end their relationship Equity will also permit owner in occupation to claim an allowance in respect of improvements effected by him, if he is accountable for an occupation fee (he who comes to equity must do equity) (Teasdale v Sanderson in Foregeard)Can only claim compensation in defensive equity during existing litigation for action for partition, statutory trust or administration (Williams in Foregeard)Entitled to an allowance for the lesser of the value of enhancement/cost of repairsImprovements > mere repairs and maintenance (Leigh v Dickson in Foregeard)If one co-owner with joint debt pays a debt in full, he is entitled to require the other owner to contribute a rateable amount; the parties’ rights would apply in the case of all joint debts, even if the debtors owned no property (Muschinski v Dodds in Forgeard)SeveranceJT severed by destruction of ‘4 unities’ -possession, interest, title, time (Blackstone 1778)Unilateral action (Williams in Corin)Cannot destroy unity of time/possession/interest unless title is also destroyedJT may register transfer himself to sever joint tenancy (s 97 RPA)Does not need accompanying certificate of titleRG may need names/addresses of all joint tenants and statement that severing joint tenant is unaware of any limitation on right to sever, e.g. private agreement not to (s 97(2)(b)All other joint tenants must then be notified by Registrar of lodgement of transfer (s 97(5))Equity may impose trust for tenants in common where there is no mutual agreement/understanding/intentionE.g. voluntary or involuntary alienation in equity (creation of trust) of one joint tenant’s interest will be enforced over whole land which other JT holds as trustees for tenants in common in equity (unless competing equities)Note: ‘No survivorship’ clause may be entered onto the register to prevent trustee who holds land as joint tenant from unilaterally disposing his or her interest, to prevent dealings with land other than by all the registered proprietors without court orderTransfer to strangerWhere 1 joint tenant alienates interest, JT will be severed and alienee will become tenant in common re undivided share of land (Wright v Gibbins)Registration of transfer brings about severance; without registration transfer would operate under equity if there has been an agreement for valuable consideration Declaration of trustEffective if written and signed by person entitled to prop (s 23C(1)(b) CA)Interest in equity, severable in equity. No registration but effectiveGrant of mortgage or lease Mortgage of Torrens land by joint tenant does not itself sever JT (Lyons)Competing authority re whether equitable mortgage on CL land will sever JT (Guthrie – no; Frieze – does not sever, merely ‘suspends’ during lease)Grant of fix-term lease or where joint tenant of life estate grants fixed term to stranger severs JT (Re Shannon’s Transfer)Mutual agreementIn equityNo statutory formalities to create transfer in equity & become TC (Abela)Subsequent repudiation of agreement to sever will not affect the severanceEquity will impose a trust of Torrens land held by legal owners in JT; land entitlements become TC in equal shares (Corin)In lawSeverance of JT requires statutory formalities to be metApplying for division of property under s 79FLA does not sever JT (Parzak)Course of dealing to evince intention Parties’ conduct must show they treated themselves as tenants in common (Williams)Sufficient acts to represent course of dealing:Payment of proceeds of sales of JT into separate bank accounts (Abela)Insufficient acts:Inconclusive agreement due to preconditions not met (Abela)Where there is no consensus regarding sale (Magill)If joint tenants treat property as partnership assets for tax reasons (Barton)Joint tenants occupy separate floors and pay separate maintenance, if evidence that they intended for JT to continue (Greenfield)Homicide of one joint tenant by another@Law wrongdoer entitled to whole interest, but constructive trust imposed @ eqForfeiture rule: legal owner to hold ? interest on trust for deceased joint tenant (Rasmanis)Discretion on court to vary forfeiture rule if ‘justice requires the effect of the rule to be modified’(s 5(2) FA)Can consider conduct, effect of app of forfeiture rule, any material matters (s 5(3) FA)Exception: no discretion if offender convicted of murder (s 4)Operation of rule restricted where wrongdoer has reduced culpability (no intention to benefit):No app if joint tenants died after suicide pact (Permanent Trustee)No app if self-defence or extreme provocation (Public Trustee v Evans)No app if death is from negligent driving of other joint tenant (Gardener)Rule applies to mentally ill offenders, even if they cannot be held guilty of manslaughter (Public Trustee v Fraser)Court order - Taking interest under court order severs joint tenancy (Mitrovic)BankruptcyJoint tenant’s interest will be vested in the Official Trustee in Bankruptcy Statutory rego requirements must be met before vested in trustee (s 58(2) BA)In Equity, severance will occur on declaration of bankruptcy (Cummins)TerminationModes of terminationOne joint tenant dies, survivor becomes sole owner – jus accrescendi; can register under Torrens as sole proprietor of fee simple (s 101 RPA)One co-owner purchases/acquires interest of all other co-ownersAll co-owner sell/transfer interest to third party who becomes sole RPAgreement to divide into separate sharesCourt compels unwilling co-owners to divide/sell on application by other co-ownersLandPartition ActsAt CL all co-owners had to agree to the partition of landLegislation compels partition on application in some statesStatutory trustsCourts, on application, can appoint trustees to hold property on statutory trust for sale or partition (s 66G(1) CA)Under s 66G applicant has to be co-owner @ date of application (Darrington)Not including executor of deceased co-owner before grant of probate of deceased will Bank/mortgagee who granted mortgage to joint tenants is not a co-owner under s 66G and cannot make application (ANZ v Scott)Equitable chargee is an incumbrancer and thus can apply (CBA v MacDonald)Property on statutory trust for sale is held includes both net proceeds of sale and net income until sale to give effect to rights of co-ownersCourt has discretion to refuse application, on grounds of:Hardship or unfairness (Re McNamara)Breach of contractual/fiduciary obligation, unconscionable (Williams v Legg)Agreements between co-owners not to apply for sale/partition without notification to other co-owners is not against public policy (Nullagine)Chattels@ CL court has no power to order sale/division of chattels subject of co-ownership (Ryan v King)Can apply for division of chattels under s 36A CA Court has no power to appoint trustee for sale; but can order division by conversion into money and distribution of money (Ferrari)Statutory reform – extension of right to apply to adjust property rights to domestic relationships other than marriage ................
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