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Notes for topic 1-6
Property Law (LAW 2112)
Monash University
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The Concept of Property (Topic 1)
Property ownership:
Property can be defined as a “bundle of rights” enforceable against the world including: o The right to use , the right to exclude others; and the right to alienate ( Milirrpum ) Alienate means the transfer of property into the ownership of another (can sell/ leave in will etc. to transfer property to another)
Rights in rem. Not in personam ( David Allen & Sons ) o A right in rem is a proprietary right which is a right that is enforceable against the whole world. You do not need to have a contract with someone in order to enforce your right with respect to that property. Your ownership of that property is conclusive. o Conversely, a right in personam which is a contractual right between two or more people or parties that are privy to that contract.
Property Rights as Rights in Rem :
The in rem nature of property rights has a number of implications, including:
- There are fixed categories of rights that the law recognises as having a proprietary character. These rights include fee simple (freehold) , leases , restrictive covenants , easements, and mortgages.
- Most systems of property rights- particularly in relation to land – incorporate mechanisms of public recording (either of titles or transactions). The rationale is that “the world” must know that there are rights against them (i. property rights to a thing).
Recognition of new forms of property:
Restrictive Covenants ( Tulk v Moxhay ) Semen ( Bazley v Wesley Monash IVF ) Body Parts ( Doodeward v Spence ) Native Title ( Mabo v Queensland ) Spectacle ( Victoria Park Racing v Taylor )
The Doctrine of Fixtures
s 18 PLA : Land includes “any tenure, and mines and minerals whether or not held apart from the surface, buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments ”. s 38 ILA : Land includes “.. permanently affixed to land”. If an object is permanently attached to the land, it becomes part of the land. o Selling the land, unless the contract says otherwise, implies the object is included. o (A fixture is a chattel so attached to the land that it becomes part of the land) o Ownership of land entitles a landowner to ownership of fixtures o “If the object is determined to be a fixture, it runs with the land and shall become the property of the new owner”.
Doctrine of Fixtures may be relevant when:
Land is sold : fixtures are passed to the buyer under the contract of sale (chattels will only pass if specifically identified) Land is mortgaged (or charged): a mortgagee’s security interest will generally include fixtures (but not chattels) Land is leased to a tenant: special rules apply to fixtures installed by a tenant (common law vs statute) A land owner dies : fixtures automatically pass to those entitled to the real estate not to those entitled to personal property Land is given by gif : only fixtures will be passed to the new owner (not chattels)
What is the effect of removal on the object?
How much damage will occur to the object if it is removed. When strongly attached and would cause damage to the object remove it is more likely to be a fixture. If no damage, would suggest Chattel.
What is the mode and structure of annexation?
How is attached? Just a few screws? Or cemented in? Is it strongly or weakly attached?
What is the cost of removal?
Not just cost to remove, have to consider the cost of just buying a new object. If it costs less to remove than to buy a new one suggests it is a chattel and vice versa.
Step 5- What is the object of annexation?
o Consider these factors per Conti J ( NAB V Blacker )
Was the object fixed to promote increased enjoyment of the land ( Belgrave Nominees ) or for increased enjoyment of the object itself ( Leigh v Taylor )
Ask does object make the land more functionable, comfortable- such as an aircon unit or allow you to enjoy the object itself- such as a tapestry hung on a needle with string.
What is the inherent nature of the object?
Usually obvious- cannot be a chattel if it’s a hot water system (pipes run all the way through the property, designed to make the property liveable etc.
How permanently is the object attached?
In respect of time. Was it put there to be forever or just temporarily. Does also overlap with the physical way it has been attached.
What is the function of annexation (Objective intention)
Whether or not the object is ‘crucial’ and ‘necessary’ for the property.
Step 6- Are any of the cases analogous to the facts?
o NAB v Blacker
Irrigation system on a farm, made up of valves, sprinkler heads, and pumps on wheels. Held: a system comprising of multiple parts can have each part considered separately. In this case, each part was found to be a chattel.
o Belgrave Nominees v Barlin Scott Airconditioning
An air conditioning unit on the roof of a house, attached with bolts. Held to be inherently a fixture of an office building.
Objectively, AC was intended to be fitted permanently to the building and therefore a fixture at the time of removal.
o Leigh v Taylor
A tapestry was hanging on a wall. Hanging the tapestry on a wall was the only way to enjoy it properly: chattel.
Step 7- Conclude on balance
o On balance, by considering the degree and object of annexation, the object is a (fixture/chattel) and therefore.... If fixture- say: the object is determined to be a fixture so it runs with the land and shall become the property of the new owner. If Chattel- say: the object is determines to be a chattel so it does not run with the land and will be the property of the previous owner (person’s name)
Removal of Fixtures
If it is a vendor – purchased relationship:
o Once a contract of sale has been entered into, fixtures cannot be removed unless specifically excluded from sale per the contract.
o Chattels do not run with the land and are removable.
If it is a mortgagee – mortgagor relationship:
o The mortgagor is entitled to posses the property (including fixtures) in the event of a default.
If it is a landlord – tenant relationship:
Residential Tenancies Act s 64 (RTA) (difference to PLA s154A is that you need to get
landlord’s consent first)
Modifications to rented premises (1) A tenant must not, without the landlord’s consent – (a) Install any fixtures on the rented premises; or (b) Make any alteration, renovation, or addition to the rented premises
(2) Before a tenancy agreement terminates, a tenant who has installed fixtures on or renovated, altered or added to the rented premises (whether or not with the landlord’s written consent) must –
(a) Restore the premises to the condition they were in immediately before the installation, renovation or addition, fair wear and tear excepted; or (b) Pay the landlord an amount equal to the reasonable cost of restoring the premises to that condition
(3) Subsection 2 does not apply if – (a) The tenancy agreement otherwise provides; or (b) The landlord and the tenant otherwise agree
Summary of s
For residential tenancies, s64 Residential Tenancies Act :
o Tenant must not install fixtures without landlord’s consent: s64(1)
o If tenant does install fixtures with/without consent, the tenant must
restore premises to original condition/compensate LL: s64(2)
Different types of interest
Freehold fee simple: most complete form of ownership of that land, in perpetuity. It allows the land holder to deal with the land including selling, leasing, licensing or mortgaging the land
A leasehold interest: If there is rent, its only for a limited time, exclusive possession of land and certain period of time (for a maximum duration). This is a fixed term lease Bill is the lesse (tenant).
I am the lessor (landlord) and have the right to have it back when the lease is up and to be unencumbered.
Mortgage: an interest in property, given as security for the repayment of money lent
Real property An incorporeal hereditament- intangible - Mortgagor = owner
- Mortgagee = bank The ‘registration’ of the mortgage means the land in Torrens system land Because it is registered the mortgage is legal if not registered the mortgage would be equitable only
A profit a prendre: the right to enter onto another’s land and to take something from the land (soil, wild animals, timber ect.)
Easement: a landowners right to use or to restrict the use of another person’s land in some particular way
Includes right of way Form of real property Incorporeal hereditament – intangible
Restrictive covenant: a private agreement between landowners to regulate the use and development of their land
A real incorporeal interest Once its in there it will run with the land as long as there is notice of it
Fragmentation of Proprietary Interests (Topic 2)
Multiple people can have an interest in the same property at different times:
Fragmentation by reference to time (topic 5 & 8-9)
E. Fee simple estates, leasehold estates, and life estates
Fragmentation by reference to space
Once piece of land may be subdivided in a number of ways. o Subdivision (easements) along horizontal, ground level boundaries is used to produce a number of separate blocks of land for which new titles will need to be created. o Alternatively, strata title systems allow people to acquire title to separate units in the same building using both, or either, horizontal and vertical partitions. o The legislative basis for horizontal/vertical spatial division of property is contained in the Subdivision Act 1988 (Vic), Parts 1 & 5 & s 39 and the Owners Corporations Act 2006 (Vic).
Fragmentation by reference to the nature of title- possession
In some circumstances both a possessor and an ‘owner’ of property may have a title which can be asserted against third parties.
The only way you can prove ownership of land is by showing an unbroken chain of transactions concerning the land for at least 30 years. Land is transferred by deed. Purchaser needs to acquire a ‘good root of title’ established by a chain of deeds of ownership – each transaction required a purchaser to ensure that the owner of the land had a good root of title through the chain of title. This process was a costly and time consuming. Investigating the “chain of title” meant looking through a bundle of deeds that established who purchased from whom. Governed by the Property Law Act o The Torrens System Replaces General Law Land. Governed by the Transfer of Land Act which commenced in 1862. Title is conferred by registration. Based on the idea that registered title is conclusive, in accordance with a warranty provided by the State. One central public register containing details of land ownership is conclusive evidence of titles (transfer of a legal interest of Torrens land requires registration) Provides certainty about chain of title, and security of transaction encouraged by the three objects of Torrens: o The land titles Register accurately and completely reflects the current ownership and interests about a person's land (Mirror). o Because the land titles Register contains all the information about the person's land, it means that ownership and other interests do not have to be proved by long complicated documents, such as title deeds (Curtain). o Government guarantee provides for compensation to a person who suffers loss of land or a registered interest (Insurance). 98-99% of Victorian Law is Torrens Land – Requires Land Title registration – The land itself is registered- any dealings on land are made with reference to the title. – Certificate of Title becomes proof of ownership, not a chain of conveyance Native title (for noting only) o Definition of Native Title (per Brennan J Mabo) The rights and interests of indigenous inhabitants of land, whether communal, group or individual, possessed under the traditional laws acknowledged by, and traditional customs observed by, the indigenous inhabitants.
Native title, its incidents and the persons entitled thereto, are ascertained according to the laws and customs of the indigenous peoples who, by those laws and customs, have a connection with the land. Native Title Act 1993 s 223
Legal and Equitable Interest in Land (Topic 4)
According to Fragmentation, multiple people can have an interest in the same property at different times. A legal Interest arises when the requisite formalities have been met. o E. an unbroken chain of transactions concerning the land for at least 30 years under the General Law; or o Registration of title under the Torrens System An Equitable Interest may arise when formalities have not been met. o E. signing a contract of sale but not proceeding to registration; or o Through the creation of a trust either expressly or impliedly
The historical development of Equitable Jurisprudence
The administration of law and equity is fused in Victoria and has been since the Judicature Act 1883 (Vic). Today, see Supreme Court Act 1986 (Vic) s 29 Law and equity to be concurrently administered (1) Subject to the provisions of this or any other Act, every court exercising jurisdiction in Victoria in any civil proceeding must continue to administer law and equity on the basis that, if there is a conflict or variance between the rules of equity and the rules of the common law concerning the same matter, the rules of equity prevail.
The Modern Trust
X conveys property to A in fee simple on trust for B. o X now has no property interest. o A has legal property interest. o B has equitable property interest.
How Trusts Arise (For noting only)
- Express trusts Most commonly they are created expressly when one person transfers property to another, to hold it on trust – e. A conveys Blackacre to T on trust for B. e. A conveys 1,000 Telstra shares to T on trust for B Alternatively, a person may declare herself to be the trustee of property – e. A owns Blackacre. A declares himself as trustee of Blackacre for B. e. A has 50,00 Telstra shares. A declared herself trustee of the shares for B. The requirements for a valid inter vivos trust are contained in the Property Law Act 1958 (Vic) s 53.
Can alienate inter vivos or by testamentary disposition. o Inter vivos means during the course of your life. o Testamentary disposition means after you die. Fee Simple Absolute o Highest form of ownership. o No limitation in Grant on use of land o Assumed if conveyance is “To B” or “To B and her heirs” Fee simple Defeasible (Fee simple conditional or Fee simple determinable) o Grant imposes restrictions on use right of re-entry. o Fee simple estate may be determined by Grantor on occurrence of an event.
Life Estates
The individual retains possession of the land for the duration of his life. Technically temporary: ends when the owner dies; It is treated as complete ownership. Freehold granted for the duration of someone’s life. o Can be por sa vie (for your life) or por autre vie (someone else’s life) The life tenant cannot devise the estate in their own will if it is based on their own life, they can if it is based on the life of another. Doctrine of waste exists to protect and maintain the land for the benefit of other interest holders. Estate por sa vie o The life tenant has the right to possession and enjoyment of the asset and its income until their death. At their death, the ownership of the property may revert to the original owner (or to their heirs) this is known as a reversionary interest. o The life tenant may alienate or otherwise transfer their freehold estate. Estate pur autre vie o Similar to a Life estate o But it is measured by the life of someone other than the grantee. If grantee dies, then they can devise the estate in the own will so long as the other person is still alive. Life Estates and Reversionary interests o A reversionary interest arises when the owner of an asset grants an interest in the asset to another person for life or for a specified length of time (e. life estate or leasehold estate). o When the other person's interest in the asset expires, the interest is returned (reverts) to the owner or her heirs. The owner (or heirs) is known as the reversioner. o A reversionary interest is a future interest. It is vested in interest at the time of the grant , but does not vest in possession until the expiry of the granted interest
(i. life estate or leasehold estate). The reversioner may grant her interest in a will, or alienate the interest inter vivos (during their lifetime). Examples of reversion: “To A for life”- reversion to the owner/Grantor is presumed “To A for use as a farm only” – If the property is no longer used as a farm the interest reverts back to original owner because of failure of condition. (Technically this is a reverter rather than revision. But Grantor still has a reversionary interest. “To my sister’s children” – if the sister dies without children then the interest is reverted. Life Estates and Remainder interests o A remainder is a future interest that is created in some person other than the grantor or transferor. E.: “To A for life; then to B”. o The holder of a remainder interest is known as the “ remainderman ”. o A remainder interest is vested in interest at the time of the grant but does not vest in possession until the expiry of the grant interest. The remainderman may grant her interest in a will, or alienate the interest inter vivos. There are two types of remainders in property law, vested and contingent. Vested: o A vested remainder is held by a specific person without any condition precedent. For example: "O grants Blackacre to A for life, then to B". o The remainder interest is certain to vest after the existing interest expires and is not dependent on any conditions or other events occurring. o A vested remainder may be bequeathed by will, or otherwise alienated inter vivos (even though it has not yet vested in possession). o A remainder may vest (in interest) during the period of a life estate : e. “To A for life, and then to her children”. If A has children after the grant of the life estate, then the remainder interest of the children vests at the time of their birth. o Have to specify what type of vested remainder inter est they get- i. vested remainder in Fee simple Contingent: o A contingent remainder is one for which the holder has not been identified , or for which a condition precedent must be satisfied. o The remainder is not certain to vest: it requires fulfilment of a condition other than expiry of the life estate. For example: "A for life, then to B if B reaches 21 , and if B does not reach 21 then to C and C's heirs " B and C are both contingent remainders. While B and C are ascertained persons, the condition (reaching 21) implies alternative contingent remainders for both parties. o A contingent remainder has not vested in interest or possession ( until fulfilment of the contingency ); and, therefore, cannot be alienated or devised until fulfilment of the contingency. o Where there is ambiguity, the Courts apply a presumption that a grant was vested rather than a contingent remainder because they don’t like grants failing.
Armory v Delamirie - A finder of goods that have been lost or abandoned, while not acquiring an absolute property or ownership, shall have such a property as will enable him or her to keep it against all but the rightful owner.
Parker v British Airways Board- Donaldson CJ set out the following key principles concerning the rights of an occupier of land on which/in which an item is found:
o An occupier has better rights than the finder to items embedded in or
attached to land (and its buildings/fixtures).
o An occupier only has better rights to items lying loose (i. without
attachment) if they manifested an intention to exercise control over the building and all things in it.
The ‘Finders Keepers’ rule - the finder will have better rights than an occupier of land where there is no manifest intention to exercise control over things in or on the land/building, subject to the following principles: ( Parker v British Airways Board )
o The item must be abandoned or lost, and the finder must take the item under their care and control. o The finder must not act with dishonest intent or in the course of trespassing. o An employee who finds an item acts an agent for the employer unless there is an agreement to the contrary. If the follow is true, the finder keepers’ rule does not apply: o The goods were attached to or embedded in the land; in which case the find is on behalf of the owner of the land. o The goods were found on the land and the occupier of the land had expressly or implicitly manifested an intention to control things upon that land. o The find is made in the course of agency or employment, in which case the find is on behalf of the principle or employer.
Waverly Borough Council v Fletcher [1995]- Principles of Parker v British Airways apply to public spaces. The mere fact chattel is embedded in the land is intent to control means landowner/occupier has right to it. Also, the finder must act within the scope of lawful entry to have possessory claim. A prior possessor has better rights to an object as against a subsequent possessor provided that the prior possessor has not abandoned the object.
What is the limitation period for recovery of chattels in Victoria?
LAA: s 5(1)(a):
(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued
(a) Subject to subsections (1AAA), (1AA) and (1A), actions founded on simple contract (including contract implied in law) or actions founded on tort including actions for damages for breach of a statutory duty.
Limitation of Actions and Adverse Possession
o A possessor of land (even wrongfully) may have rights enforceable in rem against the whole world except persons with superior title.
Limitations of actions for recovery of possessory land : Limitation of Actions Act 1958 (Vic) (‘LAA’)
LAA s 8: No action shall be brought by any person to recover land after the expiration of 15 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.
LAA s 18: Subject to the provisions of section eleven of this Act, at the expiration of the period prescribed by this Act for any person to bring an action to recover land (including a redemption action or an action to compel discharge of a mortgage) the title of that person to the land shall be extinguished
ss 8 and 11 of LAA mean:
o Afer 15 years of adverse possession, the title of the true owner is extinguished, and the adverse possessor acquires a superior title.
When does time normally begin to run against a person who has lost possession?
LAA s 9(1): Where the person bringing an action to recover land or some person through whom he claims (a) has been in possession thereof and (b) has while entitled thereto been dispossessed or discontinued his possession : the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance.
LAA s 14(1): No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as "adverse possession"); and where under the foregoing provisions of this Act any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date the right of action shall not be deemed to accrue until adverse possession is taken of the land.
Adverse possession involving future interests in land: (Life estates)
LAA s 10:
(1) .. the right of action to recover land shall, in a case where—
(a) the estate or interest claimed [is] in reversion or remainder or any other future estate or interest; and (b) no person has taken possession of the land by virtue of the estate or interest claimed—
If Fee Simple : when the owner discontinues possession or is dispossessed (s 9(1) LAA) If a periodic tenancy without written lease: end of the relevant period (s 13(2) LAA) o If rent later received: time restarts (s 13(2) LAA) If a tenancy at will : after one year of commencement or last payment (s 13(1) LAA) o (very informal basically living on someone’s property and they haven’t asked you to leave) If an interest under a will , so long as owner in possession at time of death, time starts at time of death. (s 9(2) LAA) AND A person adversely possesses the land (s 14(1) LAA) o The person must prove they had both factual possession and an intention to possess ( Buckinghamshire County Council v Moran ) o Factual possession: Physical control over the land Will depend on the character and value of the land, the suitable and natural manner of using it and circumstances of each case. o Intention to possess ( animus possidendi ) Clear evidence of intention to exclude the title-holder and other people- an objective test is applied
Step three (first step of proving adverse possession): Is there Factual possession?
Determined objectively as a question of fact. o Factual possession involves physical control/custody over the land. Must be more than mere occupation ( Buckinghamshire County Council v Moran ) Must be open, not secret; peaceful, not by force; adverse, not by consent of owner ( Mulcahy v Curramore ) The Adverse Possessor must deal with the land as an occupying owner might have ( Whittlesea City Council v Abbatangelo ) JA Pye (Oxford) v Graham- was enclosed by hedges and accessible through gate locked by G. Analogise facts with the cases!!! This is where the marks are. Step Four: Is there an intention to possess? Clear and unequivocal intention to exclude the whole world, including the true owner... for the time being. ( Whittlesea City Council v Abbatangelo ). Must be open, not secret; peaceful, not by force ( Mulcahy v Curramore ). Need only an intention to possess, not an intention to own ( JA Pye (Oxford) v Graham ). Fencing/enclosure of the land is prima facie evidence of an intention to possess ( Whittlesea City Council v Abbatangelo ). Indicates the requisite animus possidendi.
Not intention if its mere enjoyment of a special benefit from the land by casual acts of trespass (e. the kids sometimes trespass on the land to play and then come home for dinner)
Analogise facts with the cases!!! Marks!
Step five (if applicable): Can multiple periods be aggregated?
Multiple periods of continuous adverse possession can be aggregated ( Mulcahy v Curramore ) – the property will go to the first possessor. Temporary absence is not necessarily abandonment ( Mulcahy v Curramore ) – especially where the property is devised in a will. Visiting on weekends may be sufficiently continuous ( Whittlesea City Council v Abbatangelo ). If discontinuous, time restarts ( Mulcahy v Curramore; s 14(2) LAA )
Step six: Has time ever stopped running?
- Owner asserts superior title:
o Must be more than mere entry. E. taking possession or instituting proceedings (s 16 LAA)
- Intruder admits owner’s superior title
o Must be in writing. Admission must acknowledge superior title not simply ownership alone (s 25 LAA)
- Part payment of debt (s 24 LAA)
o If you pay rent, you admit your use of the land is subject to your landlord.
o Or not payment but you a license to use land from the owner.
- Abandonment
o Mere non-use is not conclusive evidence of abandonment.
o An adverse possessor is expected to act as a true owner would act, and that he or she
may decide not to reside on or use the land for a time and that there are various ways of demonstrating possession and ownership. (e. AP might go on holiday for a month, this isn’t abandonment, this is something an owner would do).
Step seven: Conclude. (Consequences for Torrens Land)
If made out: The owner’s title will extinguish after expiration of the limitation period (s 18 LAA) The Adverse Possessor may be registered on title (ss 60-62 TLA) The rights of the Adverse Possessor are a paramount interest (s 48(2)(b) TLA) If not made out:
Notes for topic 1-6
Course: Property Law (LAW 2112)
University: Monash University
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