CoEownership#...#17! ! 1

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1 1 La#Trbe#University# Real#Prperty#Law# LAW2RPT# 2013# Cnsensual#transactins#with#prprietary#interests#...#2 Prprietaryeffectfcntractstcnferaninterestinland...3 Dctrine)f)part)perfrmance)...)3 Specifically)enfrceable)cntracts)...)3 Gifts...4 Wills...5 Trusts...5 Express)Trusts)...)5 Resulting)Trusts)...)5 Cnstructive)Trusts)...)5 Estppel)...)6 Mere)Equities)...)7 Leases#...#7 Fixedtermlease...7 Peridiclease...7 Tenancyatwill...8 Tenancyatsufferance...8 Registeredandunregisteredleases...8 Rightsanddutiesflandlrd/tenant...8 Cmmn)law)implicatins)...)8 Statutry)implicatins)...)9 Prtectin)fr)tenants)...)9 Lease)assignment/SubHlease)...)9 Terminatin...10 NnHRTA)leases)...)10 RTA)leases)...)10 Mrtgages#...#11 TrrensSystemmrtgage...11 Remedies)f)mrtgagee)...)11 Pwer)f)Sale)...)11 UnregisteredmrtgagefTrrensTitleLand(equitablemrtgages)...12 Remedies)fr)mrtgagee)(equitable)mrtgage))...)12 Trrens#System#...#12 Indefeasability...12 Indefeasibility)f)terms)in)a)registered)instrument)...)13 Vlunteers)...)13 Overriding)interests)...)13 Exceptins)t)indefeasibility)...)14 Trrenspririties...15 Caveats)prvisins)...)15 Caveatable)interests)...)15 Requirements)fr)validity)...)16 Withdrawal,)lapse,)remval)...)16 Disputesbetweencnflictinginterestsinland...16 Dispute)between)tw)full)equitable)interests)...)16 Prir)mere)equity)vs)Subsequent)full)equitable)interest)...)17 Prir)full)equitable)interest)vs)Subsequent)mere)equity)...)17 Prir)equitable)interest)vs)Subsequent)unregistered)legal)interest)...)17 CEwnership#...#17

2 Jinttenancy...17 Essential)characteristics)...)17 Rightfsurvivrship...17 Tenancyincmmn...17 CreatinfcSwnership:Jinttenantsrtenantsincmmn?...18 Cmmn)law)psitin)...)18 Psitin)in)equity)...)18 RightsandbligatinsfcSwners...18 Dealingwithinterest...19 Transfer)f)interest)...)20 Encumbrance)f)interest)...)20 Severance)f)jint)tenancy)...)20 AdversepssessinbetweencSwners...22 TerminatinfcSwnership...22 Easements#...#22 Requiredcharacteristics )There)must)be)a)dminant)and)a)servient)tenement)...)23 2.)The)alleged)easement)must)accmmdate)(benefit))the)dminant)tenement)...)23 3.)The)dminant)and)servient)tenements)must)nt)be)wned)an)ccupied)by)same)persn)...)23 4.)Alleged)easement)must)be)capable)f)frming)the)subject)matter)f)a)grant)...)23 Creatin...23 By)grant)r)reservatin)...)23 By)necessity)...)24 By)prescriptin)...)24 Trrens)land)...)24 Extinguishmentfeasements...24 Prfits#a#prendre#...#24 Key PLA:PrpertyLawAct1958(Vic) TLA:TransferfLandAct1958(Vic) IA:InstrumentsAct1958(Vic) RP:registeredprprietr RTA:ResidentialTenanciesAct1997(Vic) Cnsensual#transactins#with#prprietary#interests# SalefLand: Evenwherefrmalitiesntcmpliedwith,transactinmaycreateequitableinterest(i.e.ntbylaw) Prcessgenerally: Cntractfsalesigned(purchaserpaysdepsit) Settlement30S90daysaftercntractsigned(purchaserpaysbalance,receivesexecuted memrandumftransfer+certificateftitle) PurchaserldgesdcumentsatLandRegistry Frmalities:dependnwhetherlandisgenerallawlandrTrrensTitleland GeneralLawLand Deedisrequiredtcnveylegaltitle[s52(1)PLA] Cnveyance=mrtgage,charge,lease...everytherassurancefprperty/interest,exceptawill[s18 PLA] Deed=passesaninterest/right;createsbindingbligatin;affirmatinfsmethingwhichpasses interest/right Mustbeinwriting+signedbypurchaser[s126IA;s53(1)(a)PLA]. Ifanagentissigning,theymustbeauthrised Neffectuntilregistered[s40TLA] 2

3 s126iarequires:descriptinfland;identificatinfparties;statementftransactin;signaturefpersntbe charged/authrisedagent ANZvWindn:Canreadmrethannedcumenttgether,buttheremustbealinkbetweenthe dcuments(smethingprimafaciethatshwsthatthedcumentsmustbereadtgether) " Dcumentdidntcntaindescriptinfland " ButdiaryntesfBankManagerdid " Primafacienlinkbetweendcumentanddiaryntes " Oralevidencentpermittedinestablishinglink(becauseitmustbeprimafacie) TrrensLand InterestacquirednregistratinftheTransfer[s40TLA] Prprietary#effect#f#cntracts#t#cnfer#an#interest#in#land# Thelegalinterestinlanddesntpassuntilthetransferflandisregistered.Hwever,whereacntractfrthegrantf aninterestinlandisspecificallyenfrceablethepurchaseracquiresaninterestinthelandinequity. Dctrine#f#part#perfrmance# McBridevSandland:7elements Actsculdhavebeendnefrntherreasnthantperfrmtheallegedagreement Smesuchagreementasthatalleged=acntractf)the)general)naturethatisalleged Musthavebeendneinfactbythepartyrelyingnit+therpartymusthaveallwedittbedne Mustbednebyapartyttheagreement Therewasacmpletedagreement Actwasdneunderthetermsf,andbyfrcef,thatagreement Specifically#enfrceable#cntracts# LysaghtvEdwards:aspecificallyenfrceablecntractfsalecnfersanequitableinterestnthepurchaser EagreedtselltL Epaiddepsit Edied Settlementdue Themmentyuhaveavalidcntractfsalefrprpertythesellerbecmes,inequity,atrusteefthatprperty frthepurchaser(whbecmesbeneficialwner) Sellerthenhasrighttpurchasemney,achargerlienntheprperty;andarighttretainpssessinfthe prpertyuntilpaid Lien)=)right)t)secure)a)debt) Examplesfapplicatin: BunnyIndustriesvFSWEnterprises FSWsldlandtBunny BefreregistratinfBunny,FSWsldlandtD2(whbecameRP) Bunnysught(1)declaratinthatFSWheldprceedsfsaletD2ntrustfrit;and(2)rderfr paymentfprceeds Bunnyargument:prceedsheldntrustbecauseequitabletitlehadalreadypassedtBunny AppliedLysaghtvEdwards,held: " TheCurtfundthatatrustexisted,i.e.FSWheldprceedsntrustfrBunny " PrceedsawardedtBunny Butntbyspecificperfrmance(i.e.Bunnydidn tgettheprperty),becauseprperty alreadytransferredtd2 TanwarEnterprisesvCauchi Tenteredcntracttpurchase3prpertiesfrmC Datefrcmpletinwas25June2001(timestipulatedtbe ftheessence ) Tdidntcmpleten25June Cterminatedcntractn26June Targuedithadequitableinterestandsughtspecificperfrmance i.e.reliefagainstfrfeiturefits equitableinterestintheland Held " The interest fthepurchasercrrespndsttheavailabilityfspecificperfrmance 3

4 " Availabilityfspecificperfrmanceisanissuewherethereisaterminatinbysellerfrfailuret cmplete " Reliancenan interest therefredesntassist(bedevilledbycircularity) WalshvLnsdale(examplefwherecntractgivingrisetequitableinterestisntcmpleted,issueisthen whethertheinterestisextinguished WenteredagreementtleaseprpertyffL Agreementmade,butndeed(nfrmallease),therefrentalegallease Wbehindnrent;Ltriedtexerciserightf distress (taketenant schattelsifbehindnrent) Wseeksinjunctinnthegrundthattheleasewasntprperlysignedandtherefrenrighttdistress Held " Equitableleaseariseswhereanagreementinwritingdesntabidefrmalrequirements,i.e.nt adeed " Equitablelease,wherecurtwuldawardspecificperfrmance,shuldberespectedaslegal lease Tenantacquiresequitableinterest,slandlrdshuldacquiresmeprtectinsin return Cntractenfrceableatlaw(s126IA) r Cntractsufficientlypartperfrmedbypartyseekingremedy = REMEDYfspecificperfrmance(anequitableinterest) (ifcurtpreparedtexerciseitsdiscretin) AlsappliestTrrensLand:BarryvHeider BisRP MemrandumftransfertSchmidtexecutedbutntregistered HlansmneytS(mrtgage) Issue:didSchmidthaveequitableinterestbasedntheunregisteredmemrandumftransfer Held B sregisteredinterestsetaside HandShaveequitableinterested s40tlamightdenyeffecttaninstrumentuntilregistratin,butdesnttuchthecntractualand equitablerightsthatliebehindit " BscnductfhandingvertransfertSempweredStactaswner;Bscnductledt mrtgage,therefreheisrespnsiblefrit Gifts# FraneffectivegiftflegaltitletTrrenssystemland,thetransferflegaltitlemustberegistered Whendesequitableinterestpasstadnefagift(befrethelegaltitlepasses)? Onepersn(dnr)purprtstmakeagifttantherpersn(dnee) Butfailsttakenecessarystepsttransferthelegaltitle Generalrule=equitydeclinestprvideremedyinfavurfdnee " ^Illustratestwmaxims: Equitydesntassistvlunteer Equitywillntperfectanimperfectgift CrinvPattn MrandMrsPjintprprietrs MrsPexecutedtransferfherinteresttherbrtherC MrsPalsexecuteddeedftrust(CthldprpertyntrustfrMrsP) TransferanddeedhandedtMrsPslicitr Inrdertcmplete,MrsPneededcpyfdcumentfrmBank Shediedbefredings Issue:whetherMrsPdispsedfherinterestprirtherdeath,thusseveringjinttenancyanddefeatingMrP s rightfsurvivrship Held: MrsPattemptedtseverjinttenancybygiftinginteresttC Frequitytrecgnisegift,intendingdnrmustdallthatisnecessaryttransferthelegaltitle MrsPdidntdallthatwasnecessary,sthegiftisntrecgnised 4

5 Wills# Awillisgenerallynteffectivetpassaninterestinlanduntilthetestatrdies[s4WillsAct1997(Vic)] Trusts# Cncept: Splitbetweenlegalandbeneficial Smetimesdeliberatelyusedtseparatefrmalwnershipandmanagementfrmthebenefitsfwnership Legal:heldbytrustee Beneficial:heldbybeneficiary Beneficialwnershipamuntstaprprietaryinterest Subjectftrustmaybelegalrequitable Twsurces: Intentinfaprpertywnertcreateatrust Impsitinfatrustbyperatinflaw Express#Trusts# Ownermusthaveintentintcreateatrust,andcapacitytds Createdbydeclaratinrtransfer/settlement: Bydeclaratin(intervivstrustbydeclaratin)requirements: " s53(1)(b)pla: manifestedandprvedbysmewritingsignedbysmepersnwhisablet declaresuchtrustrbyhiswill " Intentin: Evidencefintentinattimefallegedcreatin[ByrnesvKendle] Resulting#Trusts# Bytransfer/settlementrequirements: " CreatrtransfersinteresttaTrusteetbeheldntrustfrtheBeneficiary " Samefrmalityrequirementsasutrightsalergift " Ariseswhenlegaltitletprpertydesntreflectthecntributinsttheacquisitinftheprperty Equitypresumesthatpersnwithlegaltitlehldsprpertyn resultingtrust frantherpersn " Presumptinrebuttablebyevidencefactualintentin " s53pladesnt Affectthecreatinrperatinfresulting,impliedrcnstructintrusts Purchase)mney)resulting)trusts) Examples: " ApaysfrinterestinlandbuttitleregisteredinnamefB rebuttablepresumptinthatlegaltitleisheldbybntrustfra " Aprvidesaquarterfthepurchaseprice;Bprvidesthreequarters;registeredinB sname rebuttablepresumptinthatlegaltitleisheldbybntrustfrainprprtinttheircntributins [CalverlyvGreen] Presumptinrebuttedby: " Evidencefcntraryintentinheldbyallcntributrs;r " Displacedbypresumptinfadvancement: Wherehusband/fiancé/mther/fatherprvidesmneyfrpurchasefprpertyinnamef wife/fiancé/child: " Presumptinisthatagiftwasintended Presumptinfadvancementcanalsberebuttedbyevidencefcntraryintentin Desntapplytdefactwife(usualpresumptinfresultingtrustapplies)[CalverlyvGreen] Cnstructive#Trusts# " Equitabledevicewhicharisesbyperatinflaw " s53pladesnt Affectthecreatinrperatinfresulting,impliedrcnstructintrusts Cmmn)Intentin)Cnstructive)Trusts) Adaptedfrmcnstructivetrustasmechanismtachievefairdistributinfprpertybetweenpartiesinintimater familyrelatinships 5