LAWS2012/5008 I NTRODUCTION TO P ROPERTY AND COMMERCIAL L AW E XAM O NE: TOPIC 1-2

Transcription

1 LAWS2012/5008 I NTRODUCTION TO P ROPERTY AND COMMERCIAL L AW E XAM O NE: TOPIC 1-2 I NDEX L IST "TheConceptandFunctionofRealProperty"and"IntroductiontoRealProperty" Page2 ExtractsfromChosesinPossession Page27 RelevantTests Page30 Topic2 5ExamNotes 34

2 LAWS2012/5008 I NTRODUCTION TO P ROPERTY AND C OMMERCIAL L AW TOPIC O NE: EXAM N OTES What is Property? 1 King v David Allen [1916] 1 Assignable Rights 1 Rights In Rem 1 Rights In Personam 1 Essential Characteristics of Property Rights 2 1. Enforceability 2 Contractual v Proprietary Rights 2 King v David Allen [1916] 2 Contractual Rights 2 Proprietary Rights 2 2. Existence 3 3. Other Characteristics 3 Alienability 3 Excludability 3 Value 3 Creation/Transfer of Proprietary Right 4 Milirrpum v Nabalco (1971) 4 Taxonomy 4 Land and Goods 4 Real and Personal 4 Legal and Equitable 5 Tangible and Intangible 5 Distinguishing Ownership and Possession 5 Permanence 5 Alienability 6 Conditional upon Event 6 Delayed Ownership 6 Sale or Gift 6 King v David Allen (1916) 6 Non-Possessory Rights to Land 6 Profits A Prendre 6 Easement 6 The Doctrine of Tenure 7 Categories of Estate 7 Fee Simple 7 Life Estate 7 Leasehold 7 Future Interests 8 WA v Ward (2002) 9 Mabo (No 2) 9 Pre-Mabo 9 Mabo (No 2) (1992) 9 Native Title Principles 10 WA v Brown (2014) 11 Wik v Qld (1996) 12 Native Title Statute 12 Definition of Native Title 12 Land and Equitable Interests in Land 12 Formalities for the Transfer of Land 12 Creation of Legal Interests 13 Old System with deed 13 Old System without deed 13 Creation of Equitable Interests 13 Old System written agreement 13 Trusts 13 DKLR Holdings (No 2) 14 Re Brockbank [1948] 14 Contracts to Grant Equitable Transfer Fee Simple 14 Lysaght v Edwards [1876] 15 Stern v McArthur (1988) 15 Contracts to Grant Equitable Lease 15 Walsh v Lonsdale (1882) 15 Enforcing Oral/Unwritten Contracts 16 Part Performance 16 Madison v Alderson (1883) 16 ANZ v Widin (1990) etc 17 Equitable Mortgage 17 Immediate Transfer 17 Executory Agreement 17 Part Performance 18 Old System Title 18 General Registration 18 Specific Registration 18 Issue of Forgery 18 Old System Mortgage 19 Mortgagee s Right to Possession 19 Four Maids v Dudley Marshall [1957] 19 Equity of Redemption 19 Subsequent Mortgage of Equity of Redemption 19 Limits on Equity of Redemption 20 Torrens Title 20 Effect of Registration 20 Barry v Heider (1914) 21 Principle of Indefeasibility 21 Frazer v Walker [1967]; Breskvar v Wall (1971) 22 Creation of Property Rights 22 Registered Property Rights 22 Bringing Land into the System 22 Folios and Certificate of Title 23 Torrens Title (Legal) Mortgage 23 Ciaglia v Ciaglia (2010) 23 Mortgagee s Right to Possession 23 Figgins Holdings v SEAA (1999) 24 Fixtures 24 Degree of Annexation 24 Belgrave Nominees v Barlin [1984] 24 Object of Annexation 24 NH Dunn (1979) 24 Leigh v Taylor [1902] 25 Belgrave Nominees v Barlin [1984] 25 Tenants Fixtures 25 Determining a Tenant Fixture 25 Removal of Tenants Fixtures 25 Leigh v Taylor [1902] 25 Registrar v Spender (1909) 26 Spyer v Phillipson [1931] 26 Agricultural and Residential Tenancies 26 Re Cancer Care Institute (2013) 26 Other Material 27 Inter Vivos Gift: Nolan v Nolan [2003] 27 Common Establishment Gift: Re Cole [1964] 28 Donatio Mortis Causa: Trustee v Bussell (1993) 28 Tests 30 Establishing a Legal Interest 30 Establishing an Equitable Interest 30 Contracts Creating Equitable Interest 31 Fee Simple: Lysaght v Edwards (1876) 32 Lease: Walsh v Lonsdale (1882) 32 Lease: Chan v Cresdon (1989) 32 Mortgage: Theodore v Mistford (2005) 32 Mortgage: Ciaglia v Ciaglia (2010) 33

3 LAWS2012/5008 I NTRODUCTION TO P ROPERTY AND C OMMERCIAL L AW What is Property? Property is a right, not a thing. It is a relationship Yanner v Eaton (1999) Property: Most commonly used to refer to things people own. When lawyers take about property, they are generally referring to the rights people have to things rather than the actual thing itself. Lawyers divide rights into two categories: 1. Personal Rights 2. Property Rights things such as land, belongings, bank accounts, shares, debts dues and even legal claims. In these regards property is looked at through assignability of rights and is seem as including everything that could be regarded as wealth or which an accountant might list as an asset on a balance sheet. Largely however, the law of property is based on the enforceability of rights and not their assignability. Rights In Rem A property right is a right to a thing which can be enforced generally against the entire world. Whereas a personal right is a right enforceable against a single person or defined set of people. King v David Allen [1916] Personal rights could only be enforced against parties to the contract. Real (proprietary) rights have a greater scope of enforceability and can be enforced against the world. Property rights are created when a person intends to create that right and takes all the steps necessary to give effect to that intention. The intention and the action combine to bring the property right into existence. Assignable Rights Enforceable against the entire world. If I borrow your book and promise to return it, you continue to own the book. In addition to my promise, you have a right in rem which is enforceable against me because I have your book. The property right follows the book, and if I give your book to a friend, you can assert your right in rem against my friend, because he or she has your book. A right in rem depends upon the continued existence of the thing to which the right relates. For example, if your book is destroyed, your property right is gone. The destruction may give you a right in personam against the person who destroyed your book or against your insurance company, but it brings to an end your right in rem to the book. At its widest property means any right that can be transferred from one person to another. > For example, when someone dies, most of their rights form an estate which will be transferred to the executor and then distributed according to law. > The collection of these type of rights are often called the property of the deceased including Rights In Personam Enforceable Against Particular Person/Class If I borrow $20 and promise to repay it, I owe you $20. You do not expect the same $20 note back. Instead, I have a personal obligation to pay which corresponds to your personal right to be paid. This 1

4 is a right in personam which can be enforced against me, regardless of what has become of the $20 note. If I give that note to a friend or spend it, you do not acquire any rights against my friend or the shop. You have no right to the note nor to any other $20 note. A right in personam does not depend on the existence of any particular thing. Instead, it corresponds to some person s obligation to fulfil that right. The value of the right in personam depends on the ability of the person to perform a corresponding obligation. Essential Characteristics of Property Rights A property right can be identified as a right to a thing, which corresponds to a general duty placed on other members of society not to interfere with that right. 1. A property right can be enforced not just against specific persons, but against a wide range of persons (Enforceability). 2. A property right always relates to, and depends on the existence of, some particular thing (Existence). 1. Enforceability All legal rights, whether personal or property, have correlating obligations. If I owe you $20, you have a right to be paid $20 and I have a corresponding obligation to pay that amount. Your personal right and my personal obligation are two sides of the same coin. Contractual v Proprietary Rights King v David Allen [1916] A licence does not confer a sufficient plenitude of rights over the land to qualify as a proprietary right. Only proprietary rights are enforceable against third parties [a licence is a mere permission to do something which would otherwise be unlawful). Contractual Rights Sphere of enforceability > Parties to a contract can enforce the right (i.e. Between promissee and promisor). > Doctrine of privity limits who can enforce contractual rights. > Thus a right in personam. Potential content of the right - what rights make up contractual rights? > Content governed by the terms of the agreement. An infinite possible array of contractual rights - parties determine what they re agreeing to. Proprietary Rights Sphere of enforceability > Owner can enforce the right against the whole world. > Thus a right in rem. Potential Content of the right > The prima facie position is that the law only recognises a set number and type of property rights. > Since property rights are enforceable against all the world, would be impractical and unreasonable to force people to comply with novel property rights. 2

5 2. Existence Excludability Property rights relate to things which are separate and apart from ourselves. Things intrinsically connected to us, such bodies and reputations, cannot be subject to property rights. Although they are valuable to us and protected by laws such as the rules against assault and defamation, they are not protected by property law. Meaning that the holder of a property right is able to exclude others from making use of the thing subject to that right. Most property rights do include this trait. For example, if you own or rent a home, you have the right to exclude others from it. If you borrow a book from the library, you have the right to exclude others from using the book. 3. Other Characteristics Alienability They can be sold or given away to others. While most rights are alienable, many are not. Most non-assignable rights are rights in personam, but there are also a few non-assignable rights in rem. In other words, there is some property that cannot be sold or given away. For example, a non-assignable, residential lease is certainly a property right, even though the tenants are not free to transfer it to others. All property rights can be described as alienable if that term is understood to mean disposable rather than transferable. Since property rights must relate to some thing which is only contingently connected to the right holder, it must be possible for that person to alienate the thing in the sense of severing her or his connection to it. However, that connection can be severed without transferring the right to another. For example, the tenant with a non-assignable lease can surrender it and vacate the dwelling. However, there are property rights which do not allow the right holder to exclude others from the thing subject to that right. For example, a right of way is a property right to cross another person s land. It meets the definition of a property right in that it relates to some thing (land) and is enforceable against other members of society (including the land owner), who are not permitted to interfere with its proper use. However, the holder of a right of way is not permitted to exclude others from the land subject to it. Value Most, but not all, property rights share the trait of value. Many things which are subject to property rights have only sentimental value. There are other things which are completely valueless. For example, your property right to dirty motor oil drained from your car may create a liability for the cost of discarding it safely. Some personal rights are commonly regarded as property rights because of their value. The most familiar example is the bank account. Money in the bank may be a person s most valuable asset, but that does not make it property. If you deposit a $100 note in the bank, your property right to that note passes 3

6 to the bank and the balance in your account increases by $100. The bank does not keep that $100 note safe for you. It belongs to the bank and is used as the bank sees fit. The deposit does not give you any property rights to any other notes or assets in the bank. Your money in the bank does not correspond to anything but the bank s promise to pay you $100 (plus interest, less fees and taxes) on request. In other words, you have exchanged your property right to the $100 note for a personal right of similar value. You are the bank s creditor and the bank is your debtor. Creation/Transfer of Proprietary Right Property rights are created when a person intends to create that right and takes all the necessary steps to give effect to that intention. The intention and the action combine to bring the property right into existence. There are both essential/substantive and formal requirements to be met creating proprietary rights. Milirrpum v Nabalco (1971) Plaintiffs claimed that the defendant s activities were wrongly interfering with their property rights to use certain land to perform ritual ceremonies. Although they could not have given away or sold their rights, they had the power to sever the connection by moving away. Further, the right to perform rituals can be a property right so long as it corresponds to a general duty placed on other members of society not to interfere with the exercise of the right. Taxonomy Land and Goods Arguably the most important division in the law of property. However, there are many things that are not land or goods such as shares or copyright. Goods are those things other than land that are tangible such as a car, dog or loaf of bread. Land is both permanent and stationary remaining relatively constant while the people who use it come and go. A parcel of land will always be subject to the laws that apply in that location. Whereas a car made in one State may become subject to the laws of other states if it is driven from place to place. Real and Personal Plaintiffs claim for Native Title was dismissed as Blackburn J set a high bar for essential characteristics that needed to be met plaintiffs were not entitled to exclude others from the land and could not sell or give their rights to others. In contract, the distinction between real and personal property is based on the nature of the right. Real property rights are generally related to land, whilst personal property rights are related to chattels. The result likely would have been different today in light of Mabo (No 2) where a wider understanding of essential characteristics was embraced. The distinction between real and personal property should no the confused with the distinction between right in rem and rights in personam. 4

7 Personal property rights are not rights in personam. They are property rights because they relate to external things and are enforceable generally against other members of society. Legal and Equitable Personal is often classified as tangible or intangible. > Right to possession goods: chose in possession. > A personal property right to an intangible thing is called a chose in action, also used to refer to purely personal rights, such as a bank account or other rights to receive the payment of money. There are two important practice differences between legal and equitable property rights. 1. The manner of their creation: Most equitable property rights can be created with less formality than comparable legal property rights. 2. Durability: Equitable property rights tend to be less durable than legal property rights and are more easily extinguished by competing property rights to the same thing. Tangible and Intangible Property rights are sometimes classified according to whether they are tangible or intangible. This is also known as - Corporeal or Incorporeal. All property rights are intangible in that they are rights enforceable against other persons, regardless of the nature of the thing to which those rights relate. A thing cannot be possessed unless it is something, which can be controlled physically, like a book or a parcel of land. Thus, property rights to things which cannot be possessed (such as copyright to a song or a share) are necessarily intangible. It is possible however to have property rights to physical things, which do not entitle the holder to possession of that thing. For example, a person can have a right of way to cross another land and not be entitled to possession of that land A right of way (easement) is an example of an intangible (incorporeal) property right to a physical thing. Distinguishing Ownership and Possession Can be difficult because most define ownership through reference to possession. But a person can possess a thing without owning it. The law protects ownership and possession in precisely the same way. > Remedies available to an owner are triggered by wrongful interference with possessions or a right to possessions such as trespass, conversion, or detinue. > When owners recover things from others, it is not because they are owners, it is because they have a better right to possession. > If an owner doesn t have an immediate right to possession, their interference with another s possession is a tort. When we say that someone has possession, and not ownership, we mean that there is an owner with a greater right to possession, which will revive when the possessors right come to an end. This is a reversionary right. Permanence One feature of ownership, which distinguishes it from possession, is its potential for permanence. While ownership normally includes the right to possess a thing indefinitely, possession without ownership is a temporary right. 5

8 Alienability King v David Allen (1916) Owners are generally free to bring their ownership to an end by selling, giving or destroying the thing owned. Conditional upon Event Some owners rights to possession in future may be conditional upon happening of events. > Hire-purchase agreement, hire-purchaser takes possession of the thing and becomes its owner when all the payments are made. > This creates a bailment destined to become ownership if all goes well. > Although the owner/bailor may never again have right to possession, ownership continues so long as right to possession remains possible. Delayed Ownership King formed agreement in the form of a license with Allan allowing Allan to put up posters on property walls. King then leased the property to another company, which did not refer to original agreement with Allan. Question was whether the right conferred in the license was proprietary and was enforceable against the new owner. License doesn t qualify as proprietary right. Because it delivers insufficient control over the land. Only proprietary rights are enforceable against third parties. However, an interest is not proprietary simply because its enforceable against third parties. A proprietary interest could have been created through clear wording in the contract as a lease shows importance of construing the document. Allan s right could only be enforced against the King. People can own things even though their right to possession is delayed by a very long time. > For example, the owner of land might lease it for 100 years, in which case the tenant s right to possession will last over a lifetime and the owner s right to possession will not return until he or she is dead. Still, the owner has a reversionary right which will endure beyond the tenant s right. It is a property right which can be enjoyed by another when the time comes. Sale or Gift The difference between a sale or gift (which transfers ownership) and a lease or bailment (which transfers possession, but not ownership) is that a sale or gift disposes of all the owner s rights to the thing, while a lease or bailment leaves the owner with some residual right. Non-Possessory Rights to Land Profits A Prendre A profit à prendre is a right to take something, such as sand, timber, or wild rabbits, from land belonging to another person - Trustee Aus v Shand (1992). Someone who wrongly interferes with the profit holder s right is guilty not of trespass to or conversion of chattels, but of nuisance for interfering with a right to land. Easement An easement is a right to use a neighbor s land without possessing it (e.g. right of way to travel across neighbor s land). 6

9 The court identified four substantive requirements for the creation of an easement. 1) Must be a dominant and servient tenement. 2) Easement must accommodate the dominant tenement. 3) Dominant and servient tenement must not be held and occupied by the same person. 4) The right must be capable of forming the subject matter of a grant. The Doctrine of Tenure The doctrine of tenure is division of land based on space. The doctrine's legal effect is: > The crown is the owner of all the land. No one has absolute ownership. > Rather, landowners hold the land 'of' the Crown as tenants (therefore tenure). They may then alienate their land further, creating subtenants (subinfuedation). > The relationship between a lord and his tenant is one of mutual duties. In return for tenure, a tenant provides the lord with services and a right to incidents. > The doctrine of tenure does not strictly apply in Australia, but some parts remain: o The concept of the Crown owning all the land and freeholders not having absolute ownership remains. Categories of Estate Estate: [T]he fee simple of land and any of the various interests into which it could formerly be divided at law, whether for life, or for a term of years or otherwise. - Road Australia v Commissioner [2001]. Fee simple: Exclusive possession forever Life estate: Exclusive possession for duration measuring life Lease: Exclusive possession for certain time Easement: Right, accommodating dominant land to use, or restrain use of, servient land in a manner not inconsistent wit servient owners continuing ownership Profit a Prendre: Right to enter servient land and remove soil or its natural produce Chattel Ownership: Exclusive possession forever Bailment of Chattel: Delivery of exclusive possession with an obligation to redeliver Fee Simple The most extensive estate in duration. It is only the doctrine of tenure which prevents the holder of such an estate from being the absolute owner. The fee simple endures indefinitely and its holder may dispose of the estate inter vivos or by testamentary disposition. An estate in fee simple is for almost all practical purposes the equivalent of full ownership of the land - Gumana v Northern Territory (2007) Life Estate May exist in two forms: it may be granted for the life of the grantee or for the life of a person other than the grantee, an estate pur autre vie. The latter form often arises not pursuant to a direct grant but as a result of the holder of a life interest conveying the estate to another person. Leasehold Not originally considered an estate in land: rather it was considered a personal, contractual transaction 7

10 and relationship between the landlord and tenant. Many contractual principles which were not formerly applied to the landlord-tenant relationship, have now been held to do so. Nevertheless, until recently, a tenancy was still always seen as giving rise to a proprietary interest, a leasehold estate in the land. However, the House of Lords in Bruton v London & Quadrant Housing Trust [2000] held that it is possible to have a lease which does not create a leasehold estate in the land but which is effective only in contract between the parties. Most residential tenancies are governed by statute, such as the Residential Tenancies Act 2010 (NSW). s 63 s 85 Landlords General Powers in Lessor Obligations All leases must have a definite duration. Fixed Term: A lease for a fixed term of years is a lease for a fixed period which expires automatically at the end of the period. Despite the phrase fixed term of years the lease may be for any specified period such as one day or 9999 years. ended at any time by either landlord or tenant Cth Life v Anderson (1945). Future Interests A remainder is a grant of a future interest to someone not previously entitled to an interest in the land. A reversion is created when the holder of an estate grants a lesser estate in possession to some other person, as where the grantor does not dispose of the whole of the estate. It is possible to have a right to possession which arises in the future. E.g. A has a fee simple estate and grants a life estate to B, B will have the right to exclusive possession while he lives. A does not have a right to possession during B s life, but A does have a valuable property right. When B dies, the right to possession will revert to A. While B lives, A has a right to possession which will arise in the future. A s right is called a reversion since the right to possession will come back to her. A s right to possession after B s death is an existing property right which can be sold or given to another. Periodic tenancy: A periodic tenancy differs from a lease for a fixed term in that it does not terminate until appropriate notice is given. Periodic tenancies may be created on a monthly or weekly basis or by reference to any other agreed period and the notice required to terminate the tenancy will vary accordingly. Each periodic tenancy is really a series of fixed-term leases, which are automatically renewed unless some event brings tenancy to an end. At will: A tenancy at will exists whenever the tenant obtains the right to possession of land on the (express or implied) understanding that it may be If the identity of the person taking the remainder (called the remainder man) is not known at the date of the grant, a contingent remainder arises. E.g. if A has a fee simple estate, A might grant it to B for life, with the remainder to A s first grandchild to graduate from university. If none of A s grandchildren have graduated from university at the date of the grant, then no-one knows who will be entitled to possession when B dies. When the first grandchild graduates, the identity of the remainder person is known and the fee simple estate vests in interest. If no grandchildren ever graduate from university, the estate would revert to A. 8

11 WA v Ward (2002) A lease conferring the right to exclusive possession would confer rights which are inconsistent with native titles rights, allowing extinguishment. When determining whether a lease confers exclusive possession, one does not determine automatically from the classification of the lease (i.e. 'pastoral lease'). Classification or 'name' of the lease is irrelevant - each lease is examined individually to determine whether it confers exclusive possession. Issues: Did the Meriam people have a claim to the island of Mer in the Torres Strait as original owners of the land? Did the crown have absolute ownership of and legal possession of all land in the Murray Islands? Assuming that it is a settled colony (as it wasn t conquest or cession), then the case is not restricted to Murray islands but goes for all settled colonies. This became a very complex issue of who owned or had title to the land and when and what rights created or extinguished for each party. Mabo (No 2) Pre-Mabo Held: Meriam people were in occupation generations before European contact. The major decision prior to Mabo was that of Milirrpum v Nabalco (1971). In that case Aboriginal clans at Yirrkala brought action seeking to restrain mining of bauxite on traditional lands and challenged validity of the mining leases granted over land by Cth Government. Blackburn J considered that he was bound by existing authority, in particular the decision of the Privy Council in Cooper v Stuart (1884), to the conclusion that Australia was a settled colony and that no previously existing legal rights survived the assertion of British sovereignty. Mabo (No 2) (1992) Facts: The island of Mer, part of the Murray Islands, lies in the Torres Strait - in 1982, the Islanders initiated action against the government claiming they owned their own land and had always owned it. Universal and absolute Crown Ownership (Seas and Submerged Lands Case) (1975) held that as soon as British subjects arrived, they assumed control of everything and indigenous rights were extinguished. Whilst acknowledging that this is fundamentally immoral and should be questioned by common law - court cannot adopt contemporary rules of justice if their adoption would fracture the skeleton of principle which gives the body of our law its shape and internal consistency. Also reluctant to disagree with a case in this own court - acknowledges the conflict about whether the overturning of a traditional rule would disturb things more than it would benefit things. Thus the doctrine of tenure was upheld. But the idea that the Crown had control lies on the assumption that indigenous people did not have a proprietary interest in the land - it belonged to no one (Terra Nullius). 9

12 It is a doctrine that cannot be overturned for skeletal reasons and gives our land law its shape and consistency, derived from feudal origins. Acquisition of Sovereignty The law in force depends on the manner of acquisition - there were three ways of acquiring sovereignty, which were conquest, cession or occupation of lands terra nullius (ie settlement). European nations had claimed that backward people had given them the right to occupy land, and ideas about the benefits of Christianity and European civilisation were advanced. Some theories were about cultivated land or not - either way, the Meriam people were ardent gardeners so this theory does not apply. Reception of the Common Law According to Blackstone, common law would prevail upon first settlement of a deserted/uninhabited country or by the Sovereign s legislative power over a conquered or ceded country. Absolute Crown Ownership Propositions it s not necessary to the structure of the legal system to refuse the recognition of the rights and interests of the Indigenous inhabitants. There is no reason why land within Crown s territory is not subject to native title: it s only when the falsehood of equating sovereignty with beneficial ownership of land (which isn t the case) that we get this idea of native title being extinguished by the acquisition of sovereignty. Native Title Indigenous inhabitants occupied a territory and enjoyed proprietary interests when the Crown acquired sovereignty When a clan or group has continued to acknowledge and practice the rules and customs based on their traditions, and their connection with the land has been substantially maintained, their traditional title can be maintained. If time has washed these away, then native title has also been washed away. If it was conquered, the laws of the country would continue until they were altered by the conqueror - same applied to ceded colonies although they usually had treaties to outline such things. The indigenous people were hence taken to be without laws and without a sovereign, and thus primitive in their social organization. English law became the law of the land, binding colonists and Indigenous people alike - hence, the Meriam people in 1879, like Australian Aborigines earlier on, became British subjects owing allegiance to the imperial Sovereign. Extinguishing Native Title The exercise of a power to extinguish native title must have a clear and plain intention to do so, and since this has not been exercised; there is no way that there has been extinction of rights on the Murray Islands. Native Title Principles The common law of Australia rejects the notion that, when the Crown acquired sovereignty over territory which is now part of Australia it thereby acquired the absolute beneficial ownership of the land therein, 10

13 and accepts that the antecedent rights and interests in land possessed by the indigenous inhabitants of the territory survived the change in sovereignty. Those antecedent rights and interests thus constitute a burden on the radical title of the Crown. Where the Crown has validly alienated land by granting an interest that is wholly or partially inconsistent with a continuing right to enjoy native title, native title is extinguished to the extent of the inconsistency. Thus native title has been extinguished by grants of estates of freehold or of leases but not necessarily by the grant of lesser interests (for example, authorities to prospect for minerals). Native title to particular land (whether classified by the common law as proprietary, usufructuary or otherwise), its incidents and the persons entitled thereto are ascertained according to the laws and customs of the indigenous people who, by those laws and customs, have a connection with the land. Native title to an area of land which a clan or group is entitled to enjoy under the laws and customs of an indigenous people is extinguished if the clan or group, by ceasing to acknowledge those laws, and (so far as practicable) observe those customs, loses its connection with the land or on the death of the last of the members of the group or clan. If native title to any parcel of the waste lands of the Crown is extinguished, the Crown becomes the absolute beneficial owner. WA v Brown (2014) Arose from native title claim of the Ngarla People in the Pilbara region in Western Australia over land that was held under mineral leases. Significant works had been conducted under the mineral leases, including: 1. open pit mining, which transformed Mount Goldsworthy from a hill to a pit, 2. construction and operation of mining infrastructure, and 3. establishment of a town of over 200 houses and associated works. As the mineral leases were granted before 1975, the Court did not consider extinguishment of native title under the native title legislation. The Court first looked at the terms of the mineral leases and found they did not give the miners rights of exclusive possession. The Court found the miners rights to carry out mining and associated works on the land would have been inconsistent with a native title right to control access to the land, but could coexist with the claimed non-exclusive native title rights. The grant of the leases did not therefore extinguish those non-exclusive native title rights. The Court then considered whether native title was extinguished subsequent to the grant of the mineral leases in developed areas such as the areas of the mine, town site and associated works. The Court found that such use of the land was irrelevant to the issue of extinguishment. The outcome was that non-exclusive native title rights and interests of the Ngarla People were recognized to continue to exist in the areas of the mineral leases, including in the developed areas. 11

14 Those native title rights may have been suspended during the operation of the mine, townsite and associated works, but were not extinguished. Wik v Qld (1996) At common law the grant of a pastoral lease does not necessarily extinguish native title. The granting of a pastoral lease in pursuance to Acts did not of itself extinguish native title subsidising in the leased land. An examination of the terms and circumstances of each such lease and its authorising statute would be necessary to determine whether an extinguishment had been effected. Native Title Statute Native title is now a creature of statute. The Native Title Act 1993 (Cth) follows the reasoning of the High Court in Mabo (No 2) (1992) but today it is the Act which confers the entitlement to native title. The Act also provides procedures to ascertain the existence of native title in any instance, the validation of Crown acts in relation to native title and the extinguishment of native title. The Cth legislation is supplemented by legislation in the States also. Definition of Native Title s 223 The Native Title Act 1993 (Cth) (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. (2) Without limiting subsection (1), rights and interests in that subsection includes hunting, gathering, or fishing, rights and interests. Land and Equitable Interests in Land Conveyancing Act 1919 (NSW) 23B 23C 23D(2) Assurances of Instruments Creation of land to be by required to be interests in deed in writing land by parol 33E 38 54a Savings in Signature and Contracts for regard to secs attestation sale of land to 23B, 23C, 23D be in writing Formalities for the Transfer of Land Issue of Substantive validity: Is the interest in the land which A is trying to give B, actually one which the law recognises. I.e. Are the bundle of rights A wants to vest in B, recognised by the law as being one of the limited pigeon holes that make up property. Formal requirements: Assuming that the bundle of rights A wants to transfer to B is recognized by the law, there is a need to ascertain any formal requirements that need to be satisfied. Must A manifest his/her intention to give B rights in a particular way/form. 12

15 Creation of Legal Interests Old System with deed Step One: For a legal transfer of old title land to be effective a deed must be used s 23B(1). > This section only applies to old system, not Torrens Title land. > Exception being a leade not required to be in writing s 23B(1)(d). (1) Specific Performance: The normal response to a breach of contract is an award of damages. A court of equity can order the specific performance of the contractual obligations. (2) Injunctions: A court of equity can issue an injunction to stop someone from interfering with the rights of another. (3) Trusts: The holder of legal title declares them self trustee for another. Step Two: The deed must conform with certain requirements s 38. > Written, signed, sealed, attested, witnessed, delivered etc. Old System without deed Only applies if it comes within lease exception found in s 23D(2). Three requirements to obtain a lease which is effective at law under this provision, even though the lease is oral. 1) Must be at the best rent which can reasonably be obtained without taking a fine (market rent - matter of expert evidence); 2) Must take effect in possession - must give the lessee an immediate right to possession; and 3) The term plus any option must not exceed three years. Creation of Equitable Interests The development of the equitable interest in land law began primarily as a result of the many fetters that the common law placed on the holders of freehold estates. The holder of a freehold estate for example was unable to dispose of an estate by will. Aspects of equity especially important to modern law of property: Old System written agreement Person with legal interest in Old system land can transfer equitable interest in that land with a written instrument signed by the person Step One: Allows creation of an equitable (not legal) interest in Qld System land by a written and signed instrument (not in the form of a deed) even without consideration s 23C(1)(a) (Not effective under Torrens Title without consideration s 41) Trusts Typically, a freeholder conveys land to a trusted person who holds land not for own use or benefit, but for use of the grantor during the grantor s lifetime and then for other members of the grantor s family after the grantor s death. The most significant equitable estate or interest a person can have or hold is the equitable estate in fee simple available to the beneficiary of a trust who is of legal age and capacity, and absolutely and presently entitled. But even that right is qualified by the rights and powers of the trustee, including the power available to a trustee to give good title to the trust property to a bona fide purchaser of the legal title for value without notice, even though such a sale might be wrongful and in breach of trust. 13

16 DKLR Holdings (No 2) Where the trustee is the owner of the legal fee simple, the right of the beneficiary although annexed to the land, is a right to compel the legal owner to hold and use the rights which the law gives him in accordance with the obligations which equity has imposed upon him. The trustee, in such a case, has at law all the rights of the absolute owner in fee simple, but he is not free to use those rights for his own benefit in the way he could if no trust existed. Equitable obligations require him to use them in some particular way for the benefit of other persons. Re Brockbank [1948] A trustee of property with active duties to perform is not obliged to accept any advice or direction from the beneficiary as to how the trust property should be managed; nor can the trustee be removed simply because the beneficiary might wish to do so. Contracts to Grant Equitable Transfer Fee Simple Equity regards contracts to transfer an interest in land as being able to give the transferee rights in equity, even though the contract itself has not been performed. Section 23C(1)(a) deals with the purported immediate transfer, but there are equitable interests as well, which say that equitable interests can arise without a transfer, provided that there is a contract to transfer the interest in land. Step One: Must be an enforceable contract to grant or transfer an interest in land > See s 54A(1): Contract is enforceable if (1) agreement itself is in writing; or (2) there is a note or memorandum of the agreement in writing; and (3) it is signed by the party you want to sue (party to be charged) or the agent of that party. > Oral contract (see Enforceability of oral contracts): s54a(2) - part performance Step Two: If equity would decree specific performance of the contract > Most contracts to transfer property rights to land are specifically enforceable and most contracts to transfer other property rights are not. This is because the right to specific performances arises only when the right to compensation is regarded in equity as an inadequate substitute for performance of the contract. > Some contracts of sale can be specifically enforced under the rules of equity. In such cases, the buyer has an equitable personal right to specific performance of the obligation to transfer ownership, in addition to a legal personal right to damages if the seller fails to keep that promise. Step Three: The interest contracted to be granted or transferred is regarded in equity as already having been granted/transferred. > Accords to principle that equity regards as done that which ought to be done. > Constructive Trust: In accordance with the fundamental equitable maxim that equity deems that to be done which ought to be done, equity has held that a contract for the sale of land confers a beneficial title upon the purchaser, conditional upon the payment of the balance of the purchase price, at the point when the contract becomes enforceable. This transforms the vendor s title into that of a constructive trustee and confers an enforceable beneficial title upon the purchaser. 14

17 Lysaght v Edwards [1876] Lysaght (P) entered into a contract for the purchase of real estate. After the title had been accepted, and before completion, the vendor died. Vendors will gave personal estate to wife, whom he appointed executor and devised all real estate to cousin Hubbard and friend Muller upon trust for sale, and having also devised to Hubbard alone all the real estate which at his death might be vested in him as trustee. estate of the vendor under the will. On the other hand, if the purchaser dies before the contract is performed, but the contract is later performed by their estate, the land is transferred to the person who is entitled to the real property of the purchaser. Stern v McArthur (1988) There is no doubt that a trust exists once the buyer pays the full purchase price and becomes entitled to possession of the land and the transfer of legal title. One of the issues in the case was what rights did Lysaght, as purchaser, have against the estate of Edwards for the land he had contracted to purchase. The moment you have a valid contract for the sale the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser. The vendor having a right to the purchase-money, a charge or lien on the estate for the security of that purchase-money, and a right to retain possession of the estate until the purchase money is paid, in the absence of express contract as to the time of delivering possession. Although the purchase-money is unpaid, the contract is valid and binding; and being a valid contract, it has this remarkable effect, that it converts the estate, so to say, in equity; it makes the purchase-money a part of the personal estate of the vendor. If the vendor dies before the contract is performed, the vendor s interest in the land, which he/she still has, is converted into personal property. So when the contract is performed, the person who gets the purchase money is the person who gets the personal Contracts to Grant Equitable Lease Step One: Is there an enforceable contract to grant or transfer an interest in land > If written - must conform with requirements of s 54A(1). > If oral it will be enforceable if there have been sufficient acts of part performance (s54a(2) Step Two: Would equity would decree specific performance of the contract Step Three: Is the interest contracted to be granted or transferred is regarded in equity as already having been granted/transferred. Walsh v Lonsdale (1882) D agreed to lease a mill to P for a term of seven years. The lease agreement was never executed. The agreement set out that the P would pay rent in accordance to the number of looms in operation. The D could require the P to pay a year s rent in advance (plus arrears) in circumstances where quarterly rent was not paid in advance. The P did not pay rent in advance and the D demanded a year s rent in advance and the balance of rental owing. The D then took possession of the mill and sought the legal remedy of distress. The issue was whether the lease 15