3012LAW Property Law 2 Notes

3012LAW Property Law 2 Notes Property Boundaries 5 General notes 5 Upper boundaries: airspace 5 Lower boundaries: mining 7 Lateral (horizontal) boundaries: surface, road, river and tidal 7 Encroachment 8 Improvements under mistake of title 8 Restrictions on land use - environmental considerations 9 Fixtures vs Chattels 10 The test 10 Case examples 11 Formalities 14 Doctrine of Tenure... 14 Doctrine of Estates... 14 Future possessory interest... 14 Reversion... 14 Remainder... 14 Words of purchase and words of limitation... 14 Fee tail... 15 Life estate... 15 Statutory Modifications to formalities... 15 Limitations... 16 Determinable limitations... 16 Conditional limitations... 16 Void Limitation... 17 Estates 18 Fee simple 18 Transferring a fee simple estate inter vivos 18 Life estate 18 1

Waste 18 An estate involves a right of possession. 19 Joint tenancies & tenancy-in-common 21 Rights of enjoyment as between co-owners 22 Conflict between co-owners 23 Severance of a joint tenancy 23 Partition 25 Equitable interests in land 27 Part Performance 28 Equity and Third Parties 28 Introduction to Torrens, registration & equity 29 S 184 Quality of registered interests 29 Torrens in essence: 30 The status of unregistered interests in the Torrens system 30 Rules on priorities 32 184 Quality of registered interests 32 Torrens & Indefeasible Title 34 Land Title Act 1994 34 Conveying land 35 Operation of the Torrens system 35 Effect of registration: indefeasibility 36 Doctrine of immediate indefeasibility 37 Protection afforded to a registered proprietor according to indefeasibility 38 Exceptions to indefeasible title 40 1. EXPRESS EXCEPTIONS 40 Fraud and notice under the LTA 40 In personam exception (personal equities): s185(1)(a) 44 2

Interest of a lessee under a short lease: s185(1)(b) 47 Omitted, or misdescribed, easements: s185(1)(c) 47 Adverse possessor: s185(1)(d) 47 Earlier existing indefeasible title: s185(1)(e) 49 Failure to cancel following a transfer: s185(1)(f) 49 Wrong inclusion of land: s185(1)(g) 49 Interest of an authority holder under an access agreement: s185(1)(h) & (i) 50 Mortgagee fails to take adequate steps to identify mortgagor: s185(1a)50 2. REGISTRARʼS POWER TO CORRECT THE REGISTER: ss 15, 186 50 Competing priorities 51 Registered vs Unregistered Interests 51 a claim to a legal right followed by a claim to a legal right 52 a claim to a legal right followed by a claim to an equitable right 52 a claim to an equitable right followed by a claim to a legal right 52 an equitable claim followed by an equitable claim - with notice 52 an equitable claim followed by an equitable claim - no notice 53 a claim to a mere equity followed by a claim to an equitable interest 54 Volunteers 55 Caveats & Settlement Notices 56 Caveats 56 Settlement Notices 59 Differences between caveats and settlement notices 59 Remedies 60 Recovery of possession 60 Section 187 remedies 60 Compensation 61 Important cases 63 3

Bahr v Nicolay (No 2) 63 Barry v Heider (1914) 19 CLR 197 63 Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265 64 Frazer v Walker [1967] 1 AC 569, 64 Breskvar v Wall (1971) 126 CLR 376 65 Mercantile Credits Ltd v Shell Co Ltd (1976) 136 CLR 326, 65 Bank of SA v Ferguson (1998) 192 CLR 248. 66 Grgic v ANZ Banking Group (1994) 33 NSWLR 202. 66 Friedman v Barrett [1962] Qd R 498. 66 Loke Yew v Port Swettenham Rubber Co Ltd [1913] AC 491. 66 Schultz v Corwill Properties Ptd Ltd [1969] 90 WN (NSW) 529. 66 MMI v Gosper (in personam exception) 67 Macquarie Bank v Sixty-Fourth Throne (in personam exception) 67 4

Property Boundaries General notes The key thing for fixtures is the degree and extent of annexation to the land. This is always a matter of fact, not law. For example, a tennis court is not a fixture. A fixture could be e.g. a hot water system. Property needs boundaries for it to be recognised as property as such. There must be a relationship of exclusive possession. This is the basis of a right in property, or what the common law calls a right in rem. These boundaries are once again a replication of the liberal public/private divide. For example, the airspace above your house is subject to a public/private divide. Incursions as a result of natural consequences (e.g. trees) require proof of actual interference in order to establish the tort of trespass. Land includes messuages, tenements, and hereditaments, corporeal or incorporeal, of any tenure or description, and whatever may be the interest in land: Acts Interpretation Act 1956 s36. A messuage is a house, including gardens, courtyards, orchards and building. A tenement is property held on tenure, that is a holding of property. A hereditament is real property which, on intestacy, passed to the heir at common law (this no longer happens in Queensland due to the Succession Act 1867). Corporeal things are visible and tangible objects, such as land and houses. Incorporeal things are rights of property suc as easements and profits a prendre. Title denotes ʻownershipʼ of the land, i.e. you have the right to possession of the land. Seisin, while formerly it had technical meanings, now can be equated to possession. Relativity of title means at common law a plaintiff only need prove his title is relatively better than that of the defendant c.f. good as against the whole world. Upper boundaries: airspace At common law a landowner does not have unlimited right to the airspace above his land: Berstein v Skyviews & General Ltd. It extends to such height as is necessary for the ordinary use and enjoyment of his land and the structures upon it... E.g. trespass can occur when advertising signs encroach in the airspace: Kelsen v Imperial Tobacco Co Ltd (UK case) E.g. where a metal cladding on a building projected by 6cm into the airspace of neighbouring land: PCH Melbourne v Break Fast Investments [2007] VSC. 5

At common law a landowner generally has the right to erect a building to any height, but today this right s nearly always restricted by planning laws. The test for determining whether activities and an incursion above the surface of the land constitute a trespass to land is whether they are of a nature and at a height which may interfere with any ordinary uses of the land which the occupier may see fit to undertake. (NB: This is not the actual use at the time, but what the occupier may hypothetically like to do.): LJP Investments v Howard Chia Investments (1989); Bendal Pty Ltd v Mirvac Pty Ltd (1991) 23 NSWLR 464. These cases adopt an ʻabsolutistʼ position in contrast to Bernstein which sought to balance the private ownerʼs right against the publicʼs right to the airspace above a house. LJP Investments v Howard Chia Investments (1989) The defendant sought the plaintiffʼs permission to erect scaffolding that would overhang onto the plaintiffʼs airspace. The plaintiffʼs response to that request was to charge for occupation of its airspace at the rate of a lump sum payment of $30, 000 plus a rental of $570 per week for the first two months and then a rental of $1,140 per week thereafter. The defendant ignored that demand and erected the scaffolding. The scaffolding was built at a height of about 4.5 metres above ground level and extended for approximately 16 metres along the boundary between the two properties. The scaffolding extended 1.5 metres into the plaintiffʼs airspace and at the ground level two posts of 50 millimetres diameter were situated 100 millimetres on the plaintiffʼs land. The plaintiff initiated legal action to have the scaffolding removed. The defendant attempted to offer $200 per week after the legal proceeding after refusing it earlier. Thus it was something of a position to not negotiate with the neighbour from the outset. Hodgson held that the relevant test was not as to whether the incursion actually interfered with the actual use of the land but rather whether it interfered with the ordinary use of the land. For his Honour the case concerned whether or not a party should be permitted to use anotherʼs land for significant commercial gain if it doesnʼt cause significant damage to the other party. This question was answered in the negative. Essentially, it is the right of the occupier not to have such infringement. The courts then developed some general principles to deal with these situations: 1. An incursion where is within a level where such interference will affect the landownerʼs ordinary use and enjoyment of their land. 2. As a general rule a person should not be permitted to use the land of another for considerable commercial gain. 3. Trespass rather than nuisance is the appropriate cause of action. Bendal Pty Ltd v Mirvac Pty Ltd (1991) The plaintiff owned a 7-story office block. The second defendant owned the adjacent office block being constructed and the first defendant was responsible for building the offices. The building techniques involved in the project meant that protective scaffolding encroachment was inevitable. These temporary mesh screens would buffer the three stories under construction at any point in time. To position and reposition this scaffolding involved a 1.5 metre incursion onto the plaintiffʼs real estate. The crane was placed at the south-western corner of the plaintiffʼs premises and would swing with a radius of 45 meters over the plaintiffʼs land when used to load. The crane was also allowed to weathervane across the building when not in use. 6

Bryson J held that the plaintiffʼs airspace was not a natural resource that could just be used as the defendants saw suitable. His Honour held that the case then still revolved around the following two questions: 1. Whether they are of a nature and at a height which may interfere with any ordinary uses of the land which the occupier may see fit to undertake; and 2. Encroachment by protective mesh screens projecting from a high rise building site and movement of materials from ground level to heights above the screens constituted a continuing trespass. It was generally held that the encroachment by the crane was not necessarily actionable. Specifically in consideration of Griffiths Jʼs decision in Bernstein where his Honour considered airspace to be for use of the public. It was held however, that the test for determining whether activities and an incursion above the surface of the land constitute a trespass to land is whether they are of a nature and at a height which may interfere with any ordinary uses of the land which the occupier may see fit to undertake. In this sense then the scales were essentially tipped back into the favour of the first occupier. There was more of an inference that the first occupier had exclusive possession over an increased amount of space. However, it was noted that there is also the law of easements in terms of forcing the occupier for an easement to comply with certain considerations. This can be either through arrangement, time (common law) and the Property Act. Lower boundaries: mining Somewhat unexplored area of the law. Generally thought that rights will extend such as is necessary for the reasonable use and enjoyment of the land. Canʼt do things below the surface of your land if it will disrupt the lateral support for your neighbour ʻs land (including that necessary for any buildings they may have): De Pasquale Bros v Cavanagh Biggs & Partners. Although rights to minerals exist at common law, now they are all owned by the Crown due to statute. E.g. Mineral Resources Act 1989. Section 6 defines ʻmineralsʼ very widely. The exception to this common law rule was and still is gold and silver but they now belong to the Crown despite the nature of the grant to the landowner: The Case of Mines (1568) 75 ER 472 at 510. There are many types of mining tenements: Prospecting permits, Exploration permits, Mineral development licences, Mining claims, and Mining leases. Same with radioactive materials, e.g. Atomic Energy Act 1953 (Cth). Similarly, uses for water under the ground is entirely controlled by the state: Water Act 2000 s19. But may have riparian rights but these are not rights of ownership but rather rights of use. Lateral (horizontal) boundaries: surface, road, river and tidal Can be either natural features (e.g. a stream) or an artificial boundary drawn on a survey plan. Natural features are primary, such that if they change (e.g. river changes course) then artificial boundaries must be adjusted accordingly: Svendson v Queensland [2002] Where the boundary is a road or non-tidal stream there is a rebuttable presumption it is the middle of the road or stream, aka ad medium filum rule: Randel v Brisbane City Council (No 2) [1990]. But the bed of the river is owned by the Crown: Water Act 2000 s21(1). In this case the landowner owns only down to the normal waterline (not to the middle of the river). 7

Similarly, the middle of the road rule has been superseded by statute such that the road is owned by the public: Land Act 1994 s95. Tidal landʼs boundary is determined by the high water mark: Land Act 1994 s9. This is the ʻordinary high-water mark at spring tidesʼ, as per Sch 6. See also interpretation of this in: Svendson v Queensland [2002] --> ʻordinary high-water mark at the spring tides of each lunar monthʼ and calculated by averaging the two highest tides on days when the range from high tide to low tide is greatestʼ. Ambulatory boundaries: Ambulatory boundaries are natural boundaries which change due to accretion or erosion. The legal boundary will change if the accretion/erosion is: a) slow and gradual; and b) caused by natural forces. See Hazlett v Presnell (1982) CLR. This has been explicitly stated in statute w.r.t. tidal navigable rivers: Land Act 1994 s9(2). There are special provisions re tidal boundaries for planned subdivisions: Land Title Act 1994 Part 10A. At common law you had riparian rights (rights of use) for an owner of land abutting a river or natural water course. The Water Act 2000 provides something similar to riparian rights in s20 (but for superusers you need special water allocations). Encroachment Where landowner A constructs a building so that it encroaches across the boundary onto another landowner Bʼs land, the encroaching part of the building constitutes a continuing trespass or, where damage can be established, a continuing nuisance: Billiet v Commercial Bank of Australasia [1907]. If there is a continuing trespass / nuisance, the owner of the land on which the building encroaches may obtain a mandatory injunction ordering its removal and/or damages: Kelsen v Imperial Tobacco [1957]. HOWEVER, the above common law only applies when the encroaching thing does not come within the definition of, e.g. a building, the Property Law Act 1974 which deals with encroachments. S184(1) provides either the encroacher or the encroached may apply to the court for relief. S182 contains relevant definitions - encroachment is defined to mean basically any type of building encroachment either above or beneath the ground; building means a substantial building of permanent character, including a wall. A building which crosses the boundary line will constitute an encroachment even though, at the time of its construction, the adjacent owner consented to the intrusion: Boed v Seymour (1989) NSWLR. Compensation can be ordered, and the relevant considerations for this are set out the in above mentioned Act. Another option is an order for the conveyance, transfer or lease of, the grant of an easement or lesser right over the land on which the encroachment extends (the subject land ). Section 185(1)(c) gives the court the power to order the removal of the encroachment. Section 185(a)-(f) specifies matters which the court may take into account in deciding whether to grant relief. Improvements under mistake of title At common law, if something is wrongly created on someone elseʼs land, it becomes the property of that other person: Brand v Chris Building Society. Div 2 Pt 11 of the Property Law Act 1974 seeks to ameliorate this. S196 provides that in such circumstances an 8

Fixtures vs Chattels The test Some physical objects, when attached to land, are legally regarded as part of the land, such that the owner of the estate in fee simple in the land automatically acquires title to those objects. These are fixtures. This is relevant, of course, when property is switching hands and the person selling wants to take the thing with them. A fixture is a chattel that has become part of the land. Hollan v Hodgson (1872) is where the two main tests come from: 1. First: the degree of annexation (a question of fact). 2. Second: purpose of annexation (subjective test, i.e. intention for the thing to be annexed permanently or only temporarily?). Hence there are two key presumptions: 1. If a chattel is attached to the land other than by its own weight then prima facie itʼs a fixture; 2. If a chattel is only attached by its own weight, then it is not a fixture, even if it has become embedded in the soil. In terms of the burden of proof: 1. If it is just sitting on the ground then the burden will rest with the person asserting that it is a fixture. 2. Conversely, if there is more annexation then the burden will rest with the person asserting that it is a chattel. The object or intention of annexation test says that: 1. If the intention of annexation is the better use and enjoyment of the land, the item is more likely to be a fixture; 2. If the intention was the better use and enjoyment of the item itself, the item is more likely to be a chattel. The requisite intention must be ascertained objectively by looking at the degree and object of the annexation. I.e. would a reasonable person consider the object was intended to be fixed or merely remain a chattel? It looks to the entirety of the circumstances and includes the intention of both parties. Third parties throw a spanner in the works, e.g. where a third party lends/hires something to someone who affixes it to their land and then sells the land to someone else: Hobson v Gorringe. The Hire Purchase Act 1959 used to apply but has now expired. Basically the result would be that the third party can get their property back in all circumstances except where the land has been purchased bona fide by a third party for value without notice. Tenantʼs have a special exception whereby there is a special class of fixtures (tenantʼs fixtures) which tenants are allowed to removed:commissioner of State Revenue v 10

Uniqema [2004] VSCA. They can remove it while they are the tenant and, in some cases, after the tenancy agreement has ended. Div 6 of Pt 8 of the Property law Act 1974 says agricultural fixtures are now regarded the same as tenantʼs fixtures. Case examples See Textbook pp 114 for loads of examples. The tests used to determine whether a chattel has become in law a fixture is difficult if not impossible to state definitively. So, examples are helpful: Hollan v Hodgson (1872) Mill was the owner of a mill and mortgaged the mill to the plaintiff with terms in that mortgage including ʻall fixtures and whateverʼ. A trustee was appointed to manage all of the mill owner's creditors. Looms were attached to the property as they were nailed to the floor. The trustee sold the looms and the plaintiff sued for selling the looms. Blackburn J affirmed the general position that what is annexed to the land becomes part of the land however, he noted difficulty in terms of assessing what is actually annexed to the land. While he noted that it was a difficult test his Honour held that the answer could be found by applying two tests with consideration for differing circumstances of each case. The two tests are of intention. It is really a decision between the competing rights of the two parties answered through the question of the degree of annexation. I.e. to what extent is the item fixed? Obviously this will differ in a case-by-case basis. Reid v Smith (1905) Two dwellings resting on stumps by their own weight were held to be fixtures. Because they were resting on their own weight they were initially presumed to be chattels, but this presumption was successfully rebutted. The person who is claiming something is not a fixture is the one who needs to rebut the presumption. Commissioner of Stamps (WA) v L Whiteman Ltd (1940) CLR. Brick-making machinery bolted to concrete bases in a factory were fixtures. Perkins & Co v Galloway. Galvanised iron (water) tanks resting by their own weight on wooden stands, the posts of which were embedded in the ground: were fixtures. Park v Lasrado A chandelier was not a fixture, it was a chattel. PWC Legal v Perpetual Trustee Victoria [2007]. Pre-fabricated transportable houses resting by their own weight on concrete piers set into the ground, and connected to sewerage, electricity and telephone services. Belgrave Nominess v Barlin-Scott Air Conditioning [1984]. Issue whether air con roof chillers were a fixture. They rested by their own weight. Held they were. There was an intention that the installers of an air conditioner did not retain possession of the air con unit once installed, and combined with the fact that the roof chillers were to be connected up with pipes and stuff (although they werenʼt connected at the time), there is therefore an intention they will become fixtures. 11