Property 2

Classifications and theories of property

Property can be identified as relating to and depending upon a particular thing (rights in rem)

Usually include

·       The right to use and enjoy

·       The right to exclude others

·       The rights to transfer

·       The right to possess

·       The right to destroy

Property often called a ‘bundle of rights’ and is a good working definition of what it means to have property in a thing:

-       Subject of property: the entity exercising rights over the ‘thing’

-       Object of property: the ‘thing’ over which rights are exercised

Both are determined in light of social values, as recognised by the state.

Classifications and theories of property

·       Property is a social institution, being a means by which societies regulate access to material resources (power and control)

·       Counter traditions to these rights include inherent social obligations, duties, and responsibilities to care and tend to land:

-       Millrrpum v Mabalco and Western Australian v Ward reflecting spiritual connection of Indigenous people with the land

-       Protection of the ‘global commons’: (Hardin’s Tragedy of the Commons)

-       Property serves social objectives (France-Hudson)

In the case of Yanner v Eaton, Gleeson, Gaudron, Kirby and Hayne JJ said:

‘the word “property” is often used to refer to something that belongs to another. But the Fauna Acts as elsewhere in the law, “Property” does not refer to a thing, it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing.

Defining property: proprietary versus personal

The fundamental difference between contracts that confer property rights and contracts that do not are that proprietary rights are enforceable against the whole world (rights in rem), whereas contractual rights are enforceable only against the parties to the contract (pursuant to the doctrine of privity of contract)

In other words, a person with a contractual right only generally has the right to enforce the contract against the other contracting party and not against third parties.

Distinguish different kind of licences

·       Bare licence (permission)

·       Contractual licence

·       Licence coupled with a proprietary interest

-       King v David Allen and Sons Billposting Ltd [1916] 2 AC 54.

-       Cowell v Rosehill Racecourse Co Ltd (1936) 56 CLR 605.

King v David Allen and Sons Billposting Ltd [1916] 2 AC 54

·       King entered a licence with David Allen prohibiting adverts posted on walls, King later leased land to Flinn, who wanted to post adverts

·       Privy council: Agreement between King and David Allen was contractual. Enforceable only against contract parties (not Finn) unless formally assigned. By granting exclusive possession of land to Finn under lease and without assigning the restriction, King was not in the position to fulfil the contract: could not stop Finn posting adverts; liable to David Allen for damages for breach of contract

·       Question arose as to whether a licence to place an advertisement on the walls of a building given by the preceding tenant bound the new tenant

Held

·       The licence was not binding on the new tenant.

King v David Allen and Sons Billposting Ltd [1916] 2 AC 54

Key point

Contractual licences are not proprietary in nature. Earl Loreburn stated the licence does not create any interest in the land expect for a promise to allow the other party to the contract to use the wall from advertising purposes and an implied undertaking that not to breach the contract.

Vertical and horizontal boundaries

While property rights can be distinguished at a theoretical level from person (contractual) rights, real property can also be distinguished physically – through vertical and horizontal boundaries, that establish the end of one person’s ownership, and the start of another’s. Boundaries between parcels or land are shown in survey/title plans and/or a plan of subdivision that accompanies the certificate of title.

Water course boundaries

Land may be bound by a creek, river, lake, or sea. Where land is bounded by water on one or more sides, the natural process of erosion may reduce or increase the total area of that land. This is known as the doctrine of erosion and accretion and the ownership of land may chance because of this.

Boundaries

Before determining whether someone has possessed land adversely or whether something is a fixture, need to understand physical boundaries of land.

-       Boundaries as to height and depth

-       Boundaries as to horizontal space

-       Boundaries with seas, rivers, and lakes

-       Boundaries can be artificial or natural

Boundaries (vertical)

Cujus est solum est usque ad coelum et ad inferos

-       The person who owns the surface of the land also owns both the sky and space above the surface stretching to the limits of the atmosphere and the soil beneath the surface down to the centre of the earth

Airspace

-       Depends on what land is owned – e.g., strata subdivisions

-       Is it real property which can be conveyed (YES)?

-       Does the owner of the surface have a sufficient property interest in the airspace to raise a claim of trespass or nuisance (doubt as to legal status)

Below ground

-       8^th August 1891 – Limit 50 ft/15.24m

-       3^rd July 1973 – 15.24m

-       However, there was always exceptions

Boundaries (Horizontal)

·       Most parcels of land in Victoria are based on survey having derived from a crown grant. The boundaries of which were surveyed and marked on the ground.

·       The land conveyed in a crown grant is deemed to be the land within the survey boundary (PLA s 269)

-       PLA s 272 applies the ‘little more a little less’ rule to allow for minor errors in description of boundaries to limit court actions

-       Fences Act (Vic) s 30E: circumstances in which a person can claim adverse possession regarding boundaries

-       Fences Act (Vic) s 35: a fence erected on a line that is not the common boundary (water way or other obstruction) does not create adverse possession, or affect the title to or possession of, the adjoining land.

Watercourse boundaries

·       Horizontal boundaries may be fully dimensioned (‘metes and bounds’) or may be defined by reference to a watercourse or the coastline

·       Boundaries may move as the water level changes under common law doctrine:

-       ‘erosion’ natural process of erosion or encroachment of the water to reduce the total are of the land

-       ‘accretion’ natural process of silt deposit (etc) receding water, can increase the total area of that land.

·       Boundaries with sea and tidal rovers set at the mean high-water mark. The soil below that belongs to the crown.

·       Rivers, creeks, streams, watercourse, lakes, lagoons, swamps or marshes (i.e., “watercourses”) through private land belong to landowners (Land Act 1958 (Vic) s 384)

·       If land bounded by a “watercourse” – Land Act (VIC) s 385

1.5 Doctrine of fixtures (common law doctrine)

·       Doctrine of Fixtures dictates when items classified as personal property become part of land – so that they change their classification to real property.

·       Arises from definition of “land” in property Law Act 1958 (Vic) (PLA) s 18

·       A physical item capable of being inherited (e.g., goods and chattels) fixed to land becomes part of the land, known as a “fixture”

·       Pursuant to this doctrine, the owner of land is also the owner fixture to the land

The doctrine of fixtures is a legal principle that states that personal property can become real property if it is attached to land. This is important in property law and can affect buyers and sellers in real estate transactions.

How does the doctrine of fixtures apply?

-       Landlord and Tenant: Tenants can’t install fixtures without the landlord’s consent

-       Vendor and purchaser: Fixtures are passed to the buyer when land is sold

-       Mortgagor and mortgage: A mortgagee’s security interest generally includes fixtures

-       Inheritance: Fixtures automatically pass to those entitled to real estate

How is a fixture determined?

The doctrine of fixtures is based on the degree on annexation, or how the item is attached to the land, and the object of annexation, or the intention of the parties. For example, a chandelier bolted to the ceiling is likely a fixture, but a freestanding bookshelf is not. The doctrine of fixtures determines when and in which circumstances an item of personal property which is attached to land loses its identity as a chattel and merges with the land.

What is the impact of fixtures?

Fixtures can significantly affect the value and appeal of a property.

Doctrine of Fixtures Uses/Relevance

Doctrine of fixtures might 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 changed): a mortgagee’s security interest will generally include fixtures (but not chattels)

·       Land is leases to a tenant: special rules apply to fixtures installed by a tenant (common law vs statute)

·       A landowner dies: fixtures automatically pass to those entitled to the real estate not to those entitled to personal property

·       Land is given by gift: only fixtures will be passed to the new oner (not chattels)

Doctrine of Fixtures

General Rules

In a dispute about whether an item is part of land, or personal goods, and there is no relevant contract or agreement between the disputing parties, a court will use the doctrine of fixtures to determine the matter.

-       This requires examining the circumstances that existed at the time the item was annexed (or not) objectively as a question of fact.

-       The Doctrine has two limbs, which provide structure to your analysis and establish the burden of proof between parties:

-       Degree of annexation: How is the item attached to the land?

-       Object of annexation:  What is the item attached to the land and why was it attached?

Criticism of doctrine:

-       Inflexible, lacking genuine, coherent legal principles (courts take a more holistic approach)

-       Often overridden by statute in some cases: e.g., in leasing or credit transactions

Belgrave Nominees Pty Ltd v Barlin-Scott Airconditioning (Aust.) Pty Ltd [1984] VR 947

Facts:

-       BN was the owner of 2 buildings – BN contracted with a builder to renovate the buildings, including the air conditioning plant. The builder sub-contracted to BSA to supply and fit air conditioning plant (including a chiller) on the roof of each building. BSA positioned a chiller on a custom installed platform constructed on the roof of each building – the chiller stood free on its own weight on Vibersorb pads between its legs and the surface of the planform (shock absorbers). The chillers were connected to the water system by Flanges and Bolts. A water supply pipe was connected to a water pump that was secured on each platform. Electric supply cables forming part of the structure of the building were connected to an electrical junction box fitted to one of the chillers (although not connected to electric power supply.

BN claimed

BN Claimed relief on the basis that the air-conditioning plant formed part of the building (as a fixture) at the time it was removed, based on the common law that fixing to the property makes them part of the freehold.

National Australia Bank Ltd v Blacker (2000) 104 FLR 288

Facts:

-       Blacker had granted a mortgage to NAB over “mortgaged property” – under the real property mortgage, “mortgaged property” was defined to include a specific parcel of land “farm” and “all plant, machinery and other improvements affixed thereto” (at the time of mortgage or subsequently). blacker wrote to NAB to advice that it would be vacating the premises, (handing the land over to NAB) and identified that they were still using the irrigation system including pumps and sprinklers which “were not fixtures” – and that they would also be removed. In the same letter, Blacker asked whether NAB wishes to purchase the irrigation equipment from them. The day after receiving a holding response from NAB on the issue, Blacker removed the pumps, sprinklers, and valves from the land.

-       A dispute arose whether the pumps were chattels or fixtures (on the basis that pumps were a party of the underground irrigation system – therefore whether blacker was entitled to remove them.

Held

Per Conti J:

-       Establish the objective intention with which the items were put in place [10].

-       No one satisfactory test to determine the issue. Common considerations include looking at the degree and object of annexation and all the relevant circumstances.

-        In some circumstances, a chattel may be a fixture even if not affixed to land, and an object may be a chattel even though affixed to land → use objective test.

-       Since the items were not fixed into the ground the onus of proof was on NAB to prove that the items were fixtures. ▪

-        All could be removed without damaging the land, and the cost of removing them was much less than their value. Thus, all of the items were deemed to be chattels, which entitled the Blackers a right to remove them.

-       NB: A dairy farm requires an irrigation system, so it is unusual that the court allowed the removal of certain parts of the system → Is the annexation point more important than the purpose point?

-       NB: The presumptions are rebuttable. They simply allocate the onus of proof. Therefore, NAB had the onus of proving that the pumps and sprinkler-heads were fixtures; and the Blackers had the onus of proving that the valves were chattels

1.5 Doctrine of Fixtures: Degree of Annexation

·       Mode and structure of annexation: how is the item affixed?

·       Whether removal would cause damage to

-       The land or building the item is attached, or

-       The team itself

·       Whether it would cost more to remove it than the item is worth

Presumption and burden of proof

Is the item affixed?

-       If the item is fixed (other than by its own weight) it is presumed to be a fixture. The burden of proof lies with the party claiming the item is a chattel to prove otherwise.

-       If the item is not fixed (or only by its own weights) it is presumed to be a chattel. The burden of proof lies with the party claiming the items if a fixture to prove otherwise.

Burden of proof difficult to satisfy in our cases examples, cases are lost due to a failure to satisfy the burden of proof rather than won by the parties who have the presumption in their favour

1.5 Object of annexation: test

Belgrave Nominees, at 951:

-       Nature of the chattel: what is it? Objectively do you expect it to be a chattel, or does it form part of a building/land? is it essential to the building? is it unique (can it be easily replaced with another)?

-       The relation and situation of the party making the annexation Vis-à-vis the freehold owner/person in possession: what is the business of the parties? does this affect how you view the item as a chattel or fixture?

-       The mode of annexation: (degree of annexation considerations) what is the mode of fixing? would removal cause damage to the building (more likely fixture) or item (more likely chattel)? does it cost more to remove the item than the item is worth? is expertise/specialist required to remove the item

-       Purpose of fixing: does fixing allow item to be enjoyed? or does fixing improve the building/land? us fixing temporary or permanent (mode of fixing might impact this)

1.5 Object of annexation: Mode of annexation

·       Mode and structure of annexation: How is the item affixed?

·       Whether removal would cause damage to:

-       The land or buildings to which the item Is attached, or

-       The item itself

·       Whether it would cost more to remove it than the item is worth

1.5 Object of annexation: purpose of fixing

·       Whether the article was attached for the better enjoyment of the article, or for the better enjoyment of the land or building to which it was attached, including:

-       The nature of the property the subject of affixation

-       Whether the item was to be in position either permanently or temporarily

-       The purpose of annexing it

Removal of fixtures

Fixtures attached to land can be removed in certain conditions. A contract between the relevant parties may provide for some items personal property to be removed from the land when, for example, a vendor and purchaser complete settlement of the sale of land, or when a lease expires, and the tenant vacates the property. Where there is not relevant contract between relevant parties, removal may be permitted by statute or common law.

1.6 Recognising new forms of property

Common law and equity recognised various categories pursuant to the doctrine of numerus clauses. While the categories of property are not closed, the parliament and judiciary are reluctant to recognise new forms of property outside of these categories.

For example:

-       Courts have recognised new forms of property to resolve Inequity between parties, recognise input of skills/expertise, promote personal autonomy, reflect changing political and moral values, prevent exploitation, but have difficulty recognising property where rights are hard to identify/articulate

For example: Human bodies. body parts, tissue

-       Parliament has recognised new forms of property to protect, conserve and manage natural recourses, recognise input of skill/expertise

For example: Water, Carbon, Fisheries, Intellectual property

New interactions between individuals and ‘things’ challenge the boundaries of property law to expand. While the classes of what is recognised as property are not closed, this does not mean that recognition as property is appropriate in all cases

Lyria Bennet moses ‘the applicability of property law in new contents to cyberspace’ (2008) 30 (4) SLR 639

-       Courts and commentators struggle to explain limits on what constitutes a ‘thing’ that might be an object of property rights, when the thing arises from technological change

-       Where change results in some new thing that might be recognised as property, it more than one person could have the rights in it simultaneously there is potential for conflict.

-       To resolve that conflict should the general rules of property apply, or sui generis right created?

-       Consider both: The role of property and implications of exclusion and concept of property.

-       There are physical and conceptual limitations to what can be ‘property’ and this can include the commercial value, as well as moral and practical challenges.

-       Property law is broad but needs to be varies according to the type of property involved.

1.6 FOR EXAMPLE: property in environmental recourses

Property used to protect against exploitation, encourage conservation, manage use and access to natural recourses:

·       Water: Tradeable water permits

·       Fisheries: fishing quotas based on volume of fish caught/percentage of stock availability

·       Carbon sequestration (climate chance): rights in carbon sequestration dealt with separately to trees and/or land. Carbon sequestration creates personal ‘carbon credits’ under the Emissions reduction Fund under the carbon credits Act 2011 (Cth)

·       Environmental protection and biodiversity conservation: Imposition of conservation covenants ‘that can lock in protection or conservation actives indefinitely.

1.7 Proprietary remedies, Property law and remedies

Another feature of property is that the applicable law, that is, property law provides an additional distinct set of remedies that go beyond the traditional remedies of contractual damages, including:

-       Injunctions

-       Trespass

-       Detinue and conversion

-       Equitable and legal remedies

Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605

Facts:

-       Rosehill was conducting a race meeting on the land, and in consideration for Cowell paying 4 shillings, allowed Cowell to remain on the racecourse and view the race. Rosehill ejected Cowell from the racecourse before the conclusion of the race. Cowell alleged assault and argues that Rosehill breached its contract with Cowell by ejecting him (Revoking licence). The appellant stated that the respondent was carrying out horseracing on the land and that the respondent had informed him that if the appellant paid to the respondent four shillings, he would be allowed to remain on the property to watch the races. The appellant paid four shillings to the respondent and stated that in seeking to removing from the land the respondent was in breach of the contractual licence that was in place. In other words, it was not possible to revoke a licence which was contractual.

Legal Issue:

-       The issue in the circumstance was whether a licence which was contractual in nature could be revoked.

Held:

-       It was held that a licence, although it had been paid for by the appellant did not create any proprietary interest. It did create a contractual right; however, this was revocable at common law and the respondent was not prevented by equity from revoking the licence or relying on the revocation. The result was that the licence was revoked before the alleged assault and therefore, the appellant’s appeal failed.

Property law and remedies protection of property

How are property rights protected in Australia?

·       Australian constitution s 51(xxxi): to “the acquisition of property on just terms from any state or person for any purpose in respect of which the parliament has power to make laws

·       Land Acquisition and Compensation Act 1986 (Vic) establishes a framework for “compulsory acquisition”. This includes an entitlement to compensation (s 30)

·       Chater of Human Rights and Responsibilities Act 2006 (Vic) s 20 provides that a person “must not be deprived of his of her property than in accordance with the law”.

1. Definition

-        Property law regulates the use, transfer, and rights associated with land and goods. It includes both real property (land and things attached to it) and personal property (movable items).

2. Real property

·       Real property refers to land and anything permanently attached to it, including buildings, structures and fixtures

·       Physical boundaries of property: The physical boundaries of property are defined by the land boundaries. In general, property extends from the surface of the land downward to the centre of the earth and upwards to the sky, with some exceptions for air and mineral rights. The boundaries of land are typically marked by fences, walls, or natural landmarks (e.g., rivers)

·       Land is defined under the Property Law Act 1958 (PLA) s 18 as “corporeal hereditaments”, referring to tangible items capable of inheritance.

3. Personal property

·       Personal property (chattels) includes items such as furniture, goods, and vehicles

·       Personal goods can become part of land if affixed to it in certain ways, thus becoming fixtures under the Doctrine of Fixtures

4. Doctrine of fixtures

·        Definition: The doctrine of fixtures dictates when personal property (chattels) becomes part of land, changing its classifications to real property

·       This applies in situations such as land sales, leases, mortgages, and inheritance

How it applies:

-       Landlord and Tenant: Tenants cannot install fixtures without the landlord’s consent

-       Vendor and purchaser: Fixtures automatically pass to the buyer in a sale, unless stated otherwise

-       Mortgage: Mortgages generally include fixtures as part of the security interest

-       Inheritance: Fixtures pass to those entitled to the real estate

-       Gift: Only fixtures pass to the new owner, not chattels

5. How is a fixture determined

·       Degree of Annexation: How the item is attached to the land (e.g., bolted, nailed).

·       Object of annexation: The purpose and intention behind attaching the item to the land

Examples

Belgrave Nominees Pty Ltd v Barlin-Scott:

Court found air conditioning plant wasn’t fixed enough to be a fixture

National Australia Bank Ltd v Blacker:

Court ruled irrigation equipment was a chattel, not a fixture, based on the degree of annexation and intended use.

Criticism of doctrine

The doctrine is seen as inflexible and often overridden by statute, particularly in leasing or credit transactions.

6. New form of property

Courts are legislators sometimes recognize new forms or property to address changed in technology, society, and the economy. These include

-       Intellectual property

-       Environmental resources (e.g., carbon credits, water, fisheries)

-       Human body parts

Challenges:

-       Technological advances challenge the traditional boundaries of property law, especially in cyberspace and digital resources

-       Lyria Bennett Moses discusses challenges in categorizing new forms of property due to technological changes and conflicting interests

7. Proprietary remedies

Property law provides remedies beyond monetary damages, including:

·       Injunctions

·       Trespass

·       Detinue and conversion

·       Specific performance

Case examples

Cowell v Rosehill Racecourse Co Ltd: Court ruled that a paid license to view a race was a contractual right, not a proprietary interest, and thus could be revoked by the property owner

8. Protection of property

·       Australia constitution s 51(xxxi): Property cannot be acquired by the government or any state without just compensation

·       Land Acquisition and Compensation Act 1986 (Vic): establishes compensation rights in cases of compulsory property acquisition.

·       Charter of Human Rights and Responsibilities Act 2006 (Vic): Protects individuals from deprivation of property except as allowed by law.

Overview of possession

Possession is the act of holding or controlling property and is the cornerstone of property rights. It establishes a legal claim to property or land, enabling individuals to exercise rights over their possessions and protecting them from unauthorized dispossession.

Ways to acquire possession

Acquisition of property though taking possession/possessory title

Possession can be attained through several methods

Both the doctrine of tenure and Native title rely on the notions of possession to evidence title (or ownership) to property

-       Consent: Gaining permission from the prior owner

-       Purchase: Obtaining property through a legitimate sale transaction, conferring ownership rights

-       Gift: Receiving property freely from another party without any exchange of value

-       Loan: Temporarily holding property with the intention of returning it

-       Taking possession: Physically controlling an item without the previous owner’s consent, often concerning lost property

-       Abandonment: An owner may relinquish control, allowing a subsequent possessor to claim rights

The limitation period for recovery of property however may defeat an otherwise successful claim to have property restored to the person with better title. See limitation of Act 1958 (Vic)

What is possession?

Justice Toohey in Mabo v Queensland (No 2) in disucussing the nature of possessory rights said:

“possession” is notoriously difficult to define but for present purposes it may be said to be a conclusion of law defining the nature and status of a particular relationship of control by a person over land ‘Title’ is in the present case, the abstract bundle of rights associated with that relationship of possession. Significantly, it is also used to describe the group of rights which result from possession, but which survives its loss; this included the right to possession” “So long as it is enjoyed, possession gives rise to rights, including the right to defend possession or sell or to devise the interest:”

When asked what possession means what you must point out in that its two elements

-       Occupation (physical possession)

-       AND Control

What is possession? Possession or seisen of real property

In the context of real property “seisen” is an older term, distinct from mere possession, referring to the right to legal possession of a freehold estate in land, while possession is the actual physical control of the property

Legal status of possession

The right of possession is enforceable against everyone unless a superior title is claimed. This fundamental principle states that mere possession affords certain legal protections. Under the limitation of Actions Act 1958 (Vic), specific timeframes – seven years for land and six years for personal property – are stipulated for initiating recovery actions, highlighting the necessity for prompt legal action in disputes.

Definition of possession:

Justice Toohey, in Mabo v Queensland (No 2) 1992, defines possession as a legal conclusion denoting control over land or property. It involves both title (which represents the rights associated) and practical possession (the actual control and the intent to maintain that control)

What is possession? Possession or seisen of real property

·       Historically there were sound reasons to protect possession rather than title

·       How does possession differ from seisen?

Seisen: the right to bring action to recover land, or to eject someone from land

·       No absolute ownership so common law protected persons ‘seised’ of land (in possession of freehold)

·       Possessor of land gained a right in land enforceable against the world at large except against someone with a superior right

·       A possessor of land (even wrongfully) may have rights against the world at large but her title may be susceptible to attack from specific people with better title.

Historical context of possession

Historically, legal frameworks prioritized possession over title, recognizing the need for protections for individuals lacking complete ownership, such as tenants. Even when someone is in possession, they might possess enforceable rights against those who do not have a superior claim

Key historical events

-       1640: The case of R v Rudd underscored possession principles

-       1824: Introduction to The Statute of Limitations, impacting claims of possession

Case study

Perry v Clissold [1907] AC 73

Rule: Moving on and using land counts as adverse possession.

At 79: ‘It cannot be disputed that a person in possession of land in the assumed character of owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but that rightful owner’

What is possession, Possession of real property: Perry v Clissold

-       Government gave notice to resume land that was occupied by Clissold (a squatter). Compensation was payable to displaced persons. Before compensation was claimed, Clissold died. His executors took action to recover compensation

-       Government refused to pay on the basis that Clissold was a trespasser and at that time, had merely a possessory title to the land (not the true owner).

-       On appeal to the privy council Held that a person in possession of land has perfectly good title against the whole world except the rightful owner. Government could not deny compensation to Clissold if the rightful owner does not come forward.

This landmark ruling by the Privy council upheld Clissold’s claim to occupancy when it was contested by the government, which argued he was a trespasser. The decision confirmed that a person in possession, like Clissold, holds valid title against all but the rightful owner, thereby affirming his claims for compensation.

Historical Recognition of Native Title

The evolution of native title recognition in Australia is marked by significant legal milestones:

Chronology

-       1971: Australia declared “terra nullius” Millirpum v Nabalco

-       1982: Enactment of Queensland (Aboriginal and Islander Land Grants) Act 1982

-       1982: Test case in High Court by Murray Islanders to determine legal rights of islanders to the islands of Mer, Dauar and Waier in Torres Straight (Meriam people in occupation for generations prior to European contract)

-       1985: Enactment of Queensland Coast Island Declaration Act 1985

-       1988: Mabo v Queensland (no.1)

-       1992: Mabo v Queensland (no.2) Native title officially recognised in Australia

Nature of native title:

Native title: Australia as “terra nullius” Millirpum v Nabalco [1971] 17 FLR 141

-       Claim made by Aboriginal clans located at Yirrkala on the Grove Peninsular of NT, seeking to restrain the mining of bauxite on their traditional lands and challenge the validity of the mining leases granted over these lands by the commonwealth government to Nabalco Pty Ltd.

-       The plaintiff’s case was dismissed due to the absence of excludability (right to exclude was not apparent and in fact denied) and alienation (expressly repudiated by plaintiffs) characteristics.

-       Justice Blackburn historically declared that Australia was terra nullius at the time of sovereign acquisition by England, and rejected the ‘native title’ rights of Australia’s Aboriginal people

Native title is rooted in the traditional laws and customs of Aboriginal and Torres Strait Islander peoples, signifying their inherent connections to land and water. It remains valid unless explicitly extinguished by legislative measures or other actions, and its applications is evaluated individually based on the community’s connection to the land and recognition by common law.

Sovereignty and Extinguishment

Sovereign power: The crowns acquisition of sovereignty adds complexity to native title, as indigenous rights can be extinguished when sovereign actions infringe upon them. Legislative measures aiming to extinguish native title must respect existing rights and adhere to the Racial Discrimination Act 1975, a principle upheld in various court rulings, including Mabo v Queensland (No 1) (1988)

-       Sovereign capacity to create and extinguish rights and interest in land

-       Pre-existing rights and interests of native title became vulnerable to extinguishment on acquisition of sovereignty by the valid exercise of sovereign power inconsistent with the continued right to enjoy the native title, e.g. grant of inconsistent estate or interest in land

Limitations on the sovereign power to extinguish

-       Not every act that might extinguish native title can validly be done in disregard of native title rights

-       Mabo v Queensland (no 1) (1988) 166 CLR 186; Provisions of the racial discrimination act 1975 (cth) operated to restrict the capacity of stake/territory laws to extinguish or reduce native title (inconsistent legislation – Constitution art 109)

-       Mabo v Queensland (no 2): acquisition of property on ‘just terms’ to restrict commonwealth’s power validly to appropriate/extinguish native title.

Native title legislation

Native Title Act 1993: The Native Title Act 1993 (NTA) is the foundational legislation that acknowledges and safeguards native title in Australia. it provides a comprehensive framework for identifying native title rights and includes procedural mechanisms for their protection. The act was enacted on January 1, 1994 and has undergone key amendments in 1998 and 2007 to improve its functionality in recognizing and processing native title claims.

Section 3: Objectives

-       Provides for the recognition and protection of native title

-       Establishes a mechanism for determining claims to native title

Common law recognition of native title:

Mabo v Queensland (No 2)

Arguments

Plaintiffs Sought declarations that the Meriam people were entitled to the Murray Islands as owners, as possessors, as occupiers, or as persons entitled to the use and enjoyment of the island

Defendant argued that when the territory of a settled colony became part of the Crown’s dominions, the law of England became the law of the colony and, by that, the Crown acquired absolute beneficial ownership of all the land in the territory so that the land could thereafter be possessed by other person unless granted by the crown.

Held (Generally)

·       Upon settlement the crown acquired sovereignty over the territory and radical title – this is not justiciable

·       Australia was not terra nullius – radical title upon settlement did not confer on the Crown absolute beneficial ownership of land occupied by Indigenous inhabitants

·       Common law of Australia recognises a form of native title where not extinguished

·       Extinguishment does not give rise to compensation (not held by entire majority see Deane, Toohey and Guadron who state otherwise)

·       Native title exists where clear indication to the fact from pre-1788

Native title Act 1993 (Cth): Statutory definition of native title

Native title not a create of common law or statute (Yorta Yorta case)

·       NTA section 223: Native title; native title rights and interest means communal, group or individual rights and interests of Aboriginal and Torres Strait islander peoples to land or water.

-       (a) possessed under traditional laws/ traditional customs and

-       (b) by those laws and customs enable a connection between Aboriginal and Torres Strait Islander people and the land/water and;

-       (c) are rights/interests recognised by common law of Australia

·       ‘Traditional’ used in a special sense to convey ‘an understanding of the agent of the traditions’ – to normative rules in societies that existed before the assertion of sovereignty

·       ‘Rights and interests recognised by common law’: Enables rights/interests antihertical to fundamental tenants of common law to be refused. Emphasizes the intersection between legal systems and the time of sovereignty

·       ‘Connection between Aboriginal and Torres Strait islander people and land/water’: Must be able to be translated into ‘rights and interests’

Native title Act 1993 (Cth)

·       The scope of native title has changed over time: Wik peoples v Queensland (1996) 187 CLR 1, held that native title could co -exist over land with pastoral leases

·       Native title claims are complex and resource intensive: Burden on claimants compares to benefits received.

·       Reviews and reform of NTA processes

-       2015: Australian law reform commission: Connection to Country: A review of the Native Title Act 1993

Armory v Delamirie (1722) The ‘Finders keepers rule’

This case if foundational for ‘finders rights’ establishing that possession, even without title, bestows rights against all but the true owner.

General principle: Finder’s right are based on their lawful possession and control of found items; which are good against the whole world except someone claiming a prior right based on possession/control, or the rights of the true owner “That the finder of a jewel, though he does not by such finding acquire an absolute property or ownership, yet he has such a property as will enable him to keep it against all but the rightful owner, and consequently may maintain trover”

Parker v British Airways board (1982)

This case reinforced that finders who take reasonable steps to locate the true owner of lost property maintain their rights, balancing the interest of finders and property owners.

Facts:

-       Parker found a man’s gold bracelet inside a British airways lounge at Heathrow. While BAP might have some rights over the bracelet as the occupier of the premises where it was located, it is also true that a finder, without prospect of reward, would be tempted to conceal the bracelet without taking action to locate its true owner.

Rights and obligations of finders [1017] A finder acquires rights

-       To an item that has been abandoned/lost IF the item is lawfully taken into their care and control;

-       If they act honestly and take reasonable steps to find the owner.

-       In the course of employment ONLY if agreed with their employer.

Obligations and liabilities of occupiers [1017-8]:

An occupier has superior rights (over a finder) for items attached to occupied land OR if the occupier manifests an intention to exercise control over the building and the items which may be in or on it IF the occupier takes reasonable measures to ensure lost items are found and returned to their true owner.

Held:

Parker’s possession was lawful. P acted honestly and reasonably in handing in bracelet to BAP. BAP did not have sufficient control of premise to acquire rights superior to P.

Obligations of funders and Occupiers

Finders have a responsibility to act in good faith, attempting to return lost items to their rightful owners, while occupiers of property retain superior rights regarding items found within their premises, outlining a structured hierarchy in possession rights

Concept of Abandonment

Definition and legal implications:

 Abandonment occurs when an owner intentionally relinquishes their property rights. This may lead to legal claims for detinue (wrongful retention of someone else’s goods) or conversion (Unauthorized dealing with another’s property) if others subsequently take or retail the abandoned property. The legal implications of abandonment are critical in resolving competing claims regarding possession.

Note: Abandonment of goods

·       In a property law sense, the term abandonment is essentially linked with some sort of property right in a chattel and not in real property. Real property (other than things such as incorporeal hereditament e.g., easements) cannot be abandoned. Leases may be abandoned (Chattels real)

·       The law on abandonment is not settled. Case law suggests that two things must occur for property to be abandoned

1.     An act by the owner that clearly shows that he or she has given up rights to the property and not merely an intention to relinquish possession.

2.     An intention that demonstrates that the owner has knowingly relinquished control over the property

·       A claim of detinue, trespass to goods or conversion may arise when another person wrongfully takes or retains property

Defining 'adverse possession'

Common law concept of 'adverse possession'

• No statutory definition of adverse possession

• Generally, adverse possession is where someone has possession of land without permission of the person with the right to immediate possession or true owner

• A person unlawfully dispossessed of land has a right to bring an action against the wrongdoer to recover possession of the land

• That right can only be pursued within prescribed time limits. These time limits are set out in The Limitation of Actions Act 1958.

Adverse possession is a doctrine recognised in common law jurisdictions, allowing a person to claim ownership of land under specific conditions even if they do not hold the title. It typically occurs when someone occupies land without their permission of the true owner for a legally specified period.

Legal right to recover

Despite the possibility of gaining ownership through adverse possession, the original owner retains the right to recover their land through legal means. However, this right is subject to the time limitations imposed by the Limitation of Actions Act 1958 (Vic), which dictates that the original owner must act within a designated time frame to make a claim against the possessor.

What is "adverse possession"?

A person claiming title to land by adverse possession must prove:

• Factual possession for the relevant period of time

• Intention to possess (Animus Possidendi) - Clear an unequivocal act regarding intention to possess the land to the exclusion of others (need not specifically be owner)

• Look for a combination of both

Both are determined objectively, as questions of fact: By looking at the nature of land and the manner in which it is commonly used and enjoyed.

What is adverse possession: Factual possession

• Mulchay v Curramore Pty Ltd [1974] 2 NSWLR 464 - Possession must be open not secret; peaceful; not by force; adverse without consent of the true owner. Physical control is key.

• Open possession: Means user must be unconcealed and such that it would notice by a documentary owner reasonably careful of his interests. Can't be fraudulent.

• Peaceable possession: Uninterrupted, exclusive, and continuous possession.

• Adverse: It must be without the consent of the trust owner, and contrary to their desired or actual use (ie not under lease or licence; not capable of being used as desired by both parties at the same time)

• Physical control: Look at the nature of the land and manner in which land of that nature is commonly used or enjoyed (Riley v Pentilla 1974 VR 547

Factual possession continued

• Possession of part of a piece of land may be taken despite the fact that the owner remains in possession of other parts of the land

• Can occur on a horizontal or vertical basis

• Owner and possessor can't be in possession at the same time

• Proof of acts of user inconsistent with the purpose to which the true owner intends to put the land is unnecessary: Buckinghamshire country council v Moran [1990] Ch 623

Adverse Possession: Intention to possess

• Must be more than a persistent trespasser

• Intention to use the land as their own and to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow (Powell v McFarland)

• Intention to possess must be present and should be made clear to the world (Powell v McFarlane (1977) 38 P and CR 452

• Need to demonstrate an intention to exclude true owner forever. Intention to possess not to own

• Value of evidence of adverse possessor re intention needs to be objectively considered

What is factual possession?

Factual possession, In the context of property law, refers to the physical control and exclusive use if land, demonstrating an appropriate degree of control over the land, open to public view and without the consent of the true owner.

-       Looks at the character of the land itself. In the case of JA Pye v Graham were looking at land enclosed by hedges and having an entry to a lock gate. This is physical possession and control over land given it is farmland.

-       Hedges and a lock gate constitute factual possession

Case Law (JA Pye oxford v Graham [2003] 1 AC419

Factual Possession

Facts:

• P owned land adjacent to G's Farm

• P granted G a grazing licence, when it ended in December 1983, G remained in possession

• G sought a new licence on several occasions (Denied), G continued to occupy the land until 1999

Factual possession?

• Land enclosed by hedges and gate (Graham has only key)

Whittlesea City Council v Abbatangelo [2009] VSCA 188

Factual Possession

Facts:

• A's land surrounded WCC land on three sides (Hedges, post and wire fences). Other side was bounded by a road

• A used WCC's land to farm poultry, graze cattle, sheep, goats and horses from time to time, graze cattle, maintained fences on some boundaries, and eventually constructed a fence on the roadside boundary.

Factual possession?

• A's land surrounded WCC land on three sides (hedges, post and wire, fences). Other side was bounded by a road

• A maintained and used the land as if it were his own

Buckinghamshire Council v Moran [1990] Ch 623

“When the law speaks of an intention to exclude the world at large, including the true owner, it does not mean that there must be a conscious intention to exclude the true owner.

Facts

• Council acquired land intended to use as a roadway in the future. Adjacent to land was a house and garden. Council land used by adjacent landowner as part of his garden. This adjacent land sold to Moran

• Moran aware that council owned adjacent land but believed he could use it until such time as roadway built.

• Council wrote to Moran in 1975 regarding permission to use Council land and disclaiming those rights

• Council did not take action against Moran until 18 years after date land acquired

Factual possession

• No fence between B's land and council land. Access to council land from road only by locked gate

• Planted with grass and daffodils, used as part of B's Garden 

Adverse possession intention to possess: Case law

• Requests made by the adverse possessor to the owner for formal permission to occupy land (eg licence) does not negate their current intention to possess the land (Oxford v Grahamn)

• Actions constituting a "special benefit" to the adverse possessor can support intention - Social use, farming, maintaining land (Whittlesea city council v Abbatengelo)

• Intention can exist despite adverse possession being aware that true owner has a specific use of land in mind for the future, However, if this knowledge reduces occupation to something that is not 'adverse', then this is problematic (Buckinghamshire council v Moran)

• Intention to possession can exist despite owner not being completely excluded from land

Mention is a continuous intention to possess that is not negated by knowing that the true owner has other uses of the land or knowing that their possession may eventually end.

3.2 Statutory requirements 'Booked provisions' LAA s 8, 18

Key framework

• LAA s 8: No action shall be brought by any person to recover any land after the expiration of fifteen years from the date of which the right of action accrued to him or, if it first accrued to come 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

Note: Period of limitation in contract or tort is 6 years LAA s 5

Statutory requirements Time starts to run.

LAA s 9(1), 14(1)

In property law, time starts running on limitation periods from when the cause of action accrues, which is when all the necessary elements for a claim come into existence. The specific accrual point can vary depending on the type of claim. Time stops running once a limitation period has been suspended, usually through a standstill agreement or a court order, or when the claim is settled or resolved.

When does time begin to run?

• 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.

Plus

• 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 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.

3.2 Statutory requirements who can be adversely possessed?

Land owned by specific entitles entities cannot be adversely possessed

The law specifically exempts certain types of land from being subject to adverse possession or claims. These mainly include land owned by government and other public entitles. The law provides a shield against adverse possession for these types of land, ensuring that public land remains under the control of the appropriate authorities.  

• Can all landowners be dispossessed of their land via adverse possession? What about

• The crown LAA s 7

• Vic Track LAA s 7A

• Waiter Authority LAA s 7AB

• Council LAA s 7B

• Owners Corporation LAA s 7C

• Cannot adversely possess common areas, such as lobbies or public spaces however if you do not own property in that onus corporation you can adversely possess onus corporation land

• What happens if one of these entities sells land under possession to third party? LAA s 8

3.2 Statutory requirements periods of possession

Periods of possession

In Victoria the time limit for a successful adverse possession claims in 15 years continuous, uninterrupted and exclusive possession of the land. This means the claimant must have been in actual possession of the land for at least 15 years, and this possession must not have been with the permission of the legal owner.

• After 15 years, an AP's possessory title can be recognised as being the same as the former owner

• The period of possession does not have to be satisfied in a single period of possession, but can be established by aggregating smaller successive, unbroken and uninterrupted periods of possession by multiple people.

-       This can occur even if possession is transferred informally between APs

-       If an AP abandons land without the 15-year period being satisfied, then the time must be re satisfied in full. If the time is satisfied, the right can be accrued once the AP re-enters possession.

3.2 Periods of possession: Mulcahy v Curramore

• When a person enters into AP of land, as long as he continues in possession before the expiry of the statutory period, he has title to the land in the nature of a free simple good against the whole world expect the true owner and that title can be conveyed or devised to another person.

• Possession by successive trespassers must be continuous to have this effect

• Upon the extinguishment of the true owner's title, the title in free simple will (technically) go to the first of the successive trespassers (the final trespasser would by virtue of current possession have an interest relative to prior possession (who may not assert title against final trespasser).

• If there is a break in AP by any of the successive trespasser then the true owner’s title is restored to its pristine force

3.2 Statutory requirements: When does time stop running

When does time stop "running"?

Time stops running in property law primarily through the successful completion of adverse possession, the expiry of the applicable limitation period, or through specific events that interrupt or restart the time running such as standstill agreements or hardship situations.

Assertion of superior title

• If the true owner asserts its right of possession for the land (more than documentary claims of ownership, or mere formal entry: e.g., institute proceedings to recover, take possession) LAA s 16

• Part payment of debt: LAA s 24

• Admission of superior title for AP (Admission must be in writing: LAA s 25)

3.2 Case examples: Outcome

Was adverse possession proven in our cases? Was title of the owner extinguished?

Was process did the adverse possessor take to assert their rights 

• JA Pye (Oxford v Graham

• Whittlesea City Council v Abbatangelo

• Buckinghamshire Council v Moran 

3.2 Adverse possession: Other issues Future interests in land

Special rules to determine WHEN time starts to run: LAA s 9(2); 10(1)

LAA s 9(2): Accrual of right of action in case of present interests in land

• Where any person brings an action to recover any land of a deceased person, whether under a will or on intestacy; and the deceased person was on the date of his death in possession of the land … [THEN] the right of action shall be deemed to have accrued on the date of his death

LAA s 10(1): Accrual of right of action in cases of future interests

• The right of action to recover land shall, in cases where the estate or interest claimed was an estate or interest in reversion or remainder or any other future estate or interest; and no person has taken possession of the land by virtue of the estate or interest claimed be deemed to have accrued on the date on which the estate or interest became an estate or interest in possession

3.2 Adverse possession: Other issues future interests in land

Special rules determine LENGTH of statutory time period: LAA s 10(2)

LAA s10(2): Accrual of rights of action in case of future interests

• If the person entitled to the preceding estate or interest, not being a term of years absolute, was not in possession of the land on the date of the determination thereof, no action shall be brought by the person entitled to the succeeding estate or interest after the expiration of fifteen years from the date on which the right of action accrued to the person entitled to the preceding estate or interest, or six years from the date on which the right of action accrued to the person entitled to the succeeding estate or interest, whichever period last expires.

This section is about limitation period for bringing an action (like recovering possession of land) when someone has a future interest – e.g., a remainder or reversion – that comes into effect after someone else’s estate ends

1.     There’s a preceding interest (e.g., life estate) and a succeeding interest (e.g., a remainder after that life estate)

2.     When the preceding estate ends, you look what whether that person was in possession of the land, if they were in possession, this rule applies.

3.     Then, the person with the succeeding interest has a time limit to bring a legal action

-       They have 15 years from when the right of action arose for the preceding interest-holder or

-       6 years from when the right arose for those succeeding interest-holder themselves

-       Whichever of these two-time limits ends last.

3.2 Adverse possession: Other issues Tenancy arrangements

3.2 Adverse possession: Adverse possession of Torrens System land

Pursuant to the transfer of land act ss 60-62, the AP can become the registered owner of the interest in question

• Register must advertise the application

• Give notice to every registered owner on title

• Allow at least 30 days to receive objections. Objections can lodge a caveat on title (TLA s 61) to stop the application being processed

• Registrar makes vesting order in favour of adverse possessor

• Register is amended under transfer of land Act s 62A

• Rights to adverse possessor are 'paramount interests' under Transfer of land Act section 42(2)(b) (continuity with new registered prop)

Encroachments

Where possession is in dispute between adjacent owners, or around boundaries: fences, overhanging eaves, driveways, etc, may be dealt with differently to traditional rules of adverse possession. In Victoria, legislation does not prevent adverse possession of a part of land,

• Statute: PLA s 272 "little more little less" rule

• Common Law: good working rule (See Break fast investments)

Encroachments

Break Fast investments v PCH Melbourne [2007] VSCA 311

Break Fast and PCH owned adjoining property in East Melbourne. Break fast had refurbished an office block on its property, building along the common boundary. Mental cladding on building encroached onto PCH's land by 6cm. PCH sought an injunction against Break Fast for trespass.

Primary judge: Encroachment was "not trifling" and exceeded tolerance of 'a little less a little more' under PLA. Encroachment prevented PCH from building upon the boundary of its own land. Cost of removal would exceed $300, 000.

Court of appeal: While PCH prima facie entitled to an injunction to prevent encroachment, damages may be awkward in lieu of remedy in exceptional circumstances.

• The relevant test is not whether the incursion actually interferes with the occupier’s actual use of the land at the time but rather whether it is of such nature and at a height which may interfere with the ordinary uses of the land which the occupier may see fit to undertake.

• See also LJP Investments Pty Ltd v Howard Chia investments Pty Ltd (1989) 24 NSWLR 490

4.1 General Law Land (Deeds register)

·       Deed’s registration system applied to general law land

·       The Deeds register was a written register where the existence of “title deeds” i.e., documents constituting a chain of title to land, could be recorded

-       Registration was voluntary, and did not affect the validity or enforceability of the interest in land

-       Available to both legal and equitable interests in land

-       Often deeds were not registered

Why register?

-       Means of notice that interest exists

-       Reduced opportunities for fraud (see Topic 12)

-       Improved chance of success for registered interest holder in a priorities dispute with subsequent competing interest

-       But: registration did not cure defects in title

While the deeds registration system was better than the common law system it was not perfect, and so soon enough it gave way to the Torrens system of title which is where the majority of our land is dealt with in Victoria.

Registers of Native Title interests

The native title registrar maintains three registers of information relative to native title. These registers are electronic and maintained by the National Native Title Tribunal in Perth:

·       Register of Native Title claims: Contains information about native title claimant applications that have satisfied the conditions for registration (registration test): Native Title Act 1993 (Cth) s 190A

·       National Native Title register: Contains information of all approved determinations of native title in Australia

·       Register of Indigenous land use agreements contains information about Indigenous land use agreement made between people who hold/may hold native title in the area and other people, organisations, or governments

The information in these registers is particularly important for parties involved in native title claims applications, especially the spatial dataset information which represents the external boundaries of all native title claimant applications, approved determinations, land use agreements and further act notices.

Registers of Native Title interests

·       Native title register is maintained by a registrar

·       Registrar is required to keep register up to date in relation to claims to native title, native title interests and land use agreements

·       Registrar may decide In the public interest, that parts of the register should be kept confidential

·       Registrar is responsible for informing land titles officials about native title determinations etc.

Instrument

means a document that is lodged with the Registrar in order to register a specific estate or interest in land on the central Register. Each instrument has a unique number (‘dealing number’ / ‘instrument number’)

Register

Central register of interests maintained by Registrar under TLA s 27

Registrar

Registrar of Titles, administrator of the Register.

Registered interest

An interest that may be registered under the Torrens System is known as a “registrable” interest, or an interest that is “capable of registration”. The interest can become ‘registered’ by producing documents that meet the requirements of the Torrens Statute – ie are in “registrable form” – and lodging these for registration with the Registrar.

Volume and folio

applies to proprietary interests that are (a) not capable of registration, or (b) are capable of registration but are not registered. While all ‘registered interests’ are legal, not all legal interests are registrable/registered – it is important to distinguish between the nature and registered status of instruments even though these terms are often used interchangeably.

“unregistered interest”

Volume and Folio identifier/numbers are the unique numbers assigned to all parcels of land.

Indefeasibility

Indefeasibility means that the title of the registered proprietor is subject only to such estates and interests as are recorded on the title.

The Torrens system

The Torrens title system is a land title registration system where ownership and interests in land are recorded in a central register, guaranteeing title and providing security for property transactions

The Torrens system works on three principles: The land titles register accurately and completely reflects the current ownership and interests of a parcel of land, because the register contains this information, it means ownership and other interests do not have to be provided by title deeds.

Torren’s system objectives

·      The Torrens system was first introduced as the Real Property Act (SA)

·      The Torrens system was introduced in Australia to resolve the ‘losses’ heavy costs and much perplexity that arose because the existing law was complex, cumbrous, and unsuited to the requirements of local inhabitants (RPA 1858 Preamble)

·      Or in other words, provide a system of land title by registration based on the underlying principles of

-       Mirror: Accurate and complete reflection of the current ownership and interests in a person’s land

-       Curtain: Proof of title; no need to investigate chain of title

-       Insurance: Statute guarantees the register with compensation system (loss-based register error)

Key principles

Title by registration:

Ownership of land is determined by registration in the Torrens title register, not by the possession of title deeds

Indefeasibility of title:

Once a title is registered, it is considered valid and cannot be challenged, even if there are prior claims or defects in the title

Centralized register:

The Torrens title system relied on a central register that accurately and completely reflects ownership and interests in land

Guaranteed title:

The state government guarantees the title, and a Torrens Assurance Fund (TAF) provides compensation for any loss suffered due to fraud or error in registration.

The Torrens system vs title deeds

The recording of the deed served to give notice to the world of the conveyance of title to the grantee named in the deed. The basic difference between the deeds registration and Torren’s systems is that the former involves registration of instruments while the latter involves registration of title.

The Torrens system, a method for registering land ownership, differs from title deeds in that it provides a simplified, secure, and transparent framework where ownership is determined by the register, not by tracing historical deeds.

Torren’s system Converting land to ‘Torren’s land’

Since 1862, general law land has been converted to ‘Torren’s system’ land at varying rates.

-       Less than 1% of all land in Victoria remains outside the Torrens system (churches, mechanics institutes)

-       TLA s 8: Unalienated Crown land is deemed to be under the Torrens system

-       TLA s 9: The registrar may convert general law land to Torren’s land (usually at the time of dealing)

The Torrens system objectives

-       The Torrens system was first introduced as the Real property Act 1858 (SA)

-       The Torrens system was introduced in Australia to resolve the “losses and heavy costs, and much perplexity that arose because the existing law was complex, cumbrous and unsuited” to the requirements of local inhabitants (RPA 1858 Preamble).

-       Or in other words, provide a system of land title by registration based on the underlying principles of:

Mirror: Accurate and complete reflection of the current ownership and interests in a person’s land

Curtain: Proof of title; no need to investigate chain of title

Insurance: State guarantees the register with compensation system (loss based on register error)

Torren’s system key feature: Central register

The central feature of the Torrens system is its register, what we mean by title by registration is that you gain your title to land by registration and that’s what distinguishes it from deeds which was a system of registration of title

Torren’s system established a system of title by registration (cf registration of title). In Victoria the Torrens statutes is the Transfer of Land Act 1958 (Vic)

Key features

·       The registrar administers the central register of registered interests in land (TLA s 27)

·       The certificate of title is the register entry for each parcel of land, showing fragmented interests in that land

·       Certificates of title are identified by a unique reference number: Volume and Folio numbers

Torren’s system converting land to ‘Torren’s land’

Since 1862, general law land has been converted to ‘Torren’s system’ land at varying rates.

-       Less than 1% of all land in Victoria remains outside the Torrens system (churches, mechanics institutes etc)

TLA s 8: Unalienated crown land is deemed to be under the Torrens system

TLA s 9: The registrar may convert general law land to Torren’s land (usually at the time of dealing)

Torren’s system registration of interests (mirror objective)

The key principle of the Torrens system, which together establish indefeasibility of title, are: Mirror principle – The land titles register accurately and completely reflects the current ownership and interest about a person’s land

Registered interest: Interest identified on the certificate of title within the register. Registration confers protection by indefeasibility.

Compare with:

-       “Registrable interest”

-       “registrable form”

-       Interests or information “recorded” or “noted”

-       “unregistered” “unregistrable”

Process of registration registered vs unregistered interests

However, the Torrens system also recognises that some interests in land many are not registered (or even capable of registration). The Torrens system even though it wants to be a mirror and curtain there are interests that are not able to record in the Torrens system but nonetheless they exists outside Torrens and they are legitimate interests In land

Barry v Helder (1914) 19 CLR 197

“The Torrens statutes do not touch the form of contracts. A proprietor may contract as he pleases, and his obligation to fulfil the contract will depend on ordinary principles and rules of law and equity...in denying effect to an instrument until registration, does not touch whatever rights are behind it. Parties may have a right to have such an instrument executed and registered and that right, according to accepted rules of equity is an estate or interest in land”

Abigail v Lapin [1934] AC 491 at 500

“The statutory form of transfer…when registered... is effective to pass the legal title.”

Indefeasibility

Indefeasibility is a key principle in Australian property law under the Torrens system, meaning that once a person is registered as the owner of land, their title is generally protected from being challenged. However, there are two different approaches to when this protection applies

Deferred indefeasibility

·       Under this approach, a person who acquires title through fraud or a forged instrument does not get immediate protection.

·       The first person to receive the forged title has a “defeasible” title – meaning It can still be challenged and overturned in court

·       However, if this first fraudulent owner sells the land to an innocent third party, then that innocent purchaser will have an indefeasible title

Case example: Gibbs v Messer (1891)

-       A fraudster forged a transfer to himself and mortgaged the land

-       The mortgagee’s title was defeasible because it was based on fraud

Immediate indefeasibility

·       Under this approach, a person who acquires title – even if it was transferred to them through fraud or forgery – gets immediate protection upon registration

·       This means that as soon as the buyer is registered, their title is indefeasible, even if they acquired it unknowingly through fraud

·       Example case: Frazer v Walker

-       A wife forged her husband’s signature to obtain a mortgage

-       The mortgagee was an innocent party and, one registered, had an indefeasible title, even though the initial transaction was fraudulent. 

Principles of indefeasibility Immediate indefeasibility: Frazer v Walker [1967] 1 AC 569?

·       In Australia, Frazer v Walker has rejected the approach of deferred indefeasibility, and endorsed the alternative immediate indefeasibility approach:

Facts:

-       Mr Frazer forged her husband’s signature on an instrument of mortgage over their property. The mortgagee exercised its power of sale with Mrs Frazer defaulted, selling the property to Walker (Purchased the property at auction, in good faith, and without actual knowledge of the fraud)

-       Walker became the registered proprietor. Could Mr Frazer nullify the mortgage?

No

-       Subject to limited exceptions (see topic 4): title derived from registration of a void instrument is indefeasible: to find otherwise would destroy the whole Torrens system of registration

-       Preference for immediate indefeasibility does not limit the possibility for in Persona claims in relation to fraud.

Immediate indefeasibility: Breskvar v Wall (1971) 126 CLR 376

Facts:

The Breskvars were reg props of land at Acadia Ridge. In March 1968 they obtained a loan from Petrie. Petrie wanted security for the loan and so he got the Breskvars to sign a transfer of the land to him. The signature of the transferee was left blank; in other words, Petrie held the blank transfer and the DCT as security for the

loan. Subsequently, Petrie fraudulently inserted the name of his grandson Wall) as transferee and registered the transfer. Wall was affected by the fraud because Petrie was held to have been acting as his agent. Wall then entered a contract of sale with Alban Pty Ltd, who was unaware of the fraud. The Breskvars then discovered the

fraud and lodged a caveat. (Alban not yet registered as proprietors)

·       Instrument of Transfer (Wall to Alban) is defeasible for fraud. BUT once registered, immediate indefeasibility will protect Alban (as long as they are not also fraudulent)

·       As between Breskvar and Alban, this means that Alban’s interest is also indefeasible to a claim made by Breskvar for return of land. However, Breskvar may pursue Wall for damages in an in personal claim (Topic 11) and/or claim for insurance (Topic 4.3.4)

Principles of indefeasibility: Scope of indefeasible title

To the extent that registration confers an indefeasible title, how far does the protection of indefeasibility extend?

·       Leases: covenants that ‘touch and concern’ the land likely to be protected by indefeasibility. Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326: Registration of an instrument does not automatically give indefeasibility to every right contained in it (such as personal covenants, or covenants which do not affect the estate or interest in land with which then instrument deals)

·       Mortgages: aw is unsettled: indefeasibility extends to key terms included on the instrument registered to create the mortgage but may not extend to the personal covenant to pay, contained in ‘off register’ agreements between the Mortgagor and Mortgagee.

Principle of Indefeasibility Central Indefeasibility provisions

TLA s 40 (Transfer of land Act Section 40)

Subject to this Act no instrument until registered as in this Act provided shall be effectual to create vary extinguish or pass any estate or interest or encumbrance in on or over any land under the operation of this Act, but upon registration the estate or interest or encumbrance shall be created varied extinguished or pass in the manner and subject to the covenants and conditions specified in the instrument or by this Act prescribed or declared to be implied in instruments of a like nature.

TLA s 41: Certificate to be conclusive evidence of title

No folio of the Register under this Act shall be impeached or defeasible by reasons or on account of any informality or irregularity in any application or instrument or in any proceedings previous to the creation of the folio or the making of any recording on it; and every folio of the Register shall be received in all courts as evidence of the particulars recorded in it and all the recordings of those particulars in the Register, and shall be conclusive evidence that the person named in the folio as the proprietor of, or having any estate or interest in, or power to appoint or dispose of, the land described in the folio is seized or possessed of that estate or interest or has that power.

TLA s 42: Estate of registered proprietor paramount

1)     Notwithstanding the existence in any other person of any estate or interest. which but for this Act might be held to be paramount or to have priority, the registered proprietor of land shall, except in case of fraud, hold such land subject to such encumbrances as are recorded on the relevant folio of the Register but free from all other encumbrances whatsoever, except—

a)     he estate or interest of a proprietor claiming the same land under a prior folio of the Register.

b)     as regards any portion of the land that by wrong description of parcels or boundaries is included in the folio of the Register or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser.

1)     Notwithstanding anything in the foregoing, the land which is included in any folio of the Register or registered instrument shall be subject to [a range of exceptions (a) – (f) – see Topic 10.4

TLA s 43: Effect of notice

Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any land shall be required or in any manner concerned to inquire or ascertain the circumstances under or the consideration for which such proprietor or any previous proprietor thereof was registered, or to see to the application of any purchase or consideration money, or shall

be affected by notice actual or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud

TLA s 44: Certificates etc void for fraud

1)     Any folio of the Register or amendment to the Register procured or made by fraud shall be void as against any person defrauded or sought to be defrauded thereby and no party or privy to the fraud shall take any benefit therefrom

2)     But nothing in this Act shall be so interpreted as to leave subject to an action of ejectment or for recovery of damages or for deprivation of the estate or interest in respect of which he is registered as proprietor any bona fide purchaser for valuable consideration of land on the ground that the proprietor through or under whom he claims was registered as proprietor through fraud or error or has derived from or through a person registered as proprietor through fraud or error; and this whether such fraud or error consists in wrong description of the boundaries or of the parcels of any land or otherwise howsoever.

Compensation/assurance fund (insurance principle)

Subject to the Act, a person sustaining loss or damage (by deprivation of land or otherwise) is eligible to claim compensation in certain circumstances: TLA s 110(1)

b) By any amendment of the register

c) Any error, omission or misdescription in the register

d) Payment or consideration given on faith of register

g) Exercise by the register of any of its power

Despite eligibility, no indemnity is payable

-       If claimant, legal practitioner, or agent caused or substantially contributed to loss by fraud, neglect or wilful deceit (s110(3)(a)

-       Because of costs incurred in taking or defending legal proceedings without registrar consent (s110(3)(b))

-       In consequence of registrars failure to enquire: ss 110 (3) (c) and (d)

Compensation/assurance fraud

Restrictions on claims:

-       Time limit to apply (6 years) Transfer of land Act s 110(4) see Breskvar v Wall

-       Claims cannot be made against the consolidated fund for: Breach of trust; paramountcy provisions; registration on plan of subdivision: TLA s 109

-       Amounts paid by registrar in compensation can be recovered from person responsible, or from their estate, including a legal practitioner: TLA s 109

Procedure for claim: Claims can be made

-       Directly by the registrar (TLA s 111) OR

-       Against the registrar as a nominal defendant to proceedings (TLA s 110(2)

Freehold Estates

Leasehold Estates

fee simple estate

Fixed term leases

fee tail estate

Periodic leases

life estate (for a person's life)

Tenancy at will

life estate (for the life of another)

Tenancy at sufferance

The doctrine of estates

The doctrine of estates is a fundamental principle in property law that categorises different types of ownership and rights in land, allowing for fragmentation of interest over time, such as freehold and lease hold estates.

The doctrine of estates continued

·       The essence of the Doctrine of Tenure was that the king owned or had paramount title of the land (noting mabo).

·       If the King owned land what did the “tenant” own?

·       Estate in land – interposed between the tenant and the land

·       Tenant owned an “estate” in land but not the land per se

·       This right would either exist in the present as an interest vesting in possession or a present right to an interest vesting in possession in the future

·       The doctrine of estates was developed to facilitate persons having interests in land which would give them a right to possession

·       This is a ‘division’ or more correctly, a fragmentation of a proprietary interest on the basis of time

·       Gives holder a right of possession

·       Nature of the estate determines the extent and duration of the right

5.1 The doctrine of Estates: Types of estates

·       An estate is a proprietary interest in land that gives its holder the right to exercise rights over land for a specific duration. Holders of an estate in land normally have the right to ‘seisen’ (possession of land at some time).

·       In Australia there are two types of estates in land

-       Freehold estate (i.e., ownership)

-       Leasehold estate (i.e., tenancy)

What distinguishes a freehold from a leasehold estate?

-       Duration: indefinite vs definite duration

-       Scope of rights exercisable over land

Freehold estates

There are three different types of freehold estates: they are:

1.     The fee simple

The fee simple is the largest estate you can have in land. It is the largest estate in duration and the closest estate to absolute ownership (remember the doctrine of tenure)

2.     The fee tail

The fee tail is an estate of inheritance and is limited to a particular person and her or his specified lineal descendants. The fee tail estate can no longer be created in most states of Australia

3.     The life estate

A life estate is an interest in property that exists for the life of the grantee. For example:

-       A grants B an interest in A’s land for all of B’s life – not an estate of inheritance creates a life estate in B

-       An estate pur autre vie (for the life of another) was created by an express gift by A to B for the life of C

Freehold estates Fee simple

·       Use of the word ‘fee’ in land titles is derived from ‘fief’ meaning a feudal landholding; being an interest in land that was inheritable

·       Feudal landholdings existed in several varieties, most of which involved a tenant having to supply some service to his overlord, such as knight service or (military service)

-       If the tenant's overlord was the king, then this might require providing many different services, such as providing horses in time of war or acting as the king's ceremonial butler

-       These fiefs gave rise to a complex relationship between landlord and tenant, involving duties on both sides. For example, in return for receiving his tenant's fealty or homage, the overlord had a duty to protect his tenant.

-       THUS: When feudal land tenure was abolished all fiefs became "simple", without conditions attached to the tenancy (owner could pass estate freely to heirs

Life estate

A life estate is an estate in land for limited duration, dependant on the life of a particular person:

-       For the life of the grantee. “To B for life”

-       For the life of a third party (pur autre vie): “To B for the life of C”

·       The doctrine of occupation (now succeeded by statute) applies to life estates pur autre vie in the event that the life estate holder dies before the third party whose lifetime determines the estate

·       Life estate can be established either inter vivos or upon death.

Freehold estates: Life estates

-       Rights associated with a life estate: ownership rights including use/possession; exclusion; alienation/disposal (subject to terms of life estate)

-       Responsibilities: Doctrine of Waste applies so that the lesser interest holder cannot degrade or damage the value of interests of future interest holders. See PLA s 132, 132A

Leasehold estates

-       A leasehold estate is distinguished from a freehold estate by the fact that their duration is known (or certain) or must be able to be made known

-       If you think about it, there is no way of knowing what the duration of a freehold estate is. We generally do not know how long a person will hold their free simple interest (that is when they might decide for example to sell it) or how long a person may enjoy a life estate

-       Leases are a proprietary interest granted for exclusive possession with a certain duration. As compared to licences which are a form of contract and do not grant exclusive possession

-       Leasehold estates can take the form of fixed term lease, a periodic lease or a tenancy at will or a tenancy at sufferance.

Freehold estate in land

The most common estate in land, a freehold estate is the estate owned by what lay people would regard as the ‘owner’ of land. There are three different types of freehold estates: fee simple; fee tail; and life estates (person’s life/life of another)

Leasehold estates

A leasehold estate is distinguished from a freehold estate by the fact that its duration is known (or certain) or must be able to be made known. At common law, leasehold estates can exist in four forms: (i) fixed term lease, (ii) periodic tenancy, (iii) tenancy at will, or (iv) tenancy at sufferance.

Terminology

A remainder is the grant of a future interest to a person who was not previously entitled to the land.

‘For example, if A grants B a life estate and upon B’s death, the fee simple is to pass to C, C has a remainder interest in the subject property. Effectively what A has done in this example is divested herself of her entire fee simple in the property.’

A reversion is a grant of a future interest back to the grantor (a person previously entitled to the land) upon the termination of a lesser estate or interest in land.

‘For example, if A grants a life estate or a leasehold estate to B and provides for no further grants, the fee simple will revert back to A when the life estate or leasehold estate expires.’

Future interest in land

·       A future interest in land is a right to own an estate in land in the future – e.g., freehold estate or leasehold estate

·       An interest in land that cannot be exercised at the present time is described as an interest in interest (i.e., it exists in ‘interest’ only). This distinguishes interest that can be exercised at the present time as an interest in possession.

‘This means the right to own an estate in land in the future is a right that exists in the present. Even though the estate to which it relates is in the future’

·       Future interest is described as: in reversion or in remainder

·       Interests in reversion or in remainder may be further described as: vested or contingent (conditional or determinable)

Remainders and Reversions

Reversion: An estate of land reverts (returns/goes back) to a previous owner sometime in the future. For example:

-       Life estate: If Annie grants a life estate to Bert and provides for no further grant, the fee simple will revert to Annie when the life estate expires. Annie holds a reversionary interest or is called the Reversioner

-       Leasehold: Landlords are reversioners of land subject to a lease

Remainder: An estate in land is granted to a new person in the future (i.e., goes forward). This person had not previously been entitled to the estate in land. For example:

Life estate: Annie grants Bert a life estate and upon Bert’s death, the fee simple is to pass to Chloe, Chloe has a remainder interest in the subject property. 

Future interests in land: Vested interests

An interest is vested when there are NO conditions or barriers imposed on the interest to prevent it from being exercised by its owner. Both present and future estates in land may be vested

-       Eadie grants a life estate to Joni. Upon Joni’s death, the fee simple is granted to Jilly. Jilly has estate in fee simple is in interest (in the future) is vested. There are no conditions or barriered to her becoming the fee simple estate owner of land, except from Joni’s death (certain but of unknown timing)

Compare with

-       Eadie grants a life estate to Joni. Upon Joni’s death, the fee simple is granted to Jilly if she has attained the age of 18 years. The grant of the future fee simple estate is conditional upon Jilly being 18 years or over ( it is contingent). Jilly’s interest will vest when, during Joni’s life. Jilly turns 18 years old

Future interests in land: Contingent interests

An interest is contingent when there ARE conditions or barriers imposed on the interest that prevent it from being exercised by its owner:

‘Eadie grants a life estate to Joni. Upon Joni’s death, the fee simple is granted to Jilly if she has attained the age of 18 years. The grant of the future fee simple estate is conditional upon Jilly being 18 years or over. At the time the grant is made, it is contingent on Jilly turning 18 years old’

A contingent interest may be further described as conditional or determinable.

Conditional: A condition must be fulfilled before the grant is made. For example, grant of fee simple estate when A turns 18 years old, achieving ATAR of 75, upon marriage, upon birth of first child ETC

 Determinable: The grant is made but will end if a specific event or circumstance occur. For example, grant of fee simple estate to A until they become bankrupt, while they are married, while they live in NSW.

Rule against perpetuities

Jo owns a property in Northcote, Victoria. In their will, they grant an interests in the Northcote property as follows:

“to my son Bing, then to Bing’s children, then to Bing’s

grandchildren.”

-       grant to Bing will vest upon Jo’s death (vest from an interest in interest to an interest in possession). Bing’s interest in Northcote is a life estate.

-       According to the common law rule against perpetuities the interest in Northcote must vest within 21 years after the end of Bing’s life

-       The further grant to Bing’s children will be fine – as this will vest upon Bing’s death (ie Bing’s death + 0 years)

-       However, the next grant to Bing’s grandchildren – will offend the rule