real property: priorities in old system assoc prof cameron stewart (c) cameron stewart 2009

Real Property: Real Property: Priorities in Old Priorities in Old

SystemSystemAssoc Prof Cameron StewartAssoc Prof Cameron Stewart

(c) Cameron Stewart 2009


What is property? Real & What is property? Real & PersonalPersonal

Real Property – realty, interests in Real Property – realty, interests in land – land is three dimensional land – land is three dimensional space located by reference to a point space located by reference to a point on the earth’s surface – fixtures – in on the earth’s surface – fixtures – in the past only land was recoverable the past only land was recoverable

Real Property is also split into two Real Property is also split into two categories – corporeal and categories – corporeal and incorporeal hereditaments (a right incorporeal hereditaments (a right capable of being devised to an heir)capable of being devised to an heir)


What is property? Real & What is property? Real & PersonalPersonal

Personal Property – catchallPersonal Property – catchall (a) Chattels real – leasehold and other (a) Chattels real – leasehold and other

interests in land that are less than interests in land that are less than freehold – distinction drawn because freehold – distinction drawn because of an institutional definition of rights – of an institutional definition of rights – only freeholds were enforceable by only freeholds were enforceable by real actions for recoveryreal actions for recovery

(b) Chose in possession – a movable (b) Chose in possession – a movable corporeal thing – eg goods corporeal thing – eg goods


What is old system title?What is old system title?

Title is a measure of ownershipTitle is a measure of ownership

Old system: the system prior to Old system: the system prior to Torrens system- 1% of land Torrens system- 1% of land holding in NSW and closing – holding in NSW and closing – sometimes ‘common law title’ – sometimes ‘common law title’ – about 4000 titles leftabout 4000 titles left


Traditional conveyancingTraditional conveyancing

Feoffment with livery of seisinFeoffment with livery of seisin Words spoken of intention to pass, Words spoken of intention to pass,

ceremony in public, door knob, lump ceremony in public, door knob, lump of earthof earth


Collusive court action as a Collusive court action as a way of conveyancingway of conveyancing

Doe v Roe fictionsDoe v Roe fictions Collusive court actionsCollusive court actions Springing usesSpringing uses Conveyancing is very difficult!!!Conveyancing is very difficult!!!


Statute of FraudsStatute of Frauds

Statute of Frauds – then in NSW in Statute of Frauds – then in NSW in the Conveyancing Act 1919 s 23B, S the Conveyancing Act 1919 s 23B, S 23C,s 23D, s 23E, s 54A23C,s 23D, s 23E, s 54A


DeedsDeeds

Grants by deedGrants by deed Deed pollDeed poll Deed indentureDeed indenture


Proving TitleProving Title

Title deeds: difficult to read, disgusting to Title deeds: difficult to read, disgusting to touch and impossible to understand: Lord touch and impossible to understand: Lord WestburyWestbury

Good root of title – an unbroken chain of Good root of title – an unbroken chain of ownership to the original Crown grant (post ownership to the original Crown grant (post 1788) – possible but difficult – in England 1788) – possible but difficult – in England impossible – the convention is an unbroken impossible – the convention is an unbroken chain of ownership of 30 years from present chain of ownership of 30 years from present contract for sale – was 60 years but amended contract for sale – was 60 years but amended under CAct s 53(1)under CAct s 53(1)


Proving titleProving title

Abstract of title – summary of title documents Abstract of title – summary of title documents – now common usage of chronology– now common usage of chronology

Security - no guarantee – if purchaser takes Security - no guarantee – if purchaser takes property subject to interest - mergerproperty subject to interest - merger

Covenants for title – s 78(1) CAct s 4 Covenants for title – s 78(1) CAct s 4 covenants –covenants –

Full power to conveyFull power to convey Quiet enjoymentQuiet enjoyment Freedom from encumbrancesFreedom from encumbrances Further assuranceFurther assurance


Priorities between competing Priorities between competing interests in Old systeminterests in Old system

What are “priorities”? – in some What are “priorities”? – in some situations competing claims (both situations competing claims (both legal and equitable) will be made legal and equitable) will be made over the same piece of property – over the same piece of property – priorities are the rules to work out priorities are the rules to work out which interest takes precedence which interest takes precedence over other interestsover other interests


CharacterisationCharacterisation

You must be able to characterise what form You must be able to characterise what form an interest takes:an interest takes:

Is it legal or equitable or nothing (not Is it legal or equitable or nothing (not property)?property)?

Was the interest created or transferred in Was the interest created or transferred in accordance with either the rules of CL or accordance with either the rules of CL or Eq?Eq?

If CL then LEGALIf CL then LEGAL If Eq then EQIf Eq then EQ If neither then NOTHINGIf neither then NOTHING


Case study 1: When Case study 1: When contracts go badcontracts go bad

A (vendor) exchanges contracts with B A (vendor) exchanges contracts with B (purchaser)(purchaser)

A gets a better offer from C (he knows A gets a better offer from C (he knows about B’s offer) and completes the sale to about B’s offer) and completes the sale to C before B knowsC before B knows

Common law approach? Breach and Common law approach? Breach and damages – no property held by Bdamages – no property held by B

Equitable approach: breach and specific Equitable approach: breach and specific performanceperformance

But what about the property interests?But what about the property interests?


Case study 1: When Case study 1: When contracts go badcontracts go bad

In common law B is not the owner as the In common law B is not the owner as the contract has not been completed so the contract has not been completed so the property cannot be returnedproperty cannot be returned

In equity, the rule in In equity, the rule in Lysaght v EdwardsLysaght v Edwards says that B gets an equitable interest says that B gets an equitable interest from the exchange and that it is a form from the exchange and that it is a form of constructive trust, which can be of constructive trust, which can be enforced against C (when he knows enforced against C (when he knows about B)about B)


Case Study 2: Fat Henry Case Study 2: Fat Henry and the problem of trustsand the problem of trusts

Henry and the Henry and the purse stringspurse strings

Taxation in Tudor Taxation in Tudor England – feudal England – feudal tenurestenures

PrimogeniturePrimogeniture Devising land by Devising land by

willwill The legal The legal

remainder rulesremainder rules


The useThe use

A --------------------------B --------------------CA --------------------------B --------------------C

(Landowner)(Landowner) ((feoffee to usefeoffee to use ) )((cestui que usecestui que use))

Legal estate Legal estate Beneficial estateBeneficial estate

CLCL EquitableEquitable


The Statute of Uses 1535The Statute of Uses 1535

Collapse the useCollapse the use Springing usesSpringing uses The use on the useThe use on the use Equity creates property where there Equity creates property where there

was none before……was none before……


Case study 3: Part Case study 3: Part performance and the performance and the

equitable ‘impersonation’equitable ‘impersonation’

A Lease for a factory – an A Lease for a factory – an agreement to create a deedagreement to create a deed

Or a mortgage created by deposit of Or a mortgage created by deposit of title deedstitle deeds

Or a promise to give a life interest if Or a promise to give a life interest if cared for in dotage…cared for in dotage…


The requirements for The requirements for writingwriting

23B23B Assurances of land to be by deedAssurances of land to be by deed(1)(1) No assurance of land shall be valid to pass an No assurance of land shall be valid to pass an

interest at law unless made by deed.interest at law unless made by deed.

23C23C Instruments required to be in writingInstruments required to be in writing(1)(1) Subject to the provisions of this Act with Subject to the provisions of this Act with

respect to the creation of interests in land by respect to the creation of interests in land by parol: (a) no interest in land can be created or parol: (a) no interest in land can be created or disposed of except by writing signed by the disposed of except by writing signed by the person creating or conveying the same, or by person creating or conveying the same, or by the person’s agent thereunto lawfully the person’s agent thereunto lawfully authorised in writing, or by will, or by authorised in writing, or by will, or by operation of law, ….operation of law, ….


The requirements for The requirements for writingwriting

54A54A Contracts for sale etc of land to be Contracts for sale etc of land to be in writingin writing

(1)(1) No action or proceedings may be brought No action or proceedings may be brought upon any contract for the sale or other upon any contract for the sale or other disposition of land or any interest in land, disposition of land or any interest in land, unless the agreement upon which such unless the agreement upon which such action or proceedings is brought, or some action or proceedings is brought, or some memorandum or note thereof, is in writing, memorandum or note thereof, is in writing, and signed by the party to be charged or by and signed by the party to be charged or by some other person thereunto lawfully some other person thereunto lawfully authorised by the party to be charged…authorised by the party to be charged…

CL says no dealCL says no deal


PrioritizationPrioritization

Once you have characterised the Once you have characterised the interest you can test is strength interest you can test is strength against other interestsagainst other interests

There are only four types of priority There are only four types of priority dispute:dispute: Legal vs legalLegal vs legal Equitable vs EquitableEquitable vs Equitable Earlier Legal vs Later EquitableEarlier Legal vs Later Equitable Earlier Equitable vs Later LegalEarlier Equitable vs Later Legal


Legal interest v legal Legal interest v legal interestinterest

When two or more legal interests in the When two or more legal interests in the land conflict the main principle is that a land conflict the main principle is that a person cannot convey an interest which person cannot convey an interest which he or she does not have (“nemo dat quod he or she does not have (“nemo dat quod non habet”)non habet”)

Partial eg where A leases to B – A then Partial eg where A leases to B – A then sells to C – C ‘s interest is taken subject sells to C – C ‘s interest is taken subject to the leaseto the lease

Wholly inconsistent – A sells to B and Wholly inconsistent – A sells to B and then sells to C: C receives nothingthen sells to C: C receives nothing


Equitable interest v Equitable interest v equitable interestequitable interest

Moffett v DillonMoffett v Dillon [1999] 2 VR 480, at 491, it was stated by [1999] 2 VR 480, at 491, it was stated by Brooking JA (Buchanan JA concurring, at 506) that the Brooking JA (Buchanan JA concurring, at 506) that the resolution of priority disputes in the context of competing resolution of priority disputes in the context of competing equitable interests in property could be resolved by equitable interests in property could be resolved by applying either of two distinct rules. The first rule is that, applying either of two distinct rules. The first rule is that, generally, if the holder of the second equitable interest generally, if the holder of the second equitable interest takes with notice of the first equitable interest, he or she takes with notice of the first equitable interest, he or she takes that interest subject to the first equitable interest. takes that interest subject to the first equitable interest. The second rule is that, prima facie, the equitable The second rule is that, prima facie, the equitable interest first created prevails. However, this prima facie interest first created prevails. However, this prima facie rule can be displaced if the holder of the second rule can be displaced if the holder of the second equitable interest has a ‘better equity’. The onus of proof equitable interest has a ‘better equity’. The onus of proof in such cases is upon the holder of the second equitable in such cases is upon the holder of the second equitable interest to displace the prima facie priority of the first interest to displace the prima facie priority of the first equitable interest holder: equitable interest holder: Platzer v Commonwealth Bank Platzer v Commonwealth Bank of Australiaof Australia [1997] 1 Qd R 266, at 279 [1997] 1 Qd R 266, at 279



Who has the best equity? Who has the best equity? Heid v Reliance Finance Corporation LtdHeid v Reliance Finance Corporation Ltd – the – the

better equity depends on the circumstances – better equity depends on the circumstances – look to the conduct of the partieslook to the conduct of the parties the question of negligence on the part of the the question of negligence on the part of the

prior claimantprior claimant the effect of any representations made by the the effect of any representations made by the

prior claimant which may give rise to an prior claimant which may give rise to an estoppelestoppel

did the conduct of the prior claimant enable did the conduct of the prior claimant enable such a representation to be made?such a representation to be made?



GenerallyGenerally: the earlier equitable interest : the earlier equitable interest may be postponed to the later interest may be postponed to the later interest where:where:

(a)(a) the conduct of the earlier interest the conduct of the earlier interest holder has led to the later interest holder has led to the later interest holderholder acquiring an interest; acquiring an interest;

(b)(b) in the mistaken belief that the prior in the mistaken belief that the prior interest did not existinterest did not exist

If the equities are equal then first in timeIf the equities are equal then first in time



EG Able agrees to sell his land to Barb. EG Able agrees to sell his land to Barb. Able gives the title deeds to barb and Able gives the title deeds to barb and signs a receipt for the purchase money signs a receipt for the purchase money even though he has yet to be paid. Barb even though he has yet to be paid. Barb proceeds to grant an equitable proceeds to grant an equitable mortgage over the land to Clary. How mortgage over the land to Clary. How has the better interest?has the better interest?

Look to the equities: Look to the equities: Able has an equitable lien over the propertyAble has an equitable lien over the property Clary has an equitable mortgageClary has an equitable mortgage



Both the equities are security Both the equities are security interests – no real difference interests – no real difference between them – However Able’s between them – However Able’s negligent conduct in giving the title negligent conduct in giving the title deeds and signing the certificate deeds and signing the certificate means that it was his fault that Clary means that it was his fault that Clary took his interest without notice- took his interest without notice- Hence Clary’s interest is superiorHence Clary’s interest is superior

See See Rice v Rice Rice v Rice (1853) 61 ER 646(1853) 61 ER 646


Equitable v EquitableEquitable v Equitable In In JNJ Investments Pty Ltd v Sunnyville Pty LtdJNJ Investments Pty Ltd v Sunnyville Pty Ltd

[2006] QSC 138, a vendor of property contracted to [2006] QSC 138, a vendor of property contracted to sell property to a purchaser. On the day of sell property to a purchaser. On the day of settlement of this contract, the vendor completed a settlement of this contract, the vendor completed a sale of the property to a second purchaser for a sale of the property to a second purchaser for a higher price. The first purchaser, upon becoming higher price. The first purchaser, upon becoming aware of what had happened, lodged a caveat to aware of what had happened, lodged a caveat to prevent registration of the second purchaser’s prevent registration of the second purchaser’s transfer. The second purchaser commenced transfer. The second purchaser commenced proceedings to have the caveat removed. The issue proceedings to have the caveat removed. The issue before the court was whether the first purchaser before the court was whether the first purchaser had priority over the second purchaser. Mullins J, at had priority over the second purchaser. Mullins J, at [70], held that the first purchaser had priority [70], held that the first purchaser had priority because the second purchaser ‘had notice of the because the second purchaser ‘had notice of the first [purchaser’s] equitable interest at the time of first [purchaser’s] equitable interest at the time of the acquisition of its interests’.the acquisition of its interests’.



Exception: Exception: in the case of land held in the case of land held under a trust the beneficiaries will under a trust the beneficiaries will not lose their priority because of not lose their priority because of negligent or fraudulent conduct by negligent or fraudulent conduct by the trusteethe trustee

Shropshire Union Railways and Shropshire Union Railways and Canal Company v The QueenCanal Company v The Queen



Shropshire Union Railways and Canal Company v Shropshire Union Railways and Canal Company v The QueenThe Queen

In that case Holyoake, as trustee of shares for In that case Holyoake, as trustee of shares for Shropshire, held all title documents relating to the Shropshire, held all title documents relating to the shares. In breach of trust Holyoake borrowed from shares. In breach of trust Holyoake borrowed from Robson and gave Robson the share certificate as Robson and gave Robson the share certificate as security for the loan. Robson held the shares but security for the loan. Robson held the shares but did not have them registered into his name on the did not have them registered into his name on the company register. The issue before the court was company register. The issue before the court was whether Shropshire’s earlier equitable interest as whether Shropshire’s earlier equitable interest as beneficiary under the trust of the shares was beneficiary under the trust of the shares was defeated by Robson’s later equitable mortgage over defeated by Robson’s later equitable mortgage over the shares. The House of Lords ruled that the shares. The House of Lords ruled that Shropshire’s earlier equitable interest had priority. Shropshire’s earlier equitable interest had priority.



Exception doesn’t apply unless Exception doesn’t apply unless the trust is properly formed or in the trust is properly formed or in cases where the trustee has cases where the trustee has failed to complete the trust be failed to complete the trust be receiving the trust propertyreceiving the trust property

Walker v LinomWalker v Linom


Mere EquitiesMere Equities Exception: Exception: Mere equities – personal right Mere equities – personal right

to a remedy – proprietary in nature but less to a remedy – proprietary in nature but less than a full equitable interestthan a full equitable interest

Examples: the right to have a document Examples: the right to have a document rectified, right to have a conveyance set rectified, right to have a conveyance set aside because of the grantee’s fraudaside because of the grantee’s fraud

Latec Investments Ltd v Hotel Terrigal Pty Latec Investments Ltd v Hotel Terrigal Pty LimitedLimited: Terrigal had granted a mortgage : Terrigal had granted a mortgage to Latec. Latec exercised the power of sale to Latec. Latec exercised the power of sale of the mortgage and sold it to a wholly of the mortgage and sold it to a wholly owned subsidiary, Southern – Southern owned subsidiary, Southern – Southern granted a further equitable interest to MLC granted a further equitable interest to MLC which had no notice of the Terrigal interestwhich had no notice of the Terrigal interest


Mere EquitiesMere Equities

Terrigal argued that the sale was fraudulent – Terrigal argued that the sale was fraudulent – not at arm’s length – both Southern and Latec not at arm’s length – both Southern and Latec had conspired to sell at a low pricehad conspired to sell at a low price

What was the priority between the interest What was the priority between the interest held by Terrigal and the interest held by held by Terrigal and the interest held by MLC? It was held that Terrigal had a bare MLC? It was held that Terrigal had a bare right to sue and have the transaction set aside right to sue and have the transaction set aside – a mere equity– a mere equity

A prior mere equity will not prevail over a A prior mere equity will not prevail over a later full-blown equitable interest that was later full-blown equitable interest that was taken without noticetaken without notice


Exception: tackingException: tacking Exception: Exception: tacking – tabula in naufragio – if a tacking – tabula in naufragio – if a

later equitable interest holder purchased for later equitable interest holder purchased for value and without notice and is later able to value and without notice and is later able to acquire the legal estate then the later interest acquire the legal estate then the later interest holder can tack its equity onto the legal estate holder can tack its equity onto the legal estate and jump priorityand jump priority

EG Mortgages – If Able grants a mortgage to EG Mortgages – If Able grants a mortgage to Bette then an equitable mortgage to Clary and Bette then an equitable mortgage to Clary and then another equitable mortgage to Donna – then another equitable mortgage to Donna – then the order of priority will normally be B, then the order of priority will normally be B, C, D – but if Donna can later buy the land off C, D – but if Donna can later buy the land off Bette then Donna equitable interest will be Bette then Donna equitable interest will be tacked to the legal estate and Clary will come tacked to the legal estate and Clary will come in lastin last


Prior legal interest v equitable Prior legal interest v equitable interestinterest

In cases where there has been no In cases where there has been no fraud on the part of the legal estate fraud on the part of the legal estate holder the prior legal estate prevails holder the prior legal estate prevails over the later equitable estateover the later equitable estate

Where the equities are equal the law Where the equities are equal the law prevailsprevails



Exceptions:Exceptions: Where the legal interest holder was a party to Where the legal interest holder was a party to

the fraud that led to the equitable interest the fraud that led to the equitable interest being created being created Northtern Counties v WhippNorthtern Counties v Whipp

Where the legal interest holder was grossly Where the legal interest holder was grossly negligent in failing to inquire after or obtain negligent in failing to inquire after or obtain possession of the title deeds possession of the title deeds Walker v LinomWalker v Linom

Mere carelessness on the part of the holder of Mere carelessness on the part of the holder of the legal interest is not enough to constitute the legal interest is not enough to constitute postponing conduct: postponing conduct: Evans v BickellEvans v Bickell (1801) 31 (1801) 31 ER 908, at 1005–6. ‘Gross negligence’ in the ER 908, at 1005–6. ‘Gross negligence’ in the sense of a special degree of lack of care or sense of a special degree of lack of care or prudence is needed for this exception to arise.prudence is needed for this exception to arise.



Exceptions:Exceptions: Where the legal interest holder entrusted Where the legal interest holder entrusted

the title deeds to an agent with limited the title deeds to an agent with limited authority to raise money by using the authority to raise money by using the property as a security interest, and that property as a security interest, and that agent exceeds authority by borrowing agent exceeds authority by borrowing more than was intended – legal interest is more than was intended – legal interest is bound to the full extent.bound to the full extent.

Brocklesby v Temperence Permanent Brocklesby v Temperence Permanent Building SocietyBuilding Society



Exceptions:Exceptions: Where the legal holder hands over a Where the legal holder hands over a

title document which is used by a title document which is used by a fraudster to create an equitable fraudster to create an equitable interest in another who takes on the interest in another who takes on the faith of the documentfaith of the document

Barry v HeiderBarry v Heider


Prior equitable interest v legal Prior equitable interest v legal interestinterest

Pilcher v RawlinsPilcher v Rawlins (1872) LR 7 Ch 259, at 268. (1872) LR 7 Ch 259, at 268. The legal interest will prevail if it was acquired:The legal interest will prevail if it was acquired:

1. 1. by a purchaserby a purchaser:: Anyone who acquire an interest for value Anyone who acquire an interest for value

(lessee, fee simple owner, mortgagee)(lessee, fee simple owner, mortgagee)2 2 for valuefor value Consideration in money – needs to be more than Consideration in money – needs to be more than

nominal amount but not market valuenominal amount but not market value3 3 in good faithin good faith Bona fide – no hint of conspiracy or unclean Bona fide – no hint of conspiracy or unclean

hands:hands:Midland Bank Trust Co Ltd v GreenMidland Bank Trust Co Ltd v Green [1981] AC 513, at 528[1981] AC 513, at 528



44. without notice of the prior equitable interest. without notice of the prior equitable interest Can be actual, constructive or imputedCan be actual, constructive or imputed Actual:Actual: knowledge of the actual facts – real knowledge of the actual facts – real

knowledgeknowledge Constructive:Constructive: knowledge that would have come knowledge that would have come

into the person’s attention had they made into the person’s attention had they made reasonable inquiries eg case of land sold with a reasonable inquiries eg case of land sold with a tenant in possession – purchaser should have tenant in possession – purchaser should have checked the rights of the lessee - constructive checked the rights of the lessee - constructive noticenotice

Must be able to find the interest – old system title Must be able to find the interest – old system title allowed to go back 30 yearsallowed to go back 30 years

CAct s 164 CAct s 164 Imputed:Imputed: at law you are regarded as having been at law you are regarded as having been

notified eg where agent is notified by no principlenotified eg where agent is notified by no principle



The rule in The rule in Wilkes v SpoonerWilkes v Spooner [1911] 2 KB [1911] 2 KB 473473: Subsequent purchasers are in the : Subsequent purchasers are in the same shoes as the legal estate holder even same shoes as the legal estate holder even when the subsequent legal interest has when the subsequent legal interest has notice or receives via gift:notice or receives via gift:

[I]n justice to the owner of the land who [I]n justice to the owner of the land who had no notice when he acquired the land, had no notice when he acquired the land, it would not be right to hamper his power it would not be right to hamper his power of dealing with his own land, because of dealing with his own land, because certain persons, who possibly would be certain persons, who possibly would be the only customers for the land likely to the only customers for the land likely to pay the best price, have such notice.pay the best price, have such notice.


Registration SystemsRegistration Systems

Problems with fraudulent Problems with fraudulent transactions in the early colonytransactions in the early colony

1800 – order of Governor King that all 1800 – order of Governor King that all agreements concerning land be in agreements concerning land be in writing or entered into books kept at writing or entered into books kept at Sydney, Parramatta and HawkesburySydney, Parramatta and Hawkesbury

1802 – Judge Advocate’s office1802 – Judge Advocate’s office


Registration SystemsRegistration Systems

1817- Gov Macquarie – Fraudulent 1817- Gov Macquarie – Fraudulent against a bona fide purchaser for against a bona fide purchaser for valuevalue

1825 – Registration Act – 1825 – Registration Act – substantially amended over time and substantially amended over time and then repealed in 1984 and sections then repealed in 1984 and sections transferred into the Conveyancing transferred into the Conveyancing Act Act


Conveyancing Act and the Conveyancing Act and the Register of DeedsRegister of Deeds

Section 184C – general register of deedsSection 184C – general register of deeds Open to public inspection – s 199Open to public inspection – s 199 Deliver original and copy to the Registrar – Deliver original and copy to the Registrar –

registered with a number – copy kept on registered with a number – copy kept on filefile

Any instrument affecting land or not can be Any instrument affecting land or not can be registered – not necessarily a “deed” as registered – not necessarily a “deed” as such such


Conveyancing Act and the Conveyancing Act and the Register of DeedsRegister of Deeds

Are there competing Are there competing instruments?instruments?

Are the documents expressed to Are the documents expressed to be subject to each other?be subject to each other?

Is the instrument created or Is the instrument created or recorded on paper?recorded on paper?


Requirements to have Requirements to have priority under s 184Gpriority under s 184G

Valuable consideration: Valuable consideration: IIn n Bullen v Bullen v a’Becketta’Beckett (1863) 15 ER 684, a (1863) 15 ER 684, a conveyance for 10 shillings was held to conveyance for 10 shillings was held to be for nominal consideration and thus be for nominal consideration and thus not entitled to the benefits of the not entitled to the benefits of the legislation.legislation.

Part value of the property will suffice: Part value of the property will suffice: Bassett v NosworthyBassett v Nosworthy (1673) 23 ER 55 (1673) 23 ER 55

Reflects equity will not assist a volunteerReflects equity will not assist a volunteer



Good faithGood faith

Unconscionability, eg Unconscionability, eg Commercial Commercial bank of Australia v Amadiobank of Australia v Amadio

The onus of proving good faith is The onus of proving good faith is upon the person asserting priority upon the person asserting priority based upon registration of his or her based upon registration of his or her instrument: instrument: Jones v CollinsJones v Collins (1891) 12 (1891) 12 LR (NSW) L 247LR (NSW) L 247



Without noticeWithout notice

Notice received before the Notice received before the executionexecution of the of the instrument upon which priority by registration instrument upon which priority by registration is based precludes priority based upon is based precludes priority based upon registration of that instrument: registration of that instrument: Scholes v Scholes v BluntBlunt (1917) 17 SR (NSW) 36. Notice received (1917) 17 SR (NSW) 36. Notice received after execution of the instrument but before its after execution of the instrument but before its registration does not preclude priority based registration does not preclude priority based upon registration of that instrument: upon registration of that instrument: Burrows Burrows v Crimpv Crimp (1887) LR (NSW) L 198, at 210. (1887) LR (NSW) L 198, at 210.



Without noticeWithout notice

Notice includes actual constructive Notice includes actual constructive and imputed noticeand imputed notice

Hunt v LuckHunt v Luck



Fraud in the document will not be Fraud in the document will not be cured by the registration of the cured by the registration of the instrumentinstrument

Re Cooper Re Cooper


ExampleExample Moonking Gee v TahosMoonking Gee v Tahos

Tahos sold to Gee by contract 13 Nov Tahos sold to Gee by contract 13 Nov 19581958

11 february Thas sold land again to 11 february Thas sold land again to Wun. Wun.

Sale to Wun completed 6 March 1959Sale to Wun completed 6 March 1959 12 March 1959 Gee found out and 12 March 1959 Gee found out and

registered his contractregistered his contract Wun registered 11 days laterWun registered 11 days later


ExampleExample

Moonking Gee v TahosMoonking Gee v Tahos

Gee sought specific performance of Gee sought specific performance of contractcontract

His registration conferred priorityHis registration conferred priority


Problems with the deed Problems with the deed registration systemregistration system

Improved level of knowledgeImproved level of knowledge Offered greater degree of protectionOffered greater degree of protection ButBut Did not grant a total security of interestDid not grant a total security of interest Purchasers took subject to unregistered interests Purchasers took subject to unregistered interests

which have not been documentedwhich have not been documented Purchasers take subject to unregistered Purchasers take subject to unregistered

instruments which they ought to have discoveredinstruments which they ought to have discovered Purchasers title is still dependant on the chain of Purchasers title is still dependant on the chain of

title and the risk that a prior interest may be title and the risk that a prior interest may be invalidated breaking the chain of title and invalidated breaking the chain of title and destroying the purchaser’s interestdestroying the purchaser’s interest

real property: priorities in old system assoc prof cameron stewart (c) cameron stewart 2009

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goods c cameron stewart

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