Tenures, Estates and Native Title Legal and Equitable Interests in Land

Old System TitleTorrens Title

Assoc Prof Cameron Stewart

The Anglo-Saxon Invasions c500AD

The Battle of Hastings 1066

Norman Reorganisation

• Sovereignty• Absolute beneficial

title• Reception of laws

– Conquering– Settling;– Cession

• Complete Feudalism

Feudalism

• The hierarchy of property• Homage fealty• Subinfeudation• Lords and villeins – unfree servitude (labour)• Growth of manorial customary law –

enforceable in the manor courts – unfree tenure - copyhold

Types of tenures• Knight service - military• Serjeanty – personal services to the King – onerous to

the comical• Frankalmoin – religious• Socage - residual – money or quit rents• Incidents – Homage and fealty, • primer seisin - king's right to take land until homage paid• relief - right to claim amount when heir took tenancy• aids - levies for particular occasions eg ransom• wardships - when heir took inheritance before majority

lord would take wardship and be able to claim fees for administering estate- control marriage - traffic

• escheat - right of feudal overlord to take back estate if tenant was convicted of serious offence, fled jurisdiction or died without heirs

• BLOUNT S FRAGMENTA ANTIQUITATIS

Types of tenures

ASTON-CAMLOU, COUNTY OF WARWICK.The manor of Aston-Cantlou (so called from the family of Cantilupe) was by inquisition after the death of Laurence Hastings, Earl of Pembroke, returned to be held in this form, viz. That that manor is held by itself of our lord the King in capite, by the service of finding a foot soldier, with a bow without a string, with a helmet, or cap, for forty days, at the proper charges of the lord of that manor, as often as there should be war in Wales

Types of tenures

MIDELINTON, COUNTY OF OXFORD.

Henry FitzWilliam holds of our lord the King one piece of land in Midelinton, by the serjeanty of finding one towel to wipe the hands of our lord the King, when he shall hunt in the forest of Witchwood, in the parts of Lankeleg, and that land was worth forty shillings.

Types of tenures

Rowland le Sarcere held one hundred and ten acres of land in Hemingston, in the county of Suffolk, by serjeanty; for which, on Christmas-day, every year,, before our sovereign lord the King of England, he should perform, altogether, and at once a leap, a puff, and a fart; and, because it was an indecent service, therefore it was rented, says the record, at 26 s, 8 d a year, at the King's exchequer. One Baldwin, also, formerly held those lands by the same service; and was called by the nickname of Baldwin le Pettour, or Baldwin the Farter

Types of tenures

BOCKHAMPTON, COUNTY OF BERKS.

William Hoppeshort holds half a yard-land, in that town, of our lord the King, by the service of keeping for the King six damsels, to wit, whores, at the cost of the King. This was called pimp tenure

Henry II – the Father of the Common law

• Curia Regis• General Eyre and

Assizes • Assize of Clarendon

1166 – 12 freemen from the hundred and 4 from the town

• Henry, Richard Coeur-de-Lion and John Lackland

Edward Longshanks Hammer of the Scots

• Parliament begins 1275• The use of statute as

opposed to ordinance

Curia Regis – embryonic courts

• Court of Exchequer – revenue• Court of Common Pleas – civil actions• Court of King’s bench – crime• Remaining Council functions split into King’s Council later Concilium Regis and then

Privy Council

Land Reforms under Longshanks

• Statutes of Westminster (1285) – De donis conditionalibus – fee tails

• Quia Emptores (1290)– end to frankalmoin and end to subinfeudation

The Writ System

• Bureacracy• Organisation of wrongs• Remedies• Popularity• Recording• Stare Decisis• Common law• Seisin

Types of legal estate

• Freehold estates • Fee Simple – closest to absolute ownership -

rules of primogenture – escheat• 1540 Statute of Wills - later recognition that

can be passed by will – “simple” meant that it could pass to any heir unlike the fee tail which must pass to particular heirs

Freehold

• Absolute interest• Determinable interests – the occasion of some

event will cause the fee simple to revert eg “to y and his heirs so long as St Paul’s Cathedral shall stand”

• - a possible or latent reverter interest• - words used “while”, “during”, “so long as”, “

until”

Freehold

• Conditional – a subsequent condition on the devise which states that the occurrence of some event will allow the grantor to take back the interest eg “to Y and his heirs on the condition that the property is not used to sell liquor” – only exercised by right of entry

• words used “on the condition” , “but if”, “provided that”

Fee tail

• Fee tail- a disposition that would last only while the heirs of that person would last – if they died out the interest would revert back to the heir of the original owner – way of keeping land in the family and restraining any disposition

• Tail male – male descendents specified• Tail female – female descendents• Special tail – the descendants of a particular wife

Fee Tail

• Made possible in De Donis Conditionalibus – lords wanted control over who would get estate – so that despite any attempt to alienate the interest the interest would past to the designated heir on death

• Barring the entail - Common recovery/fine = collusive court actions

• Now abolished Cact 19

Life estate

• Life estate – granted to a person for life – • Pur autre vie – for the life of another – “to A

for the life of B” or where A has a life interest (“to A for life”) and A alienates that interest during his life time

• In either case when the life tenant died the interest terminated

Future interests

• Already apparent that estates allow in to be granted for the future eg “to A for life and then to B in fee simple”

• B’s estate is a future estate – it doesn’t come into being until the death of A

• Reversions – a grant of an estate in possession which returns to the grantor eg X grants and life estate to Z hence X is the reversioner

Future interests

• Remainders - a grant of a future interest to some one who did not have a previous interest – eg to W for life and then to Y in fee simple – Y is the “remainderman” or “remainder”

Vested and Contingent Remainders

• the rules concerning future interests require the interest to vest or “fructify” by a certain time – if it does not then the interest will fail

• An interest vests when the identity of the interest holder is ascertained and when there is no condition precedent other than the normal determination of prior estates

• “to A for life and then to B in fee simple” - Vested

• To A for life remainder to B in fee simple if B attains 25 years - Not vested

Vested and Contingent Remainders

• To A for life remainder to B in fee simple if B attains 25 years - Not vested

• Why? B’s interest is contingent unless he has already achieved the age of 25 when the clause was written – that is the fact that he must be 25 is a contingency which must be satisfied for the property to vest in him

Interests in Land that are less than freehold

• Leases• Easements• Profits a Prendre• Restrictive Covenants• Mortgages

Old System Title

• Feoffment with livery of seisin• Charter of feoffment• Deeds – Lord Westbury “disgusting”• Chain of title

17th Century changes

• Tenures Abolition Act 1660 – socage tenure

• An Act for Prevention of Frauds and Perjuries 1677 – now in the Conveyancing Act 1919

The requirements for writing23B Assurances of land to be by deed(1) No assurance of land shall be valid to pass an interest at

law unless made by deed.

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

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

The requirements for writing• 23D Creation of interests in land by parol• (1) All interests in land created by parol and not put in writing

and signed by the person so creating the same, or by the person’s agent thereunto lawfully authorised in writing, shall have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only.

• (2) Nothing in this section or in sections 23B or 23C shall affect the creation by parol of a lease at the best rent which can reasonably be obtained without taking a fine taking effect in possession for a term not exceeding three years, with or without a right for the lessee to extend the term at the best rent which can reasonably be obtained without taking a fine for any period which with the term would not exceed three years.

The requirements for writing54AContracts for sale etc of land to be in writing(1) No action or proceedings may be brought upon any

contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged…

The requirements for writing

• 23E Savings in regard to secs 23B, 23C, 23D• Nothing in section 23B, 23C, or 23D shall:

(a) invalidate any disposition by will, or (b) affect any interest validly created before the commencement of the Conveyancing (Amendment) Act 1930, or (c) affect the right to acquire an interest in land by virtue of taking possession, or (d) affect the operation of the law relating to part performance.

Colonial Australia

• The status of the local laws of a colony depended upon whether it was:

• a conquered colony; or• a settled colony (terra

nullius- an empty land)

Colonial Australia

• Australia was treated as being settled as it was considered to be unoccupied, that is, as terra nullius – or was it?

• No recognition of Aboriginal laws or customs?• Aboriginal land rights not recognised?

Terra nullius

• International law of conquest, cessation or settlement

• Effect of law of inhabitants• Imperial authorities assumed settlement

theory• Respect for native inhabitants• Ambiguous position

R v Ballard or Barrett [1829] NSWSupC 26; sub nom. R v Dirty Dick (1828) NSW Sel Cas (Dowling) 2

• Charge of Murder of one native by another

• Forbes CJ - I believe it has been the practice of the Courts of this country, since the Colony was settled, never to interfere with or enter into the quarrels that have taken place between or amongst the natives themselves. This I look to as matter of history, for I believe no instance is to be found on record in which the acts of conduct of the aborigines amongst themselves have been submitted to the consideration of our Courts of Justice. It has been the policy of the Judges, & I assume of the Government, in like manner with other Colonies, not to enter into or interfere with any cause of dispute or quarrel between the aboriginal natives. In all transactions between the British Settlers & the natives, the laws of the mother country have been carried into execution. Aggressions by British subjects, upon the natives, as well as those committed by the latter upon the former, have been punished by the laws of England where the execution of those laws have been found practicable. This has been found expedient for the mutual protection of both sorts of people; but I am not aware that British laws have been applied to the aboriginal natives in transactions solely between themselves, whether of contract, tort, or crime. Indeed it appears to me that it is a wise principle to abstain in this Colony

• The accused was released

R v Boatman or Jackass and Bulleye (1832) NSW Sel Cas (Dowling) 6; [1832] NSWSupC 4

• Sheep stealing• The first question for consideration is whether the aboriginal natives of this Colony are subject to

the jurisdiction of this court by the law of England. The general principle acted upon, I believe, with respect to these people since the foundation of this as a British Colony, is to regard them as being entirely under the protection of the law of England for offences committed against them by the white settlers & subjects of the Crown, & on the other hand to render them liable for any infraction of the British Law which may be injurious to the persons or properties of His Majesty's white subjects. We interfere not with their own habits, customs or domestic regulations,[4 ] but leave them to adjust their own disputes & differences amongst themselves. Dirty Dick's case.[5 ] Vol. 22 p. 98. But before a person of this description can be tried in this court it must be made to appear that he understands what is passing & is sensible of the liability he incurs; for if he does not understand what is passing he must be regarded as a person deaf & dumb, or a lunatic. In other words he must be a reasonable & responsible being. Rex vBinge Mhulto[6 ] Vol. 9. P. 100; but if he be a reasonable being, & understand the nature of his present responsibility [p. 12] then, I hold, as at present advised, that he is liable to the Britis [sic] law. His anomalous position as a savage native of a country which has become the territory of the British Crown, disentitles him[7 ] to the privileges of a foreigner, of being tried by a jury half English & half foreigners, even if the Act for the administration of justice in this country would authorize us in adopting a course of trial for which we have no machinery. Where should we find the materials for such a jury?

• Found guilty but released becuase they didn’t understand their wrongdoing

R v Jackey [1834] NSWSupC 94 • Forbes CJ – white murdered by black• If in a newly inhabited country, there be no municipal

law, then the law of nature comes into operation; for if it were not so, the law of retaliation or self-defence would be acted upon. It was then as much for the benefit of the black as the white portion of the community, that the protection of the law should be equally afforded them; it was a reciprocal protection, founded on the dictates of policy, justice and humanity.

• Jury found accused guilty of manslaughter - transportation

R v Murrell and Bummaree (1836) 1 Legge 72; [1836] NSWSupC 35

• Jack Congo Murrell was charged with murdering Jabbingee at Windsor – Richard Windeyer argued that Murrell was not subject as he received no protection from the Crown

• Burton J (Forbes CJ and Dowling J) and – no aboriginal law – ‘lewd superstitions’

• NSW was unoccupied by a nation• 1st although it be granted that the aboriginal natives of New Holland are

entitled to be regarded by Civilized nations as a free and independent people, and are entitled to the possession of those rights which as such are valuable to them, yet the various tribes had not attained at the first settlement of the English people amongst them to such a position in point of numbers and civilization, and to such a form of Government and laws, as to be entitled to be recognized as so many sovereign states governed by laws of their own

• English law applied

R v Bonjon (1998) 3 Australian Indigenous Law Reporter 410-425; [1841] NSWSupC 92

• Bon Jon charged with murdering Yammowing at Geelong• Willis J -The Report further states, "It might be presumed that the native inhabitants of any

land, have an incontrovertible right to their own soil; it is a plain and sacred right which seems not to have been understood. Europeans have entered their borders uninvited, and when there, have not only acted as if they were the undoubted lords of the soil, but have punished the natives as aggressors if they have evinced a disposition to live in their own country. If they have been found upon their own property (and this is said with reference to the Australian Aborigines) they have been hunted as theives and robbers – they have been driven back into the interior as if they were dogs or kangaroos." To elucidate so far as I am able the point for decision, I will first briefly trace the history of this colony and of the settlement of this district, at the same time remarking on the character which has been given of the Aborigines; and in the second place, state so much of the acknowledged law of nations and the manner it has been acted upon with regard to Aborigines, as seems to me to bear on the subject, adding a few notices of the manner in which uncivilized tribes have been treated with in other British Colonies, and the steps taken in Colonies where English law was in force. I will premise that the policy, or impolicy of an existing system can avail nothing in the present instance. I am here as a Judge to declare the right, and not to have recourse to the expedient. I can never permit the end to justify any undue means for its accomplishment. This may be policy and wisdom in a statesman, but it is little less than treason in a Judge.

R v Bonjon (1998) 3 Australian Indigenous Law Reporter 410-425; [1841] NSWSupC 92

• Willis J - I desire to see the state of the Aborigines of Australia improved, I desire to see them freed from the yoke of error; to see the duties of humanity amply and practically fulfilled; to see all due protection extended to this unhappy race – the protection of their rights by laws adapted to their capacity and suited to their wants – the protection of all equal and all powerful justice.

• Bon Jon was ordered to stand trial but Willis J reserved the issue of jurisdiction

• He was later released without trial • Dowling CJ was very critical of the decision because he

believed that Murrell had decided these issues

Attorney General v Brown (1847) 1 Legge 312

• 1847 – challenge by coal miner of ownership in the Crown – absolute title in the Crown from 1788 and passing reference to the fact that aboriginal title would b inconsistent with the Crown’s ownership

• NB –barrister Richard Windeyer was said to have called his opposition, John Darvall, a liar and he shaped up to fight him in court. They both spent Xmas in 1846 in Darlinghurst gaol for contempt.

Cooper v Stuart (1889) 14 App Cas 286

• 1889 – reservation of Crown right to take land for public purposes

• Argued to be offensive to rule against perpetuities

• PC – NSW was a “…tract of territory practically unoccupied, without settled inhabitants or settled law, at the time it was peacefully annexed to the British dominions…”

Mirrilpum v Nabalco

• 1970 – first land rights action – restraint of mining without consent – Blackburn J – there was a system of law but the issue was one of law and not of fact – not a property holding in any sense of the common law hence not enforceable

Mabo No’s 1 and 2

• No 1 – interlocutory – preliminary issue concerning validity of a declaratory Act by the Queensland government to extinguish the title of the Murray islanders – held to be in breach of the RDA

• No 2 – instituted 1982 decided 1992 – original jurisdiction of the High Court

• Moynihan J of SC QLD for facts – found complex land ownership – plots and gardens

• Decision (6:1) in favour of a concept of native title

Mabo No’s 1 and 2

• Terra Nullius • Found to not be a common law principle but of

international law – the true common law principle is that of the law of settlements – Australia is regarded as such a territory – all judges agreed that Australia was settled, despite the fact of prior occupation of Aboriginal people – hence the real issue was the relevance of terra nullius to Australian law – settlement is not a bar itself to recognizing native title – sovereignty could not be questioned

Mabo No’s 1 and 2

• Sovereignty • The sovereignty of Australia was not

challenged in the proceedings – indeed it could not be so challenged by an Australian municipal court

• The original sovereignty of the native Australians was not discussed – there was a recognition that Aborigines had settled law (hence that aspect of terra nullius was rejected)

Mabo No’s 1 and 2• What is native title? • The conquering or the settlement of as colony does

not automatically extinguish the rights of the original inhabitants to land

• Traditional Aboriginal occupancy of and connection with the land by a people, in accord with a system of laws and customs

• Content of rights determined by those laws and customs – includes rights to fish hunt and gather (usufructory rights) – but is varied by particular laws and customs – can evolve over time

• Inalienable (except in accordance with the traditional laws and customs)– can be surrendered to Crown

Mabo No’s 1 and 2• How do you prove native title?• Existence of identifiable group• Traditional connection with or occupation of

land under laws and customs – spiritual more than occupation – special and exclusive ( 4 judges) – Toohey various interests

• Substantial maintenance of connection - physical occupation not necessary

Mabo No’s 1 and 2• How is it extinguished?• Crown did not take an absolute title but a radical

title, which gave sovereignty but not ownership – native title is a burden

• Radical title grants power to extinguish without consent - clear and plain intention to extinguish – freehold, leasehold extinguishes – pastoral leases?

• No duty to pay compensation (3:3 split in majority and Dawson J also in favour of no compensation) – nt not accorded full respect

• Constitution S 51(xxi)? – Only Deane and Gaudron JJ

Mabo No’s 1 and 2• How then can native title be

protected?• RDA – immunity from wrongful

deprivation

Mabo No’s 1 and 2• Fiduciary duty • General obligation to protect

welfare – Toohey J – limitation on Parliamentary omnicompetence

• Specific obligation to protect property - no clear decision – Hints in Brennan, Dean and Gaudron JJ

Native Title Act 1993

• Categorises acts – past acts after RDA and before NTA –

• A – extinguish native title – grant of freehold, commerical lease, public works

• B – extinguish to inconsistency – not A acts or mining leases – not a commercial lease

• C – non-extinguishment – mining leases• D – any act not A,B,C - easements licenses

and permits – non extinguishment

Native Title Act 1993

• Compensation on just terms for extinguishment• Future acts – passing legislation after 1 July 1993

or the doing of some other act after 1 January 1994 – Permissible future acts – treat the same – compensation payable for extinguishment

• Right to negotiate concerning future acts of government – agreements accepted by NTT and registered with FC

Wik and Thayorre People’s case (“Wik”)

• Issue concerned the effect of pastorals leases on land claimed by two clan groups – question of extinguishment

• Wik peoples – pastoral leases do not confer exclusive possession - are statutory creatures and must be interpreted as such – no language of extinguishment – look to the facts of the grant

Wik and Thayorre People’s case (“Wik”)

• Decision 4:3 in favour of the Wik and Thayorre• Statutory Interpretation - clear and unambiguous

language – majority said that language of statute and practical exercise of the lease the key

• History of Pastoral Leases – sui generis statutory land holdings – not leasehold tenures and as such no automatic right to exclusive possession

• Brennan CJ (minority) – ordinary technical use of leasehold terms indicates intention for exclusive possession

Wik and Thayorre People’s case (“Wik”)

• Extinguishment – Majority said that no clear intention in words of grant mean that no extinguishment – Toohey, Gaudron and Gummow JJ specific focus on exercise of rights and conflict with actual Aboriginal custom – Kirby J only the grant itself

• Radical Title and reversion – even if the grant did not extinguish did the reversion back to the Crown extinguish? – Brennan CJ no way doctrine of estates says that a reversion gets fill beneficial interest hence extinguish – majority said look to the statute – too much to automatically presume that doctrine of estates applies

• Suspension and revival - fiduciary duty - not answered

Since Wik

• 10 point plan• Yanner v Eaton [1999] HCA 53 – native title

includes the right to hunt fauna including crocodiles for food and ceremony. The native title protection overrules State law prohibiting hunting because of s 109 conflict

• Commonwealth v Yarmirr (the Croker Island case) - native title rights over the sea exist but limited to traditional uses

Since Wik

• Western Australia v Ward [2002] HCA 28 – evidence of native title

• Wilson v Anderson [2002] HCA 29 – no native title in NSW Western lands division

• Yorta Yorta Peoples – occupation but not substantial connection

Introduction to Equity - The Office of the Lord Chancellor

• Around since Norman times

• Keeper of the King’s Conscience

• Cleric and Keeper of the Great Seal

• Member of Lords, Judge and Church

– Lord Cottenham– Lord Falconer

Chancery as a Court

• Around the 15th century• Function to repair the failings of Common law• Principles of Christian fairness/conscience• Maxims of equity

– Substance not form– Does not assist a volunteer– Equity follows the law– Clean hands

• Discretion and the Chancellor’s foot• The two streams – law and equity

What does Equity do?Parkinson: (i) the exploitation of vulnerability or weakness, as exemplified in

principles relating to unconscionable dealing and undue influence; (ii) the abuse of positions of trust or confidence, as exemplified in the

law of trusts and fiduciary obligations generally; (iii) the insistence upon rights in circumstances which make such

insistence harsh or oppressive as exemplified in relief from penalties and forfeiture, the law of equitable set-off, and the refusal of specific performance on the discretionary ground of hardship;

(iv) the inequitable denial of obligations, as exemplified in the doctrine of part performance and the principle of equitable estoppel;

(v) the unjust retention of property, as exemplified in certain constructive trusts and principles of subrogation

The relationship between CL and Eq

• James VI of Scotland• The rise of

protestantism• Absolutism of sovereign

– Divine Right of Kings or King-in-parliament?

• Bacon & Ellesmere: Earl of Oxford’s case

Earl of Oxford’s case

• The Office of the Chancellor is to correct Men’s consciences for Frauds, Breach of Trusts, Wrongs and oppressions, of what Nature soever they be, and to soften and mollify the Extremity of the Law ... [W]hen a Judgment is obtained by Oppression, Wrong and a hard Conscience, the Chancellor will frustrate and set it aside, not for any error or Defect in the Judgment, but for the hard Conscience of the Party.

The legalisation of equity

• The Civil War – equity nearly destroyed• Lord Nottingham (1673-82)– father of equity• Lord Eldon – (1801-27) modern rules• Precedent and fixation• Appointment of VC• Poor administration• Infamous delay – record 16 years and still

interlocutory

19th Century reforms• Bentham and the ‘dog law’• Judicature Acts 1870s – 1970s• Fusion fallacies• Salt v Cooper (1880) 16 ChD 545 at 549, Jessel MR said of the effect

of the Act: • It has been sometimes inaccurately called 'the fusion of Law and

Equity'; but it was not any fusion, or anything of that kind; it was the vesting in one tribunal the administration of Law and Equity in every cause, action, or dispute which should come before that tribunal. … To carry that out, the Legislature did not create a new jurisdiction, but simply transferred the old jurisdictions of the Courts of Law and Equity to the new tribunal, and then gave directions to the new tribunal as to the mode in which it should administer the combined jurisdictions.

• The two streams in one courtWindeyer J in Felton v Mulligan (1971) 124 CLR 367 at 392; [1972] ALR 33 at 46

Property in CL

• Universalized, reified, fetishized – the materialization of the common law

• Formality• Creation• Transfer• Rights recognised in contract and tort – breach of

contract, trespass, negligence• Remedies for breach of property rights – damages• CL makes orders about the property not the people

Property in Eq• Substance• Conscience• Power• Responsibility – lunacy, infants, married woman• Trust and confidence• BUT through the logic of precedent not unfettered

discretion• Rights recognised through doctrines of equity –

misrepresentation, undue influence, duress, unconscionability, fiduciary relationships, part performance, equitable estoppel, breach of confidence

• Remedies – injunctions, specific performance, constructive trusts, personal orders

• Equity makes orders about the people not the property

Property in Eq

• Equitable property or interest (equitable fee simple, mortgages, covenants etc)

• Personal Equities (Gill v Gill)• Mere Equities (Latec)

Case study 1: When contracts go bad

• A (vendor) exchanges contracts with B (purchaser)• A gets a better offer from C (he knows about B’s

offer) and completes the sale to C before B knows• Common law approach? Breach and damages – no

property held by B• Equitable approach: breach and specific performance• But what about the property interests?

Case study 1: When contracts go bad

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

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

Case Study 2: Fat Henry and the problem of trusts

• Henry and the purse strings

• Taxation in Tudor England – feudal tenures

• Primogeniture• Devising land by will• The legal remainder

rules

The use

A --------------------------B --------------------C(Landowner) (feoffee to use ) (cestui que use)

Legal estate Beneficial estate

CL Equitable

The emergence of the trust

• Collapse the use• Springing uses• The use on the use then the trust• Equity creates property where there was none

before……

Case study 3: Specific performance and rule in Walsh v Lonsdale (1882) 2 Ch D 9

• A Lease for a mill for 7 years • An agreement to create a deed but no deed• Agreement was for rent payable quarterly with an

entitlement of the landlord to request a year in advance• Tenant entered into possession and paid rent for 18 months• Landlord levied distress; tenant refused and sought an

injunction• The agreement was in writing so satisfies s 54A and s 23C

BUT not s 23B

The requirements for writing23B Assurances of land to be by deed(1) No assurance of land shall be valid to pass an interest at

law unless made by deed.

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

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

The requirements for writing54AContracts for sale etc of land to be in writing(1) No action or proceedings may be brought upon any

contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged…

CL says ‘no’ but equity says ‘maybe’

Walsh v Lonsdale

• Equity looks on as done that which ought to be done

• Jessel MR at 15:There are not two estates as there were formerly, one estate at common law … and an estate in equity under the agreement. There is only one Court, and the equity rules prevail in it. The tenant holds under an agreement for lease. He holds therefore, under the same terms in equity as if a lease had been granted, it being a case in which both parties admit that relief is capable of being given by specific performance.

Chan v Cresdon Pty Ltd (1989) 168 CLR 242

• Cresdon agreed in writing to lease land to Sarcourt. • The agreement contained the terms of the lease as an

annexure. • The lease was duly executed but never registered. • Sarcourt defaulted under the lease and Cresdon took action

against Chan as guarantor of the unregistered lease. • Cresdon’s action against Chan was stated as being one

taken on the guarantee ‘under this lease’. • Cresdon’s action was unsuccessful. • The court held that as there was no registered lease there

was no enforceable guarantee. Cresdon’s alternative claim was based upon the rule in Walsh v Lonsdale.

Chan v Cresdon Pty Ltd (1989) 168 CLR 242

• This claim also was unsuccessful. In coming to its conclusion the court ruled that, although the rule in Walsh v Lonsdale meant that an agreement to lease gave rise to an equitable lease, it did not create a legal interest. A consequence of this is that the equitable lessee will be defeated by a bona fide purchaser of the legal estate who acquires the legal estate for valuable consideration and without notice of the equitable lease

Chan v Cresdon Pty Ltd (1989) 168 CLR 242

• The court also confirmed that the operation of the rule depended upon the availability of specific performance of the agreement to lease.

• In the circumstances of the case, two facts raised doubts as to the availability of specific performance. First, Cresdon had in the meantime mortgaged the property. Second, the lease had come to an end before the expiration of the term due to Sarcourt’s breach.

Case Study 4: the Doctrine of Part Performance

• What if there is no writing at all?

• What if you borrow some money off your friend and as security you give her your title deeds?

Case Study 4: the Doctrine of Part Performance

• For the doctrine of part performance to apply, three matters need to be established.

• First, the acts done must be done by the party to the contract seeking to rely on the doctrine, or his or her authorised agent: McBride v Sandland (1918) 25 CLR 69 at 79.

• Second, it must be shown that the acts done by the plaintiff were permitted, but not necessarily required, to be done by the terms of the oral agreement: Regent v Millett (1976) 133 CLR 679 at 683

Case Study 4: the Doctrine of Part Performance

• The third matter to be established for the doctrine to apply is that the acts done must be unequivocally and in their own nature referable to a contract of the general nature of the alleged oral agreement: McBride v Sandland (1918) 25 CLR 69 at 78.

• In establishing this element it is generally accepted that the court looks at the acts done and then judges to see if there is an implication of an agreement of the type alleged, rather than looking at the terms of the alleged oral agreement and judging if the acts are inconsistent with such an agreement: McBride v Sandland

Maddison v Alderson (1883) 8 App Cas 467

• Alderson cared for Maddison doing the housework

• Maddison promised that Alderson would be granted a life estate for her work

• The will left Alderson a life estate be it was not valid

• The son argued that he should be given the house

• Alderson argued that there was a valid contract

Maddison v Alderson (1883) 8 App Cas 467

• The claim for part performance failed because the acts performed might have been given for love and affection– There have not been wanting cases in which time and

care have been bestowed by one person upon another, even from a vague anticipation that the affection and gratitude so created would, in the long run, ensure some indefinite reward. And legal tribunals have refused in those cases to turn courtesy into contract and compel any payment although such service had been performed

Cooney v Burns (1922) 30 CLR 216

• Agreement to purchase a lease of a hotel (plus some other items of furniture)

• An agent agreed to the sale, money was paid and documents were drafted for the assignment of the lease but not executed

• But there was no giving of possession• Trial judge found that there had been

sufficient acts of part performance

Cooney v Burns (1922) 30 CLR 216

• Majority – (Isaacs, Higgins, Starke JJ) find no part performance

(1) The taking of the inventory? No, just a check(2) The handing over of the lease? No, just

inspection(3) Incurring legal expenses? No(4) The payment of money – No – not sure if it

relates to the contract

Cooney v Burns (1922) 30 CLR 216• Starke J:

• The act found by the jury in this case is, I think, unequivocally and of its own nature referable to some such agreement as is alleged by the plaintiff, but it does not change the relative positions of the parties as to the subject matter of the contract, namely, the land. The delivery of the lease for the purpose of preparing an assignment did not alter the title in the land, it did not affect the possession or the right to possession of the land, and it did not affect the use of the land or touch or concern the land in any way whatever. A deposit of title-deeds by way of security affects the title to the land, and therefore alters the position of the parties as to the land itself. So, again, the laying out of money in improvements on the land changes the position of the parties in relation to the use of the land. On the contrary, any acts preparatory to the completion—not the formation—of the contract do not alter the position of the parties in relation to the land. Examples of this latter class of case may be found in Maddison v. Alderson[94], and, in my opinion, the present case falls within the same category. The finding that an inventory of furniture was taken in performance of the contract stands in no different position.

Regent v Millett (1976) 133 CLR 679

• Regent purchased a property in the Sydney suburb of Sefton by providing $1000 of his own money and borrowing $3500.

• He orally agreed with the Milletts (his daughter and son-in-law) that, in return for payment of $1000 and an agreement to make the repayments on the $3500 loan, they could live in the house and have it transferred into their names when all the payments had been made.

• The payments were made. However, Regent refused to uphold his part of the bargain.

• The Millets obtained an order for specific performance based upon the doctrine of part performance.

• The principal act relied upon by the High Court was the taking of possession of the Sefton property by the Milletts.

• The High Court held that this was an act permitted, but not required, to be performed by the oral contract. Nevertheless, it was, of itself, sufficient to attract the operation of the doctrine as an act in performance of the oral contract

Payment of money?

• The traditional view has been that a payment of money alone cannot be an act of part performance, simply because the payment of money does not point to a particular type of contract.

• However, a payment of money combined with other factors can allow a court to find that part performance has been established

Payment of money?• Most recently, in the New South Wales Court of Appeal decision of

Khoury v Khouri (2006) 66 NSWLR 241 at 268, Bryson JA said:

• Acts on the land can much more readily be seen as unequivocally referable to the contract than payments of money. The anomaly of not recognising payment as an act of part performance is clear … Unless authoritatively directed to do otherwise, my view is that the Court of Appeal should apply the doctrine of part performance as it has received it, according to the terms in which it has been recognised in decisions of the High Court of Australia [in cases such as McBride v Sandland and Regent v Millett]. The unavailability of payments as acts of part performance is part of what has been so received.

Theodore v Mistford Pty Ltd [2005] HCA 45; 221 CLR 612

• Son wants to buy a business but doesn’t have enough money and can’t get a loan

• The business owners will sell but with a loan back but want extra security

• Son gets mum to offer up her house as security – deposit of title deeds

• Did she go guarantor as well?

(c) Cameron Stewart 2005

Registration Systems

• Problems with fraudulent transactions in the early colony

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

• 1802 – Judge Advocate’s office• 1817- Gov Macquarie – Fraudulent against a

bona fide purchaser for value• 1825 – Registration Act – substantially amended

over time and then repealed in 1984 and sections transferred into the Conveyancing Act

Torrens system

• Registration system• State guaranteed title• Indefeasibility and exceptions• Legal (registered) and equitable (unregistered)

interests• Compensation

(c) Cameron Stewart 2005

Example• Barb steals Able’s title documents and uses it

to enter into a contract for sale with Clarence (who know nothing of the theft). Barb forges Able’s signature and Clarence resgiters the conveyance – once registered Able’s interest in the property is defeated

• Compare old system with Torrens