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Real Property Law (Estates
durations of time in land (Freehold estate…
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Law and equity
Legal interests (proprietory)
- most superior interest
- compliance with formalities, e.g. registration
- binds the whole world
Equitable interests (proprietory)
- second most superior interest, binds the whole world except for equity's darling ("purchaser" in LTA) (some controversy as to the nature of a beneficiary's rights (in a trust), whether it is in rem or in personam, but main point is the sphere of enforceability, i.e. doctrine of notice)
- non-compliance with formalities available
- specific performance available
Trusts
Interest under an agreement for a lease
- the agreement is specifically enforceable (cf. specific performance not a requirement for equitable lease, other equitable reliefs available (Golden Village Multiplex v Marina Centre Holdings))
- application of maxim: "equity looks upon that as done which ought to be done"
(Walsh v Lonsdale)
Purchaser's interest under an enforceable contract of sale (constructive trust)
Characteristics
- divisibility of proprietory interests, e.g. possible to divide legal and equitable ownership
- creation of equitable property interests, e.g. equitable fee simple, life interest in personalty (not just realty) e.g. creating a trust giving equitable life interest for W in X's legal 999 year leasehold interest
Express trusts
- beneficiary's equitable interest under a trust
Doctrine of notice
- equitable interest can prevail over legal interests if there is notice (actual, constructive, or imputed)
(Kingsnorth Finance Co v Tizard)
(note: bona fide purchaser of an equitable interest without notice is not protected like a bona fide purchaser of a legal interest without knowledge [4.32])Also, value must be given [11.11] and actual legal title must be passed from seller to purchaser [11.15]
Other equitable interests
- unpaid vendor's lien
- mortgagor's equity of redemption (property interest cf. mere personal contractual right in common law)
- burden of restrictive covenants run with land to bind third parties which have notice (not in common law)
Mere equity (personal)
- not an interest in land
- confers only a personal right (right in personam) though there is also support that it is proprietory, though more limited
- e.g. right to set aside due to undue influence, mistake, misrepresentation
(National Provincial Bank Ltd v Ainsworth)
- if third party has notice, then can enforce against 3P too
Future interests
- remainders (vested in interest and contingent)
- reversion (vested in interest but not in possession)
Vested in interest: when there is a present fixed right of future enjoyment.
Vested in possession: interest which gives a right to immediate/present enjoyment of an interest in property.
Consider:
- what are the effects of these rights on third parties, is it fair?
- how can third party rights be balanced against the facultative function of courts (courts' response to circumstances arising between parties)