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Wk 4 Land Registration Pt III - Coggle Diagram
Wk 4 Land Registration Pt III
Which interests?
Unregistered interests include equitable interests but sometimes they can also be legal interests
Can be capable of registration but have not been registered
Not capable of registration (this is where vulnerabilities lie)
Unregistered interests are generally considered equitable interests
Legal and equitable interest is as it is in equity & trust, with the main equitable interest being a trust.
Generally registered interests equal legal interests (exception short term lease)
Legal interests have a higher priority and a stronger claim to ownership
Equitable interests (eg an entitlement under a trust cannot be mentioned on the land register - more complicated to prove
Caveats/Priority Notices
s 124 LTA
What is it?
Provides notice of one's interest in the land and also prevents any further dealings with the land which are inconsistent with the caveator's interest. Also provides notice effectively to the world of the caveator's interest
Caveat is an encumbrance on the property
Priority notice is an administrative device
See Pt 7A LTA
Who may lodge a caveat?
see text RPLIQ 11.100
There are cases where courts have held that the interest is not caveatable. See materials
A person claiming an interest in a lot - s 122(1) LTA
The general principle is that the interest must be one where equity will give relief for. However, the interest must be in land. A contractual/personal right is not a caveatable interest
Purchaser under instalment contract for sale of land - s 74 Property Law Act 1974 (Qld)
PLA
Adverse Possession claimant - s 104 LTA (called objecting caveat)
The registrar under s 17 - s 122(1)(b) LTA
The registered owner - s 122(1)(c) LTA
Court orders - s 122(1)(d), (e) LTA
Text Book
Consequences of failing to lodge caveat
There is no duty to caveat. It is discretionary.
Effect may be serious where not lodging a caveat creates a belief in a later interest holder that the earlier interest (which could/should have been caveated) did not exist.
See
Abigail v Lapin
(1934) AC 491
Link
Priority Notices
Cheaper and more efficient way to protect an interest rather than a caveat
Introduced as a result of risks associated with paperless systems
Notifies all parties who do a title search of the priority of interests listed in the notice
Copy of priority notice
Guide to completing a priority
Link
Intention that the instruments in the notice be lodged in the order noted in the priority notice
Compensation ss 188 - 190 LTA
s 188A Compensation for loss or damage
(1) This section applies if a person (the claimant) suffers loss or damage because of -
(a) the incorrect creation of an indefeasible title in the name of another person; or
(c) an error in an indefeasible title or in the freehold land register; or
(d) reliance on the incorrect state of the freehold land register; or
(e) loss, destruction or improper use of a document deposited or lodged at the land registry or held by the land registry for safe custody; pr
(b) incorrect registration; or
(f) omission, mistake, breach of duty, negligence or misfeasance of or by the registrar or a member of the staff of the land registry; or
(g) the exercise by the registrar of a power in relation to an application or dealing with which the person had no connection
(3) Despite anything in sub-section (1) or (2), the claimant is not entitled to compensation under this section for loss or damage caused by the incorrectness of a register kept by the registrar if the registrar my correct the register under section 15.
S 188 Compensation for deprivation of lot or interest in lot
(1) this section applies if a person (the claimant) is deprived of a lot, or an interest in a lot, because of -
(a)-(g)
as per s 188A
Compensation limits
s 188AA - Compensation for which claim may not be made
(1) The compensation to which a claimant is entitled under section 188 or 188A does not include compensation for personal injury
"
personal injury includes loss of income, including loss of income claimed to arise from personal injury, and psychological and psychiatric injury
"
S 188D - No rights of subrogation for insurers
S 189 - Further limitations
S 188C - 12-year limitation to make claim may be extended
Text FLL 12.80
Land Title Act 1994
Why protect unregistered interests
This is where priority rules have application
They are vulnerable to being defeated by later indefeasibility title under Torrens (unless exceptions apply, eg fraud, or in personam claim, eg a five year lease that has not been registered)
Torrens system also does accomodate equitable interests even though they cannot be registered.
See ss 109-110 LTA - declarations of a trust
It is an unclear relationship, that is not spelt out
Priorities
There were general law (pre-Torrens) rules which developed before Torrens. These rules still apply subject to modification by Torrens
Torrens prevails
MAIN EXAMPLES
Dispute over competing registered/legal interests
general rule is that the earlier interest prevails, but under Torrens RP has indefeasible title subject to exceptions ss 184, 185
Priority Rule 1
Competing legal interests
Under general law earlier interest prevailed but the Torrens system has significantly changed the application of this rule.
Upon registration RP gets indefeasible title (subject to exceptions)
Time of lodgement of the instrument of registration is crucial as instruments are registered in the order that have been lodged (not the date of the execution of the document) - s 177(1) LTA
Registration is effective when the particulars are registered in/on the register - s 173 LTA
Dispute over unregistered/registered interests
Priority Rule 2
Equitable versus legal interest
But under Torrens
Any prior interest, even with notice, do not defeat the RP's indefeasible title unless the exceptions appl
Some unregistered interests are considered superior, short term lease. s 185(1)(b) LTA
Whichever came first under general law the rule that there was a bona fide purchaser for value without notice prevailed
May involve both legal and unregistered (equitable)
Under Torrens RP succeeds unless exceptions to indefeasibility apply
Generally this involves equitable interests so you will need to be able to identify an equitable interest
Exceptions - long term lease (5 year) could be a legal interest but not registered
Short term leases are protected under s 185(1) of LTA
Examples include equitable lease, equitable mortgage, equitable easement, equitable interest in fees simple
or of course a Trust
Mere equities are the lowest in the hierarchy of interests.
-eg, different types of estoppel
Competing equitable interests
When the merits of each interest are the same/equal, the earlier shall prevail
sometimes called rule in
Rice v Rice
(1853) 2 Drew 73*
Case note and problem question
Henry Long, Finding the Better Equity
Latec Investments Ltd v Hotel Terrigal Pty Ltd
(1965) 113 CLR 265 per Kitto J, 276
The Illusion of Mere Equity
HOWEVER, the later interest may defeat the earlier interest if there is some conduct on the part of the holder of the earlier interest which demands that they should lose their priority
In equity it may be described as being against 'good conscience' to rely on the indefeasibility of title in these circumstances
He who comes to equity must do so with clean hands
When does a later interest defeat an earlier interest
Not always clear
due to the discretionary nature of equity
the matters should be treated on a case by case basis
Where earlier holder of interest has effectively equipped/armed a third party to act as though they had absolute rights to ownership
Abigail v Lapin
[1934] AC 491
Link to case
Lapins executed/signed a transfer of land to Mrs Heavener in order to obtain a loan of money from her
Mrs Heavener mortgaged the property to the Abigails (acting as though she was the owner) from which she obtained a sum of money. She disappeared with the Abigails' money
The Abigails did not register the mortgage
The Lapins did not caveat their interest
Privy Council decided in favour of later interest (Abigails) and Lapins lost priority
Breskar v Wall
(1971) 126 CLR 376
Link
Where holder of earlier interest has a 'mere equity' and the later interest holder has an equitable interest and knew nothing about the earlier one and bought the property for value (not a volunteer)
Where the earlier right holder was a volunteer and the later right holder paid/gave value for their interest and further, had no notice of the earlier volunteers interest
Where earlier right holder expressly waives their priority