property law

property law
Question 1
What in legal terminology do we call the following interests?
i) Natasha owns a farm with beautiful views of nearby lakes. Michael wants to buy it. Natasha agrees that for $150,000 paid on the signing of the agreement, if in the next five years she decides to sell the farm, she will offer it first to Michael for $10 million plus interest (calculated according to a formula set out in the agreement).
Does Michael have an interest in Natasha?s land? If so, describe its nature and what the interest is called. (100 words)
(2 Marks)
ii) Henry has a beautiful Moreton Bay Fig Tree in his front yard, admired by the neighbourhood and people far and wide. Henry, also on behalf of his heirs and assigns, signs a deed in favour of his next door neighbour Alicia, and her heirs and assigns, promising in consideration of $500 never to remove the tree unless it is certified by a qualified tree expert as terminally ill or dangerous to life, limb or property.
Does Alicia have an interest in Henry?s land? If so, describe its nature and what the interest is called. (100 words)
(2 Marks)
iii) Harry owns the Regal Theatre. He feels that it adds to the cultural and almost bohemian atmosphere of the precinct if he allows posters advertising cultural events to be posted on the north wall of his theatre, which borders on a lane leading to chic dark coffee shops, cafes and vaudeville venues. He agrees with the group Classical Ballet that for a token $10 per month they have a non-exclusive right to place their posters on the north wall.
Does the group Classical Ballet have an interest in Harry?s land? If so, describe its nature and what the interest is called. (100 words)
(2 Marks)
iv) Margaret has owned her bountiful orchard for many years but feels age is creeping up on her. Margaret has known of Sam?s Perfect Stone Fruit for some time. She likes the way he does business and Sam cannot hide the ecstasy of eating a ripe juicy peach. Margaret agrees with Sam that for a period of three years, in consideration of 5% of the value of the annual crop, he may enter her land, tend the trees and harvest the crop of fruit that grows there.
Does Sam have an interest in Margaret?s land? If so, describe its nature and what the interest is called. (100 words)
(2 Marks)
v) Freya recently purchased an apartment just one street from the local suburban railway station where she plans to catch the train to work. On her first day of travel Freya realised that the park through which she had planned to walk, from her street to the street where the station is located, is actually private property adjacent to the home of its owner, Jim, who she met ? a retired solicitor. After some discussion, Jim said that he did not mind Freya walking across his park but felt there should be an agreement ? otherwise she might acquire rights by long user. Jim drafted an agreement for Freya?s consideration: in order to enhance the convenience of travel from her apartment it allows her to walk across Jim?s park four times daily for three years with a maximum of two other people along the constructed pathways by the most direct route. Jim proposes that the agreement should take the form of a deed.
Will Freya acquire an interest in Jim?s park through the proposed deed? If so, describe its nature and what the interest is called. (150 words)
(2 Marks)

Question 2 (6+4=10marks)
Karl is a student in the Law School at University of Canberra. Explain his rights, if any, in respect of the following ?
a. Karl was camping overnight in a dry creek bed on Goanna Bend Cattle Station while racing his motorbike in the three day Alice Springs to Coober Pedy cross country Trail Bike Classic, which was held over the Australia Day long weekend in January 2012. He noticed protruding from the creek bank part of an ancient Aboriginal wooden shield featuring exquisite decorations etched and burned on to it. He excavated it and put it in his support vehicle, which took it home to Canberra. The shield has been assessed to be 15,000 years old and valued at $900,000 and is the centre of a media sensation. An ANU archaeologist, Dr Rosa Luxembourg, has come forward to claim the shield, stating that she saw the shield from the opposite bank in December 2011 but could not reach it because the creek was in flood and she even noted its location on her GIS with accurate data from her GPS. Frank Fairweather holds a fee simple estate in Goanna Bend Cattle Station and he has also claimed the shield as owner of the land. Goanna Bend Cattle Station is 2000 square kilometres in area and is largely unfenced.
What are the respective rights of the parties to the shield? Why? (300 words)
b. Karl?s best friend Alex has left all of his furniture in a garage while backpacking around Europe. In Monaco he met, fell in love with and became engaged to a Princess in the Monaco Royal Family in a whirlwind romance. At the wedding in Monaco Alex told Karl that he no longer had any use for his water bed, bean bag and lava lamp and he wanted to give them to Karl. With a grandiose gesture he presented the garage key to Karl stating to all present that the contents of the garage were now Karl?s. Three weeks later Alex fell to his death while honey-mooning in the Swiss Alps. His will left everything to his new wife, who is intrigued by such quaint objects and wants to travel to Australia to collect them.
Who has the better right to Alex?s objects in the garage? Why? (200 words)
Question 3 (5+5=10 marks)
a. Petra, Quentin and Roslyn formed a small partnership to make some extra money by developing inner-urban properties with the plan of reselling them at a profit. To cut costs they do their own conveyancing. They have encountered the following problem.
Roslyn found 56 Pine Avenue on the internet. A search of the Land Title Register showed that the vendor held an unencumbered fee simple estate. The partners did not bother to inspect the building because they planned to demolish it anyway. The partners agreed to buy the house. Six days after the transaction was settled and the Transfer of Land registered in the partners? names, the partners inspected the property. To their collective surprise, a woman and a child drove up to the house in a car, unpacked their shopping and went inside. The woman came back out and exclaimed to the partners ?Oh, you must be the new landlords. Can I speak with you about the dodgy plumbing?? The woman is a tenant in possession of the property. The lease is for less than 3 years and unregistered.
Must the partners take the land subject to the lease, or can they demand that the tenants leave the premises? (250 words)
b. Petra, Quentin and Roslyn have struck another problem.
When Quentin inspected 104 Station Street he noticed nothing suspicious. A search of the Land Title Register showed that the vendor held an unencumbered fee simple estate. The partners agreed to buy the house. Six months after the transaction was settled and the Transfer of Land registered in the partners? names a man opened the back gate to the lane, drove a truck across the backyard, opened another gate on the other side of the yard that had not been noticed before, and then drove the truck into the rear of the house next door. When he returned to close the gates he explained that an easement of carriageway had been created in favour of his neighbouring land by a deed that was not registered.
Must the partners take the land subject to the easement in favour of the neighbouring land? (250 words)

Question 4 (10 marks)
Mandy owned a convenience shop. She decided to upgrade it in order to stay ahead of the competition, moving the north wall to make room for a liquor section, installing more refrigeration in order to expand the range of frozen goods, and so forth. ?It will be mini-supermarket, like the ones you see in the city!? she told her mother on the telephone. Mandy would have to borrow money to achieve her objective but she had always paid for things in cash, so did not have a successful credit record, and the present value of the shop was too low to serve as a security for the loan she had in mind.
Coincidentally, friends of Mandy?s mother, Mr and Mrs Bhutto who lived in the next town, were looking for an investment but were very wary of institutional investment after losing a lot of money during the Global Financial Crisis. However, they trusted Mandy implicitly and admired her plans. ?We should always invest in people,? said Mrs Bhutto.
?Let?s do it this way!? proposed Mr Bhutto. You transfer to us your registered title to the shop in exchange for the amount of the loan. Then we will rent your shop to you ? the monthly rent you pay will service the loan and repay the loan by instalments over 20 years. When you have repaid the loan, which you can do at any time, we will re-transfer the title to you.? Mandy saw the proposal as an ideal solution and they implemented it. The arrangement worked perfectly and everyone was very happy.
However, after 10 years the elderly mother of Mrs Bhutto needed assistance and she and Mr Bhutto made plans to return to Pakistan to assist her. Everyone started thinking hard what to do about the arrangement. A business acquaintance of Mr Bhutto, Mr Iain Campbell, expressed interest in buying out his interest. The discussion progressed. Mr Bhutto fully explained the right of Mandy to pay out the loan and get a retransfer of the title. The new arrangement went ahead and they embodied their agreement in a contract of sale. Mr Campbell would pay Mr Bhutto the current outstanding balance of the loan and Mr Bhutto would transfer the shop title to Mr Campbell. Mandy?s tenancy would continue as before.
Five years after Mr Campbell became registered as proprietor of the title to the shop Mandy won enough money in a rare ?flutter? on the Melbourne Cup to pay out the balance of the loan and wrote to Mr Campbell explaining her intention to do so. At first Mr Campbell wrote back explaining his calculation of the outstanding balance, with which Mandy agreed. However, he later telephoned Mandy explaining that he was now the registered owner and he had his own plans for the shop. Some days later, Mandy received a notice terminating her tenancy in one month?s time.
Explain Mandy?s rights. (500 words)

Question 5 (20 marks)
Kelly was the registered proprietor of a fee simple estate in some forested land known as ?Ferny Glen?. She built a cabin and moved there to ?escape the rat race? where she would devote herself to a peaceful life creating artistic works in wool. While exhibiting her works in Melbourne she met John Cooper, a member of the visiting UK sailing team. Kelly decided to return with him to England and help in the family shipping company.

Kelly left any outstanding affairs in the hands of her sister Laurel. After five years Kelly had virtually forgotten about her life in Australia and had lost touch with Laurel. Laurel was accepted into the Sorbonne Medical School to undertake postgraduate work. She explained to a work colleague, Jess, that her bush block ?Ferny Glen? had become a major obstacle to her realising this opportunity, her great dream. She did not explain that the title was registered in the name of her sister Kelly. Jess said that she had been looking for some land in the country and, without inspecting it, offered $900,000 ? about 75% of its market value. Laurel agreed on the condition that they could conclude the transaction within five days. Laurel forged Kelly?s signature on the Transfer of Land document. Jess noted the different name on the transfer. Laurel told him that Kelly was her real name but she had been called Laurel since kindergarten, where she had a constant friend called Hardy. Jess paid cash for the land and registered as proprietor of ?Ferny Glen?. Laurel spent the money on her further studies. In her final year of studies she married and settled in Paris.

Soon after acquiring the land, another tempting opportunity came Jess?s way. ?It never rains, but it pours,? said Jess to his friend Bruce as they looked around a restaurant for sale with views of the bay, ?Who could pass this up?? To raise her share of the purchase price, Jess mortgaged ?Ferny Glen? and all of her other assets to secure a business loan of $2 million from Far Flung Finance. The mortgage was not registered because Jess could not find the duplicate Certificate of Title. She promised to provide it or a replacement forthwith, but over time everyone forgot about it.

Jess?s favourite niece Sabine was undertaking a Ph D on forest eco-systems when she recognised the enormous potential in ?Ferny Glen? as the centre of an eco-tourism business. She explained her thoughts to Jess, how she would extend the cabin and build exercise facilities, as well as trails through the forest and bird hides. Its proximity to the mountains would attract cross-country skiers, she suggested, and she could work as a scientific advisor with the Department of Environment & Natural Resources in a nearby town. Jess?s interests had already turned to ocean racing yachts, and she told Sabine that if she did all of that she would transfer to her the title to the land. She did not think to tell her about the mortgage. Sabine moved into the cabin and started work straight away. Over five years she spent $250,000 and hundreds of hours. Sabine?s business throve.

Unfortunately, Jess?s did not. One by one her ocean racing yachts, light aircraft, racehorses and sports cars were sold. Jess decided to refinance her business. Dependable Bank Co agreed. A valuer employed by Dependable Bank inspected ?Ferny Glen? and reported that it was worth $1.5 million. Dependable Bank advanced $2 million on security over all of Jess?s assets, including ?Ferny Glen?. Jess found the duplicate Certificate of Title and handed it over with an executed registrable instrument of mortgage. The $2 million disappeared quickly into the financial black hole of Jess?s business debts to the taxation department, employees and trade suppliers.

The mortgage to Dependable Bank over ?Ferny Glen? was not registered at the time when Jess slammed her last powerful car into a bridge pylon at 200 kilometres per hour and died. In her will, made 30 years beforehand, she left her entire estate, real and personal, to Adam ? her lover at that time.

Meanwhile, Kelly has returned from England and upon discovering the situation at ?Ferny Glen? placed a caveat on the title. Sabine and the Far Flung Finance have also lodged caveats.

Describe the interests held in ?Ferny Glen? by Kelly, Adam, Far Flung Finance, Sabine and Dependable Bank.

Determine the relative priority between their interests. (800 words)


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