2018_Practice

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May 23, 2024

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2018 QUESTION 1 All land in this problem question is governed by the Torrens System. Whiteacre and Blackacre are adjoining blocks of land in South Australia. Allan is the registered owner of Blackacre. The property has been in his family for 150 years and Allan is very attached to his family home. Allan’s son, Evan, is a lawyer who runs a successful legal practice in the city. Evan does all of Allan’s legal work, including with respect to Blackacre. Facts here set-up the problem and are most relevant to question three. Specifically, noting that the land has been in the family for such a long time is relevant to the ethics of taking it away under the mortgage. Every year Evan travels to Las Vegas to gamble. On his last trip, Evan lost $100,000. Most of this money was placed on credit cards and he was having a hard time repaying the debt once he returned to Australia. To alleviate his financial worries, Evan decided to transfer Blackacre into his name and execute a mortgage for $100,000. In Evan’s mind this was only going to be a temporary arrangement and Allan did not need to know. Evan forged Allan’s signature on the transfer document, including the other required forms, and lodged the instrument online using the PEXA platform. Once Evan was the registered owner of Blackacre he visited his bank (Capital) and organised a mortgage for the sum of his debt. In the first paragraph, we learned that Evan does all the legal work with respect to Blackacre. This is consistent with the 2016 amendments which required dealings with property to be done through a conveyancer or a solicitor. By transferring the land to himself, Evan has engaged in forgery as interpreted in section 69(b) of the RPA and Breskvar v Wall . Evan has registered the fee simple and so at this point he has a legal fee simple. Note that the facts specifically mention forgery. If they did not, an argument could be made under section 69(a) of the RPA and cases such as Bahr v Nicolay & Loke Yew v Port Swettenham . The mortgage was ‘executed’ by Evan and this implies registration. This is supported further by the fact that Evan visits the bank (Capital) and organises a mortgage. However, good answers might consider that only an equitable mortgage has been created and note that an equitable mortgage mirrors a legal mortgage in substance and effect. Question does not turn on this fact and you are not asked to advise on the Bank’s legal position. … Manny is the registered owner of Whiteacre. Manny has just been appointed Secretary General of the United Nations and so enters a 10-year lease over Whiteacre with Peter. Rent is set at $400 a week and Manny is given the option to increase rent at the end of END OF EXAMINATION
each year. The lease agreement permits Peter to sub-let and assign Whiteacre but the lease is never registered. Agreement is called a lease but it must satisfy the substantive requirements – term and rent, per Radichv Smith . Looks satisfied on the facts. Question whether a 10 year lease needs to be registered as per the RPA. Also apply sections 3 &5 of the RTA. Peter has been living in Whiteacre for 3 years but decides to move interstate for work. Peter assigns the rest of his interest to his brother Paul and informs Manny of the change. Paul cannot move into the house straight away and so he enters into a written contract with Claire to sublet Whiteacre for 3 years. After Claire has been living in the house for 1 year, Manny decides to increase the rent by $50 a week. Manny passes this information on to Paul and Paul advises Claire. However, Claire thinks that this increase is too large and continues to pay Paul $400 a week. To enforce a covenant the parties need to be either in a relationship of privity of estate or privity of contract. Note that Peter has express permission under the terms of his contract to assign or sub-let the land. Initially Peter and Manny have both privity and estate and privity of contract. Once Peter assigns his interest, Manny and Paul have privity of estate. Once Paul sub-let’s his interest to Claire, Manny does not have privity of estate or privity of contract with Claire. 1. Evan is unable to repay the interest on his mortgage and after six months the bank exercises its power of sale. Michael purchases the property and becomes registered owner. Is there anything Allan can do to regain his property? (30 marks) a. Run through power of sale under section 133 RPA. b. Dispute between Allan and Michael is a prior equitable fee simple v a subsequent legal fee simple. Using Bahr v Nicolay (No 2) Allan’s right might also be defined as an equitable right to have the have the register corrected. c. Argument concerns exceptions to indefeasibility. Can Allan bring forger home to Michael? No. Michael, will satisfy the proviso and so take the land free and clear. Michael can seek compensation under the assurance fund per section 201 of the RPA. 2. Manny is upset that the rent increase is not being paid. On a return visit to Adelaide he visits Whiteacre but was chased off the property by a woman he did not know. Advise Manny if he can terminate the lease agreement and regain possession of Whiteacre. Is there anything Claire can do to stay in Whiteacre until her lease expires? (50 marks) a. Under section 124 of the RPA there is an implied covenant in each lease agreement that the lessee will pay rent. Claire is breaching this covenant. Section 125(c) also gives Manny the right to terminate lease if rent is not being paid. Important to note that Manny cannot enforce covenant against Claire but he can pursue his interest via Paul. b. If Manny seeks to terminate the lease, two parties are impacted. Only END OF EXAMINATION
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