Land Law Final Exam Notes
Title, Interest and Priorities
The doctrine of tenure and estates in New Zealand
The doctrine of tenure is division of land based on space. The doctrine's legal effect is: The crown is the owner of all the
land. No one has absolute ownership. Rather, landowners hold the land 'of' the Crown as tenants (therefore tenure).
This was extended to and applied in New Zealand from 1840 and land in NZ is said to be held by the crown (Veale v
Brown).
● Crown holds customary title subject to customary rights (AG v Ngati Apa)
As such, if you do not own the land, what do you own?
You own an estate in land (doctrine of estate) and is an abstract concept representing rights exercised to that land.
● This gives the owner exclusive possession subject to interests in land such as
○ Easements
○ Covenants
○ Leases etc
4 Types of Estates:
Fee Simple Estate The holder has exclusive possession to land indefinitely. Full right to use, enjoyment and alienation
Life Estate Lasts for the person OR another person's lifetime. (Usually for estate planning)
Stratum Estate Essentially apartments - either freehold or lease.
Leasehold Estate Legal right to exclusive possession for a certain period LESS than the period for which the landlord
holds the land.
Common law and equity
Estates and interest in land may be legal or equitable. However, legal estate complies for formalities (eg registration).
● On the other hand, equitable estates or interest CANNOT be registered but can lodge a caveat to prevent dealing.
Conditions for Equity Intervention
● Valuable Consideration
● Remedy of Specific Performance
Difference between Legal and Equitable
Legal Equitable
Creation in order to create a legal interest for most purposes equitable interests on the other hand can be created
that requires registration under the land transfer and informal ways. (Eg, agreement or deed of lease,
system. So once that formal process has been agreement to mortgage)
completed, then a legal estate or interest has been
created.
Assignment a legal assignment is only effective when the May assign informally (eg, under oral agreement for
formalities have been completed, which for most sale and purchase)
purposes means registration of a transfer under
the land transfer system. (Statutory requirements).
Enforceability Enforceable against the world only enforceable as between the original parties and
if you have a registered legal interest as third parties who had notice - but limited by LT
enforceable against everyone, through the system
indivisibility concept
Priorities Properties between accepting legal interest based Prima Facie priorities are based on the date of
on date of registration creation unless there is a reason to reverse
,The concept of "title"; adverse possession and prescriptive title
Title = Ownership of Property and has
● Right to maintain possession by an action in trespass
● Right to recover possession by an action of ejectment
However, title is relative and a better title can defeat the defendant. This includes people with adverse possession
(squatters right - someone who acquires legal ownership based on continuous possession of the property) and can claim:
● Title by limitation
● Title by prescription
○ S155 and 270 of LTA 2017
■ Title can only raise on proof of uninterrupted use or possession of the land for 20 years and
continued possession thereafter until a claim for title is lodged with the land registry office
The Land Transfer System of title registration; automation
Now we use the land transfer system (aka Torrens System) to replace the Deed System.
Rationale: Certainty of Register, no need to check chain of title and protect the registered title holder through indefeasibility.
Effect of the Registration
● Section 51 - Title by Registration and cannot be set aside
● Section 35 - Priorities between registered interest is determined by the time of registration
Practically what happens (Landonline)
● E-Search - online title search
● E-Dealing - Lodging instrument for registration
Unregistered interests and priorities
Competing Interests
2 Registered First to register has legal interest
1 Registered 1 If registered, then legal right to land is indefeasible
not
2 Unregistered May arise from enforceable contracts (Eg, loans from two lenders).
The Contract must be for VALUABLE CONSIDERATION and the remedy of SPECIFIC PERFORMANCE
must be available. Re Universal Management
For remedy of specific performance with respect to land you need either
● An agreement in writing (s24 PLA 2007) or
● Part performance (s26 PLA 2007)
False Colours
HoneyBone Honeybone was RO and borrowed money from N, instead of granting mortgage,
honeybone signs transfer to N with duplicate CT to N. (back in the days where there
way CT). N hold on these documents. Although N agreed stated he would not transfer,
he did and transferred.
N then borrowed money and used land as security to the loan and handed CT and
mortgage documents to the bank.
Honeybone lodges cavent to protect equitable right to have land returned when the
debt is returned to N.
Now! Two competing equitable interest
● Honeybone has equity to redemption to have land returned
● Bank mortgage.
, Held: H’s equitable interest displaced because he falsely represented the transaction
between him and K that it was a sales arrangement rather than a mortgage agreement.
First in Time
AGC v CFC
Property had to be sold eventually for 160k. Neither mortgage was registered, and
both P and D were promised first ranking security in relation to the property. CFC went
to court saying it was them who had first charge over the property as they wanted the
first right to take their money to be paid back using the 160k. CFC was to challenge
the caveat
Held: Mortgage to AGC loses priority as they delayed on lodging caveat and FCF
acted on reliance on the title search.
The delay of the lodging caveat AND failure to get the duplicate CT justified a reversal
of the priorities.
Note: Courts then stated,
■ Must direct attention to whole conduct of the both parties
■ In working out equity, does not limit to looking at time where interest is created
(must look at subsequent conduct too).
■ Because CFC delayed in challenging AGCs caveat, CFC had to indemnify the
loss suffered by AGC due to the delay.
● Land was sold and CFC had to pay $55,000 out of the proceeds from
the sale
Note 2: it was implied that if CFC had not searched the titles then the priorities
probably would not have been reversed.
Equitable Priorities - notice
● Subject to certain exceptions an equitable interest acquired with notice of an earlier equitable
interest cannot prevail over that earlier interest.
● The earlier right prevails against the later right if the acquirer of the later right knows of the
earlier right or would have discovered it had he taken proper steps (constructive notice) Barclays
Bnkas O’Brien.
Effect of Knowledge O’Keary v Sentiero Properties
● O was RO and leased land to farmers which included an option to purchase. (Equitable interest
for farmers to buy). Then O entered into S&P with S who now has second interest.
● S should have known of the farmers priority and cannot reverse priorities.
, Indefeasibility, Exceptions and Compensation
“Indefeasibility” of title and the manifest injustice exception
Concept
● Kerr (1926)
○ The Torrens system aims to facilitate the proof of title to estates in land
○ The Register should prove such title to all the world and against all the world
○ Bona fide purchasers can rely absolutely on the title appearing in the Register, and, on becoming
registered… cannot be defeated… notwithstanding whatsoever glaws there may have been in the title of
his vendor.
● CA explained in Harvey v Hurley
○ “the starting point in any consideration of estates or interests held pursuant to the provisions of the Land
Transfer Act is the principle of indefeasibility of title. That principle is central to our system of land
registration”
○ “On registration, instruments become part of the register and are to be treated as if written out on the face
of the register. Anyone proposing to deal with the land is required “to examine the documents
constructively placed before his eyes”.
○ Indefeasibility provides protection against adverse interest.
■ Claims of competing owners who at common law would point to defect in chain of ownership of
current owner
■ Other interests not noted on the register such as unregistered mortgages
Relevant Law: LTA 2017
51 (1) On registration under this Act of a person as the owner of an estate or interest in land, the person
obtains a title to the estate or interest that cannot be set aside.
Title by (2) The title of the registered owner is free from estates and interests in the land that—
registration (a) are not registered or noted on the register; or
(b) are not capable of being registered or noted on the register.
(3) Despite subsections (1) and (2), the title of the person registered as owner of the estate or interest is
subject to—
(a) the exceptions and limitations in sections 52 to 56, subparts 1 and 3 of Part 4, and section 204;
and
(b) any enactment other than this Act that overrides or limits the title.
(4) Subsections (1) and (2) apply whether or not the registered owner acquired the estate or interest—
(a) for valuable consideration; or
(b) from a fictitious person.
(5) Nothing in this section affects the in personam jurisdiction of the court.
52 (1) The title of the registered owner to an estate or interest in land is subject to the following exceptions
and limitations:
Exceptions (a) in a case where the title of the estate or interest of the registered owner is acquired through fraud
and on the part of the registered owner or the registered owner’s agent:
limitations (b) an estate or interest registered or noted on the record of title at the time of registration:
(c) the estate or interest of a person having a valid claim to the same estate or interest under a prior
record of title:
(d) the estate or interest of another registered owner that has been included in the record of title as a
result of an incorrect description of area or boundaries:
(e) an easement omitted from, or incorrectly described in, the record of title regardless of whether the
easement was created before or after the land was brought under this Act.
(2) Nothing in this section limits section 54.
Immediate Indefeasibility
Registration of a void or voidable instrument by a bona fide purchaser confers ‘immediate’ indefeasibility.
Title, Interest and Priorities
The doctrine of tenure and estates in New Zealand
The doctrine of tenure is division of land based on space. The doctrine's legal effect is: The crown is the owner of all the
land. No one has absolute ownership. Rather, landowners hold the land 'of' the Crown as tenants (therefore tenure).
This was extended to and applied in New Zealand from 1840 and land in NZ is said to be held by the crown (Veale v
Brown).
● Crown holds customary title subject to customary rights (AG v Ngati Apa)
As such, if you do not own the land, what do you own?
You own an estate in land (doctrine of estate) and is an abstract concept representing rights exercised to that land.
● This gives the owner exclusive possession subject to interests in land such as
○ Easements
○ Covenants
○ Leases etc
4 Types of Estates:
Fee Simple Estate The holder has exclusive possession to land indefinitely. Full right to use, enjoyment and alienation
Life Estate Lasts for the person OR another person's lifetime. (Usually for estate planning)
Stratum Estate Essentially apartments - either freehold or lease.
Leasehold Estate Legal right to exclusive possession for a certain period LESS than the period for which the landlord
holds the land.
Common law and equity
Estates and interest in land may be legal or equitable. However, legal estate complies for formalities (eg registration).
● On the other hand, equitable estates or interest CANNOT be registered but can lodge a caveat to prevent dealing.
Conditions for Equity Intervention
● Valuable Consideration
● Remedy of Specific Performance
Difference between Legal and Equitable
Legal Equitable
Creation in order to create a legal interest for most purposes equitable interests on the other hand can be created
that requires registration under the land transfer and informal ways. (Eg, agreement or deed of lease,
system. So once that formal process has been agreement to mortgage)
completed, then a legal estate or interest has been
created.
Assignment a legal assignment is only effective when the May assign informally (eg, under oral agreement for
formalities have been completed, which for most sale and purchase)
purposes means registration of a transfer under
the land transfer system. (Statutory requirements).
Enforceability Enforceable against the world only enforceable as between the original parties and
if you have a registered legal interest as third parties who had notice - but limited by LT
enforceable against everyone, through the system
indivisibility concept
Priorities Properties between accepting legal interest based Prima Facie priorities are based on the date of
on date of registration creation unless there is a reason to reverse
,The concept of "title"; adverse possession and prescriptive title
Title = Ownership of Property and has
● Right to maintain possession by an action in trespass
● Right to recover possession by an action of ejectment
However, title is relative and a better title can defeat the defendant. This includes people with adverse possession
(squatters right - someone who acquires legal ownership based on continuous possession of the property) and can claim:
● Title by limitation
● Title by prescription
○ S155 and 270 of LTA 2017
■ Title can only raise on proof of uninterrupted use or possession of the land for 20 years and
continued possession thereafter until a claim for title is lodged with the land registry office
The Land Transfer System of title registration; automation
Now we use the land transfer system (aka Torrens System) to replace the Deed System.
Rationale: Certainty of Register, no need to check chain of title and protect the registered title holder through indefeasibility.
Effect of the Registration
● Section 51 - Title by Registration and cannot be set aside
● Section 35 - Priorities between registered interest is determined by the time of registration
Practically what happens (Landonline)
● E-Search - online title search
● E-Dealing - Lodging instrument for registration
Unregistered interests and priorities
Competing Interests
2 Registered First to register has legal interest
1 Registered 1 If registered, then legal right to land is indefeasible
not
2 Unregistered May arise from enforceable contracts (Eg, loans from two lenders).
The Contract must be for VALUABLE CONSIDERATION and the remedy of SPECIFIC PERFORMANCE
must be available. Re Universal Management
For remedy of specific performance with respect to land you need either
● An agreement in writing (s24 PLA 2007) or
● Part performance (s26 PLA 2007)
False Colours
HoneyBone Honeybone was RO and borrowed money from N, instead of granting mortgage,
honeybone signs transfer to N with duplicate CT to N. (back in the days where there
way CT). N hold on these documents. Although N agreed stated he would not transfer,
he did and transferred.
N then borrowed money and used land as security to the loan and handed CT and
mortgage documents to the bank.
Honeybone lodges cavent to protect equitable right to have land returned when the
debt is returned to N.
Now! Two competing equitable interest
● Honeybone has equity to redemption to have land returned
● Bank mortgage.
, Held: H’s equitable interest displaced because he falsely represented the transaction
between him and K that it was a sales arrangement rather than a mortgage agreement.
First in Time
AGC v CFC
Property had to be sold eventually for 160k. Neither mortgage was registered, and
both P and D were promised first ranking security in relation to the property. CFC went
to court saying it was them who had first charge over the property as they wanted the
first right to take their money to be paid back using the 160k. CFC was to challenge
the caveat
Held: Mortgage to AGC loses priority as they delayed on lodging caveat and FCF
acted on reliance on the title search.
The delay of the lodging caveat AND failure to get the duplicate CT justified a reversal
of the priorities.
Note: Courts then stated,
■ Must direct attention to whole conduct of the both parties
■ In working out equity, does not limit to looking at time where interest is created
(must look at subsequent conduct too).
■ Because CFC delayed in challenging AGCs caveat, CFC had to indemnify the
loss suffered by AGC due to the delay.
● Land was sold and CFC had to pay $55,000 out of the proceeds from
the sale
Note 2: it was implied that if CFC had not searched the titles then the priorities
probably would not have been reversed.
Equitable Priorities - notice
● Subject to certain exceptions an equitable interest acquired with notice of an earlier equitable
interest cannot prevail over that earlier interest.
● The earlier right prevails against the later right if the acquirer of the later right knows of the
earlier right or would have discovered it had he taken proper steps (constructive notice) Barclays
Bnkas O’Brien.
Effect of Knowledge O’Keary v Sentiero Properties
● O was RO and leased land to farmers which included an option to purchase. (Equitable interest
for farmers to buy). Then O entered into S&P with S who now has second interest.
● S should have known of the farmers priority and cannot reverse priorities.
, Indefeasibility, Exceptions and Compensation
“Indefeasibility” of title and the manifest injustice exception
Concept
● Kerr (1926)
○ The Torrens system aims to facilitate the proof of title to estates in land
○ The Register should prove such title to all the world and against all the world
○ Bona fide purchasers can rely absolutely on the title appearing in the Register, and, on becoming
registered… cannot be defeated… notwithstanding whatsoever glaws there may have been in the title of
his vendor.
● CA explained in Harvey v Hurley
○ “the starting point in any consideration of estates or interests held pursuant to the provisions of the Land
Transfer Act is the principle of indefeasibility of title. That principle is central to our system of land
registration”
○ “On registration, instruments become part of the register and are to be treated as if written out on the face
of the register. Anyone proposing to deal with the land is required “to examine the documents
constructively placed before his eyes”.
○ Indefeasibility provides protection against adverse interest.
■ Claims of competing owners who at common law would point to defect in chain of ownership of
current owner
■ Other interests not noted on the register such as unregistered mortgages
Relevant Law: LTA 2017
51 (1) On registration under this Act of a person as the owner of an estate or interest in land, the person
obtains a title to the estate or interest that cannot be set aside.
Title by (2) The title of the registered owner is free from estates and interests in the land that—
registration (a) are not registered or noted on the register; or
(b) are not capable of being registered or noted on the register.
(3) Despite subsections (1) and (2), the title of the person registered as owner of the estate or interest is
subject to—
(a) the exceptions and limitations in sections 52 to 56, subparts 1 and 3 of Part 4, and section 204;
and
(b) any enactment other than this Act that overrides or limits the title.
(4) Subsections (1) and (2) apply whether or not the registered owner acquired the estate or interest—
(a) for valuable consideration; or
(b) from a fictitious person.
(5) Nothing in this section affects the in personam jurisdiction of the court.
52 (1) The title of the registered owner to an estate or interest in land is subject to the following exceptions
and limitations:
Exceptions (a) in a case where the title of the estate or interest of the registered owner is acquired through fraud
and on the part of the registered owner or the registered owner’s agent:
limitations (b) an estate or interest registered or noted on the record of title at the time of registration:
(c) the estate or interest of a person having a valid claim to the same estate or interest under a prior
record of title:
(d) the estate or interest of another registered owner that has been included in the record of title as a
result of an incorrect description of area or boundaries:
(e) an easement omitted from, or incorrectly described in, the record of title regardless of whether the
easement was created before or after the land was brought under this Act.
(2) Nothing in this section limits section 54.
Immediate Indefeasibility
Registration of a void or voidable instrument by a bona fide purchaser confers ‘immediate’ indefeasibility.
