mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Commonwealth Bank of Australia v Baranyay [1993] 1 VR 589
Outcome: followed
accept Perpetual's argument that MFLPH was unable to grant a future lease, whether registered or not registered, after the creation of the mortgage without Perpetual's consent (see Independent Order of Odd Fellows of Victoria Friendly Society v Telford (1991) V ConvR 54-419 per Gobbo J; Commonwealth Bank of Australia v Baranyay [1993] 1 VR 589 at 599 per Hayne J; Rancho Holdings Pty Ltd v Impact Developments (Wodonga) Pty Ltd (1994) V ConvR 54-509 per Batt J; Maher v Commonwealth Bank of Australia [2004] FCA 248 at [24] ; ss 66 and 77 of the TLA (and the equivalent provisions of the LTA); and cl 8 of the common provisions of the mortgage). The time of the creation of the mortgage is the time the mortgages are entered into, not registered. Once the mortgage is registered, it would take priority over any tenancy, but necessarily only a tenancy entered into after the mortgage was created. I should say something more about this conclusion I have reached as to the relevant time for considering the competing claims and the creation of the mortgage. It is important to keep in mind that in this proceeding we are concerned with a competition between a lease and a mortgage, which necessarily brings into operation the principles discussed in Baranyay [1993] 1 VR 589, cl 8 of the common provisions of the mortgage, and the provisions of the TLA and LTA dealing with mortgages and leases. If one were dealing with a competition between a lease and, say, a registered proprietor of the property, the relevant time to consider may be the time of lodgement or registration of the relevant interest. This is because the registered proprietor would not be able to rely upon cl 8 of the common provisions, and the statutory provisions relating to mortgages and leases and their priority, and the focus would be only upon the operation of s 42(2)(e) of the TLA and s 40(3)(d) of the LTA. In this proceeding, the sequence of events in relation to the creation of the lease and mortgage, other than in the case of Gainsford, can be easily resolved, because the leases were clearly entered into prior to the creation of the mortgages. In the case of Smith this is apparent, even accepting the arguments of Perpetual relating to the sequence of events. In the case of Easterbrook and Gray, this is so because there was an agreement for lease from the date of the Agreement for Sale of Real Estate, or upon settlement at which time Easterbrook and Gray were entitled to possession pursuant to an actual lease (which events occurred before the mortgage was created and the principal sum was advanced by Perpetual), or because, contrary to the argument of Perpetual (to be dealt with later), there was no simultaneous lodgement or registration of the transfer of land and mortgage.
Case: Craddock Bros v Hunt [1923] 2 Ch 136
Outcome: cited
turn to the nature of the interest of each retiree. In my view, each retiree had an equitable interest in the land by reason of the fact that each was entitled to specific performance of the Contract of Sale or Agreement for Sale of Real Estate or the Deed of Agreement to the possession of the property as a tenant immediately upon settlement. The extent of that interest is to be determined by the form in which specific performance would be granted by a court. The retirees were entitled as against MFLPH to an order requiring MFLPH to sign and deliver to the retirees upon settlement a lease of the property upon the terms agreed, relevantly for life, subject to the condition that the retiree stay in possession for a certain period and pay the nominal rent (see Downie v Lockwood [1965] VR 257; Craddock Bros v Hunt [1923] 2 Ch 136; Chan v Cresdon Pty Ltd (1989) 168 CLR 242; Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 332-333, [53]; Black v Garnock [2007] HCA 31 ; (2007) 230 CLR 438 at 449-450, [32] ). It is not necessary that specific performance be available at the time of the hearing: Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qd R 712. It is important to appreciate that the availability and the nature of specific performance is a precondition to the recognition of an equitable interest and the extent of that equitable interest in the property. Here, as I have said, a court, by reference to the terms of agreement between the retirees and MFLPH, would give each retiree possession of the land upon settlement by making an order that MFLPH sign and deliver a lease of the property to each retiree effective from the moment of settlement.
Case: Daniels v Davison (1809) 16 Ves 249
Outcome: applied
any event, I have come to the view that even if there is to be a comparison of the two competing interests as suggested by Perpetual, the interests of the retirees have priority. Even accepting that Perpetual took the mortgage at arm's length, in the normal course of its business and for valuable consideration, I have formed this view for the following reasons: (i) the earlier equitable interest in the property of the retirees I have generally regarded as a stronger claim than the later interest of Perpetual; (ii) fairness and justice does not require or indicate the earlier equitable interest of the retirees should be postponed (see Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326 at 341 (per Mason and Deane JJ)); (iii) any lack of notice by Perpetual is only one aspect of the circumstances I have taken into account, which does not displace the earlier interest of the retirees; (iv) Perpetual knew by itself, or its agents, that the properties were occupied, or at the very least expected the properties would be tenanted, even if Perpetual did not know the exact terms of the Contract of Sale or Agreement for Sale of Real Estate or of the lease. If I am wrong in this regard as to knowledge or expectation, this would still not alter my view as to the competing position; (v) the retirees were in fact in possession of the property which I regard as significant, although not 'decisive' (cf Burke v Dawes [1938] HCA 6 ; 59 CLR 1 per Evatt J at 26); (vi) Perpetual had constructive notice of the retirees' rights and it took its interest subject to them, and this occurs even if the tenant is in possession pursuant to additional entitlements: Hunt v Luck (1902) 1 Ch 428; Lowe v Clyne [1968] 2 NSWR 292 ; Daniels v Davison (1809) 16 Ves 249; and Allen v Anthony (1816) 35 ER 679, and particularly McMahon v Swan [1924] VLR 397 at 405-406 and Burke v Dawes 59 CLR 1 at 26-27 per Evatt J; (vii) Perpetual in failing to investigate the interest of the retirees did so at its 'peril' (see Evatt J at 27 in Burke v Dawes [1938] HCA 6 ; 59 CLR 1 ; and Lowe v Clyne [1968] 2 NSWR 292) ; (viii) whilst the retirees did not lodge timely caveats, the failure of the retirees to lodge a caveat is explicable. They were in fact still registered proprietors. In any event, 'the exception in s 42(2)(e) makes the failure to lodge a caveat of no moment, because it takes away from the registered proprietor that paramountcy which actual registration confers; and the only purpose of a caveat is to prevent such registration' (see Burke v Dawes [1938] HCA 6 ; 59 CLR 1 at 25-26 per Evatt J); (ix) further, I do not regard the failure to lodge a timely caveat as sufficient to postpone the retirees' interests, particularly as there was no evidence that Perpetual relied on the registration or absence of caveat (see IGA Distribution Pty Ltd v King &amp; Taylor Pty Ltd [2002] VSC 440 at [205] per Nettle J); and (x) no retiree consented to or ratified the mortgage to Perpetual.
Case: Davies v Littlejohn (1923) 34 CLR 174
Outcome: applied
Perpetual submitted that the interest of an unpaid vendor does not arise out of, and is not an incident of, or referable to, any right of occupation or tenancy because a vendor's lien, like other equitable liens, is a species of equitable charge, not dependent upon possession (referring to Hewett v Court 149 CLR 639 at 645 per Gibbs CJ and at 663 per Deane J). The vendor's lien arises because the unpaid vendor has parted with the legal title by way of conveyance. It is 'created by equity as part of a scheme of equitable adjustment of mutual rights and obligations applying ... to every ordinary contract for the sale of land': Davies v Littlejohn (1923) 34 CLR 174 at 185 per Isaacs J, and as part of the broader scheme whereby the equitable interest in land passes to the purchaser upon execution of the contract of sale: Tyler, Young and Croft, Fisher &amp; Lightwood's Law of Mortgage (2 nd Aust. ed, 2005) at [2.24]. Perpetual submitted that any vendor's lien flows from a separate document to that creating the right of occupation (alternatively, from a severable provision of the same document). The two rights are entirely severable, as each is capable of standing without the other. In each case, if the lease was terminated, the vendor's lien (if it then existed) would stand. Perpetual contended then that the right of occupation and the vendor's lien are not referable to or incident upon the other.
Case: Dillon v Gange (1941) 64 CLR 253
Outcome: applied
I find as fact that the mortgages were entered into and created on, and intended to be effective from and on, the date which each mortgage document bears: Anderson v Weston (1840) 133 ER 117; Dillon v Gange (1941) 64 CLR 253. There was no other evidence which would indicate to the contrary, and the principal sums under the mortgage were in fact advanced by Perpetual on these dates.
Case: Forster v Jojodex Australia Pty Ltd (1972) 127 CLR 421
Outcome: cited
the case of Gainsford the creation of the lease and the mortgage occurred on the same day as settlement. There was no specific evidence of the exact time during that day when each transaction was entered into between the parties. However, at settlement, MFLPH then and there obtained possession of the property so was able to provide such to Gainsford pursuant to the agreement for lease previously entered into and the actual lease which was to commence on 9 December 2004, the settlement day. The intention of the parties as to commencement of the lease was clear; no presumption or prima facie position as to the commencement of the lease therefore need be applied (cf Forster v Jojodex Australia Pty Ltd (1972) 127 CLR 421 at 440-441 per Gibbs J, and Associated Beauty Aids Pty Ltd v Federal Commissioner of Taxation (1965) 113 CLR 662 at 668). The intention of the retirees and MFLPH was that upon the actual time of settlement, MFLPH would grant a tenancy in possession to the retirees, the retirees no longer being entitled to possession of the property. Of course, each retiree remained in actual possession throughout all the transactions, their actual possession never being disturbed.
Case: Goodright d Humphreys v Moses [1746] EngR 208 ; (1774) 96 ER 599
Outcome: cited
Perpetual then contended that the exception to indefeasibility created by s 40(3)(d)(iii) of the LTA was subject to an exception of its own. An equitable lease does not dislodge the indefeasibility of a 'bona fide' purchaser for value without notice of the lease who has lodged a transfer for registration. For the purposes of the LTA, 'transfer' means 'the passing of any estate or interest in land under this Act, whether for valuable consideration or otherwise'. It was contended that the word 'purchaser' must be read in its context and in light of the customary common law usage of the phrase 'bona fide purchaser for value without notice' as extending to the taker of any legal interest in property, not just a transferee. Reference was made to Butt, Land Law (5 th ed, 2007 Lawbook Co); Goodright d Humphreys v Moses [1746] EngR 208 ; (1774) 96 ER 599 at 600, and Pearce and Geddes, Statutory Interpretation in Australia (6 th ed, 2006, LexisNexis) at [4.17]. That interpretation was said to be supported by the use of 'transfer' in s 40(3)(d)(iii); if 'purchaser' meant 'purchaser of the fee simple estate', a word other than 'transfer' (which by the s 3 definition, connotes 'the passing of any estate or interest') would have been used, such as 'assignment'. It was contended that the exception does not elevate the interest of a tenant under an equitable lease above those of all others who hold a registered interest in the land; it merely makes clear that a bona fide purchaser without knowledge has priority over a tenant in all circumstances. It was then contended by Perpetual that the result of the provisions in the LTA is either that: (a) if Perpetual's mortgage was registered simultaneously with or before the transfer to MFLPH, Perpetual was not bound by the alleged tenancy; or (b) if Perpetual's mortgage was registered after the transfer to MFLPH, it was only bound by the alleged tenancy if the Court found that Perpetual did not act bona fide or give good consideration for the mortgage, or it had knowledge of the tenancy at the time of registration. In the case of Easterbrook and Gray, the mortgage was created on 22 March 2005, well after the creation of any equitable lease, and after settlement when Easterbrook and Gray would have been entitled to possession pursuant to their agreement with MFLPH. The Transfer of Land and Mortgage were lodged for registration on the same day, and were each registered the day after. As discussed previously, the Mortgage was registered after the Transfer of Land. Therefore, Perpetual would be bound by the interests of Easterbrook and Gray, unless the exception found in s 40(3)(d)(iii) applied.
Case: Greco v Swinburne Ltd [1991] 1 VR 304
Outcome: applied
see no reason to depart from the views expressed by Gobbo J in Greco v Swinburne Ltd [1991] 1 VR 304 that a lease for life or lives is not void for uncertainty. Whilst the essential characteristic of a fixed term lease is that it must be of a specified maximum duration, this rule may not apply to periodic leases or leases for life (see Re Midland Railway Company Agreement v British Railways Board [1971] Ch 725 at 731-2; Bradbrook, MacCallum &amp; Moore, Australian Real Property Law (4 th ed, Lawbook Co, 2007) at [14.100]; and Foa's General Law of Landland and Tenant (8 th ed, Thames Bank Publishing Co, 1957) at [150]-[154] although see Prudential Assurance Co Ltd v London Residuary Body [1991] UKHL 10 ; [1992] 3 WLR 279 and Peter Sparkes, Certainty of Leasehold Terms (1993) 109 LQR 93).
Case: Grundt v Great Boulder Proprietary Gold Mines Limited [1937] HCA 58 ; (1937) 59 CLR 641
Outcome: cited
retirees alternatively submitted that equity comes to the relief of a plaintiff who has acted to its detriment on the basis of a fundamental assumption, the adoption of which the defendant has played such a part that it would be unfair or unjust if the defendant were left free to ignore it - equity intervening on the footing that it would be unconscionable for the defendant to deny the assumption (see Grundt v Great Boulder Proprietary Gold Mines Limited [1937] HCA 58 ; (1937) 59 CLR 641 at 675; Thompson v Palmer [1933] HCA 61 ; (1933) 49 CLR 507 at 547; and Waltons Stores (Interstate) Limited v Maher [1988] HCA 7 ; (1988) 164 CLR 387 and 404 (per Mason CJ and Wilson J)).
Case: Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326 at 341
Outcome: applied
any event, I have come to the view that even if there is to be a comparison of the two competing interests as suggested by Perpetual, the interests of the retirees have priority. Even accepting that Perpetual took the mortgage at arm's length, in the normal course of its business and for valuable consideration, I have formed this view for the following reasons: (i) the earlier equitable interest in the property of the retirees I have generally regarded as a stronger claim than the later interest of Perpetual; (ii) fairness and justice does not require or indicate the earlier equitable interest of the retirees should be postponed (see Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326 at 341 (per Mason and Deane JJ)); (iii) any lack of notice by Perpetual is only one aspect of the circumstances I have taken into account, which does not displace the earlier interest of the retirees; (iv) Perpetual knew by itself, or its agents, that the properties were occupied, or at the very least expected the properties would be tenanted, even if Perpetual did not know the exact terms of the Contract of Sale or Agreement for Sale of Real Estate or of the lease. If I am wrong in this regard as to knowledge or expectation, this would still not alter my view as to the competing position; (v) the retirees were in fact in possession of the property which I regard as significant, although not 'decisive' (cf Burke v Dawes [1938] HCA 6 ; 59 CLR 1 per Evatt J at 26); (vi) Perpetual had constructive notice of the retirees' rights and it took its interest subject to them, and this occurs even if the tenant is in possession pursuant to additional entitlements: Hunt v Luck (1902) 1 Ch 428; Lowe v Clyne [1968] 2 NSWR 292 ; Daniels v Davison (1809) 16 Ves 249; and Allen v Anthony (1816) 35 ER 679, and particularly McMahon v Swan [1924] VLR 397 at 405-406 and Burke v Dawes 59 CLR 1 at 26-27 per Evatt J; (vii) Perpetual in failing to investigate the interest of the retirees did so at its 'peril' (see Evatt J at 27 in Burke v Dawes [1938] HCA 6 ; 59 CLR 1 ; and Lowe v Clyne [1968] 2 NSWR 292) ; (viii) whilst the retirees did not lodge timely caveats, the failure of the retirees to lodge a caveat is explicable. They were in fact still registered proprietors. In any event, 'the exception in s 42(2)(e) makes the failure to lodge a caveat of no moment, because it takes away from the registered proprietor that paramountcy which actual registration confers; and the only purpose of a caveat is to prevent such registration' (see Burke v Dawes [1938] HCA 6 ; 59 CLR 1 at 25-26 per Evatt J); (ix) further, I do not regard the failure to lodge a timely caveat as sufficient to postpone the retirees' interests, particularly as there was no evidence that Perpetual relied on the registration or absence of caveat (see IGA Distribution Pty Ltd v King &amp; Taylor Pty Ltd [2002] VSC 440 at [205] per Nettle J); and (x) no retiree consented to or ratified the mortgage to Perpetual.
Case: Hedley v Roberts (1977) VR 282
Outcome: applied
contrary to my analysis and the tenancy by estoppel principles are applicable and relevant, then on the basis of the sequence of events I have found occurred, the estoppel would be fed prior to the grant of the mortgage. This is either because the mortgage was registered after the transfer of land, or because upon registration of the transfer of land, the title feeds the estoppel, so that the earlier grant of the lease operates retrospectively as if MFLPH had legal title (if that was required) at the time of the earlier grant of the lease or entry into the agreement for lease (see Hedley v Roberts (1977) VR 282 at 285 per Harris J (and the references mentioned therein)).
Case: Hewett v Court [1983] HCA 7 ; (1983) 149 CLR 639
Outcome: cited
the retirees' submitted, a vendor is entitled to an equitable lien to the extent of the non-payment of the purchase money after completion of a contract of sale, referring to Hewett v Court [1983] HCA 7 ; (1983) 149 CLR 639 , per Gibbs CJ at 645: Equitable lien does not depend either upon contract or upon possession. It arises by operation of law, under a doctrine of equity "as part of a scheme of equitable adjustment of mutual rights and obligations" ... A vendor's lien for unpaid purchase money has been said to be founded on the principle that "a person, having got the estate of another, shall not, as between them, keep it, and not pay the consideration." The retirees claimed to be entitled to an equitable interest in their property by reason of an equitable lien to the extent of the non-payment of the purchase price after completion of their respective sale contracts and as contemplated by a special condition in those contracts. By way of example, Gainsford's contract stated: The balance of the Purchase Price is payable by the Purchaser to the Vendor in instalments of $720.00 per calendar month commencing on the one month anniversary of the Settlement Date and payable calendar monthly thereafter ... It was argued that the lien is a form of charge over the land and may, in general, be enforced in the same way as any other equitable charge, namely by sale in pursuance of court order (see Hewett v Court [1983] HCA 7 ; 149 CLR 639 at 663 per Deane J). However, Perpetual submitted that the interest of an unpaid vendor does not arise out of, and is not an incident of, or referable to, any right of occupation or tenancy because a vendor's lien, like other equitable liens, is a species of equitable charge, not dependent upon possession (referring to Hewett v Court 149 CLR 639 at 645 per Gibbs CJ and at 663 per Deane J). The vendor's lien arises because the unpaid vendor has parted with the legal title by way of conveyance. It is 'created by equity as part of a scheme of equitable adjustment of mutual rights and obligations applying ... to every ordinary contract for the sale of land': Davies v Littlejohn (1923) 34 CLR 174 at 185 per Isaacs J, and as part of the broader scheme whereby the equitable interest in land passes to the purchaser upon execution of the contract of sale: Tyler, Young and Croft, Fisher &amp; Lightwood's Law of Mortgage (2 nd Aust. ed, 2005) at [2.24]. Perpetual submitted that any vendor's lien flows from a separate document to that creating the right of occupation (alternatively, from a severable provision of the same document). The two rights are entirely severable, as each is capable of standing without the other. In each case, if the lease was terminated, the vendor's lien (if it then existed) would stand. Perpetual contended then that the right of occupation and the vendor's lien are not referable to or incident upon the other.
Case: HKCB Finance Limited v Yuen Yi Wan [2004] HKEC 1564
Outcome: cited
submitted that the cases upon which the retirees rely in an attempt to distinguish Abbey have no application in this case (referring to Koompahtoo Aboriginal Land Council v KLALC Property &amp; Investment Pty Ltd [2006] NSWSC 856 ; Barclay's Bank plc v Zaroovabli [1997] Ch 321; HKCB Finance Limited v Yuen Yi Wan [2004] HKEC 1564). In my view, everything will depend upon the facts of each case, and Abbey is not setting down any inflexible rule or principle (see eg Koompahtoo Aboriginal Land Council v KLALC Property &amp; Investment Pty Ltd [2006] NSWSC 856 ; HKCB Finance Limited v Yuen Yi Wan [2004] HKEC 1564 at [61]). The nature of the transactions, their sequence, and the Money for Living scheme indicate that the transactions the subject of the registration of the transfer and mortgage were not indissolubly bound together, and the mortgage should be regarded as a separate and distinct transaction from the transfer and grant of lease, which transactions did occur simultaneously, and prior to the creation of the mortgages in the case of each retiree.