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PROPERTY LAW > Mechanics of the LTA > Flashcards

Mechanics of the LTA Flashcards

1
Q

History of Land Transfer

LTA [when]

The LT (Automation) Amendment Act [when]

Land Transfer Systems

A

LTA 1956

 Previously an RP in possession of freehold land was entitled to a CT under the LTA 1956: o	incl Name, Nature of estate, legal description, notes of interests, authenticated by seal of registrar, original for register and copy for RP produced

The LT (Automation) Amendment Act [1998]

  coverted paper based titles to ‘electronic transactions land’ o	incl unique identifier, description, any restrictions on RP o	This conversion would cancel existing paper CT’s from date transaction takes effect

Land Transfer Systems

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2
Q

Land Transfer Systems

Freehold [4 kinds] OLLL

Leasehold

A

Freehold -

I. Ordinary, fully guaranteed title – issued CT if applicant was in possession of land, competent to make an application of land where boundaries defined by instrument of title/plans
II. Limited as to parcels – issue with boundaries of land
III. Land as to title – issued with defect title to land
IV. Limited as to parcels and title

Leasehold -
• Electronic transactions land of this kind will state ‘leasehold’, date of commencement, and refer to Landlord’s CT
• On expiry of lease, leasehold CT is cancelled

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3
Q

Computer Registrar

A 
o	LT (Automation) Amendment Act 1998 – set out provisions for automation of land titles – gave power to Registrar to create computer registers for estates and interest in land
o	LT (CR) repealed the 1998 Act – but largely continues the entitlements
o	Forms of CR – ((must comply with registration requirements prescribed in LT CR i.e unique identifier, description of land)
  • Computer Freehold – electronic equivalent of manual freehold
  • Computer Interest – for those interests that require registration
  • Computer Unit Title – governed by Unit Titles Act 2000 – usually for apartments
  • Composite Computer Register – for cross leases/timeshares
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4
Q

Instrument

Permissable Instrument

A

S2 LTA – An instrument is any written or printed document/map/plan related to transfer or dealing of land

Reg 4 –a permissible Electronic instrument will
i. belong to certain class of permissible instruments
DWMT
a) discharge of mortgage
b) withdrawal instrument
c) mortgage instrument
d) transfer instrument

ii. be presented for registration as part of a permissible transaction
can include any number discharge of mortgage or withdrawal instruments– but only 1 transfer instrument and 1 mortgage instrument)
iii. contains necessary elements

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5
Q

Memorandum

A

s155A LTA -

intended to alleviate difficulty of storing bulky items (i.e mortgage/leases) for lending institutions/leasing authorities

o a lending institution can register a memorandum under s.155 that sets out provisions and covenants contained in its standard mortgage form
o Each mortgage taken by that institution can thereafter can be a single sheet form that will incorporate the provisions of the relevant pre-registered memorandum
o Limitation - Memorandum is only part of the register not for members of public

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6
Q

Searching the Register

A

Access
s46 - Any person may search the register for inspection at times approved by regulation
- however this does not apply to computer register
- However - s33LT(CR) - states people have a right to request paper/other form of copy of instrument as approved by registrar

Search
also called title search; can be for :
• CT, deposited plan, instruments currently in register, easements, title to cross leases, questions on drainage
• Failure to search may amount to negligence in certain claims to compensation

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7
Q

Essential requirements of Registrable instruments
[Act]
[2 requirements]

A

[Land Transfer (Computer Transfers and Electronic Lodgement) Amendment Act 2002]

An electronic instrument will be in order for registration if:
[1. in acceptable form (specificed by registrar)
[2. instrument is associated with a certification under s.164 LTA
[3. created by person who has
authority to act,
has taken reasonable steps to confirm identity of person they are confirming,
has evidence to show truth of certification)

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8
Q

Non- Registrable instruments

A

N, C, F, E, L,

o	Non compliant
o	contrary to another law
o	involving fraud
o	that create estates incapable of registration
o	that deal with land not subject to LTA
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9
Q

Procedure of Registration/E-Dealing

A 
S5 LT (CR) - Electronic Lodgement
•	Allows Registrar to authorize registration, and deposit of instruments

Preparing an electronic instrument within electronic workspace

Procedure:
• Registered User creates e-dealing – adds client reference – adds instruments that are signed/reviewed
• When instruments in E-Dealing are released, the eDealing may be submitted for registration (equivalent to lodging of paper dealing)
• E-dealing may be deleted after registration
When instruments are not in order…
o Instrument will be returned to individual

Completed when:
o	LTA s 34: every grant/certificate embodies the folium and volume completed in the register
o	LT (CR) s30
o	In effect when unique identifier is entered into relevant computer register
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10
Q

Priority of Registered Instruments

  1. What cases?
  2. Unregistrable Instruments?
  3. Basic Rules
  4. Exceptions
A

1.
unregistered documents that evidence agreements for valuable consideration will create equitable interests in land: these are based on contractual transactions, not simply possession
[i.e is A tranfers paper instrument to B promising to register, B has equitable interest in registrable form]

  1. Unregistrable;
    - agreement for sale and purchase
    - agreement to mortgage
    - agreement to lease
  2. Mercury Geotherm v McLachlan
    - equitable interest first in time holds priority
    - called ‘temporal priority’
    - burden of proof lies with person seeking to deprive earlier holder
    BIG Q - Who has bigger equity?/justice fairness?

EXCEPTIONS
BFPV
- [general law] Equitable interest holder may suffer loss if holder of an interest later in time becomes BFPV (without notice of prior interest)

REGISTRATION OF ADVERSE INSTRUMENT, DONE WELL
- [under LTA] holder of unregistered instrument may suffer loss if holder of later equitable registers an adverse instrument:
• for valuable consideration, without fraud, within meaning of LTA
[lodging a caveat will never improve interest]

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11
Q

Priority of Registered Instruments

O’Leary v Sentiero Properties (Oh really)

A

O’Leary v Sentiero Properties (Oh realy)
- Farmer held option to purchase on O’Leary trust property but property was sold to Sentiero
- Sentiero was aware of this option
HELD
- Farmer held earlier equitable interest
- Sentiero held actual/constructive notice of interest, did not provide arguable case for temporal priority

EXCEPTIONS TO TEMPORAL PRIORITY (not settled law)

a. where holder of later interest knows of earlier, but is led to believe it will not be enforced
b. where earlier interest holder postpones their interest

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12
Q

Priority of Registered Instruments

Perkins v Purea and Tangi-Tuake

A

o Parents agreed to let daughter and her family live in their house for 15 years while they moved to the Cook Islands [as long as daughter paid mortgage and outgoings]
o When Mother died – father moved back to NZ, denied any agreement between parents and daughter, listed property for sale
o Perkins [appellant] saw property and bought it
o Daughters lawyer lodged a caveat to protect her interest in the property
o Stalemate ensued – daughter didn’t move, perkins unable to settle transaction, purea was without proceeds of sale
• Perkins sued Mr Purea for specific performance of contract
• Mr Purea sought order that daughter’s caveat be removed
o Daughter claimed she had an equitable interest in the property that preceeded the Perkin’s interest in time and outranked it in priority

Held –
o HC was correct in finding daughter had equitable interest in property
o Although it was argued that Perkins position was protected by s182 of LTA [1s82 protects RP who is not affected by notice]
o Per Duncan v Mcdonald – s182 has been consistently interpreted to extend its protection to a purchaser only from the time of registration by that purchaser and thereafter
o Up to registration, the purchaser has only an equitable interest in the land; it becomes a legal interest in registration

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13
Q

Caveats

Registration?
Purpose?
6 kinds?

A

Registration of Caveat - done through Registrar’s office, entry on date/time of reciept

Purpose of Registration

i. to protect caveator’s registrable interest
ii. to give notice to those looking in register of caveated interest

6 caveatable scenarios in LTA:
i. Against dealings/interests in land

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14
Q

i. Caveat against dealings in land

A

s137 - person may lodge caveat against dealings or interest in land if they

a. have a beneficial interest
b. they are transferring to another on trust

Components: Name; Nature; How interest relates to RP (applied strictly as in Holt)

Holt - once lodged a caveator asserts rights and protection of these rights

  • registrar may not lodge an instrument against the caveat (s141)
  • s141 only applies to unregistered mortgages

EXCEPTIONS TO HOLT

  • no caveat clause; if lodged is a breach of contract; court may still allow caveat over equitable interest if they deem fair, court has residual discretion to remove/apply
  • if instrument is already registred
  • if mortgagee exercises power of sale
  • if caveator gives consent
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15
Q

i. Caveat against dealings in land

Competing Equitable, and Caveatable Interests

A

o courts consider time/conduct when judging competing caveatable interests
o however individual can never improve interest by lodging caveat

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16
Q

i. Caveat against dealings in land

CAVETABLE INTERESTS

A

requires present, not potential EQUITABLE interest

Creator of Trust - s137(b) - Holt

Beneficiary of Trust - s137(a) - Holt

Residual Beneficiary - only if mentioned

Agreements for Sale/Purchase:

Unconditional - yes if purchaser would potentially entitled to equitable remedy of specific performance through contract

Conditional - depends on case (i.e oral agreement; if provides equitable interest)

Option to Purchase - the grantee of equitable O.P can lodge

Equitable:

Mortgage - agreement to mortgage/memoranda of mortgage

Charge - a security that confers equitable interest to creditors (i.e loans/guarantees/debts)

Lien - charge without security; arises from relationship between parties not act

Lease - only if unregistered capable of registration

Easement - yes

Profit a prendre - right to mine timber/soil yes

17
Q

i. Caveat against dealings in land

Rights not capable of caveat

A

a contractual/personal right will not suffice (Holt); must be equitable

Unsecured Debt - unsecured creditor has personal rights

License - bare license is only a personal promise

Tenancy at will/periodic tenancy - may create interest in broader perspective, but not narrow of caveats

Mere equity - different than equitable interest

Claim under - non caveatable
   Law Reform (Testementary Promises) Act 194; Family Protection Act 1955

Shareholder - no proprietary interest in assets of company

Illegal Contract - cannot lodge

18
Q

i. Caveat against dealings in land

Methods of Clearing Caveats

A

1. s143 - apply to HC to remove

              Court has residual discretion to sustain caveat if there is a. a reasonably arguable case b. on balance of probabilites it is clear caveat should be removed
#3.  lapse after application to registrar
                  If caveat has lapsed/removed; no 2nd caveat may be lodged. Person who lodges caveat without reasonable cause may be liable for damages.
19
Q

Landco Albany Ltd v Fu Hao Construction

A

Facts

  • Agreement for sale and purchase between Fu Hao and Landco contained ‘no caveat’ clause
  • Fu Hao lodged caveat and would not remove even after agreement lapsed

Held

  • agreement not to caveat was not void - did not corrode primary principles of Torrens system (indefeasibility, protection of BFPV)
  • the absence of any real prospect for specific performance, combined with agreement not to caveat leaves court satisfied the caveat must lapse
20
Q

ii. Caveats brought against Land from outside LTA

A
  • When land is brought under LTA; the issue of CT destroys all claims to land not noted in register
  • However - this caveat - gives any person with an interest/claim in land that NOT UNDER LTA an opportunity to assert and establish their claim before the land is brought under the LTA by a voluntary application
  • Since practically all land is under LTA this is seldom applied (s136 notes this)
21
Q

iii. Caveats authorised by compulsory registration of title

A 
Caveats prior to issue of CT – 
o	S205(1) – forbids lodging a caveat regarding application to bring land under LTA; instead must lodge under Deeds

Caveats against land limited as to parcels –
o Any time after issuing of CT limited as to parcels – any occupier of land comprised in certificate/or adjoining occupier may lodge a caveat – per s205(4)
o This expires/lapses 3 months after lodging unless interest is proven/HC order obtained

22
Q

iv. Regstrars caveat

A

Registrar holds DISCRETIONARY caveat power in I.C.E.F. situations:

I. Incompetency - to protect incompetent infant/disabled/insane
II. Crown - on behalf of Crown to prohibit transfer with land belonging to another
III. Error - where error has been made on CT
IV. Fraud - to prevent fraud

23
Q

iii. Caveats against [application for prescriptive title]

A

s8 - gives individual right to lodge caveat forbidding courts from granting CT in fee simple to person in posession of land for 20+ yrs (As under LT AM Act)

24
Q

iv. Caveats against applications for title to acccess strips

Mercury Geotherm v McLachlan

A

s89c - gives controlling authority right to lodge caveat against an application for title to access strips:

Mercury Geotherm v McLachlan
Facts
 - Concerned easement between two properties [no registration of benefitting easement – servient bound?]
- Subsequent purchase had knowledge of: 
O.E.F
  • occupation of prior equitable owner of property
  • existence of joint venture for the construction / operation of a power station on that property
  • the fact that the lease contained a right of first refusal

HELD
• Purchaser should have made further inquiry as to prior equitable interest [knowledge of possession was constructive notice of other interest in land]
• It comes down to whether it is reasonable in the circumstances for the purchaser to make inquiry concerning third party’s occupation

25
Q

Wellesley Club v Wellesley Property Limited

A

Facts

  • Wellesley club used property for 27 years; Owners sought to sell; Wellesley lodged caveat claiming interest in land/estate as vendor/shraholder on basis of terms and conditions of contract that had created
    i. agreement for sale and purchase
    ii. agreement to acquire share in Wellesley Limited dated 2000

Court considered:

i. If Club held reasonably arguable case for lodging caveat [per Simon and Holt]
ii. If interest was caveatable

broad view - any equitable interest
narrow view - only registrable interests

Held

  • Was a lease, not a license as D argued
  • Therefore reasonably arguable for caveat, and Court did not wish to exercise discretion to remove, no prejudice in remaining
  • this was conditional on Club seeking specific performance of agreement
26
Q

Property Developers often require purchasers to agree to ‘no caveat’ clauses to assist efficient running of developments – this was scrutinized in:

A

St Lukes Garden Apartment Case
Facts
- Developer changed plans midway thru development
- One owner lodged caveat to prevent [no caveat clause in agreement]

Court considered - developers rights to alter, no caveat clause; no cavet clause

Held - Court did not lapse caveat
Held changes to plans exceeded developers rights under Sale and Purchase agreement

Case highlights how ‘no caveat clauses’ are not always reliable

27
Q

Song v Chi

A

Facts

  • Song family gave to money to Chi to buy them property in NZ
  • Song families visa’s did not go thru, requested return of money; Chi refused
  • Song lodged caveat against Chi’s property

Discussion:

  • s137(1)(a) - provides that any person with a beneficial interest may lodge a caveat
  • an equitable charge in this case could be made against property as repayment of debt

Held
- Equitable charge on Chi’s house remained

PROPERTY LAW (4 decks)

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