PROPERTY LAW WEEK 3

Old system title

Priority disputes arise over multiple dealings in a particular propriety interest (legal,
equitable, and equities)
A, B, and C example of enforcing settlement is a priority dispute between two equitable
interests.
1. Competing legal interests - Nemo dat rule: no one can give what they dont have. In
example of legal interest, if A transfers legal fee simple to B, then to C, B has priority as
there is nothing for A to give to C. Equity can prevent earlier legal interest holder from
holding priority if he/she is guilty of conduct known as postponement (negligence).
2. Earlier legal interest v later equitable interest: The law will prevail where equal equities
exist. Exceptions that will result in postponement of legal interest:
Failure to obtain or retain possession of title documents by the legal
interest holder
Fraud
Agent acting in excess of authority
Document conferring equitable interest or right to acquire one.
3. Earlier equitable interest v later legal interest: earlier equitable interest take priority
unless legal interest acquired with all of following:
The purchaser must act in good faith and provide consideration for value.
Notice of earlier interest will postpone a later purchaser of a legal estate.
Without notice is one of the three essential elements to displace an earlier
equitable interest. Conveyancing Act 1919 (NSW) s 164.
Actual notice awareness of facts, not rumours.
Constructive notice reasonably prudent person would have
enquired in circumstances re inspection of land and investigation
of documents.
Imputed notice s 164 Conveyancing Act, re agent.
Successors in title see Wilkes v Spooner
4. Earlier equitable interest v later equitable interest: general rule is earlier equitable
interest will prevail. However only if equities are equal. Need to determine better
equity: Heid v Reliance Finance per Mason, Deane JJ. Notice of an earlier equitable
mortgage by a later mortgagee guaranteed priority of the former: Moffett v Dillon.
5. Earlier equity v later equitable interest: difference b/w equity and equitable interest is
equity is a right to sue which must be successfully exercised as a necessary condition of
there being any relation back to the equitable interest established by the suit equity
once asserted will give the plaintiff an equitable interest.
6. Earlier equity v later legal interest: later legal interest will prevail as long as no notice of
the equity.
Old system registration: Historically, priority was given to the interest by reference to
the time the instrument was created. Only registered instruments may be conferred
priority. Priority interests not registered operate according to common law rules, eg
equitable interest arising out of part performance of oral agreement will take priority
over later legal interest if the latter was acquired with notice of former. Section 184G(1)
only applies to registered instruments.

Torrens title

In NSW, Torrens title system introduced in 1862 by Real Property Act. Land is Torrens
title through Crown-granted land as Torrens or by converting from old system title. All
Crown grants after 1 January 1863 are Torrens title and subject to Real Property Act
1900 (NSW).
Torrens system is a system of title by registration. Based on three principles:
o Mirror register book reflects all facts material to an owner-s title to land. State
guarantees rather than conduct and guarantees b/w parties.
o Curtain register is the sole source of information about legal title. No need to
look behind it.
o Insurance no innocent party will incur loss by flaw of register. The state will
indemnify.