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Wicked wife leaves husband homeless
Frazer v Walker [1967] 1 AC 569
Mr and Mrs Frazer were the registered proprietors of a rural property. Mrs Frazer, by forging her husband’s signature, arranged to borrow three thousand pounds which was secured against the farm. A mortgage document was prepared and Mrs Frazer signed it in front of her solicitor’s clerk who also attested to witnessing Mr Frazer’s signature. Along with the certificate of title, the document was then given to the mortgagee (the lender) who in turn gave Mrs Walker the money. Mrs Walker promptly absconded with the money. Soon after, the lender, having received no payment, exercised their power of sale under the mortgage. It was sold at auction to the Walkers, who registered it in the Land Title System.
This all occurred without the knowledge of Mr Frazer who was still living on the farm. Relying on his title as registered proprietor, he bought an action to have it declared that his interest in the land was not affected by the mortgage or the sale to the Walkers.
The court did not find in his favour. They said that upon registration of the mortgage, the lenders had gained “immediately indefeasible” title. This simply means that even though Mrs Frazer had committed fraud, the fact that the lenders had registered their mortgage meant that it could not be challenged. The Walkers had also gained “indefeasible title” upon their registration of the land. Poor Mr Frazer got nothing.
This case is a very important one in Australian property law. Primarily, it demonstrates the importance of registering an interest in land. Registration means that the interest, be it mortgage, a fee simple (basically ownership), or a lease, cannot normally be challenged. On a side note we also learn how a bad legal service can cause you grief, as the solicitor’s clerk should never have attested to having witnessed Mr Frazer’s signature.
Persistent farmers gain land
JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419
The Graham Family held a grazing licence on Pye’s land. The licence expired and Pye refused to extend it. The Graham’s continued to use the land without paying rent and Pye did not request them to leave. Had the Grahams been requested to pay the rent they would have complied. They wrote to Pye requesting a new grazing agreement but Pye did not respond. The Grahams changed the locks on the gate, fertilised the soil and grazed animals beyond the terms of their original agreement with Pye. Such behaviour was carried on for over twelve years.
Eventually Pye decided that they wanted the land back. However the court held that their rights to the land had been extinguished. The behaviour of the Grahams demonstrated that they had exclusive physical possession of the land and that they intended to possess the land. Moreover, they had acted in this way for a long enough period so as to take legal possession of the land. The Grahams had therefore successfully “adversely possessed” the land.
As we noted previously adverse possession is less common today (though this case is quite recent). However it is a good illustration of how the documentary ownership of land is not beyond the reach of other interests in land.
Take care of their goods after you evict them
Bowden v Los and Ors [1998] NSWSC 216
Bowden was evicted from a property he was leasing pursuant to an order of the residential tenancy tribunal. The tribunal ordered Bowden to pay $5000 in unpaid rent. A letter was also prepared by the landlord’s real estate agent stating that any goods left on the property after the landlord took possession would be considered abandoned. Bowden left the house but took only his car keys and some cash with him. Upon trying to re-enter the property he was prevented. He left a message with his real estate agent saying that he had not abandoned the goods.
The court held that the landlord had become a bailee (a person responsible for the safe return of goods) of Bowden’s goods following his eviction. Bailees are obliged to exercise reasonable care over bailed goods and if goods are lost or damaged, the onus lies on them to prove that the loss or damage was not caused by their negligence. In this case, Bowden claimed that a number of items were missing. The court found that the landlord had not deliberately taken any of the goods but had him pay 25% of Bowden’s loss.
This case demonstrates the potential liability that landlords may face when re-entering or recovering possession of premises. This liability arises as the landlord becomes bailee of goods. When exercising control over premises and a tenant’s goods, a landlord needs to make certain they know where property is and ensure that it is not damaged before it is returned to the tenant.
Signed transfers are not smart security
Abigail v Lapin [1934] AC 491.
The Lapins executed a transfer of Torrens Title land to Mrs Heavener. The transfer was intended to be security for a loan and was therefore supposed to be redeemable on repayment of the loan. Mrs Heavener, however, treated it as though she was genuinely the registered title holder and mortgaged the land to Abigail. Because they had not lodged a caveat, Abigail was not aware of the Lapins interest in the land. However the mortgage between Mrs Heavener and Abigail had not been registered. There was therefore a ‘competition’ between two unregistered interests. (Mrs Heavener had taken off with the money). The rule in such a case is that the first interest will prevail unless there exists some circumstance which the court deems should postpone it.
The court held that the Abigail’s interest should prevail. The Lapins had armed Mrs Heavener, not only by giving her the transfer of title but also because they had failed to lodge a caveat. While the court did not suggest that it is compulsory to lodge a caveat, in this case the lodgement would have alerted Abigail to the Lapin’s interest.
This case, then, demonstrates the importance of lodging a caveat where you have an interest in land that has yet to be registered. It also demonstrates that a signed transfer of your property is not a very good means of offering security against a mortgage as it leaves you wide open to exploitation and the potential loss of your land.