Land (Leases, Sale of Land)

Question 1

Section 51 LTA

Answer 1

On registration under this Act of a person as the owner of an estate or interest in land, that person obtains a title to the estate or interest that cannot be set aside
Exceptions: s 52-56 and in personam

Question 2

What are the possible interests in land?

Answer 2

Legal (needs to be registered as per LTA)
Equitable (does not require registration)

Question 3

Elements of a Lease

Answer 3

Stated in Fatac Ltd v Commissioner of Inland Revenue
1) Exclusive Possession
2) Definite period/certain term (fixed or periodic)

Question 4

Street v Mountford

Answer 4

If the agreement is objectively a lease, then it is not a license, regardless of whether the parties believed they were entering into a lease of license

Question 5

Section 24 LTA

Answer 5

An unregistered instrument cannot make a registered interest, however, caveats can protect equitable interests making it harder to register

Question 6

Elements of Trespass to Land

Answer 6

1) Unlawful (authorised)
2) Entry (or other direct interference/intrusion)
3) With land in the possession of another

Question 7

Remedies for Trespass of Land

Answer 7

Damages or injunction

Question 8

Variants of Trespass

Answer 8

• Continuing Trespass
• Trespass by relation (time-shifted)
• Trespass for permanent injury to the reversion

Question 9

Possession

Answer 9

Intention to possess and control through the excluding others

Question 10

Matchitt

Answer 10

Tenant was staying on Māori freehold land and was evicted and her belongings were thrown onto the lawn resulting in damage from rain
Matchitt was exercising possession over the land with the intention to exclude others so could sue in trespass

Question 11

Bernstein v Skyview

Answer 11

Aircraft took aerial photos of the property
The rights of the owner are restricted to such height as necessary for the ordinary use and enjoyment of their land and the structures upon it (can sue for trespass within this height)

Question 12

Star Energy Weald Basin Ltd v Bocardo SA

Answer 12

Star drilled pipe’s under Bocardo’s land without permission to get oil
Under the traditional approach, Bocardo was the owner of the land because the pipes were not so deep as to be vaporised (presumption of possession due to lack of evidence to the contrary)

Question 13

De Richaumont

Answer 13

Billboard needed to be serviced, required access to neighbours land which was not granted
Under old s 128, upheld strong property rights and concluded that billboard maintenance was not included in the exceptions

Question 14

Walsh v Lonsdale

Answer 14

Equity will treat the contract for a lease as a lease if the contract is enforceable either
- written and signed; or
- oral/unsigned but partly performed

Question 15

Short-term Leases

Answer 15

S 207; Short-term lease is unregistered lease that is a lease for a term of a year or less or a periodic tenancy for a year or less
S 208; May be oral or in writing
S 209; The short-term leasee has a legal interest in the land

Question 16

What can a landlord cancel a lease for?

Answer 16

Breach of covenant or failure to pay rent (s 244 and 245 of PLA)

Question 17

Mulholland v Waimarie Industries Ltd

Answer 17

Mulholland had not paid rent, there is a presumptive right to relief but it was not granted because he was hopelessly insolvent

Question 18

Strong v Hurunui Hotel

Answer 18

Tenant was under obligation to keep up maintenance of old hotel (replace wallpaper and clean) but failed to do so
Conditional relief was granted on the basis that the covenants had to be completed otherwise the landlord was entitled to cancel
Weight was given to the tenant as they would have lost their business and opportunity to sell

Question 19

Studio X Ltd v Mobil Oil NZ Ltd

Answer 19

Principles to Consider when granting relief
- breach was advert or deliberately committed
- breach caused by inadvertence or was entirely beyond the tenant’s control
- whether the tenant has made or will make good the breach of covenant and is able and willing to fulfil his obligations in the future
- the conduct of the landlord
- financial position of the tenant
- has the breach caused lasting damage to the landlord

Question 20

Sibrad Company v Kanters and Edwards

Answer 20

Refusal to grant renewal because Sibrad had breached a series of covenants
Sibrad has farmed bulls (more destructive), not done fertiliser tests (could not be remedied) and was hostile to neighbour
These breaches meant the lease should not be renewed

Question 21

Section 212 PLA

Answer 21

Leases to end upon the occurrence of a future event are sufficiently certain

Question 22

Smallwood v Shepards

Answer 22

The term was for public holidays (discontinuous term) was a sufficiently certain period

Question 23

New Zealand Fish & Game Council v A-G

Answer 23

Pastoral leases were leases (not licences) because the intention was to alienate the land and the most intrusive rights reserved were only exercisable with the farmer’s consent

Question 24

Sealink Travel Group New Zealand Ltd v Waiheke Shipping Ltd

Answer 24

Sealink’s licence allowed them rights to use moorings and they argued some of WSL’s actions (competing ferry company) constituted trespass
Sealink did not have exclusive possession and ARTA retained most of the rights
For a licensee to sue in trespass they must have lawful possession i.e. the requisite degree of custody and exclusive control of the land and the parties intended that the licensee shall exercise custody and control for their own benefit

Question 25

Manchester Airport v Dutton

Answer 25

Airport needed to fell trees of neighbouring land and got license but protestors occupied the land before they could work
They had a sufficient interest because of their licence to be granted the order for possession to sue in trespass

Question 26

Georgeski v Owners Corporation SP489833

Answer 26

Plaintiff owned riverside house with licence to jetty which neighbours then walked on (sued for trespass)
He did not have sufficient possession in order to sue (limited rights)

Question 27

Dent v Dent

Answer 27

Charles was giving undertakings under a deed to his father in exchange for exclusive possession during his lifetime and his wife, during lifetime
It was a licence because all the obligations under the deed were personal obligations

Question 28

Holland v Hodgson

Answer 28

Person proving that the chattel is a fixture bears the onus of proof
Something that merely rests on the land by its own weight should not be considered attached to the land

Question 29

Elitestone Ltd v Morris

Answer 29

Facts:
Tenants constructed bungalow on land that rested by it’s own weight
Held:
If you cannot remove the thing without deconstructing the property, it will be a fixture
Purpose for annexation may need to be considered

Question 30

Melluish v BMI

Answer 30

Facts:
Alarm systems, central heatings etc. was installed with intention that company would still own it
Held:
It could not be removed without significant deconstruction so was a fixture

Question 31

London Borough of Tower Hamlets v London Boroughs of Bromley

Answer 31

Facts:
Sculpture was placed on council land that was later split by two boroughs
Held:
It remained a chattel, rested on it’s own weight and could be moved without damage

Question 32

Lockwood Buildings Ltd v Trust Bank Canterbury

Answer 32

Facts:
Show home was erected; nailed to the foundations, electricity and water were connected, sewerage supply was ready for connection but affixation was intended to be temporary
Held:
Fixture, due to the degree of annexation

Question 33

Potton Developments Ltd v Thompson

Answer 33

Facts:
Volumetric boxes were complete rooms which were hired out or sold
Held:
Boxes remained a chattel; designed for easy movement and removal

Question 34

Queenstown Central Ltd v March Construction

Answer 34

Facts:
Dirt was left on law, they previously had an agreement granting consent but this had expired
Held:
The land was storage for the fill and the fill remained a chattel

Question 35

Ratana v Tihi - Tuatoki B Section 23

Answer 35

Facts:
House built on wooden piles on Māori land
Held:
The house was never severed from the land, so it remained a part of it

Question 36

Lake Edge Development Ltd v Kawarau Holdings Ltd

Answer 36

Facts:
Rock anchors were fixed to the land to stabilise it so it was able to be built upon
Held:
It was a fixture because to remove the anchors would be difficult, expensive and disruptive

Question 37

Burnett’s Trustee v Grainger

Answer 37

Facts:
Contract for sale and purchase of flat signed but transfer was not yet registered
Held:
As soon as the purchaser enters into a contract for the sale of land, they obtain an equitable property right which is enforceable

Question 38

Re Richards

Answer 38

Facts:
Unconditional contract for the sale of land, entered into prior to death but will left property to someone else
Held:
The property was owned in equity by the purchaser subject to his obligation under the contract, so the property was the purchasers

Question 39

Clarke v Ramuz

Answer 39

Facts:
Sale of land between two parties but the vendor then allowed a third party to remove large quantities of soil
Held:
Vendor trustee had a duty to keep the property in a reasonable state of preservation as when the contract was made

Question 40

Phillips v Silvester

Answer 40

Facts:
Vendor trustee allowed land to go to waste
Held:
Trustee had obligation to preserve the land

Question 41

Obligations of Vendor Trustee

Answer 41

• Take care not to damage property
• Keep the property in a proper state of cultivation
• Must not prejudice the buyer’s interest in the property
• Still entitled to rent and profits until property it handed over

Question 42

Jerome v Kelly

Answer 42

Stages as the various obligations under the contract are fulfilled, through which the purchaser obtains an increasing equitable interest until title registration as which point they become the owner

Question 43

Batchelar Centre Ltd v Westpac New Zealand

Answer 43

Facts:
Bank exercised power of sale , accepted Batchelar’s offer subject to a better offer which did come along, so they accepted that one
Held:
No good faith obligation so no breach of duty

Question 44

Southland District Council v McClean

Answer 44

Facts:
Two forestry blocks were sold under ADLS contract but severe storm damaged trees prior to transfer
Held:
Purchaser could cancel (diminution exceeded 20% of purchase price)

Question 45

Risk Under ADLS Contract

Answer 45

If damage is minor, the purchase is obliged to complete sale minus the price of the damage
If damage renders the property untenatable, the purchaser can choose to not complete the sale or complete is at the original price but get any insurance money from the purchaser

Question 46

Bevin v Smith

Answer 46

Facts:
Conditional contract, attempted to frustrate it then acquired a paper road which he refused to transfer to the buyers
Held:
The paper road will be held on constructive trust for the beneficiary (it interferes with the actual road that the purchaser was purchasing)
The equitable estate passes when equity will, but injunction or otherwise, prevent the vendor from dealing with the property inconsistently with the contract of sale

Question 47

Motor Works Ltd v Westminster Auto Services Ltd

Answer 47

Facts:
Right of first refusal
Held:
Right of first refusal does not create an interest until the vendor decides to sell

Question 48

Palm Gardens Consolidated Pty Ltd v PG Properties Ptd Ltd

Answer 48

Facts:
PG sold and conveyed a returned village to Palm Gardens
A separate agreement allowed for either party to require the sale and transfer of units on adjoining land under construction if they were fully developed and licensed by the sunset date but there was no obligation to complete the units
Held:
There was no obligation on either party to licence the units
As the conditions were not met, there was no obligation to enforce them, so Palm Gardens did not have a right

Question 49

Cousins v Wilson

Answer 49

Facts:
A third-party cut down trees on land subject to a contract of sale
Held:
Damage to the property, shower of making it untenatable, gave the purchasers no right to rescind but did allow them a reduction limited to the diminution in value of the land
Exemplary damages can be awarded if it was outrageous conduct done in contumelious disregard of the plaintiff’s rights

Question 50

Arroyo v Equion Energy

Answer 50

Facts:
Mature trees were destroyed
Held:
Diminution in value of land
Reasonable cost of reasonable reinstatement
Partial restatement if full reinstatement is either unreasonable of itself or is unreasonably costly

Question 51

Taukei - Horowhenua X1B41 North A3A and 3B1

Answer 51

Facts:
Owners wanted to sell to people who were not PCA’s but before approval of the sale PCA’s expressed interest
PCA’s get the right to first refusal for a certain period of time dictated by the Māori Land Court
Held:
The time given (7 days) to respond was unreasonably short

Question 52

Logan v Logan

Answer 52

Facts:
Offer made by PCA for Māori freehold land, subject to finance, while offer to a non-PCA was already unconditional
Held:
The PCA’s were sufficiently informed of their first right or refusal

Question 53

Te Whata - Waiwhatawhata 1 A2B6 Lot 1

Answer 53

It is difficult to convert Māori land into freehold land because the Act wants it to remain owned by Māori

Question 54

Meha v Haggerty - Tapairu A8X

Answer 54

Facts:
Māori land was next to some other land, and the owner wanted to convert it all into general land
Held:
The decision over whether it would be converted depends on whether the land can be managed or utilised more effectively as general land
There was no evidence that this would be the case for this land and it would be against the purpose of the Act so it was not converted

Question 55

Types of Easements

Answer 55

Appurtenant; Attaches to a particular piece of land
Gross; Attaches to a person

Question 56

Street v Fountaine

Answer 56

Facts:
Whether stock water rights are a licence or an easement
Held:
An easement protects rights in perpetuity due to their proprietary nature
A licence is purely contractual and does not have the strength of property rights

Question 57

Olo Ltd v KA No. 3 Trustee Ltd

Answer 57

Facts:
Were the rights of vehicle access a licence or an easement?
Held:
Grants will be presumed to be easements unless a contrary expression appears
Conditions for an easement
- Must be a dominant and servient tenement
- An easement must accommodate the dominant tenement
- Dominant and servient owners must be different people
- A right over land cannot amount to an easement unless it is capable of forming the subject matter of a grant

Question 58

Clos Farming Estate v Easton

Answer 58

The rights given under an easement cannot be too wide or vague in character and cannot amount to rights of joint occupation that would substantially deprive the owner of property rights
You can create new types of easements, however, the Courts are reluctant to recognise rights and interests in land that too greatly interfere and limit the owner rights of exclusive possession because they bind third parties

Question 59

Reilly v Booth

Answer 59

Reilly v Booth
Facts:
The property was transferred with exclusive use of a gateway
Held:
The exclusive or unrestricted use of a piece of and amounts to ownership, not an easement

Question 60

Regency Villas Title Ltd v Diamond Resorts (Europe)

Answer 60

Facts:
Timeshare properties with rights to access services (swimming pool, golf course etc.)
Held:
The grant of purely recreational (including sporting) rights over land which genuinely accommodate adjacent land may be the subject matter of an easement
The servient owner cannot have a legal obligation to manage, maintain and repair the servient tenement but there can be an expectation (this would infringe on the rights significantly)

Question 61

The Owners of East Freemantle Shopping Centre v Action Supermarkets Ptd Ltd

Answer 61

Facts:
Was the right to park vehicles an easement?
Held:
Although when a car is parked, the owner cannot do anything with the car space, it is still an easement because it does not confer exclusive and unrestricted use, they cannot be permanent parking and the servient owner retains possession and control

Question 62

Moncreiff v Jamieson

Answer 62

Ouster principle: the dominant must not be able to bar the servient owner from possession or control of the land
The servient owner would have been ousted if the servient owner not longer retains possession (subject to the reasonably exercise of the right in question) and control over the servient land

Held: Being the sole user of the coal shed did not prevent the servient owner from using the shed for any purposes of his own that do not interfere with the dominant owner’s reasonable use for the storage of coal (easement includes sole use for a limited purpose)

Question 63

Towers v Stolyar

Answer 63

An easement does not amount to grant to the dominant owner exclusive possession of the areas subject to the easement
Rights conferred by an easement cannot substantially deprive the servient owner of its rights of proprietorship or possession

Question 64

Multiplex v Bluewater Mariana Village Pty Ltd v Harbour Tropics Pty Ltd

Answer 64

Test for ouster possession: the servient owner has lost the reasonable use of its land, or involves a significant restriction on the possessory rights of the servient owner - differs to test in Moncrieff

Question 65

Schmuck v Opus Coastal Preservation Incorporated v Far North District Council

Answer 65

Facts:
Various easements including one that permitted the repair or maintenance of any vessel so that it is entirely within the adjacent boatyard property
Held:
This was a valid easement
The area affected was small, there was a time limit on construction and the easement does not deprive the District Council of possession or control
This combined the English and Australian approaches but said that on either test, the ouster test was not engaged

Question 66

Covenants

Answer 66

A promise by an owner of land to do, or not to do, something in relation to the land (there can be covenants that attach to the land or covenants gross which attach to a person)

Question 67

Ceda Drycleaners Ltd v Doonan

Answer 67

Facts:
Prohibition on owners and occupiers in the Mangere Town Centre (MTC) using their shop for commercial purposes unless they were a member of the Managere Town Centre Business Association (MTCBA)
Held:
This was a valid covenant because it benefited the dominant land (whether this is proven is a question of fact)

Question 68

Proprietary Estoppel

Answer 68

A remedy preventing people from going back on a promise concerning land

Question 69

Guest v Guest (UK - not discussed in NZ)

Answer 69

Proprietary estoppel: “the aim of which was to prevent the unconscionable repudiation of promises or assurances about property (usually land) upon which the promisee had relied to his detriment
The remedy is somewhat contentious

Question 70

Harvey v Prangley

Answer 70

Facts:
Mr and Mrs Harvey sold their land to their daughter and the land was then passed back to Mr and Mrs Harvey along with a grazing licence
The daughter transferred the land to a trust and there was a question of whether the grazing licence had terminated on the transfer
Held:
The mere existence of a licence does not create a constructive trust but there are exceptions where the court will impose a construct trust when it would be unconscionable not to do so
The exceptions require the fullest knowledge of the licence, the provision in the agreement stating that the parties agreed for the land to be subject to the lease and evidence that the sale was at an undervalue to recognise it took subject to the lease