week five Flashcards
what was the special term/interest in Bunt v Hallinan
Mrs Bunt used the pottery shed at the bottom of the garden so in the sales of the property the written agreement included that the pottery area be leased to Mr and Mrs Bunt for 15 years. This is an unregistered lease
what would you, sensibly, do to protect an unregistered lease
lodge a caveat
what did Mr Hallinan want from the property in Bunt v Hallinan
he wanted the property free of anything else on it.
what advice did Mr Hallinan get regarding the Bunt’s unregistered lease
he asked the land agent and his solicitor if Mrs Bunt had a right to occupy the property and the land agent and the soliticitor both said she has no interest at all as it is not on the title and therefore she has no legal right.
the solicitor said mere notice of an unregistered interest is not fraud, so Mr Hallinan would be fine.
did Mr Hallinan make it clear he didn’t want to recognise the pottery shed
yes, to everyone - relying on his solicitors advice
was Mr Hallinan guilty of fraud in Bunt v Hallinan
no - he was relying on his solicitors advice and he had made it clear that he didn’t want to cheat Mrs Bunt of her interest because he wasn’t going to buy the property if he couldn’t get a free title
what case is Waller v Davies similar to
Burmeister v O’Brien
what was CH Finance’s scheme in Waller v Davies
CH Finance said they’ll manage the properties and raise bank finance for the owner’s benefit. They said they’ll pay bits and pieces, and marketed it as a buy back scheme.
what happened to the 10 properties vs the 2 in Waller v Davis in terms of signing
10 were home and signed their rights away themselves. the other 2 were out at the time so their signatures were forged.
what did CH Finance do with the properties in Waller v Davies
They mortgages them and gets mortgages registered on the titles. The mortgages were to Davies SNC
who was Davies in Waller v Davies
He was acting as agent for both CH Finance and his own solicitors nominee company (SNC)
what is a solicitors nominee company
basically an internal bank operating at a law firm where the solicitor tells people who are downsizing they can invest their money in the SNC and the firm lends it out to people who pay interest - operating as a bank just within a firm
what is the problem with solicitors nominee companies (SNC)
when dishonest solicitors dip their fingers into that bank
what was the result of Waller v Davies in the HC
- Mr Davies was fraudulent
- the 10 owners had their title taken by fraud so they should get it back
- CH Finance looses the houses by being fraudulent
- Mr Davies fraud can’t be carried down to the mortgagee, therefore they are safe and the owners can get compensation to pay off the mortgage
what was the problem with this decision made in the High Court in Waller v Davies
the judge made a mistake - he thought that CHF had admitted fraudulent misrepresentation, but the owners hadn’t pleaded fraudulent misrepresentation, they had only made pleadings amounting to them not knowing what they were doing when they signed
what was the result in the CA in Waller v Davies
the owners hadn’t pleaded fraudulent misrepresentation, so the judge couldn’t do anything for the homeowners.
Mr Davies couldn’t have committed fraud as no fraud was pleaded.
Everyone lost everything because it was just a matter of the people not knowing what they are doing, rather than the non-pleaded fraudulent misrepresentation.
what was the result for the two people who had their signatures forged in Waller v Davies
their signatures were forged (clearly fraud) so they got their properties back.
why was Black River not fraudulent in North Shore Aero Club v Black River Trustees
The NSAC’s little interest was sitting behind two large registered interests, therefore they had no chance of getting their $100,000.
what is the definition of fraud from s6 of the Land Transfer Act 2017
“fraud means forgery or other dishonest conduct by the registered owner or the registered owners agent”
why did Rodney go to Dollars and Sense in Nathan v Dollars and Sense
he wanted to get involved in a business proposition and needed to borrow $250,000.
Dollars and Sense said they’d lend him the money if they could put a mortgage on a house.
what is a 3rd tier lender
first tier - nationwide e.g. ANZ and BNZ
second tier - not so stable
third tier - pretty unstable because they offer lots of money but have sketchy terms behind that for defaults etc.
who was Mr Thomas in Nathan v Dollar and Sense
he was the solicitor and agent for Dollars and Sense.
what did Mr Thomas and Rodney come up with to get the loan in Nathan v Dollars and Sense and what did Rodney do
That they would put a mortgage on Rodney’s parents’ house. Mr Thomas gave Rodney papers for his parents to sign.
He pressured his dad into signing them and forged his mums signature because he couldn’t be bothered finding her as they were separated.
Mr Thomas said this wasn’t good enough because the documents weren’t witnessed so Rodney got his girlfriend to witness the signatures and then took them back to Mr Thomas.
A mortgagee on Mr and Mrs Nathan Srs’ title is registered.
Mr Thomas is described as being ___ ____ to what was going on - no questions were asked
wilfully blind
how did Mrs Nathan discover the mortgage
Mr Nathan died and she discovered the mortgage and said to get rid of it
what happened in the HC in Nathan v Dollars and Sense
the signature had been forged so the son was a fraudster - he was acting for the agent for the mortgagee (Mr Thomas) so the fraud could be visited down to the mortgagee because they have been wilfully blind to what is going on and are therefore also fraudulent.
the mortgage is removed.
what happened in the CA in Nathan v Dollars and Sense
the CA affirmed the HC decision, but added that the mortgagee were wilfully blind, but on a false attestation ground (from Rodney going and getting his girlfriend to witness)
what happened in the SC in Nathan v Dollars and Sense
the court said Rodney was acting within the authority given to him by Mr Thomas, both as agents of the mortgagee and therefore since there was a close connection between what the agent did (fraud) and the instructions the mortgagee and Mr Thomas gave him, Rodney was acting within his agency and therefore the fraud could be visitied down to the mortgagee.
what did the SC want to correct in their decision in Nathan v Dollars and Sense
there was a line of cases protecting the mortgagee from the agents fraud (a concrete wall created by the mortgagee not explicitly telling the agent to do fraud and therefore the agent acting outside his instructions). the SC decided to rewrite this because the statute says otherwise.
the mortgagee took on risk because they told Rodney to go get his parents signatures and they didn’t question the signatures or the attestation.
the mortgagee acquired vicarious liability.
can you attack a mortgagee if its agent goes and conducts fraud that is closely connected to what you instructed him to do after Nathan v Dollars and Sense.
yes - loose instructions
the SC in Dollars v Sense said that Rodney was fraudulent and was acting ___ ___ ____ ____ and therefore this could be visited down to the principal
within his agents authority
what liability was there in Nathan v Dollars and Sense on the part of Dollars and Sense
vicarious liability
what are the two parts to vicarious liability with fraud
what acts had the principal authorised and was there a close connection with the agent
what cases did Nathan v Dollars and Sense say was incorrect when the SC rewrote the law on the topic?
Cricklewood Holdings Ltd v CV Quigley & Sons Nominees
what happened in Cricklewood Holdings Ltd v CV Quigley & Sons Nominees
Quigler was a solicitor in a legal partnership. The firm had a nominee company and within this an internal company called Farmshare. One of the subsidiary companies coming out of this was Cricklewood holdings, which had its own title.
Cricklewood already had a mortgage. Mr Quigley decided to take $300,000 from them to invest and then book back. He made up a mortgage document whereby Cricklewood was borrowing that $300,000 from the nominee company.
the other partners wanted to legitimately register a mortgage to BNZ but couldn’t find the title. When they found it in Quigleys drawer with the mortgage document he said he hadn’t registered the mortgage yet so the other parties registered that mortgage and then the one to BNZ
what was the question for the court in Cricklewood
Quigley was fraudulent, should this fraud be visited down to the nominee company (the second mortgage)
what was the result of Cricklewood, which would now be wrong due to the approach being changed in Dollars and Sense
the mortgagee company was safe because the agent was acting outside his authority. because of the concrete wall, the nominee company mortgage (second mortgage was safe) because they didn’t tell quigley to do fraud
what should ASB have done first in Burmeister v O’Brien
applied to be struck out - they weren’t a part of it because they were squeaky clean
what did the Burmeister’s waste their time doing
fighting for the ASB to be found to be fraudulent. this wasted 4 years of litigation before they even got to start to decide if the OB trust had been fraudulent. the mortgage kept rising and the Burmeister’s were only ever going to get $215,000 (the value of the property at the time of deprivation) and so the mortgage went out of control and grew far beyond this to $641,000
who was rodney to dollars and sense
their agent - entrusted with obtaining signatures on their behalf and was implicitly authorised to do so
whether the principal is liable for an agent’s conduct depends upon what?
whether the conduct of the agent fell within the scope of the task the agent had been engaged to perform - there has to be a sufficiently close connection between the task for which the agent had been engaged and the unlawful action of the agent
what does vicarious liability consider
what acts the principal authorised and is the agent’s act so connected with those acts that it can be regarded as a mode of performing them
what acts did dollars and sense authorise rodney to do
obtaining of signatures, uplifting of the duplicate certificate of title, obtaining insurance details
Blanchard J in Nathan v Dollars and Sense found?
that Rodney’s forgery was within the course of his agency
