Margaret Rosalind Malcolm And Peter Equity Essay

Questions:

What Is The Type Of Right That Is Created In The Asset For Cadbury Via The Inter Vivos Transfer?

Whether The Conditions Of Transfer Were Valid Conditions?

Whether There Is Any Action That Can Be Brought By Emma Against Cadbury?

Answers:

Introducation

The principle of adverse possession is justified as under the law of equity it is unexpected that the interest of the landowner who either does not show any interest in the current state of land or there is failure to utilize the land, or where there is no action taken on time by the owner for the prevention of running out of the period of limitation. The court however, is required to apply the principle of adverse possession in the strictest manner which is possible, as there may come out outcomes from it that are non-justifiable. Particularly in situations where the owner has had in his mind the land’s specific future use, since it would not be easy to estimate whether the actual possessor’s or the adverse possessor’s use of land, in question would be the one that is of maximum benefit.[1]

The main purpose of the equity maxim “Vigilantibus non dormientibus, jura subveniunt" is to encourage the paper owners of a land to utilize the same in a manner that is best, as land forms a very important natural resource, and in the situation where there is negligence or failure in complying with the same then a person who is willing to do the same and make such beneficial use of land may impose his legal right of taking the land’s and its papers possession and benefit for himself. [2]

In the landmark case of JA Pye (Oxford) Ltd v Graham there was an adversary possession that was established and which led to the loss of land which was worth approximately thirty five million. Nueberger J. opined in this case on the “sleeping theory” and it was stated there did was no justifiable reasoning that was given in the case where the land’s paper owner would be satisfied to let another individual trespass his property for the given period of time.[3] There was no logic that could be placed on the judge’s decision. This case was essentially in contradiction with the previously established rule that in the situation where there is a future use of the property that owner has then there cannot be any adverse possession of the land. It is thus, essential that such loss should be avoided and adverse possession should be justified in the stricted manner that is possible.

Doctrine of Tenure and its Relevance

The doctrine of tenure means the land’s division on the basis of space. It is stated by this doctrine that the land is only being held by the people and the actual ownership belongs to the Crown, thus they are only the Crown’s tenants. In other words, there is no concept of land’s actual ownership it will ultimately be the Crown to whom all the land will belong to.[4]

t was in the case of Mabo that the High Court redefined the english doctrine of tenure or in other words by developing the concept of radical title defined the Australian Doctrine of Tenure. It has thus become very important in the discussions of land titles in the recent times[5], all the land was pre mabo was owned by the Crown and there existed severe restrictions when it came to acquisition of title either by of possession of the land or occupancy,[6] post Mabo this fiction is applicable only in the cases where tenancies have been formed by way of Crown’s grant. There can no longer be exclusion of acquisition of first title of land in Australia to the real property which is un-alienated and alienated based on the principle that the original ownership is of the Crown and any such other rule that depends on it. Thus, post Mabo there is potential that the sources of title which are in addition to that which has been granted by the grant can be accommodated.

Crown's Radical Title and Native Title in terms of Extinguishment

In the Mabo case[7] the unsatisfactory position stated in the case of Attorney-General v Brown[8], was challenged. This was a judicial rhetoric as in this case it was stated that all the land in the Crown which was waste upon the colonization in 1788 would belong to the Crown due to the fact that in England the same principle applies therefore according to Stephen CJ it would be applicable in Australia as well (Secher, 2008). The land was to be held only on the basis of tenureship and the actual and full beneficial owner of the land will continue to be the crown.

Thus, when the Crown arrived they acquired what is termed as radical title. If the situation was such that Australian was truly terra nullius then this radical title would be for the Crown’s benefit. Though, there was inhabitation in Australia the radical title did not mean beneficial ownership of the property. The Radical title confers only sovereignty and cannot thus automatically extinguish the rights and titles of the land that belonged to the natives once the Crown makes grant. The land which however, are not subjected to the doctrine of tenure the native title continues to remain. The native title rights are recognized and compatible. The conditions which are most notably are that they have not either been forfeited by the individuals or the Crown has not extinguished the same. It was thus, stated in the Mabo case by Brennan J. the mistaken belief by that land ownership and sovereignty can be equated had given rise to this presumption that there has been extinguishment of the rights of the natives. The notion being that there is dictating of the land by principles that are feudal in a colony that is settled be taken to the royal demesne upon the acquisition of the sovereignty by Crown is not correct.[9]

Inter vivos Transfer

Any arrangement of transfer of assets made in lieu of a will is an inter vivos grant of property. In the case of Fletcher v Fletcher covenanted via a trust deed with his five trustees that in the situation that his sons Jacob and John survived him, ? 60,000 would be paid by his personal representatives to the trustees which the trustees shall hold in trust till the boys reach an age of 21 years.[10] However, his will made in the year 1834 disposed his estate to a certain trust for the benefit of his two natural sons and wife. On the death of the covenantor one of the sons claimed the payment of ? 60,000, this proceedings were declined by the trustee. There was however, a trust that was formed via inter vivos since the grant was made when the covenantor was alive.

Further section 47(2) of the Conveyancing Act 1919 (NSW) (“Act”) states that “Where land is conveyed to or to the use of any person without words of limitation, such conveyance shall be construed to pass the fee simple or other the whole estate or interest the person conveying had power to dispose of by deed in such land unless a contrary intention appears by such conveyance”

Application of Law: Inter Vivos Transfer

The grant was made by Burgess when he was alive in a form other than a will, it is thus as mentioned above an inter vivos transfer (Fletcher v Fletcher). Since there is no specific date that is given of the grant it is assumed that it is on a current date and hence the Act shall apply which under section 47(2) states that the term “for life” denotes that there has been an inter vivos transfer, thus there is fee simple estate that is held by Cadbury in the given situation.

Validity of Conditions

There can be limits imposed by the Grantor on the person to whom the land is passed, if such conditions are breached then the grantor or successor of the grantor shall have the right of re-entering the the property. In the case of Zapletal v Wright[12] the defendant and plaintiff were the land’s joint tenants, defendant was married and separated from his wife and moved in with the plaintiff a few years later was living together with her for fifteen years and they had two children together until she married and left with another person. Though there was no contribution on her part with the purchase of the property her name on request by her was added to her title, it was stated by him that she said if she ever left her name was to be taken off the lease. A claim was made by er that the property to be sold and the proceeds divided it was opined by the judge that this was a gift to her. It was therefore stated in this case, that the intention was to induce her so as she does not leave him, this is void condition as it is promotion of immorality. The condition forms a separate and distinct provision, the primary gift shall remain valid if the subsequent condition is void however, if the terminable limitation is void then there will be a failure of the entire gift.

A condition precedent would be considered to be invalid in the situation wherein it is:

  • conducive to a behavior that is immoral;[13]
  • is illegal such a seeking for the frustration of law of insolvency;[14]
  • uncertainty, wherein a gift was promised to the daughter provided however, that she marries someone who is not Jewish, this was found to be vague as the term “Jewishness” was defined in a vague manner;[15]

In the case of Hickin v Carroll & Ors. (No.2)[16], Patrick Caroll who had made a will on 15th of December 2011, passed away on 16th of April 2012. He had four children and bequeathed them with gifts under the will on the condition that "subject to and dependent upon them becoming baptised in the Catholic Church within a period of 3 months from the date of my death and such gifts are also subject to and dependent (sic) my children attending my funeral". The four children and their mother (ex-wife) were all practicing Jehovah’s witness though, the funeral was attended by the children however, none of them were baptised as per the will. One of children after the lapse of three month period sought from the Supreme Court a declaration that relevant clause conditions were void and had not effect and the gifts were in fact absolute gifts. After determining that the relevant clause was condition precedent, it was on the court to resolve whether it was void. On the count of being uncertain the court opined that there will not be a failure of the condition precedent merely because there has not been complete and clear expression.

Application of Law: Validity of Conditions

There are further conditions which have been set by Burgess on the estate. The condition that was laid down by Burgess was condition subsequent, a requirement which if not met leads to the termination of the interest in the property (Zapletal v Wright). Thus if there is breach of the condition set by Burgess Cadbury would lose his interest in the property and it would then eventually transfer to Emily who has contingent interest in the property (explained in detail below). There are various reasons for which the condition can be made void, however, in Cadbury’s case it cannot be stated that the condition was conducive to behavior that was immoral, illegal or uncertain. Even if Cadbury challenges this condition on the reason of it being uncertain, as opined in the case of Hickin v Carroll & Ors. that there will not be a failure of the condition precedent merely because there has not been complete and clear expression.

Emily’s Action Against Cadbury

In the case where there is grant of future interest in an individual who not entitled previously would include a interest that is vested, it is essential that there should be precise identification of such individual which is known and there should not exist any condition that is precedent and contingent interest shall come into action with the meeting of the contigency leading to the vesting of the rights.[17]

It is stated under section 16(1) of the Act that “A contingent remainder existing at any time after the commencement of this Act shall be capable of taking effect notwithstanding the want of a particular estate of freehold to support it in the same manner as it would take effect if it were a contingent remainder of an equitable estate supported by an outstanding legal estate in fee simple.[18]

Thus there is intervention of legislation placing vested remainders and contingent remainders in the same position. There is a liability on the tenant, in case of their being absence of of an agreement that is express, for ensuring the premises maintenance, this is depended partly on the doctrine of waste, and partly on the treatment of premises in a manner like tenant implied contract.[19]

It is enacted by the Statute of Marlborough, c. 23, that: "Also fermors, during their terms, shall not make waste, sale, nor exile of house, woods, men, nor of anything belonging to the tenements that they have to ferm, without special licence had, by writing of covenant, making mention that they may do it; which thing if they do, and thereof be convict, they shaH yield fuii damage, and shaH be punished by amerciament grievously." The Statute of Marlborough comprehends “fermors” to those who are holding the lease for life.[20]

A voluntary waste as per Honywood v Honywood[21], is said to have occurred if there is a positive act that takes place such as the cutting of timber.

Application of Law: Action by Emma

There fee simple remainder that has been received by Emma through both vested interest, when the property passes to Emma on the death of Cadbury and contingent interest where property passes to Emma if there is breach of condition by Cadbury. There is clear identification of the individual on whom the interest is to be vested and there is no condition precedent on her either. Furthermore under the Act, the vested remainders and contingent remainders in the same position. Thus Emma will be able to take her position on the property even if there remains a want of a freehold for supporting it.

Further an action of voluntary waste under the doctrine of waste can be brought by Emma against Cadbury. Cadbury cut down the 100 ancient Lombard polars which led to the decrease in the profits and also reduced the valuation of the estate. A a life tenant Cadbury was liable (Marsden v. Edward Heyes Ltd) for such waste furthermore there was no grant in the instrument that allowed the same (Woodhouse v Walker (1880) 5 QBD 404)

References

Bryan, M.W. and V.J. Vann, Equity And Trusts In Australia (Cambridge University Press, 2012)

Dal Pont, G. E, Equity And Trusts In Australia (Lawbook Co., 2015)

Edgeworth, B., C. Rossiter and M. Stone, Sackville And Neave's Property Law Cases And Materials (Lexis Nexis, 8th ed, 2008)

Parliament of New South Wales, "Report Of The Law Reform Commission On The Application Of Imperial Acts" (V. C. N. BLIGHT, GOVERNMENT PRINTER, NEW SOUTH WALES, 1968) <

Pettit, Philip H, Equity And The Law Of Trusts (Oxford University Press, 2012)

Secher, D., "The Doctrine Of Tenure In Australia Post-Mabo: Replacing The ‘Feudal Fiction’ With The ‘Mere Radical Title Fiction" [2006] Australian Property Law Journal

Tham, Chee Ho, "Resuscitating The Trust Of A Chose In Action" (2005) 24(1) University of Queensland Law Journal

Wilkie, Margaret, Rosalind Malcolm and Peter Luxton, Equity & Trusts (OUP Oxford, 2012)

Attorney-General v Brown [1847] 1 Legge 312

Fletcher v Fletcher [1844] EWHC Ch J69

Hickin v Carroll & Ors (No2) [2014] NSWSC 1059

Honeywood v Honeywood [1874] L.R. 18

JA Pye (Oxford) Ltd v Graham [2003] AC 419

Mabo v Queensland (No 2) [1992] 175 CLR 1

Marsden v Edward Heyes Ltd [1927] 2 K.B. 1.

Woodhouse v Walker (1880) [1880] 5 Q.B.D. 404

Zapletal v Wright [1957] Tas SR 211The Conveyancing Act 1919

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