[SOLVED]: Aria And Her Second Husband Bob Are The Registered Proprietors In Fee Simple Under The Real Property Act 1900, NSW Of A Riverside Property Near The Hawkesbury River In New South Wales.

Aria And Her Second Husband Bob

The transaction between Bob and Caden is mischievous in nature. It raises a lot of various issues to dispute the validity of the sale of the piece of land. Bob intentionally sells the property he holds in trust for Ethan to Caden.  Caden seems to know that the property belongs to Ethan as he catches up with Ethan at the bar and talks about a number of things with him but conceals the transaction bit. He acts swiftly to pay the remainder of the purchase price to Bob who takes off after bagging in the cash. Various procedures of land purchases were overlooked by Caden and Bob and further they acted in manner that raises questions of the validity of the title Caden obtains as with regards to the property. Real property transactions are emotive in nature and it is for this reason that the same require that laid down procedures and precautions be adhered to when engaging in a transaction. The reason behind clear and consistent frameworks in land transactions and registrations is to protect the parties.[1]

The first issue arising as to as the validity of the transaction conferring the property right to Caden was whether the transaction was properly witnessed.[2] The Real Property Act addresses the eligibility of a witness in execution of the sale agreement and the transfer documents.  An individual must be 18 years and above, must not be a party to the dealing or instrument conferring title over property to another, must have known the person signing the dealings as a party to the transaction for at least a year before the transaction, must have taken reasonable steps to establish the identity of the person and must be present at the time of execution of the instrument. [3] land transactions in New South Wales are subject to being written and must be witnessed. The transaction between Caden and Bob was not properly witnessed and executed and thus the title transfer to Caden can be challenged on this basis and Ethan can regain the title of his property held in trust for him.

The other issue arising from the transaction is whether the requirements of transfer of title under joint ownership was met. It is assumed that when a property is registered under joint ownership, the owners have equal rights and shares towards the same.[4] It is on this basis that Ethan’s property registered under the names of Bob and Aria. In New South Wales, the only mechanism to sell a property that is jointly owned without the consent of the other party is by making an application to the Supreme Court for the appointment of a statutory trustee to who in turn partitions or sells the property.[5]  Caden in purchasing the property would have acted reasonably with enough diligence to realize that the property was jointly owned. Further, it would have brought into his attention that not only did he require Bob’s consent by Aria’s too in order to effectively purchase the property. His failure to establish that the property was registered in the name of both and Aria or his neglect of the same dents his title to the said property to the absolute exclusion to others claiming rights over the same property. He fails to acquire a valid title for the mere reason that Aria did not consent to the transaction and neither did Caden upon realizing that the property was jointly own did make an application to the Supreme Court so that he could go ahead and secure a clean title.

Does one acquire good title to property when the transaction is based on fraud? The courts have been vocal in one seeking the authentication of each parties when property is jointly owned.[6] Caden ought to have ensured that Aria signed in his presence both the contract and the transfer document. [7]In Graham v Hall and Another[8], the court held a solicitor liable for the not exercising due diligence in the conveyance of a matrimonial home in which the spouse of the party transacting did not sign the conveyance documents in presence of the solicitor. In fact, it was established that the husband had forged the signature. Bob in this context forges the signature of his wife in order to see through the transaction and transfer. This means that the rights conferred to Caden are by way of fraud and cannot amount to a good title.[9] The issue of the consent of each parties in a joint tenancy was further emphasized by the courts in the case of Young v Hoger[10] by ordering the deregistration of the mortgage that had been fraudulently conferred as a result of forging of a party’s signature.

It is proper to presume that registration of the title in a given property confers absolute rights to the exclusion of others over the property.[11] Caden through being the registered owner of the property that was left in trust for Ethan becomes its owner and has the rights that comes with the registration of title. Grayson by way of lease had the rights to the property but the rights were not registered. There existed an oral lease agreement and upon Caden registering the property in his name, he takes the position of the initial joint owners, Aria and Bob. Subsequently, Caden acquires rights and liabilities of the property as it is following the caveat emptor principle[12] and this includes the lease agreement that was entered into between Grayson and Bob and Aria. It therefore means that Grayson will be remitting the payments/rent to Caden as his landlord.

Aria and her sons can lodge a complaint with the registrar and the court to have the title transferred to Caden revoked. Aria together with her sons will claim her lack of consent in the transaction and the proper lack of witnessing and this will be the basis for disputing the transaction that bestowed the property rights to Caden.  Even though registration of title is the prima facie evidence of ownership of property, the same can be revoked when title was not legally acquired. This has been made possible by Land Registration Act of 2002 in its schedule 4. It came into force to protect innocent victims of fraudulent land transactions like Aria and Ethan.  A provision is made for the court and the registrar to alter the register in a bid to correct a mistake. Allowing Caden to register the property in his name following the dealings with Bob. Rectification can be done to the title and Aria can get back to holding the same in trust for her son.  The courts have expanded the interpretation of the term mistake as per schedule for to include the registration of an individual as the proper title holder in cases of fraud when the registry officials had no reason to believe they weren’t.  This has been stated in the Court of Appeal case of Baxter v Mannion[13] and further emphasized in Balevents Ltd v Sartori[14]. The Malory approach has been taken by the courts when it comes to rectifications.[15] The position in Malory Enterprises Ltd v Cheshire Homes (UK) Ltd[16] If, as a result of the registration of a forged transfer the legal estate alone has transferred, the new registered proprietor holding the legal title of the property alone must do so as a bare trustee for the original beneficial owner, often the original registered proprietor. Accordingly, the original beneficial owner would be entitled to simply call for the legal title to be transferred to him provided he is entitled to the whole of the beneficial interest and are not a minor.[17] This means that Aria will not need to have Bob’s name registered back together with hers during the rectification but her name will appear solely and she will continue holding the property in trust for Ethan.

The principle of nemo dat quad non habet is key in transactions relating to transfer of title and it is on it that the title acquired by Caden becomes porous. Basically one is not able to transfer more rights than he has. As a joint tenant of the property, Bob did not have the right to effect the transfer by himself.[18] As per this principle, Caden who purchases the property cannot claim to have acquired rights to the same. Caden would have exercised due diligence during the transactions if he had wanted to become a bona fide purchaser for a value in order to gain protection from the law with regards to the validity of his title.[19]

[1] Gray, Kevin J., and Susan Francis Gray. Elements of land law. Vol. 4. Oxford: Oxford University Press, 2009.

[2] Wales, New South. “Application Form and Lodgement Guide.” (2010).

[3] Section 117 of The Real Property Act 1900

[4] MacKenzie, Judith-Anne, and Mary Phillips. Textbook on land law. Oxford University Press, USA, 2014.

[5] Section 66 of the Conveyancing Act 1919

[6] Gorton, Timothy. “Until Fraud Do Us Part: Reconciling Joint Tenancy and the Torrens Land System in Cassegrain v Gerard Cassegrain & Co Pty Ltd.” QUT L. Rev. 16 (2016): 93.

[7] Council, New South Wales Aboriginal Land. “Fact Sheet: Comparison of Land Rights and Native Title in NSW.” (2016).

[8] [2006] NSWCA 208

[9] Hamburger, Philip. “Conveyancing Purposes of the Statute of Frauds, The.” Am. J. Legal Hist. 27 (1983): 354.

[10] 2000 Q.S.C. 455 (2000).

[11] Jowsey, Ernie, ed. Real Estate Concepts: A Handbook. Routledge, 2014.

[12] Hamilton, Walton H. “The ancient maxim caveat emptor.” The Yale Law Journal 40.8 (1931): 1133-1187.

[13] [2011] 1 WLR 1594

[14] [2014] EWHC 1164

[15] van Erp, Sjef, and Bram Akkermans, eds. Cases, materials and text on property law. Bloomsbury Publishing, 2012.

[16] [2002] Ch 216

[17] Cowan, David, Lorna Fox O’Mahony, and Neil Cobb. Great Debates in Property Law. Palgrave Macmillan, 2012.

[18] Reddy, Jo, and Rick Canavan. “Nemo Dat Quod Non Habet.” Q&A Commercial Law. Routledge, 2015. 73-86.

[19] Swartz, Edward M. “The Bona Fide Purchaser Revisited: A Comparative Inquiry.” Bul Rev. 42 (1962): 403.

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