Week 4 - Tutorial Questions (1)

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University of Technology Sydney *

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Law

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Apr 3, 2024

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Tutorial Questions Tutorial Submission due Monday at 10am. Question 1 is the allocated question for submission: 1. Alicia recently purchased a property in Wagga Wagga, where she was hoping to launch an innovative online legal consultancy. To fund this venture, she turns to her old law school friend, Will, for a loan. Will agrees and provides Alicia with $250,000.00, securing the loan with a written and signed mortgage over Alicia's property. However, Will, believing that Alicia would be well-positioned to repay him, doesn’t register the mortgage. Alicia's business, while ground-breaking, struggles more than expected. To alleviate financial pressure, Alicia entered into an agreement to grant a right of way to Kalinda in exchange for $30,000. Kalinda owns the neighbouring farm with a large barn just behind Alicia’s property, but it is difficult to access through a patch of woodlands that has grown across her property. The right of way isn’t registered, but Kalinda immediately begins using the right of way, driving across Alicia’s paddock in her large 4WD. As Alicia's business continues to flounder, her debts mount, and she faces increasing pressure from various creditors. Desperate to resolve her financial woes, she decides to sell her property. The property is listed online, where it catches Diane's eye. Captivated by the property's potential to have multiple holiday homes built, Diane agrees to purchase it without a physical inspection. Registration has not yet occurred but is imminent. a) What is your advice to Will, Kalinda, and Dianne? b) Would your advice change if Dianne’s interest was already registered? Formalities and Priority Rules 2. What are the common law priority rules? In what circumstances do they apply? 3. How are the common law priority rules relevant to Torrens Land? How do we approach priority disputes over Torrens Land? 4. What does it mean to transact via a deed? 5. Is it correct to say that Conveyancing Act s 23C means that an interest is valid because it’s in writing? Why/why not? 6. What is the short-term lease exception in s 23D(2)? When is it relevant? 7. What does it mean to assess who has the ‘better equity’? In what circumstances might an equitable interest be postponed? 8. What is the function of Real Property Act s 43A? What does it mean to have an immediately registerable dealing? Problem Question 9. Alan Shore is the registered proprietor of a home located in Wahroonga. In May 2023, Alan borrowed $90,000 from his best friend and colleague, Denny Crane, to purchase a luxury car suitable for his family needs. Alan had recently joined the prestigious law firm of Crane, Poole & Schmidt and was still under probation, making it difficult for him to secure a loan from a commercial bank. To secure the loan, Alan executed a written mortgage over his Beacon Hill property in favor of Denny. Given their deep friendship and trust, Denny did not register the mortgage. Despite considering the possibility, Denny opted not to lodge a caveat, trusting in their strong personal and professional relationship. In July 2023, Alan discovers that his wife, Tara, is expecting their third child. Their Wahroonga home was spacious but with the new addition on the way, Alan decided to expand the property to include a fourth bedroom. By this time, Alan's financial situation had stabilised,

allowing him to approach the local credit union, Boston Savings and Loans (BSL), for a loan. BSL agreed to provide a $150,000 loan for the property expansion and additional renovations, with the Wahroonga property as security. Alan, fully aware of his outstanding debt to Denny but motivated by his family's needs, granted a second mortgage to BSL, which they promptly registered. The expansion was completed by October 2024l, but unforeseen construction costs prevented Alan from completing other planned renovations, leading to growing dissatisfaction within his family about their living situation. By early March 2024, Alan decided to sell the property to renowned local media personality, Shirley Schmidt, for $2,700,000. Eager to finalise the sale, Alan used Shirley's deposit to immediately repay the mortgage to BSL. BSL then provided Alan with a signed Discharge of Mortgage. At settlement, Alan presented Shirley two properly executed documents (with relevant stamp duty paid):  A Discharge of Mortgage by BSL in Alan's favour;  The signed Transfer from Alan to Shirley. However, Shirley hesitates to settle, concerned that the Discharge of Mortgage by BSL in favour of Alan should be registered first. a) Advise Shirley as to whether her concerns are justified: would her paramount interest in the property be protected if she settles the sale of the property immediately, prior to the discharge of the mortgage being registered? b) If Shirley did proceed with settlement but was yet to register, what would your advice be to Denny? Could he take any action to protect his interest? c) Would your advice to Denny be different if he discovered the sale prior to settlement?

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