Property Law Practice Problems


Monash Law Students’ Society
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STUDENT TUTORIAL
PROGRAM 2015
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Property A
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PRACTICE PROBLEMS
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IMPORTANT INFORMATION FOR STUDENTS
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1. This booklet contains a number of practice questions to be used throughout the
LSS Student Tutorial Program.
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2. Hard copies of the Practice Problems in this booklet will NOT be distributed in
LSS tutorials. It is students’ responsibility to print out this booklet and bring it
to LSS tutorials or to access it digitally on a laptop or tablet during LSS
tutorials.
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3. Wherever possible, student tutors will display the Practice Problems on a digital
projector during tutorials.
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4. Students are encouraged to read through the Practice Problem and formulate
ideas and arguments before attending LSS tutorials. This allows more time to
be devoted to discussing possible responses and improves the quality of
discussion.
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5. It is left to the tutor’s discretion as to whether and when a Practice Problem
will be covered in LSS tutorials. Not all of the Practice Problems in this booklet
may be covered in LSS tutorials.
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6. Where Practice Problems have been taken from an external source, the source
will be clearly referenced at the top of the Practice Problem. The copyright for
these materials remains with the original publisher.
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7. Tutors will not hand out ‘answer sheets’ for any of the Practice Problems
contained in this booklet. Practice Problems will be discussed in tutorials only.
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8. Tutors will not grade or provide feedback on detailed written answers to these
Practice Problems. If you have a question with a particular Practice Problem,
you are encouraged to raise it in the tutorial.
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9. It is against LSS policy to allow students to e-mail tutors for additional help. If
you have a question relevant to one of the Practice Problems in this booklet,
you are encouraged to raise it during LSS tutorials.
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10.If you have any questions, please contact Pearl Jin tutorials@monashlss.com
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DOCTRINE OF FIXTURES
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(Adapted from 2013 exam)
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Kathy is the registered proprietor of a house in South Yarra. The house has a study
containing a large bookcase which covers the side wall and was installed 70 years
ago by Kathy’s great-grandfather. The bookcase is not attached to the wall, and
when filled with books is entirely self-supporting. However the study is carpeted
and the base of the bookcase has sunk into the carpet pile.
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Kathy puts the property on the market for sale. Her real estate agent advises her
that her books, many of which are old and torn, will not look very attractive to
potential buyers. Kathy therefore removes most of the books from the bookshelf,
but when she does so discovers that the bookcase tilts dangerously forward. She
therefore affixes the back of the bookcase to the wall by means of two small
screws.
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Alice, an antiques enthusiast, inspects the house. She expresses much interest,
especially in the bookcase which she suspects was designed by a famous French
designer. She buys the house and settlement occurs in December 2014.
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When Alice moves in, she was shocked that the bookcase had been removed. She
would not have paid the price she did but for the bookcase. In addition, there are
also 2 holes in the wall where Kathy had inserted the screws.
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Advise Alice whether she can compel Kathy to return the bookcase.
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Diane and Joshua decided to buy Rita’s mansion in Toorak. Rita is a famous French
sculptor who has decided to move back to France for career purposes. On
inspection of the mansion, Diane and Joshua saw that there was a large life-size
sculpture in the backyard. In fact, the sculpture was one of Rita’s most treasured
works as it was a sculpture of her late husband. The sculpture was resting on the
grass by its own weight. It had been placed there since Rita moved to Melbourne 2
years ago.
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Another feature of the backyard was the huge marble water fountain which was
cemented to the ground. This fountain was a main feature of the property and had
been there since 1920, when the mansion was originally built.
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Advise Diane and Joshua whether the sculpture and the fountain are fixtures or
chattels.
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DOCTRINE OF ESTATES
Sabrina is the registered proprietor of 3 properties in Victoria – one in Balwyn, one
in Toorak and one in Camberwell.
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In June 2014, she grants Tara (her good friend) a life estate in her Balwyn property
for the duration of her Sabrina’s life.
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At this point, what interests do Tara and Sabrina have in regards to the Balwyn
property?
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Tara then alienates the life estate to her daughter, Millie, in August 2014.
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What interest does Millie have in regards to the Balwyn property?
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Sabrina tragically dies in a car accident in December 2014 and in her will, she
leaves the Balwyn property to her son, Chase.
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What interests do Chase and Millie have in regards to the Balwyn property?
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In the will, the Toorak property is left to Daniel, Sabrina’s husband, on trust for the
benefit of their daughter, Amelia. She leaves the Camberwell property to her
sister, Joanna for life and the remainder to Joanna’s son, Ricky, when he reaches
the age of 21.
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What interests do Daniel, Amelia, Joanna and Ricky have the in the properties?
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ADVERSE POSSESSION
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(Adapted from 2008 exam)
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in 1988 Billy decided to buy 40 acres of bushland known as Gully Hill on the coast
of Southern Victoria. His intention was to use the land as a campsite and if the
zoning of the land changed in the future, to subdivide the land into 5 acre lots and
sell it. Billy became the registered proprietor of the land, but did not live on the
land until late 1992. At that time he cleared 30 acres, built a rough hut and set up
business as a grower of organic produce.
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In 1990, unbeknown to Billy, his neighbour Stewart, began to graze his cattle on a
2 acre section on the south west corner of the property. Billy rarely visited this
area because of its inaccessibility. To prevent his cattle from straying too far,
Stewart built a fence around this 2 acre section of Billy’s land and put a gate in the
fence to give the cattle access. Stewart died in 1994, leaving all his real estate to
his son Darren, who continued to use the property in the same way. However,
Darren did change the fence to make it sturdier and longer lasting. He also
purchased a lock which he place on the gate of the fence every night.
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In early May 2008, Billy decided to give his interest in the land to his girlfriend
Candice. He executed a transfer of land to Candice and she became the registered
proprietor in July 2008.
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Advise Candice as to whether she can prevent Darren from using the land to
graze his cattle.
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LEASEHOLD ESTATES
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In January 2012, Alicia entered into a “license agreement” with Will for the use of
a warehouse for a café business, for the duration three years. Alicia planned to
open a café to cater for the workers in neighbouring warehouses and industries.
She was given a set of keys to the warehouse, which only Will has another copy of. Soon after Alicia opened her café business to the public, she became extremely ill
and so with Will’s consent, she assigned her interest to her sister Rachael, who
took over the business. Two month later, Will decided to refurbish the premises.
Contractors employed by Will erected scaffolding in front of the coffee shop,
which prevented customers from using the footpath outside. This had an adverse
impact on passing trade. Access to the premises themselves was also obstructed. To make matters worse, the neighbouring warehouse leased by Will to Fred’s Fairy
Floss Pty Ltd (Fred), also started to cause problems for Rachael. Fred
manufactures fairy floss for fairs, circuses and sideshows etc. It is necessary to
maximise airflow to the premises during the production of the fairy floss, as a
build up of humidity or heat will make the fairy floss sticky and inedible.
Therefore, Fred must keep all the windows and doors to the premises wide open.
Unfortunately, fine grains of sugar are escaping from the premises and finding their
way next door into the cafe. The sugar now finely coast the premises, it has made
everything sticky and has jammed the cappuccino machine. Rachael rings Will,
informs him of the trouble and asks him to do something. However Will refuses to
do so, stating that it is ‘not his problem.’ What actions may be available to Rachael?
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(From 2010 exam)
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RESIDENTIAL TENANCIES ACT
Harvey is the tenant of a house in Melbourne and Louis is the landlord.
Unfortunately, Harvey is not an ideal tenant. He often rests hot saucepans on the
laminex bench tops in the kitchen while he dishes up dinner. He is renowned for
holding large parties at the house at which he sells alcohol to his guests, and they
often let off loud firecrackers at these parties. After one such party, Harvey falls
over the couch and accidentally puts his fist through the wall.
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Advise Louis whether Harvey is in breach of any of the provisions of the
Residential Tenancies Act 1997 (Vic) and if so whether he can serve a breach of
duty notice on Harvey. Louis also wants to know what his notice should contain.
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CONTRACT AND PROPERTY: CONTRACTUAL LICENCES
(From 2014 tutorial booklet)
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A church group meets at a local community hall which is owned by the City of
Surrey. The church group uses the hall between 9.30am and 1.30pm every Sunday
at the cost of $15 per hour. Other community groups use the hall on Sunday
evenings and during the week. The church group has been issued with two keys to
the hall and no more may be cut without the City’s approval. The church group is
responsible for locking up when finished. Each group that uses the hall is permitted
to store equipment in a storage room in the hall. These arrangements were
embodied in writing and were expressed to last for twelve months. This period has
since expired and the church group has continued to use the hall, paying monthly.
Advise the church group.
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EASEMENTS
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Lot 1 and Lot 2 are adjoining lots. There is a narrow right of way over Lot 1 for the
benefit of Lot 2, giving the latter access to a public road. The original owner of Lot
2, Tyson (with the consent of the local council), used the shed on his property for a
motor vehicle repair business on weekends only. During the week, the right of way
was used mainly for residential access, but on weekends it was also used by the
customers of the mechanical repaid business.
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The ownership of Lot 1 and Lot 2 have now changed a number of times since the
right of way over Lot 1 came into existence. The current owner of Lot 2, Bella,
seeks the consent of the local council to demolish the house and the shed on Lot 2
so that she can erect a 3 storey high office building. Bella intends for each storey
of the building to be leased out to different companies to use as office space.
Access to the building is planned via the original right of way over Lot 1.
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Rhonda, the current owner of Lot 1, objects to Bella’s plans as she does not want a
tall building towering over her house. She also does not want increased traffic over
her block of land because of the new development.
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Advise Rhonda.
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(From 2014 tutorial booklet)
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MORTGAGES
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Cathy is the registered proprietor of a property at Apollo Bay. The property is
mortgaged to the Bayside Regional Bank to secure a loan of $300,000. Cathy has
been falling behind in her repayments on the loan and on 1 March 2009 the Bayside
Regional Bank served a written notice to pay on Cathy. Cathy was unable to pay
and on 1 May 2009 the Bayside Regional Bank made arrangements to sell the Apollo
Bay property at auction on 1 June 2009. The head office of the Bayside Regional
Bank is in Geelong which is approximately two hours drive from Apollo Bay. A local
real estate agent, Frank, was engaged to act in the sale. The auction was
advertised three times in the Geelong Weekly but was not advertised in any
newspapers in Melbourne or in the Apollo Bay area. Frank arranged for an auction
board to be erected at the property and was unaware that the board had been
blown away by gale force winds shortly afterwards and it had not been replaced.
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Due to the fact that the sale was being held in the middle of winter only one
prospective purchaser, Murray, inspected the property prior to auction. The
Bayside Regional Bank followed its usual practice of conducting the auction at its
head office rather than on the property. There was only one bid placed at the
auction by Murray who was sold the property for $305,000. Settlement is due on 1
September 2009.
Written valuations obtained by Bayside Regional Bank had
estimated that the property could sell for around $400,000.
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Advise Cathy as to whether she can bring an action against Bayside Regional
Bank on the basis of an improper sale.
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(Adapted from 2010 Exam)
SALE OF LAND
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Tutorial 9 - Sale of Land
Matthew is the registered proprietor of a nineteen hectare lot called ‘Erehwon’
located six kilometers outside Bendigo. He works in Bendigo as an lawyer and in his
spare time cultivate a small number of vines producing grapes on the lot and sells
the grapes to a local winemaker. He decides to sell ‘Erehwon’ and advertises the
property for sale by a public auction on Friday 21st March 2012 in the Bendigo
newspaper. He prepares the contract for the sale of land in standard form in two
parts which provides that the purchaser pay a deposit of 10% of the purchase price
on signing and the balance of the purchase price on settlement on Monday 19 July
2012. The last page contains space fro the vendor’s and purchaser’s signatures. On
the back of the page the following notice appears:
The purchaser should note that the cooling-off rights given by the Sale of Land Act
1962 (Vic) do not apply to this contract as the land the subject of the contract is
to be sold by auction.
Matthew staples copies of the vendor’s s32 statements to both copies of the
contract.
Danny who recently moved from New South Wales, but lives in Bendigo and
inspects ‘Erehwon’ on Friday 16th April and believes the land will be great for
growing different grape varieties. He “falls in love with” and offers to buy
“Erehwon” at a price too good to refuse, provided the contract is signed
immediately. Danny in excitement proceeds to sign both copies of the contract
immediately, inserting the purchase price, amount of deposit and signs the
vendor’s statements. He did not read the contract before signing it, and neither
read nor noticed that the vendor’s s 32 statements were stapled to back of the
contracts.
(a) Danny now regrets his haste in contracting to purchase “Erehwon”. Advise
him.
(b) Before Danny pays the deposit. Jason who offers a higher price for
‘Erehwon.’ Matthew sells the property to Jason; does Danny have any claim to
the property?