propertylaw

Key Issues

Before answering the following questions, you should be familiar with the following concepts:

  • The meaning and effect of indefeasibility.
  • The exceptions to indefeasibility.
  • The test for fraud.
  • The effect of establishing an exception to indefeasibility.
  • Remedies available for someone who claims to have been deprived of an interest.

Keep in Mind

  • Where there is an obvious case of fraud, a complete answer must still discuss indefeasibility. Fraud is only relevant as an exception to indefeasibility, and therefore an answer must first explain the general rule, then the exception.
  • The exact wording of the test for fraud. The second element is knowledge of the dishonest act, not knowledge of the interest.
  • The difference between fraud against the holder of an unregistered interest and supervening fraud. Fraud will only fall into one of the three categories. The relevant distinguishing factor between the two categories is knowledge (and intention) at the time of registration.
  • A complete answer should identify the appropriate remedy once an exception to indefeasibility has (or has not) been established.

Question 1

Amanda and Brian have been married for 10 years. They own a house, and are both listed on the certificate of title as registered proprietors. Brian frequently travels on business, and returns unexpectedly from one trip to find Amanda and his best friend David having an affair. They argue, Amanda leaves, and moves in with David. Brian, wanting a fresh start, advertises the house for sale at market price.

Sarah views the property and decides to purchase it. She is aware that Brian wants a quick sale, but is satisfied with his (fictitious) explanation that his wife has been offered a job overseas and has already moved, leaving him to wrap up affairs here. Brian forges Amanda’s signature on the agreement for sale and purchase. Sarah is registered on the certificate of title. Brian keeps all of the money and leaves the country.

Amanda returns to the house to discover Sarah living there. When she realises that Brian has forged her signature and sold the house, she consults a lawyer. She wants her house back, since she never agreed to sell it.

Advise Amanda.

[Time Limit: 45 minutes]

Answer Plan

The following points should be considered in your answer:

  • The effect of indefeasibility on Amanda’s claim.
  • Whether any exception to indefeasibility exists.
  • Any appropriate remedies.

Question 2

Would your answer to Question 1 change if the property was advertised for 20 per cent below market price?

[Time Limit: 30 minutes]

Answer Plan

Note: this is a common way of asking a question in a law exam. Students should think carefully about how best to answer it. Students should be very aware of the time and amount of marks allocated to this question. If it has the same amount of marks or time allocated as the previous question, similar detail can be expected (without the need for repetition of content). Whether the ultimate answer to the question is “yes” or “no”, students are expected to show the same reasoning process as in the previous question.

The following points should be considered in your answer:

  • The effect of indefeasibility on Amanda’s claim.
  • Whether any exception to indefeasibility exists.
  • Any appropriate remedies.
  • Conclusion.

For the full sample answers and more see Wilson Questions and Answers: Property Law (2nd ed, LexisNexis, Wellington, 2014).

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