Law Notes

Old System Title and Priorities

Meaning of title

Title has 2 distinct conceptions:

• ‘Ownership’ – though not strict meaning, as we actually hold land of the Crown; and

• The acts and events that prove ‘ownership’.

Proof of title

Good root of title

Under old systems title, proof of title involves 2 key features:

1. The original grant of Crown land; and

2. An unbroken chain of documents and events tracing devolution of the property up to the present time.

In NSW, however, a vendor must now trace title back to a good root of not less than 30 years: ConvA s 53(1). This period is calculated from the date of the present contract of sale.

Conveyances of old systems land must be done by deed (s 23B), except where it is acceptable under the ConvA, i.e. part performance.

Covenant for title

Four covenants

Under s 78(1)(A) of the ConvA, four covenants of title are implied into every conveyance of land. Similarly, there are covenants implied in a conveyance of:

• Leasehold – s 78(1)(B);

• Mortgage – s 78(1)(C);

• Mortgage of a leasehold – s 78(1)(D);

• Settlement – s 78(1)(E);

• By a trustee of mortgagee – s 78(1)(F).

The covenants exist to give purchasers the right to require vendors to do all in their power to fix defects in title, or else pay damages. They are:

1. Vendor has full power to convey – does not equal good title. Rather, the vendor promises they personally have not compromised title;

2. Purchaser will enjoy property without lawful disturbances – no breach unless disturbance is ‘lawful’;

3. Purchaser will receive the property free from encumbrances – except those expressly mentioned in the conveyance. It only applies to encumbrances (i.e. charges, mortgages) ‘made, occasioned, or suffered’ by the vendor or persons deriving title through that vendor: Stock v Meakin [1900] 1 Ch 683;

4. Further assurance – vendors will do everything possible...