Question 1

John is the owner of an estate in fee simple, in NSW under old system title, known as "Souldern". John wants to develop the property into a Bed and Breakfast, but does not have the funds necessary for this. As a consequence, on 1 June 2015 John leased "Souldern" to Veronica for a legal term of 5 years, hoping that by the end of this period he may be able to finance his proposed Bed and Breakfast. To ensure
that the property is well maintained over this time, John inserts a covenant in the lease that it be occupied over this period. However, Veronica has taken an extended 3-month European holiday during 2016, leaving the property vacant.

Realising that his dream of funding his Bed and Breakfast would not be possible due to his terrible gambling addiction, John decides to abandon his proposed development. Subsequently, on 23 July 2017 John conveyed the legal fee simple of "Souldern" to Charles. He does so without disclosing the existence of the lease held by Veronica. Charles now wishes to terminate the lease so that he can redevelop the property.

Veronica has sought advice from you as her solicitor. In a competition of priorities, advise how the interests of Veronica and Charles compete. If Charles had been told about Veronica's lease might your answer be any different?

Question 2

In February 2007 Skyline granted Mr and Mrs Brown an option to purchase its land provided the option was exercised between 7 April 2007 and 30 June 2007. The option was conditional on the non-exercise of the existing lessee, Azure, of the right to renew its lease. Before the time had expired for the Browns to exercise their option they were told by Skyline (fraudulently and falsely) that Azure had exercised
its option. For that reason, the Browns did not attempt to exercise their option during the relevant period.

When the Browns became aware that Azure had not exercised its option in early 2009 they purported to exercise their option to purchase. In March 2009 they commenced proceedings against Skyline for specific performance and in the alternative for damages for breach of contract. In the meantime, Vanbuild, on 6 May 2008, entered into a five-year lease with Skyline to commence upon Azure vacating the subject premises in July of that year. The instrument of lease contained an option to purchase within three years. Vanbuild claimed that it had exercised the option in May 2009.

At the time Vanbuild entered the lease agreement containing the option to purchase it had no notice of any interest the Browns might have in the subject property. Later Vanbuild became aware of the interest of the Browns and it commenced proceedings against Skyline and the Browns seeking an order for specific performance against Skyline and an order against the Browns that a caveat they had lodged in March 2009 preventing sale of the land be removed.

Please advise in relation to the competition between the Browns and Vanbuild, which interest has priority in proceedings against Skyline.

Question 3

James owns a hotel in Hyams Beach. He has set up a number of facilities at the  hotel for her guests. The hotels theme is "beach living" and he has commissioned two large hand painted surfboards to be mounted to the roof of the hotel to attract visitors. The hotel's name "HH Resort" is also mounted to the roof.

To make the hotel more pleasant for visitor he has also installed air conditioning units in each room and a large central unit on the roof.

He has also put some beautiful outdoor furniture in the gardens. The furniture is waterproof but to protect it from theft she has used chains and padlocks to attach the furniture to the hotel itself.

He has mounted a number of beautiful paintings to the walls from various beaches, to maintain the beach theme of the hotel. Some of the paintings have been commissioned from famous Australian artists. Each room is also painted a different colour and contains at least one "beach themed" painting in each room which matches the wall colour scheme. He has also bought specially designed curtains for each room to fit with the theme.

James decided to retire and sell his property to Bob who also wishes to run a hotel on the property. The contract for sale was drafted by James's solicitor Stephen, who was not very attentive in property class at university and forgot to ask James what items were intended to remain with the house. As a consequence, when the contract with the new purchaser was exchanged it was silent on this issue.

Following completion of the sale a dispute has arisen in respect of the following items: The hand-painted surfboards, the hotel sign, air conditioning units, out-door furniture, art work in each room and in the hotel and curtains in the guest rooms. Please advise whether and why, Bob as the new purchaser acquires these items.

You should limit your answer to the questions to 2500 words.