Tutorial: Exceptions to Indefeasibility 5.1 Veronica and Faye Veronica is the registered owner of an estate in fee simple. Veronica's cousin, Faye, house- sat for her while she was away in America for a year-long sabbatical. During that time, Faye ran into serious financial trouble and forged a transfer of the registered title to herself with the intention of borrowing money on the security of the property. She intended to pay back the money and transfer the property back into Veronica's name once her financial problems had been solved. The transfer to Faye was registered. Subsequently, a mortgage granted by Faye in favour of Profitable Bank Ltd was registered over the title. The bank had no knowledge of Faye's fraud at the time. Answer the following questions: 1. Does Faye have good legal title to the property? Explain why. 2. Can Veronica recover title to the property? If so, what should she do? 3. Explain what interest Profitable Bank Ltd has in the land. 5.2 James, Sia and Pradeep Pradeep owns a small shopping centre in Hervey Bay. His interest is fee simple and is registered in accordance with the Land Title Act 1994 (Qld). James Phillips leases one of the lots and uses it as a Warhammer supplies shop. He has a 5 year written lease, which commenced on 12 November 2018, and is unregistered. There has been a general decline in shop trade in Hervey Bay, and one by one, all the other shops in Pradeep's shopping centre have gone out of business, and the tenants have ended their leases. James' business, however, is still going strong. Other than James' lease, the property is not subject to any other interests. Sia inspects the shopping centre, and believes that she can make it more successful by installing high end food and beauty shops, thus making it a destination for wealthier shoppers. Pradeep is happy to sell to Sia, but is loyal to James, and wants his lease to be able to continue. Pradeep explains this to his lawyers, who insert the following clause in the contract of sale between Sia and Pradeep: The property is currently subject to a lease held by James Phillips. The vendor has delivered a copy of this lease to the purchaser. The purchaser agrees that she has perused this lease and acknowledges and accepts the rights set out in the lease. A copy of James' lease was provided to Sia. Before the contract was signed, Pradeep was talking to Sia while she was visiting the centre. Pradeep said: 'It means a lot to me that you are going to look after James. I wouldn't sell it to you if you weren't'. Sia did not say anything in response to this. Sia signed the contract of sale, including the clause that referred to James' lease. Settlement occurred, and the transfer to Sia was registered on 20 March 2020.
Sia firmly intended to honour James' lease, but on the 21st of March she was given advice