''Efstratiou v Glantschnig'' (1972) is an often cited New Zealand case to the limits of indefeasibility of title to land ownership, where in this case, (unlike in '' Frazer v Walker'' and '' Boyd v Mayor of Wellington'') the purchaser of the land was aware of the title fraud at the time of the purchase of the property.

Background

Mr H and Mrs Christine Glantschnig had a turbulent relationship. Originally married in

Austria Austria, formally the Republic of Austria, is a landlocked country in Central Europe, lying in the Eastern Alps. It is a federation of nine Federal states of Austria, states, of which the capital Vienna is the List of largest cities in Aust ...

in 1955, they later moved to New Zealand in 1956. In that same year they purchased their matrimonial house at 62 Wallace Street,

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for the sum of $3,900, with the wife paying half the deposit of $1,000. However, despite her paying half the deposit, only the husband was listed on the property title as the registered owner. However, this still gave her an equitable ownership to the property. In 1958 the couple briefly separated, and the husband agreed to a settlement agreement in which he acknowledged he owed his wife half the deposit for the house. The couple soon reconciled. In 1968 the wife lent the husband $1,000 for a trip back to Austria for what has been described as an indefinite stay. In his absence, the wife took in a boarder, only referred to as "K". When the husband finally returned to his wife unexpectedly on 20 April, he discovered that his wife and the boarder "K" were living together in a marriage-like relationship. In the ensuing argument, the wife walked out of the house, taking their two children with her. The following day, 21 April, the wife obtained, and had served on her husband, an interim

injunction An injunction is an equitable remedy in the form of a special court order compelling a party to do or refrain from doing certain acts. It was developed by the English courts of equity but its origins go back to Roman law and the equitable rem ...

prohibiting him from returning to the house. Not happy with these developments, on the following day 22 April, the husband showed the injunction to a Mr Petrovic, a real estate agent, and instructed him to sell the house, and the agent arranged a sale of the house for $5,000, substantially below its valuation of $8,000, the same day, with the settlement date being only three days later on 25 April. Even then, the purchaser settled the sale the following day, on 23 April, which was legally two days early than required, and the title transfer was done first thing the following day at 9.30am on 24 April. Mrs Glantschnig was then forced to file a motion for the purchase to be set aside, and also added her ex-husband and the real estate agent Mr Petrovic, who was aware of the scheme to defraud, to the proceedings. The purchaser, Mr Efstratiou claimed he had indefeasible title.

Held

The

Court of Appeal of New Zealand The Court of Appeal of New Zealand () is the principal intermediate appellate court of New Zealand. It is also the final appellate court for a number of matters. In practice, most appeals are resolved at this intermediate appellate level, rathe ...

ruled that due to amongst other things, the great speed of the sale (less than 24 hours after listing), that it was sold for only 63% of the market price, and the transaction was stamped and registered the very day after settlement, that the purchaser was aware of the wife's equitable interest in the property (albeit unregistered) and that the sale was registered through fraud, that accordingly, the purchaser did not have indefeasible title and the sale was set aside. However the court vacated the wife's previous award of damages for $3,000 and awarded her legal costs of only $300.

References

{{Reflist * Gerbic & Lawrence, "Understanding Commercial Law", LexisNexis, 2003 *

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NZLR 594 Court of Appeal of New Zealand cases 1972 in New Zealand law 1972 in case law New Zealand contract case law