Maggie is the registered proprietor of an estate in fee simple. Her property is located in regional NSW. Maggie is an accountant. She holds the land on trust for herself and her two business partners. The property was purchased some time ago with a view to the accountancy business being moved to the property. Unfortunately there has been a falling out between Maggie and her two partners over how the business income should be split.

Maggie leases the property to Jenni for a period of two and a half years.Jenni intends trying to establish a pilates studio there but is delayed in taking possession as she is waiting on certain equipment.

Maggie then sells the property to Harold, a personal coach.Harold inspects the property prior to exchange and finds it vacant.After exchange of contracts and prior to settlement, Harold meets one of Maggie's partners in the street.The partner tells Harold that the partners may be dissolving their partnership with Maggie but that, in any event, they will shortly be moving their business to the property.Harold instructs his solicitor to immediately settle the contract.Settlement takes place on three weeks later.The transfer is registered.

After settlement Harold discovers Jenni on the property. She is about to take possession of it for her studio.Jenni shows Harold the lease and insists that she has a valid lease and will be staying for the full two and a half years.

Maggie's partners now give notice to Harold that they intend to claim rectification of the register or alternatively that Harold holds as trustee for them on the basis that he was fraudulent in settling the purchase of the property, having had notice of their interest in the land.

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