Exceptions of Indefeasibility PDF

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Exceptions of Indefeasibility Exceptions of Indefeasibility Conclusive title: the purpose of indefeasibility Cannot hide behind indefeasibility to protect actions Fraud is not defined in statute. Ss 42 & 43 → assets v Mere Roihi Drew a distinction between actual fraud and equitable fraud. A broad def of fraud, but not the broadest. Actual fraud, personal dishonesty or moral turpitude. Wilful blindness (not investigating - suspicious and then did not investigate the suspicion) Anything that is not registered it is equitable. Registered (legal) interests Unregistered interests (equitable in nature) Courts in equity jurisdiction will still enforce them. A registered legal interest will defeat a prior unregistered interest. Immediate indefeasibility in Australia once you are registered. In order to defeat this; must tie in the fraudulent conduct to the party that is registering. Fraud; Dishonesty Wilful blindness - something arouses or should have aroused suspicions; deliberately become wilfully blind to the facts. Reckless indifference - have no cares to fraud In personam Claim; Personal claim / Personal Equity Something in conduct that gives rise to personal claim; court in equity will enforce them Causes of action by third parties against the RP are not affected by indefeasibility of title In personam rights are personal rights arising out of the conduct of the RP – before or after registration – that give rise to a cause of action against the RP The cause of action must be one known to law or equity Bound by the consequences of your own actions, whether they are contractual or equitable in nature. Negligence does not give rise to in personam claim- does not give rise to defeat indefeasibility Examples (not exhaustive): • Specific performance • Promissory estoppel/part performance • Unconscionability/undue influence/mistake/rectification • Trusts (express/implied/resulting/constructive) • Restitution (e.g. unjust enrichment through mistake) • Setting aside transactions intended to defraud creditors • s.172 Property Law Act 1958 Bahr v Nicolay - must know for in personam 3 families • Bahrs • Nicolays • Thompsons Bahrs sell the property to the Nicolays the condition within a certain period of time they can repurchase it when their lease expires. Nicolays then sell to the Thompsons, who will ‘honor’ the repurchase from the Bahrs. They then change their mind. Essentially the HC found a way for the Bahrs to get the property back. Not fraud. Personal claim because T made claim to uphold agreement; if never made undertaking they would not of had to honour, because they did they have to uphold under equity.

Exceptions of Indefeasibility Volunteer; Equity will not assist a volunteer - Statute will. Potential ‘maybe’ to indefeasibility. Paramount Interest; Legislation; provision S42 (2) a-f • Adverse possession • Easement • Leases Means you are bound by prior non registered equitable provisions E.g. you cant turn out leases if they are equitable, cannot be defeated by later registration. Power of the registrar to correct the register; Specific pieces of legislation require it to defeat indefeasibility - those sections prevail.

Prior Folio of The Register Exception! The title of a registered proprietor will be indefeasible under s.42(1) of the TLA, and free from all unregistered encumbrances, except – (a) the estate or interest of a proprietor claiming the same land under a prior folio of the register… Thus, where a later folio includes the same land as is included in an earlier folio, the earlier folio prevails The indefeasibility provisions in s.41(1) will not allow the later registered proprietor to acquire this interest National Trustees Co v Hasett [1907] VLR 404 e.g if two folios are created for the same piece of land the earlier folio prevails. Assumption is that second is a mistake. Creates an exception to indefeasibility - earlier folio is sufficient to defeat indefeasibility. Errors and Wrong Descriptions Exception;The title of a registered proprietor will be indefeasible under s. 42(1) b of the TLA, and free from all unregistered encumbrances, except – (b)… as regards any portion of the land that by wrong description of parcels or boundaries is included in the folio of the Register or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser. e.g.. if a mistake has been made, if a wrong piece of land has been included on title piece, you don't get to keep it. The exception is that if someone has paid good money, purchased the land in good faith, the wrong will not be corrected. Monuments not Muniment; The idea of this exception is that the register is not conclusive as to the measurements and dimensions of land registered under the Act The inclusion of plans and maps on the register are merely intended as a picture of what is found on ground The survey pegs or natural features of the land, as mapped out by surveyors, should determine the boundaries of land, not measurements on the title. where there is a discrepancy the survey will prevail over measurements and bearings shown in the crown grant, the map or plan in the register Surveyors measurement prevails maps. Where there is a discrepancy, through error on the part of a surveyor drawing the plan or map or inserting the measurements on the title, the boundaries as determined by reference to surveying evidence should prevail. Indemnity for error or misdescription - if registrar makes mistake you get compensation; if surveyor does you do not get compensation. Interaction between s.42(1)(b) and s.110(1)(c) Section 110(1)(c) of the TLA: a person sustaining loss by reason of . . . an error or misdescription in the register … may claim indemnity from the Registrar. Dempster v Richardson (1930) 44 CLR 576

Exceptions of Indefeasibility Limits on scope of Indefeasibility; Under Torrens we have system of registered instruments not interests. Whether indefeasibility extends to all covenants in a registered instrument. Process of statutory construction The limit of indefeasibility for registered mortgages arising from construction of the covenant defining the liability secured by the mortgage - Perpetual Trustees v Xiao Indefeasibility of Covenants in a Registered lease; Mercantile Credits Ltd v Shell Co of Australia Ltd (1976) 136 CLR 326 Facts: • Shell took a lease of a service station site in Adelaide for a term of 10 years. • The lease contained an option to renew for several further terms. • During one of those terms, the freehold was transferred to Celtic. Celtic granted a mortgage to Mercantile Credit. • Shell exercised the option to renew, and Celtic executed the instrument extending the term, but Shell did not register it • Celtic defaulted under the mortgage, and Mercantile claimed the right to sell the land free from Shell’s unregistered extension of lease The issue was – did a covenant in a registered lease to renew the lease for a further term, at the tenant’s option, bind a mortgagee registered after the lease in which the option was contained, but before the option was exercised (and thus the right to the new lease arose)...