Prop law - torrens system PDF

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THE TORRENS REGISTRATION SYSTEM NOTES: What is the Torrens title system? The Torrens title system – named after South Australian Sir Robert Richard Torrens, who is largely credited with designing and implementing it – is a method of recording and registering land ownership and interests. Established in South Australia in 1858, the then revolutionary and efficient land titling system was adopted throughout Australia and New Zealand, and subsequently spread across the world. Countries now using the system include, among others, England and Wales, Ireland, Malaysia, Singapore, Iran, Canada and Madagascar.

 In 1858, Torrens designed a system of registration of interests in land in which the act of registration creates legal title  The system was introduced in Australia alongside the old system title with all new transactions being converted to the Torrens system. This means, very little general law tile land remains  The central features of the system are the conclusiveness of the ‘register’ and the ‘indefeasibility of title’ to registered land (barring exceptions)  In Victoria, it is the Transfer of Land Act 1958 (Vic) that regulates Torrens title land  S53 (1) property law act 1958 (only necessary to search back 30 years instead of 60)  The framework of the new system was that a single document evidencing tittle for each parcel of land, known as a certificate of title, would replace the old chain of title. (this removes any bulky documents)  The key characteristic of the torrens system is that each new tittle would confer ‘indefeasibility’ of the tittle holder . Indefeasibility means that the registered proprietor of land is subject only to such estates and interests which are as are noted on the register, and with a number of important exceptions, will take free from any other interests.

The Torrens title system works on three principles: 1. The land titles Register accurately and completely reflects the current ownership and interests about a person's land. 2. Because the land titles Register contains all the information about the person's land, it means that ownership and other interests do not have to be proved by long complicated documents, such as title deeds. 3. Government guarantee provides for compensation to a person who suffers loss of land or a registered interest.

Before the Torrens system Before the Torrens system was introduced in 1862, a General law title system operated in Victoria. A General law title consisted of a chain of title deeds all of which had to be in place to enable a property to be transferred.

Title deeds are documents that show ownership, as well as rights, obligations, or mortgages on a property. A General law title could have many deeds, many of which were handwritten, not always legibly. In colonial times, there was often confusion with the General law title system, particularly if one or more deeds were misplaced. Because all deeds had to be made available when a property changed ownership there would be serious problems if a deed was missing. The General law title system depended on proof of an unbroken chain of deeds back to the original grant. This chain was made up of all the documents involved in every sale, resale or mortgage of the property. Torrens created a central registry where all transfers of land are recorded in the register, thereby producing a single title with a unique number (or folio) that also records easements, mortgages and discharges of mortgage. There are still some General law titles in existence today. A program to convert Victoria's few remaining General law titles to the Torrens title system continues. -

This was the old system, aka ‘common law’ ‘general law’ Difficult and time consuming

The registration of land under the old system was established through a series of instruments and events going back in time. It was obviously: an expensive exercise, but it also did not guarantee secure title since there could have been problems not recorded om the line of transfer General Land Law System v Torrens System Torrens system involves independent titles, as opposed to the dependant nature of the general land law system, which required a retrospective investigation of title each time the land was conveyed: Chris Davies,Property Law - guide book: (Oxford Press: 2001) Old system: document based (private) Torrens system: registration based (public)

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In every state, legistaltion was introduced to provide for the registration of old tittle deeds under what became known as the deeds registration system : Property law act 1958 (Vic)Pt 1. Further, in Victoria, the deeds registration system was deactivated in 1999 and since that time, it has not been possible to register an old tittle document: Property law act 1958 s6.

RECENT REFORMS Vic made amendments(due to the fact that we are now more technological advancements). Transfer of Land act amendments are the following a)

Ss44A-44N allow for the electronic lodgement and registration of the Torrens

b) S44B(1) make it clear that register may provide an electronic lodgement network for the purpose of lodging electronic systems.

c) 44G sets out that a register must, on the application of any person, produce a document in writing recording information that was registered and recorded on a folio as a result of an electronic instruments.

Characteristics of the Torrens system The register ( what do they do?)

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Records all parcels of land coming within its application Creates folios describing the land to which it relates and the estate or interest held in the land by the named proprietor or owner Many now are electronic Duplicate copy held by the register general Each has unique volume and folio number Original folio will also list caveats which are: caveat is a type of statutory injunction preventing the registration of particular dealings with real property… The word caveat means ‘beware’ and lodging a caveat on real property warns anyone dealing with property that someone has a priority interest in that property

Registrable interests

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Not compulsory however advisable Most jurisdictions it includes mortgages, registrable interests including fee simple, life estates and easements. (most common estates and mortgages) Wolfson v registrar- general : trusts aren’t included (s 37 of Transfer Land Act sets out interests arising under trusts may not be registered although they will be safe with a register. Registered Proprietor (“RP”) is assured legal tile by the registration.  Registration is compulsory in order to obtain legal tile, although, not all interests need to be registered (i.e. second mortgage, etc.).

Paramount interests which are registered (what is important) under legislation, certain land interests are immune from the effects of registration: These include easements, rights acquired under adverse possession, tenants in possession, rates and taxes. s 41 (2) lists them out NOW WE LOOK AT INDEFEASABILITY ( the protection granted) The Principle of Indefeasibility  Indefeasibility means that the registered proprietor of land is subject only to such estates and interests as are noted on the register, and with a number of important exceptions, will take free from any other interest (TOL 1958– s42).  Gives paramountcy to the registered proprietor.  COT is conclusive evidence that the person named in the certificate has the relevant estate or interest in the land.

 Unless an exception to indefeasibility arises, the RP’s tile cannot be challenged due to a defect in the grantor’s registered tile.  It is the cornerstone of the Torrens system with its central function making the RP interest paramount with the purchaser’s interest being protected against all prior interests in relation to the estate. o Once you are registered on tile, no one can take it from you unless there is an exception e.g. fraud

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Registered land holders are not subject to doctrine of notice s43

A CASE WHICH UNDERPINNS THIS IS BAHR V Nicolay 1988 Torrens title land: o Should be registered, if not they are equitable only – if don’t register, equitable right only o Upon registration benefits of indefeasibility follows (REGISTERED PROTECTION – however easement itself must be registered and noted as an encumbrance, not just the dominant tenement o Easement must be recorded on folio of both dominant and servient tenement – noted as encumbrance on title of servient owner TLA s72 o Easements, whether equitable or legal, are paramount interests: S42(2)(d) (relevant for Land Law) ie super strong rights, can defeat other people

(simple words): indefeasibility: is the protection granted by registration of an instrument dealing with an interest in land. It means that the registered owner only takes land subject to those interests that are recorded and their tittle is protected from any interest not recorded. The registered owner’s title is paramount s 42 Frazer v walker 1967 defined this

The house of lords also considered that the protection afforded by indefeasibility is Immediate upon registration and not deferred, as was the case in Gibs v Messer 1891. The house of lords decision in frazer v walker 1967 was adopted with approval by the high court in breskvar v wall

‘immediate’ or ‘deferred’ indefeasibility

 There is a debate about whether a registered interest gained indefeasibility immediately or whether that protection was deferred?  Deferred indefeasibility means that indefeasibility only attaches to the registration that is one transaction away from the transaction that is infected (i.e. fraud).

 The person who obtained the registered interest through the fraud would, although registered, be liable to an action from the person defrauded seeking reinstatement of the lost registered interest: Esmaeili and Grigg, The Boundaries of Australian Property Law: (Cambridge: 2016).  Immediate indefeasibility is based on the ‘paramountcy’ provisions and means that the registered interest attains indefeasibility upon registration, regardless of the way in which it was obtained: Esmaeili and Grigg, The Boundaries of Australian Property Law: (Cambridge: 2016). o Difference between the two is that with immediate indefeasibility, once you are registered on itle, it does not matter how that tile was obtained its yours. – Deferred indefeasibility means that if you have obtained that tile and there has been fraudulent activity, your tile is deferred and goes back to the previous tile owner. – Key Case for Deferred indefeasibility is Cassegrain. o How to choose between the two? – There was once a discrepancy between Vic and NSW. The question was, if a person was, for example, a ‘volunteer’, they did not obtain immediate indefeasibility in NSW. In Vic it was always immediate. The HCA initially determined that unless an exception applies, (fraud or in personam) indefeasibility applies immediately upon registration

Limits to indefeasibility 1. 2. 3. 4. 5. 6.

Fraud In personam rights Short terms leases Easements Adverse possession Stat exceptions

Statutory exceptions to indefeasibility FRAUD (if there is fraud you wont gain tittle or be registered) S41 TOL ACT sets out that a cert of title that has been obtained by forgery or by the means of an insufficient power of attorney or from a person under some legal disability shall not be absolute and indefeasible, but this does not apply if the registered proprietor is a bona fide and given valuable consideration or has obtained title from another person under a disability or from a person who has committed a forgery Bank of south Australia v ferg Bahr v nicolay Farah constructions ptyltd v say-dee pty ltd

Facts:

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Ferg was registered proprietor of the land and the subject of a mortgage in favour of the bank of south Australia. He was in default of the mortgage but alleged that the mortgage had been obtained by the fraud of the bank. Ferg had applied for the mortgage, but the some of the documents submitted had been altered by the bank manager without fergs knowledge Held: the mortgage was indefeasible because for fraud to be operative, it must operate on the mind of the person said to have been defrauded and to have induced detrimental action by that person. This was not the case, as the document was not prepared for or by Ferguson and was not used by ferg himself for any dishonest purpose.

In personam This exception is a principle that acts against the registered proprietor’s conscience. The registered prop tittle will be regarded as defeasible if there is a claim by another person whether the claim entitles that party to be granted

1. What are the main features of a system of ‘title by registration’? 2. In Farah Constructions, the High Court draws a distinction between constructive trust scenarios where (1) the registered proprietor is the primary wrongdoer because of a failure to convey land or comply with an obligation to share; and (2) the registered proprietor is a third party who merely had notice of an earlier interest, or of third party fraud. It concluded that the latter situation should have no effect upon indefeasibility of title. Does registration justify the per se exclusion of first limb Barnes v Addy constructive trusts against registered proprietors? 3. The views in King v Small, Rasmussen and Valoutin on the one hand and Bogdanovic and Conlan on the other are all expressed to be based on a specific reading of the Torrens legislation. Explain the rationale underlying the different interpretations. 4. How does the approach taken by Street J in Pratten v Warringah Shire Council to the Council’s rights regarding the drainage reserve differ to the approach taken by the Victorian Supreme Court in Horvath v CBA? 5. What factors will be relevant in the determination of whether subsequent legislation is inconsistent with prior indefeasibility provisions? 6. In Hillpalm, the majority concluded that the EP&A legislation did not create a ‘right in rem’ which could encumber the title so there was no inconsistency between the EP&A and the Torrens legislation. On what basis did they reach this conclusion? What approach did Kirby J (in dissent) take? 7. What is the scope of the protection given to adverse possession and how does this protection differ between the states? 8. What scope does the Registrar have to correct errors in title when such corrections may impact upon the interests of registered title holders?...