Introduction to Torrens

System:
Indefeasibility
Assoc Prof Cameron Stewart

(c) Cameron Stewart 2009

 Registration Systems
Problems with fraudulent transactions in the
early colony
1800 order of Governor King that all
agreements concerning land be in writing or
entered into books kept at Sydney, Parramatta
and Hawkesbury
1802 Judge Advocates office
1817- Gov Macquarie Fraudulent against a
bona fide purchaser for value
1825 Registration Act substantially amended
over time and then repealed in 1984 and
sections transferred into the Conveyancing Act
(c) Cameron Stewart 2009
 Problems with the deed
registration system
Improved level of knowledge
Offered greater degree of protection
But
Did not grant a total security of interest
Purchasers took subject to unregistered interests
which have not been documented
Purchasers take subject to unregistered
instruments which they ought to have discovered
Purchasers title is still dependant on the chain of
title and the risk that a prior interest may be
invalidated breaking the chain of title and
destroying the purchasers interest

(c) Cameron Stewart 2009

 The introduction of the
Torrens system
1840 RR Torrens took up post
in SA as Collector of Customs
Torrens personality Hanseatic
towns merchant shipping
system Ulrichs influence
Rip up the old system and start
anew destroy the dependent
nature of titles title needed
independence title should be
indefeasible
One document CT
(c) Cameron Stewart 2009
 The introduction of the
Torrens system
1858 SA passed the Real Property
Act Torrens as R-G
Legal profession in uproar one judge
(Boothby J) actually removed from
office in relation to his treatment of
the Torrens system (1867)
Now in NZ, Canada, Malaysia,
Singapore, Hong Kong, Israel didnt
make it in most of the USA (is in Iowa)
First introduced into NSW 1862 later
amendments consolidated into the
Real Property Act 1900
(c) Cameron Stewart 2009
 The introduction of the
Torrens system
In 1993, 3% (between 60K and
80K) held in old system
conversions occuring at around
4,000 a year at that rate old
system will be phased out in
NSW around 2013
Torrens system was
computerized in 1983 in 1993
90% computerized

(c) Cameron Stewart 2009

 NECS
The Council of Australian Governments
The Council of Australian Governments (COAG)
has confirmed the commitment of the Australian
governments to implementing the National
Electronic Conveyancing System (NECS), a
single electronic system for completing real
property transactions and lodging land title
dealings in Australia. The commitment is part of
the National Partnership Agreement to deliver a
Seamless National Economy
February 2009, the
National Partnership (NP) Agreement to Deliver
a Seamless National Economy
2011 new e-conveyancing system

(c) Cameron Stewart 2009

 The Register
Section 31B(1) folios dealings,
prescribed instruments and records
which the regulations may require
Manual or computerized folios
Record information description of
land, estates and interests in land,
descriptions of the proprietors of
those interests and any other
particulars which affect the land
Distinct folio reference

(c) Cameron Stewart 2009

(c) Cameron Stewart 2009
(c) Cameron Stewart 2009
 The Register
Certificate of title a copy of the folio you normally
have to produce the CT if you want to register a
dealing

dealings any instrument (other than a Crown grant

or caveat) that is registrable or can be made registrable
s3
Approved forms see the Conveyancing Law and
Practice Reporter or LPI website

Upon registration takes effect as a deed between the

parties - s 36(11)

The cardinal principle is that the Register is everything

Fels v Knowles (1906) 26 NSWLR 604 at 620

(c) Cameron Stewart 2009

 Title by registration
Breskvar v Wall (1971) 126 CLR 376, at 381,
Barwick CJ said that the 'the Torrens system ... is
not a system of registration of title but a system
of title by registration'. This statement confirms
that, in the context of Torrens title land, the
question of priorities is properly couched in the
terminology of registered and unregistered
interests.
Priority between competing registered interests
determined by time of registration not by date
of execution (s 36(9)) priority attaches to the
interest created under the dealing but also the
terms and conditions of the instrument

(c) Cameron Stewart 2009

 Title by registration
The practical significance of registration
is to provide third parties with the
information necessary to comprehend
the extent or state of the registered title
to the land in question: Westfield
Management Ltd v Perpetual Trustee Co
Ltd (2007) 233 CLR 528, at 531; 239 ALR
75, at 77

(c) Cameron Stewart 2009

 Section 40
(1) A manual folio shall be received by all Courts or persons having by law or consent of
parties authority to hear, receive and examine evidence as evidence of the
particulars therein recorded and shall be conclusive evidence that any person
recorded in the folio as the registered proprietor of an estate or interest in the land
comprised in the folio is the registered proprietor of that estate or interest and that
the land comprised in that folio has been duly brought under the provisions of this
Act.
(1A) Where a computer folio certificate is issued in respect of a folio of the Register:
(a)the certificate is evidence of the particulars recorded in that folio, and (b)it shall be
conclusively presumed that: (i)the certificate contains all the information that was
recorded in that folio at the time specified in the certificate,
(ii)the land to which the certificate relates was, at that time, under the provisions of
this Act, and
(iii)a person recorded in the certificate as the registered proprietor of an estate or
interest in the land to which the certificate relates was, at that time, the
registered proprietor of that estate or interest.

(1B) Where, in a manual folio or computer folio certificate, the estate or interest of a
registered proprietor is expressed to be subject to: (a)an estate or interest
evidenced by an instrument, (b)a provision of an instrument, or (c)an enumerated
provision of an Act or of an Act of the Parliament of the Commonwealth,
the whole of the contents of the instrument, provision or enumerated provision, as
the case may be, shall be deemed to be set forth at length in the folio or certificate

(c) Cameron Stewart 2009

 Unregistered interests?
As we shall see some interests can exists without being
registered they are equitable
Halloran v Minister Administering National Parks and
Wildlife Act 1974 (2006) 229 CLR 545, at 559-60; 224 ALR
79, at 88, Gleeson CJ, Gummow, Kirby and Hayne JJ, made
the following apt observation:

With respect to the land registered under the provisions

of [the Torrens system], references to vesting at law and
vesting in equity are apt to mislead. The Torrens system is
one of title by registration, not of registered title. The
assimilation of the registered title to a legal title may be
convenient so long as it is appreciated what is involved. It
is likewise with respect to the use of the term equitable
to describe interests recognised in accordance with the
principles of equity but not found on the Register.

(c) Cameron Stewart 2009

 Indefeasibility of title
What is meant by indefeasibility?
once an interest is registered it
cannot be set aside because of
some defect existing in the tile prior
to registration
Not specifically mentioned in the
RPA - - s 42 (1) confers free
ownership on a registered owner
(with exceptions for fraud etc)
(c) Cameron Stewart 2009
 Section 42
42 Estate of registered proprietor
paramount
(1) Notwithstanding the existence in any other
person of any estate or interest which but for this
Act might be held to be paramount or to have
priority, the registered proprietor for the time
being of any estate or interest in land recorded in
a folio of the Register shall, except in case of
fraud, hold the same, subject to such other
estates and interests and such entries, if any, as
are recorded in that folio, but absolutely free from
all other estates and interests that are not so
recorded except: .....

(c) Cameron Stewart 2009

 Things to note
The first thing this section does is establish the
indefeasibility principle, and it is expressed in
the section in the following ways:
notwithstanding that someone else may have
an estate or interest that would have priority
under the old system
the registered proprietor of land recorded in a
folio shall
hold their interest absolutely free from all
other estates and interests that are not
recorded

(c) Cameron Stewart 2009

 Things to note
If someone else has an interest in land that
under general land would take priority, it
will not affect the title of a registered
proprietor in Torrens Title system. That
registered proprietor will hold their interest
absolutely free from any such claim. So you
can see how that section operates to
overcome the general law system of chain
of deeds and being held subject to any
faults in the earlier chain of deeds. In
Torrens, any faults are irrelevant. You are
registered, your estate and your interest
have priority over previous claims

(c) Cameron Stewart 2009

 Things to note
The second point to make is that the
principle of indefeasibility is subject to
fraud. The person listed as the registered
proprietor will hold that interest free from
all other claims unless it can be shown
that the registered proprietor has
committed a fraud. So this provides some
protection for a person against the fraud
of the person registered in the folio.

(c) Cameron Stewart 2009

 Things to note
The third point to make is that the registered
proprietor takes the land holding free from
anything except other interests listed on the
register. So registration on Torrens Title system
means that you take your land free from
everything but claims already listed on the
register. So people that want to protect their
interests under Torrens need to register that
interest on the folio. This ensures that people
taking or buying land under Torrens Title will take
subject to the interest. Equally as purchaser of
land under Torrens you have an opportunity to
check the register before you buy and become
aware of the interests that you will be buying that
land subject to.

(c) Cameron Stewart 2009

 Things to note
The fourth point to make is that section 42 contains
internal specific exceptions to the principle of
indefeasible title. So this means that the registered
proprietor will take the land free of all of interest
except any listed on the register and any contained
within the internal exceptions within section 42 itself.
For example, the particular exceptions listed in
section 42 relate to a persons estate as listed in the
register under a prior folio a portion of the land that
has been wrongly described in the folio, or section
42(a)-(d) which sets out other specific exceptions.
This means that you have indefeasible title unless
you committed fraud and your indefeasible title is
subject to anything that is contained on the register
and anything within those listed exceptions.

(c) Cameron Stewart 2009

 Section 43
43 Purchaser from registered proprietor not to be
affected by notice
(1) Except in the case of fraud no person contracting
or dealing with or taking or proposing to take a transfer
from the registered proprietor of any registered estate
or interest shall be required or in any manner
concerned to inquire or ascertain the circumstances in
or the consideration for which such registered owner or
any previous registered owner of the estate or interest
in question is or was registered, or to see to the
application of the purchase money or any part thereof,
or shall be affected by notice direct or constructive of
any trust or unregistered interest, any rule of law or
equity to the contrary notwithstanding; and the
knowledge that any such trust or unregistered interest
is in existence shall not of itself be imputed as fraud.

(c) Cameron Stewart 2009

 Section 45
(2) Despite any other provision of this Act, proceedings for
the recovery of damages, or for the possession or recovery of
land, do not lie against a purchaser or mortgagee bona fide
for valuable consideration of land under the provisions of this
Act merely because the vendor or mortgagor of the land:
(a)may have been registered as proprietor through fraud or error,
or by means of a void or voidable instrument, or
(b)may have procured the registration of the relevant transfer or
mortgage to the purchaser or mortgagee through fraud or error,
or by means of a void or voidable instrument, or
(c)may have derived his or her right to registration as proprietor
from or through a person who has been registered as proprietor
through fraud or error, or by means of a void or voidable
instrument.
(3) Subsection (2) applies whether the fraud or error consists
of a misdescription of the land or its boundaries or otherwise.

(c) Cameron Stewart 2009

Example of indeafeasibility
Barb steals Ables CT and uses it to
enter into a contract for sale with
Clarence (who know nothing of the
theft). Barb forges Ables signature and
Clarence resgiters the conveyance
once registered Ables interest in the
property is defeated
Compare that with the deeds
registration system where the
registration would not perfect a fraud
A can sue B and might also have a right
to compensation under the RPAs
assurance fund (see later)

(c) Cameron Stewart 2009

 Immediate or deferred?
The effects of this immediate title by
registration is often called immediate
indefeasibility
In the past some courts stated that the
RPA did not act in this fashion they
subscribed to a theory of deferred
findefeasibility where in our example
could have claimed a better title to the
property up until the point that C sold his
interest onto a fourth party (bona fide for
value)

(c) Cameron Stewart 2009

 Gibbs v Messer [1891] AC
248
Mrs Messer went on holidays and left
her CT with her solicitor for safekeeping
He forged her signature to a transfer to
Hugh Cameron (a fictitious person)
Creswell acting as Hugh, signed and
registered a mortgage to Gibbs
Deferred indefeasibility applied not
from the registered proprietor, BFVWN
Clements v Ellis [1934] 51 CLR 217,
High Court favoured the doctrine of
deferred indefeasibility

(c) Cameron Stewart 2009

Frazer v Walker [1967] 1 AC
569
Mr and Mrs Frazer registered proprietors of a farm in Auckland.
Mrs Frazer who purported to be acting for both Mr Frazer and
herself, negotiated a loan from a couple - the Radomskis of 3000
pounds. In order to secure the loan Mrs Frazer gave the Radomskis
a mortgage over the farm, however instead of seeking Mr Frazers
consent for the mortgage she forged his signature. She took the
form to her solicitors office where she signed her own signature and
the clerk witnessed both Mr Frazer and Mrs Frazers signatures,
despite not having seen Mr Frazer sign the document.
The mortgage to the Radomskis was registered with the land title
office such that the mortgage appeared as a registered interest on
the relevant folio.
Mrs Frazer made no payment of either principle or interest under
the mortgage. Eventually after receiving no payments, the
Radomskis exercised their power of sale as mortgagees of the
property and sold the property to Mr Walker.

(c) Cameron Stewart 2009

Frazer v Walker [1967] 1 AC
569
As a consequence of the Radomskis sale of the property
under their mortgage, Mr Walker was registered as the
proprietor on the folio. It was shown in court that neither
the Radomskis or Walker had any knowledge of the
forgery. Once Walker was registered as the registered
proprietor he brought action against Mr Frazer for
possession of the land.
Mr Walker claimed that until that time he had not know of
what his wife had been up to. Mr Frazer counter claimed
against Mr Walker seeking a declaration that because his
signature was forged on the mortgage form that the
mortgage was null and void and ordered that he be
restored to the folio as the registered proprietor.
Nothing in s 42 equivalent to suggest that indefeasibility
deferred

(c) Cameron Stewart 2009

 Breskvar v Wall (1971) 126
CLR 376.
Breskvar v Wall (1971) 126 CLR 376 - Mr and
Mrs Breskvar executed a transfer to Petrie as
security for a loan. Petrie fraudulently used
the transfer and sold to his grandson Wall,
who became registered owner. Wall sold to
Alban Pty Ltd but before they could register
their interest the Breskvars lodged a caveat
which injuncted the sale. The conflict was
therefore between the interest of Breskvars
and the interests of Alban Pty Ltd
Barwick : 'title by registration'. What sort of
interest did Wall have? What sort of interest
does Alban have? What interest do the
Breskvars have?

(c) Cameron Stewart 2009

 The Coverage of
Indefeasibility
Sometimes an instrument will be registered
but the folio may not properly or fully
describe all the interests registered - the
interest described in the folio is said to be
subject to the actual import of the
instrument (s 42(1)) Hence in a case where
the folio had not fully described the transfer
of an interest subsequent interest holders
took their interests subject to the original
import of the document and not the register
Bursill Enterprises Pty Ltd v Berger Bros
Trading Co Pty Ltd (1971) 124 CLR 73

(c) Cameron Stewart 2009

 Provident Capital Ltd v Printy
[2008] NSWCA 131
Printy bought a property in Canoelands Sydney in
1986.
Afterwards he moved to the US where he lived for
many years.
A rogue managed to fraudulently obtain a duplicate
CT from the Registrar General.
The rogue then used the CT to enter into two loans,
offering the property as security for the loans. Two
loans were made and two mortgages were filled in
and registered on the folio.
The mortgages were not paid. The applicant in this
case exercised the right to sell the property due to
default on the mortgage and used the proceeds of
sale to pay off the two mortgages owing on the land.

(c) Cameron Stewart 2009

 Provident Capital Ltd v Printy
[2008] NSWCA 131
Printy tried to get the money that the
bank had taken to pay off the loans
back from the bank but he could not
challenge the new registered
ownership.

(c) Cameron Stewart 2009

 Provident Capital Ltd v Printy
[2008] NSWCA 131
Importantly -
Mortgage One stated that it secured
payment for everything in a memorandum.
The memorandum stated that the mortgagor
must pay the money secured in any related
agreement. Another forged agreement set
out the mortgage liability
Mortgage two stated that it secured payment
for everything in a memorandum. The
memorandum stated that the mortgagor had
received $X amount of money and was
obligated to repay $X with interest.

(c) Cameron Stewart 2009

 Provident Capital Ltd v Printy
[2008] NSWCA 131
Did indefeasibility cover the personal covenant to
repay?
Mortgages can only be enforced under ss 57-58
Under s 57(2) a mortgagee may exercise the
power of sale where a mortgagor has defaulted
on a mortgage if:
default has been made in the observance of any
covenant, agreement or condition expressed or
implied in the mortgage; or
default has been made in the payment, in
accordance with the terms of the mortgage of
[money] the payment of which is secured by the
mortgage;

(c) Cameron Stewart 2009

 Provident Capital Ltd v Printy
[2008] NSWCA 131
So the right to the charge was indefeasible but
was the right exercised properly?
Mortgage 2: It stated that it secured everything
in the memorandum. The memorandum said
that the mortgagor had received $X and owed
$X. The right of the mortgagee to exercise the
power of sale for this mortgage was not
challenged. If you look at the first limb of s
57(2), there had been a default in the
observation of a covenant express or implied in
the mortgage the obligation to pay was
express in the covenant which was expressly
incorporated into the mortgage

(c) Cameron Stewart 2009

 Provident Capital Ltd v Printy
[2008] NSWCA 131
BUT Mortgage 1: secured the obligations in a memorandum.
That memorandum referred to another loan document in
which the mortgagor had guaranteed all outstanding sums
as and when borrowed. Mortgage one obligation to pay was
not express or implied into the mortgage doc. The
mortgage doc referred to a memorandum which did not,
itself, contain the obligation to repay. So, the right to sell
couldnt come from the first limb of s 57(2). What about the
second default has been made in the payment, in
accordance with the terms of the mortgage .. of money the
payment of which is secured by the mortgage. This says that
you can sell the land if there has been a default under the
mortgage with respect to the payment of moneys secured by
the mortgage. Did this give the bank the power to sell?

(c) Cameron Stewart 2009

 Provident Capital Ltd v Printy
[2008] NSWCA 131
No! - what was secured was the right to demand
payment of what was received by Printy, agreed to in
the other document.
As he hadnt received anything he didnt have an
obligation to repay: no obligation, no breach , no right
to s 57 power of sale.

(c) Cameron Stewart 2009