•    Governed by Real Property Act 1900
•    Fundamental principal is conclusiveness of the register
•    Title by registration
•    Does not alter common law, merely simplifies land transactions

Priority Rules
Priority of Competing registered interests Governed by Order of registration, not by date of execution
•    Section 36(9)

Registered interest prevails over unregistered interest except when fraud or other exceptions

Competing unregistered interests generally regarded as equitable interests, and treated as under old system title rules
•    BUT, some unregistered interests are legal interests
o    Accepted by real property act through reference to ‘legal or equitable interest’ in s74F(1)
o    Eg: Unregistered lease complying with s23D(2) of Conveyancing Act
•    Tenancy at will under s127 of Conveyancing Act
•    Easement implied under Wheeldon v Burrows
•    Give regard to caveat provisions

Assurance Fund
•    Section 133A Real Property Act
•    Established to compensate those who lose out due to failings of system:
o    Register General sometimes makes mistakes
o    Easy to defraud people under Torrens system

Trusts
•    In old system, problems as purchaser or mortgagee who deals with trustee has obligations to beneficiaries of trust
•    For Torrens system
o    Trusts do not affect the register
•    Registered owner is owner
•    Trusts not recorded on register – s82
•    Exceptions in s12(1)(f)

Mortgagees
•    Check this
•    Under old system, mortgage required conveyance of property
•    Whenever Torrens land intended to be made security for debt, owner is to execute approved form of mortgage (s56)
o    Registered mortgage of Torrens title is statutory charge or security only, not as conveyance (s57)
Unregistered Interests

No dealing, until registered in the manner provided by the act, shall be effectual to pass any estate or interest in any land under this act…
o    Dealing must be registered for the interest to pass
•    Section 41(1) Real Property Act
o    Note:
    -    When read with caveat provisions, there is some scope for unregistered interests

Although the instrument itself is ineffective under 41(1), the agreement itself remains effective in accordance with the general principles of equity
•    Barry v Heider (1914)
o    FACTS
    -    B was registered proprietor of land
•    Certificate with R-G, as land being sub-divided
•    Signed transfer to S, who failed to pay purchase price agreed to
o    Gave B right to have transfer set aside
•    S granted mortgage to H before B acted on that right
o    H possessed all necessary evidence and information about mortgage – had done everything possible to protect interest
    -    At this point, H and S have equitable interests
    -    B argued that under s 41(1), he is only registered title holder, and thus only he could confer interest to H, not S
o    HELD - Bs registered interest set aside to equitable interests. H and S have equitable interests
•    S41 denies the instrument conveying the transfer, but not the contractual and equitable interests in the land
    -    B’s conduct of handing over a signed transfer to S empowered S to act as owner
•    Bs conduct led to the mortgage, and thus he is responsible for it

Unregistered interest is a valid equitable interest, but not a legal interest
•    Chan v Cresdon Pty Ltd (1989)
o    FACTS
    -    Sarcourt signed agreement for lease with owner.
    -    Unregistered lease provided that Chan would guarantee performance of S
•    No registered guarantee of performance
    S defaulted in payments, respondents proceeded against Chan
o    HELD - Sarcourt ought to succeed as guarantee operated only in respect of obligations ‘under the lease’
•    Only a lease at law would satisfy that description
•    Agreement to lease treated as equitable lease
    -    Provisions of indemnity and guarantee strictly construed in favour of party giving guarantee
    -    No justification to extend obligations to an equitable lease that is not a lease at law

Indefeasibility of Title

The register is conclusive
o    The register confers on the registered proprietor:
    -    An interest in land
    -    Indefeasible title to that land
•    Meaning that title cannot be set aside on the ground of a defect existing in the title before it was registered
•    Section 40 Real Property Act

Person with registered interest holds that interest free of any other unregistered interests
•    Section 42 Real Property Act
o    Exceptions discussed later

Registered person can ignore the notice of an unregistered interest (unlike Old System)
•    Section 43 Real Property Act

A registered proprietor of Torrens title land may not be ejected from the land: title is conclusive
•    Section 124 Real Property Act

Person who purchases Torrens title interest (purchaser or mortgagee) and becomes registered is not affected by irregularities in the preceding title
•    Section 135 Real Property Act
o    Prohibits recovery from the present registered proprietor, where the took as purchaser or mortgagee bona fide for valuable consideration
    Doesn’t matter if A’s vendor or mortgagor was registered through fraud, error, or under a void or voidable interest

Deferred indefeasibility: no longer accepted
•    Theory that indefeasibility did not take effect immediately in cases where the instrument was void or voidable
•    Theory now largely discarded
•    Arose out of decision in Gibbs v Messer
o    FACTS
    -    Owner of land left certificate of title with solicitor
    -    Solicitor forged owner’s signature to transfer possession in favour of fictitious person, who became registered owner
    -    Solicitor forged mortgage from Cameron to innocent mortgagee, who took for value and without fraud, and became registered proprietor of mortgage
o    HELD - Owner could have registration set aside – innocent mortgagee did not have indefeasible title
•    Court said that if innocent mortgagee dealt with another person who acted on the existing state of the register, and purchased for value without fraud, that person would have indefeasible title
    -    Reason
•    Did not deal with registered proprietor under s43, as dealt with forger, and so did not get protection
    -    NOTE – This is not the current approach: Modern view is to look at section 42, which does not need deal to be with registered proprietor

Immediate Indefeasibility: Current approach
•  
 Eg if A is registered proprietor
o    B steals A’s certificate of title
o    B poses as A to sell land to C
o    B forges A’s signature to transfer land to C, and hands certificate of title
o    On registration, C acquires a title that A cannot set aside
    -    C’s Title is immediately indefeasible
    -    A could only take personal action against B, or maybe have a right to compensation under assurance fund

Purchaser has immediate indefeasible title even though there was fraud
•    Frazer v Walker [1967]
o    FACTS
    -    Mr and Mrs Frazer own Torrens title land
•    Mrs Frazer forges husband’s signature and mortgages property
•    Mrs Frazer fails to meet repayments
•    Mortgagee sells property to purchaser, who registers it
o    HELD - Purchaser has immediate indefeasible title even though there was fraud by Mrs Frazer
    -    Significant case where Privy Council came down in favour of immediate indefeasibility

Indefeasibility for registrable dealing
•    Breskvar v Wall (1972)
o    FACTS
    -    Plaintiffs registered owners of Torrens title land
    -    As security for loan from M, they gave him certificate of title
    -    M fraudulently inserted the name of X in the transfer, who knew of the fraud
    -    X sold land to A Pty Ltd
•    Purchaser for value without notice of plaintiffs claim
•    Bought land in reliance on what was on register
    -    Before A Pty Ltd lodged the transfer for registration, plaintiff lodged a caveat
o    HELD
    -    Right of A Pty Ltd to be registered had priority over any rights of the plaintiff
    -    A acquired the right to register and obtain immediate indefeasibility
    -    Note: Could have set aside X’s interest if got there before he sold it, as X knew of fraud
    -    High Court referred approvingly to doctrine of immediate indefeasibility


Registered mortgage is extinguished by a registered discharge of a mortgage, even where the discharge is a forgery
•    Shultz v Corwill Properties Pty Ltd (1969)

Caveats and unregistered interests

•    Three relevant aspects:
o    Legislative scheme
o    Effect of lodging a caveat
o    Effect of Not lodging a caveat

•    Legislative Scheme

•    Unregistered interest in Torrens title land may be protected by a caveat lodged with the Registrar General
o    Caveat protects unregistered interest by freezing register – prohibits the recording of any dealing affecting the estate or interest

Person who claims to be entitled to a ‘legal or equitable’ interest or estate in Torrens title through an unregistered dealing or devolution of law may lodge a caveat
•    Section 74F(1)
o    Cannot be lodged to protect a mere contractual or personal right, or a right based on statute not also conferring an interest in land
    -    Linden v Wigg

Examples of caveat-able interests
•    Interests of purchaser under a contract of sale
o    Kuper v Keywest Constructions
•    Interest of mortgagee (including mortgagee by deposit of title deeds)
o    Re Victorian Farmers’ Loan and Agency Co Ltd
•    Interests of person arising from contributions made to the purchase price of the property
o    Morling v Morling
•    Option to buy land (As is equitable interest in land on option holder)
o    Laybutt v Amoco Australia
•    Right of pre-emption is NOT caveat-able
o    Walker Corp v WR Pateman
    -    Although will be once act occurs that triggers exercise of that right
•    Sterns Trading v Shteinman
•    Contractual rights are elevated into proprietary interest by creating interest in land to secure contractual obligations
o    Builder given charge over land to secure repayments of amounts owing under building agreement
    -    Griffith v Hodge
o    Lender given charge over land of borrower or guarantor to secure repayment of debt
    -    Murphy v Wright

Any registered proprietor who fears improper dealing with his or her title may lodge a caveat prohibiting any dealings being recorded on it
•    Section 74F(2)

A caveat can not be lodged to protect an interest that can only arise in the future (ie must have caveat-able interest
•    Martin v Official Trustee in Bankruptcy

•    Effect of lodging a caveat
o    Caveat does not give interest in land any greater priority than it otherwise would, it merely freezes the register
o    Failure to lodge a caveat may lead to loss of priority that interest may have had
o    Failure to caveat is merely one factor which will be taken into account when searching for the better equity
•    Butler v Fairclough (1917)

•    Effect of Failure to Lodge A Caveat

Failure to lodge caveat before later interest is acquired means that prior interest is postponed
•    Butler v Fairclough (1917) 23 CLR 78
o    FACTS
    -    June 30
•    Good (Registered proprietor of Torrens land) gave unregistered mortgage to Butler
    -    July 2
•    Good sells property to Fairclough
o    Fairclough searched register and found nothing
    -    July 8
•    Butler lodged caveat claiming equitable interest in land as equitable mortgagee
    -    July 12
•    Fairclough attempts to register the property – stopped by caveat
o    HELD - Fairclough wins, as defendant paid purchase price before caveat lodged

Anyone who gets an interest in land should lodge a caveat
•    Rose’s Case: Osmanoski v Rose [1974]
o    FACTS
    -    X sells to A who does not register
    -    X t hen sells to B who searches the register and finds no interest lodged
o    HELD - B prevails over A, as B searched register

Priorities regarding unregistered equitable interests
•    Generally first in time prevails, but court will consider:
1.    Whether conduct of prior interest holder might lead subsequent interest holders to purchase in belief that prior interest did not exist
2.    Whether reasonably foreseeable that conduct of prior interest holder might lead another to acquire subsequent interest
3.    Whether holder of interest omitted any precaution that a prudent purchaser would have taken that may have disclosed the prior interest
4.    Whether holder of subsequent interest suffered loss or detriment

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