LAW 1506 Lecture Notes - Lecture 9: Equitable Interest, Conveyancing, Fide
23 May 2018
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TORRENS SYSTEM- INDEFEASABILITY
Step 1: what interest is being registered, and by
who?
• need to establish the plaintiff has a legal
interest for rego to be valid before
considering issues with indefeasibility
o eg a mortgage needs to be valid to
be registered
Step 2: The TS is one of title by registration not
registration by title Breskvar v Wall
Basic conveyancing steps
1. Contract of sale: signed by paries, deposit
paid to purchaser
2. Settlement: usually 30-90 days. Purchaser
pays balance of price. Vendor provides cert
of title and executes transfer of land
3. Registration: under the Real Property
(Electronic Conveyancing) Amendment
Act 2016 (SA) conveyance + discharge of
mortgage and new mortgage + cert of title
lodged with registrar’s office online
(duplicate certificate of title no longer
required) after the following has taken
place
a. Seller’s identity has been verified s
273A
b. Authority of the seller as proprietor
has been verified s 273B
c. Client authorisation for the
conveyance/ practitioner to transfer
the property according to the terms
of the authorisation Pt 20A
d. Priority notice Pt 13A
The effect of rego is embodied in 3 principles
1. Mirror: Cert reflects the present state of
the title as of the date of the Cert. indicated
who holds it/ subsidiary interests.
2. Curtain: brought down on the current
transaction- person you obtain title from is
assumed to be the proper owner regardless
of what happened before them
3. Guarantee/ insurance principle: RPA
assurance fund established to compensate
persons for the ‘market value’ of their
interest where they have suffered loss of
title due to fraud, error omission or mistake
by the registrar general.
Step 3:
1. Registration guarantees immediate
indefeasible title. (contrast to differed if
facts require- Gibbs)
2. The registered proprietor’s interest is
immune from attack by adverse claims to
the registered land interest.
a. paramount to any other person’s
interest, subject to exceptions (see
below) Frazer; Adopted in AU through
s 69 RPA + Breskavar
b. But a registered mortgage IS NOT
indefeasible if it does not comply with
verification requirements s 69(i)
3. Still indefeasible if purchaser registered
title through another’s fraud, error, or by
means of a void instrument (as long as the
purchaser didn’t commit the fraud) Frazer
4. Fraud by purchaser: Registration still
creates immediate indefeasible title, but
subject to the rights of the defrauded
vendor- has an equitable interest to cancel
the contract unless property transferred to a
bona fide 3rd party purchaser (see below)
5. 3rd party Bona fide purchase of a
fraudulently obtained title- question of
priorities Breskavar
i. equitable right of the defrauded
vendor to cancel the sale will take
priority over the 3rd party’s later
equitable right to have the C*
performed (specific performance)
ii. UNLESS vendor’s conduct helped
encourage the 3rd party’s false
assumption that the title was vested
In the person who sold them the
property
iii. BUT: If bona fide purchaser
completes registration immediately-
indefeasible title
Issue: Challenge by other person who claims to
have a property right in the land
Step 1: Other parties may purport to have an
unregistered interest in the land, when faced
against registered title, the question is one of
priorities
Step 2: separate each party- describe their with
interest in the land separately
find more resources at oneclass.com
find more resources at oneclass.com
FIRST: state who the registered owner is, and
the date of their rego;
SECOND: then state what right the other party
purports to have (will be one of the following)
• Common law estate/ interest -formal-
shown through deeds- not abolished by
registration
• Freehold- two types
(1) fee simple, highest order ownership
right. Land right granted to a
person & their heirs generally
(virtually perpetual);
(2) life estate, a grant for one life
only.
• Leasehold: grant of exclusive possession
(by leasor [owner] to leasee [tenant]) for
a certain period, measured by years and
granted for monetary rent.
• Equitable interest- informal- shown
through dealings
• Equitable interests- preserved by
s 249(1) RPA
• Created by
o Equitable option to
purchase
o Any incomplete interest in
writing Walsh; or, if not in
writing- part performance
o adverse possession
(possession only, may be
the foundation of an estate)
• Trusts- equitable
• Express trust
i. Generally, can’t be registered.
ii. But creates property right
where deed of trust is executed
in writing for a beneficiary
• Constructive trust
i. Formed when a contract for
the sale of land is made, and he
person gives the other a
certificate of title to the land
ii. After receiving the cert of title,
the other party becomes the
equitable owner of the
property
Step 2: had the unregistered owner lodged a
caveat? (if yes- their interest may prevail over
the registered owner’s; if no- jump to step 3)
• Anyone holding an unregistered
property right can protect their
interests by warning others of the
existence of the right through lodging a
CAVEAT within the Torrens Register s
191 RPA
• Caveat may:
→ (a)(i) prohibit absolutely the
registration or recording of any
instrument dealing with the land
→ (a)(ii) provide that the rego or
recording of an instrument dealing
with the land may only occur subject to
the claim of the caveator, and only if
any conditions expressed in the caveat
are complied with
i. Barry v Heider
Step 3: Which party will prevail?- priorities
issue (later in course)
a. Legal s 56 RPA
b. Equitable (unregistered)
i. Rice v Rice- first in time prevails
EXCEPTIONS TO INDEFEASABILITY
(if you consider an exception, consider the
proviso)
Step 1: if the person contesting the registered
proprietor’s title is defeated (doesn’t have priority
to the land) – they may argue that an exception to
indefeasibility applies
Step 2: If an exception to indefeasibility is
established, the registered proprietor does not
indefeasible title defendable against the world- has
an indefeasible title that is subject to an
exception.
Step 3: Which exception applies?
Other registered interests
For a registered proprietor of a subsidiary
interest
• s 56 RPA: registered rights over the same
piece of land are raked in priority adoring to
their date of registration (earlier registered
rights bind later ones)
o So- a registered proprietor of a subsidiary
interests (as a exception to indefeasibility)
bound by registered rights lodged before
their own was lodged
• S 60 also, since registered proprietors are
bound by what appears on the register (which
includes rights lodged in the past)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Step 2: the ts is one of title by registration not registration by title breskvar v wall. Basic conveyancing steps: contract of sale: signed by paries, deposit paid to purchaser, settlement: usually 30-90 days. Vendor provides cert of title and executes transfer of land: registration: under the real property (electronic conveyancing) amendment. 273a: authority of the seller as proprietor has been verified s 273b, client authorisation for the conveyance/ practitioner to transfer the property according to the terms of the authorisation pt 20a, priority notice pt 13a. In the person who sold them the property: but: if bona fide purchaser completes registration immediately- indefeasible title. Issue: challenge by other person who claims to have a property right in the land. Step 1: other parties may purport to have an unregistered interest in the land, when faced against registered title, the question is one of priorities. Step 2: separate each party- describe their with interest in the land separately.
