LLB270 Chapter Notes - Chapter 8: Dual Role, Trustee Act 1925, Nsw Law Reports
WEEK 6 – PRIORITIES AND THE TORRENS SYSTEM:
Chapter 8 – Torrens Title:
8.130: Unregistered Interests under the Torrens System:
Section 41(1) of the Real Property Act has not been interpreted to mean that unregistered interests
have no place in Torrens
Other provisions recognise the existence of unregistered interests:
Section 74F(1) – provides for the lodgement of a caveat to protect an interest which arose from an
unregistered dealing
Section 82 – allows a caveat to be lodged over an instrument which creates a trust
Clear distinction between the effect of an instrument before registration and the rights that arise out
of a transaction
Unregistered dealings may create an equitable interest in land
Equitable rights are not enforceable on their own and require a court order
Some unregistered interests are protected through exceptions to indefeasibility
Most unreasonable interests won’t fall into this category and are dependent on caveats for
protection
Defeated unregistered interests cannot be reviewed
Competition between two interests usually involves equitable principles
Section 74F(1) refers to ‘legal and equitable interests’
Suggests that some unregistered interests may be legal
Legal unregistered interests under Torrens land:
Oral lease in compliance with s 23D(2) of Conveyancing Act
Easement implied under Wheeldon v Burrows
Implied tenancy at will – s 127 of Conveyancing Act
Resolving priority disputes:
Registered interest defeats unregistered interest
Competing unregistered interests resolved on old system rules and equitable principles
oDetermining ‘better equity’ involves a range of considerations, Inc. the effect of lodging a
caveat
o8.133: Caveats:
Similar to a statutory injunction
Prevent the Register from being changed
Butler v Fairclough: ‘enable such rights to be temporarily protected in anticipation of legal
proceedings’
Abigail v Lapin: ‘no instrument will be registered while the caveat is in force affecting the land,
estate or interest until after a certain notice to the person lodging the caveat.’
Provisions were consolidation in Pt 7A of Real Property Act
oRegistrar-General can lodge his or her own caveats:
Caveats against primary applications
Caveats which pertain to land which has already been brought under the Torrens system
8.134: Caveats Lodged by the Registrar-General:
Real Property Act s 12(1)(e) – provides for situations where a caveat can be created
oRegistrar-General acting on behalf of Her Majesty
oActing on behalf of a person under some disability
oWhere an instrument has been declared a trust
Section 82 mandates the recording of a caveat when an instrument declaring a trust is
lodged
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oMay also record a caveat where the mortgagee is recorded as the registered proprietor
Section 12(1)(f) provides a wide range of circumstances when it refers to the protection of any
persons interested in Torrens title land
8.136: Caveats Preventing Registration under Primary Applications:
Caveats designed to prevent land being brought may be lodged under s 74B of Real Property Act
Shelf-life of 3 months unless the caveator has commenced proceedings to establish title (s 74C) or
has been granted an injunction which prevents the Registrar-General from updating the Registrar
Known as ‘primary caveats’
Registrar-General must assess the primary applicants title
oApplicant can only succeed on the strength of his or her title
8.137: Caveats Preventing Dealings in Land:
Real Property Act ss 74F, 74G, 74I, 74K, 74MA, 74O, 74P, 74Q, 74R
High Court stated ‘the Act contains a complete code for the lodgement, recording maintenance,
removal, renewal and lapsing of caveats… In doing so, they also give effect to the purposes of the
Act and the means by which it gives priority to instruments according to their time of lodgement’ –
Black v Garnock (2007)
Used by parties seeking to protect unregistered interests
Sometimes called ‘private caveats’
Section 74F, 74A(1) and (2)(b) provide that a caveator may lodge a caveat if plans might affect
their alleged interest
Section 74F(5) requires caveats be in an approved form
oException – allows the court to disregard lack of compliance (s 74L)
oRepresents a more liberal approach
oJones v Baker cannot be ‘so far removed that the court cannot disregard to noncompliance’
Caveats are noted on the Registrar (s 74F)
oRegistrar-General will notify the registered proprietor
Removed by:
oLapsing following lodgement of a dealing
oLapsing notice without lodgement of a dealing
oPursuant to a court order
Caveats do not create a new interest
Important when registered proprietor loses their title certificate
Restrictions do exist on who can lodge caveats
Most commonly used in mortgagee sales:
oIf mortgagee is suspicious that the mortgagor is improperly exercising their power of sale, it is
important for the mortgagor to lodge a caveat
oCommon for the court to require the mortgagor to provide undertakings as damages, but this
may be waived
oCaveats are active as soon as they are lodged and given a reference number
8.140: Purpose of a Caveat:
Freezes the Register in relation to the registered interest
Has the effect of giving ‘notice to all the world that the registered proprietor’s interest is subject
to the equitable interest alleged in the caveat’ – J & H Just (Holdings) Pty Ltd v Bank of New South
Wales
Dual role of protection and notice – Black v Garnock
o‘not just to forbid registration of dealings… but also to serve as notice to anybody interested
in the land’
Exceptions to the rule that a caveat freezes the register:
2
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Document Summary
Week 6 priorities and the torrens system: Section 41(1) of the real property act has not been interpreted to mean that unregistered interests have no place in torrens. Other provisions recognise the existence of unregistered interests: Section 74f(1) provides for the lodgement of a caveat to protect an interest which arose from an unregistered dealing. Section 82 allows a caveat to be lodged over an instrument which creates a trust. Clear distinction between the effect of an instrument before registration and the rights that arise out of a transaction. Unregistered dealings may create an equitable interest in land. Equitable rights are not enforceable on their own and require a court order. Some unregistered interests are protected through exceptions to indefeasibility. Most unreasonable interests won"t fall into this category and are dependent on caveats for protection. Competition between two interests usually involves equitable principles. Section 74f(1) refers to legal and equitable interests". Suggests that some unregistered interests may be legal.
