The Integrity of the Torrens Registry

Introduction

We are all familiar with the fact that a major object of the Torrens System was to obviate the need to search through a multitude of documents (as in common law title) in order to investigate title to land. All that the Torrens System required was a search of the Registry to determine the state of the title of any parcel of land. These sentiments are well summarised by the Privy Council "the cardinal principle of the statue is that the Register is everything" (Fels v Knowles (1906) 26 NZLR 604 at 620 approved by the Privy Council in Waimiha Sawmilling Co v Waione Timber Co [1926] AC 101 at 106). In Gibbs v Messer [1891] AC 248 at 254, the Privy Council states:

"The object [of the Act] is to save persons dealing with registered proprietors from the trouble and expense of going behind the register, in order to investigate, the history of their author's title, and to satisfy themselves as to its validity"

Exceptions to Indefeasibility

Of course we soon learn that the Registry may not be all that it seems. The exceptions to indefeasibility set out in the various Torrens statutes in the individual State jurisdictions alert us to this (See for example S42 (1) (a) Real Property Act 1900 (NSW); S42 (1) (a) Transfer of Land Act 1958 (Vic); S170 (1) (e) Land Title Act 1994 (Qld); S69 v Real Property Act 1886 (SA); S68 Transfer of Land Act 1893 (WA); S40 (3) (b) Land titles Act 1980 (Tas); S58 (a) Land Titles Act 1925 (ACT); S69 v Real Property Act (NT) ). Rights in personam specifically referred to as an exception in Fraser v Walker ([1967]) IAC S69) provide another exception to indefeasibility. These rights arise up against the indefeasibility of a registered proprietor who has incurred obligations or embarked on a course of conduct affecting the proprietor's title to the land to the extent that equity in the circumstances would intervene. (See Mahoney JA in Mercantile Mutual Life Insurance Co Ltd v Cooper (1991) 25NSWLR 32 at 45; Hayne J in Vassos v State Bank of South Australia [1983] 2VR 316 at 333; Gleeson CJ in Storey v Advance Bank Ltd (1993) 31 NSWLR 733 at 737).

Overriding Legislation - Pieper v Edwards

  Another source of exceptions to indefeasibility and the displacement of the integrity of the Registry arises is overriding legislation. A good example of this is seen in Peiper v Edwards [1982] NSWLR 336. The overriding legislation in that case was S 89 (1) of the Conveyancing Act 1919 (NSW) which grants to the court a discretionary power to modify and extinguish easements or covenants. In Pieper v Edwards, the appellant (dominant tenement proprietor) purchased land (servient tenant?) which indicated an easement for the benefit of the purchase land burdening the land of the respondent. The respondent and the appellant's predecessor in title had negotiated a release of the easement, the documentation for which had been prepared, but not executed. The respondent had left the matter in his solicitor's hands who had failed to embark on the necessary formalities to bring the matter to conclusion. The appellant's predecessor in title assured the appellant that the documentation had not been signed or otherwise dealt with to effectively cause the easement to be removed. The easement was important to the appellant. Its effect was to give the dominant tenement dual access and the appellant was anxious to retrain the benefit of dual access. The respondent, on the other hand, wished his land to be free of the burden of the easement and relied on the agreement made with the appellant's predecessor in title. The Court of Appeal upheld the trial judge's decision releasing the servient tenement from the easement. One of the appellant's submissions was that he had purchased the property on the basis the easement was in existence following enquiries made to his predecessor in title, and from the State of the Register. To this submission Samuels JA made the following remarks at ???

'Section 89 necessarily assumes that, at the time of application and hence when the discretion for which it provides comes to be exercised, the land will be subject to an easement which the application seeks to modify or extinguish. If the state of the register were conclusive the scope and purpose of the legislation which contemplates encroachment upon defeasibility would be destroyed.'

  The logic behind his Honour's remarks, with respect, was compelling. However that was poor comfort to the appellant who despite his reasonable efforts to ascertain the veracity of the title failed in his appeal.

Hillpalm Pty Ltd v Heavens Door Pty Ltd

  The issue of a Statue overriding the Registry came to the fore recently in Hillpalm Pty Ltd (Hillpalm) v Heavens Door Pty Ltd (Heavens Door) [2002] NSWCA 301 (3 Oct 2002). In this case the New South Wales Court of Appeal dismissed an Appeal against a decision of Sheahan J in the Land and environment Court ([2002] NSWLEC 116 (7 June 2001)). Sheahan J had held that an unfulfilled condition of development approval (the creating of the right of way) bound the subsequent proprietor of the proposed servient tenement even though no mention of the proposed right of way appeared on the relevant certificate of title or folio in the Registry.

The facts

  In 1978, Winchcombe Carson Trustee Company (Canberra) Ltd made application to Tweed Shire to subdivide a parcel of land into two lots numbered 1 and 2. Among the conditions of the Council's approval of the subdivision was the provision of a right of carriageway over lot 2 in favour of lot 1 for access purposes. On the plan of subdivision that was eventually certified by Council, the right of way was described as a "proposed right of way 10 wide. The certificates of title that eventually issued for the two lots contained diagrams indicating of each the "proposed right of way 10 wide." Lot 2 subsequently underwent a series of subdivisions in 1981, 1983 and 1990. The diagrams on the certificates title that issued on each subdivision indicated the "proposed right of way 10 wide". Certificates of title issuing on subsequent subdivision after 1990 contained no diagram nor made mention of the right of way, but referred to the deposited plan "for a diagram of the land". Likewise the folio in the Registry made no mention of the right of way merely referring to the deposited plan. As a result of subsequent subdivision the "burdened lot" was currently lot 529 when acquired by Hillpalm in December 1998. Lot 1 was acquired by Heavens Door in January 1998.

  Heavens Door sought to obtain the benefit of the easement on the basis of the unfulfilled condition of development consent. It argued that the consent was a document of title depriving its status from statue. It also argued that Hillpalm had at least constructive notice of the development consent. Hillpalm contended that it purchased without notice and that registration perfected the subdivision. The outstanding condition of development consent was something that no longer bound it following registration and the protection of indefeasibility under the Act.

Decision

The Court of Appeal did not take up the issue of notice (Sheahan J in the Land and Environment Court had found that Hillpalm had notice). Meagher JA with whom Handley JA and Hodgson JA concurred, stated that the Council's consent to the original subdivision created "a right in rein so that it may be relied on (inter alia) by all later transferees of any Lot" (at 13) Meagher JA stated (at 14):

'In my view the Environmental Planning and Assessment Act 1979 must take precedence over the system of registration of titles regulated by the Real Property Act. This is not only because it is the later enactment, but also because it partakes more of a public law enactment compared to the Real Property Acts' private law complexion; and also because the almost aggressive working of ss 122 and 123 display an intention that they are to be of universal force.

  (Ss122 and 123 have the effect of granting a right to any person to bring proceedings for the failure to comply with conditions of development consent)

  In concurring with Meagher JA, Hodgson JA pointed out that whilst it may not be customary for purchasers to enquire about conditions of development consent when acquiring land, it may well need to become a customary enquiry. His Honours also noted that in this particular case the deposited plan referred to by the certificate of title, indicated the "proposed right of way". In a case where particularly there was "no hint" of a condition of subdivision on the title documents (such as a plan of subdivision) the court may decline to exercise its discretion.

Conclusion

1. (i) Leaving aside the particular issues of notice in this case, it is apparent that conditions of development consent, sourced as they are in Statue, can become matters that affect the State of the Registry. They are matters that should be the subject of enquiry whenever land is being purchases. They are also matters that are not necessarily evident on a search of the Registry and represent once again another inroad of overriding Statue affecting the Registry's integrity.
2. (ii) It is paradoxical that Meagher JA should upon the aspect of the Environmental Planning and Assessment Act 1979 as "a public law enactment compared to the Real Property Acts' private law complexion" (at 14). The result has been an enforcement of private rights by the "public statute" at the cost of the public benefit (the integrity of the Register) in the "private law complexion" Statute.

Gerard Kelly
Senior Lecturer
University of New England
Law School
Armidale NSW 2351

February 2003.

Originally published in the Student Law Journal