torrens title & unregistered interests
TRANSCRIPT
Statute works with common law
It must now be taken to be well settled that under the Australian system of registration of titles to land the Courts will recognize equitable estates and rights except so far as they are precluded from doing so by the Statutes. This recognition is, indeed, the foundation of the scheme of caveats which enable such rights to be temporarily protected in anticipation of legal proceedings.
Butler v Fairclough (1917) 23 CLR 78, 91
Equitable or unregistered interests are acknowledged by the Torrens system, so…priorities issues remain
Which interest will prevail?
What effect does Torrens have?
Priorities disputes in Torrens follow general law principles
Unregistered interests
are equitable interests
Competition b/w
unregistered interests = equity vs
equity
Resolve with
reference to conduct of parties
In dealing with such equitable rights the Courts in general act upon the principles which are applicable to equitable interests in land which is not subject to the Acts. In the case of a contest between two equitable claimants the first in time, all other things being equal, is entitled to priority. But all other things must be equal, and the claimant who is first in time may lose his priority by any act or omission which had or might have had the effect of inducing a claimant later in time to act to his prejudice. Thus, if an equitable mortgagee of lands allows the mortgagor to retain possession of the title deeds, a person dealing with the mortgagor on the faith of that possession is entitled to priority in the absence of special circumstancesto account for it.
Butler v Fairclough (1917) 23 CLR 78, 91
Competing interests in land
Common law rules
Legal Legal First in time prevails
Legal Equitable Registered takes free of unregistered interests
Equitable Legal Registered takes free of
unregistered interests, notice not relevant
Equitable Equitable Not resolved by the Act
Land Title Act rules
Revisiting old friends
• Rice v Rice• Breskvar v Wall• Abigail v Lapin• Heid v Reliance
Finance
How did the courts resolve the competing equities in these decisions?
A number of steps can be taken to protect an equitable interest: consider the parties’ conduct in its entirety including under the LTA
What steps might be taken to signal that an interest exists? (what does the Act provide?)
S178 LTA
S182 LTA
S141 LTA
S124 LTA
(s42 LTA)
IAC v Courtenay
• Draw a timeline of the fact scenario in IAC v Courtenay
• Provide an outline of how the law is applied to the facts in this case, according to priorities– Identify the interests– Identify the nature of the competition– Apply the law to the circumstances– Reach a conclusion
IAC v Courtenay
Feb: contract to sell A to C
Sep lodge transfer
16 Sep withdrew t/f
17 Sep contract to sell
A to D
24 Sep contract to sell
C to A
Nov: completion
contract A to D
IAC v Courtenay
• Identify the interests– Courtenay - in writing, not registered:
equitable– Denton – in writing, not registered: equitable
• Competing equities: who has better eq?– Conduct of the parties
• Denton – searched the title; saw evidence of the transfer and its withdrawal; didn’t inquire further
• Courtenay - had not armed solicitor with power to go out into the world under false colours. ie: did not contribute to a belief in Denton that no interest existed
Abigail v Lapin
• Draw a timeline of the fact scenario in this case
• Provide an outline of how the law is applied to the facts in this case, according to priorities– Identify the interests– Identify the nature of the competition– Apply the law to the circumstances– Reach a conclusion
Abigail v Lapin
Dec ’23: L gave over
signed t/f to H
H became registered proprietor
Sep ’25: H mtge to A
L lodged caveat
Feb ’26: A lodged mtge
for rego
Abigail v Lapin
• Parties’ interests– Lapin – right to recover land from mtgee;
not registered; eq– Abigail – writing; not registered; eq
• Who has the better equity? Look to conduct of parties– Abigail – no search of register BUT search
would show nothing untoward – Lapin – handed over indicia of title; without
these, A would never have lent money
Taleb v NAB
• Draw a timeline of the fact scenario in this case
• Provide an outline of how the law is applied to the facts in this case, according to priorities– Identify the interests– Identify the nature of the competition– Apply the law to the circumstances– Reach a conclusion
Taleb v NAB
T lent money; permitted to lodge caveat
Caveat not lodged
Borrower refinanced with NAB
NAB searched title: no caveat
NAB dithered, delaying its lodgment
T lodged caveat
Taleb v NAB
• Competing equities – why?• Neither party’s conduct was ‘prudent
or in its own interest’• How did the court sort out which
party’s interest prevailed?
Determining a priorities claim
Case Conduct Result
IAC v Courtenay
Abigail v Lapin
J & H Just Holdings
Platzer v CBA
Clark v Raymor
Taleb v NAB
Brunker v Perpetual Trustee
Creating an interest• ‘[The LTA] in denying effect
to an instrument until registration, does not touch whatever rights are behind it.’ Barry v Heider
Equity• Won’t assist a volunteer
No value means…• [form of] transfer alone
does not create equitable interest
Losing an interest
Did the Lapins, the Breskvars, Taleb have a right of recourse for losing their interests?
Was the Act sufficient to protect the Breskvars and Armour?
Challenges of statutory drafting
‘Compensation is available against a person…upon whose application the erroneous registration was made.’ s126(2)(b) Real Property Act 1900 (NSW)
Penrith transfer to
Armour
Armour mortgages; awaits issue
of CT
Mortgagee’s employee
forges Armour’s signature
New (innocent) owner is
registered