Transcript No Slide Title

Classes 40 & 41
Claims in personam
Volunteers
Inconsistent legislation
Registrar’s powers
Compensation Scheme
13.5.3 Claims in personam
• Judge made exception
• Concept of indefeasibility of title does not affect
personal obligations created by the RP
•Frazer v Walker
“The principle [of indefeasibility of title] in no
way denies the right of the plaintiff to bring
against the RP, a claim in personam, founded in
law or equity for such relief as the court acting
in personam may grant
In personam claims
• Bahr v Nicolay
• Mason CJ Dawson J
• Neither the two sections [ss 42 and 43] nor the
principles of indefeasibility preclude a claim to an
estate or interest in land against a RP arising out
of the acts of the RP himself
• Actions before or after registration
• Conduct gives rise to a known cause of action
in law or equity
• What actions will be sufficient to give rise
to the in personam exception?
Bahr v Nicolay
•
Bahrs were the registered proprietors of land in WA
•
They agreed to sell the land to Nicholay on the condition that Nicholay
lease the land back to the Bahrs for 3 years and then enter into a contract
of sale to resell the land to the Bahrs
•
Nicholay then became the registered proprietor and then sold the land to
Thompson who in turn was registered as the proprietor.
•
Thompson had notice of the agreement between Bahr and Nicholay.
•
The contract between Nicholay and Thompson contained an express
acknowledgment of the agreement.
•
After Thompson became registered he acknowledged the Bahrs’ interest
e.g. he wrote to the Bahrs acknowledging the obligation to sell and offered
to sell - although these offers lapsed.
•
Subsequently Thompson refused to sell and tried to rely on the indefeasible
title to defeat any interest the Bahrs’ may have had.
Bahr v Nicolay
Agreement clause 4
acknowledged Bahr’s right
and subsequent letters to
Bahr acknowledging their
rights
Nicolay
Thompson RP
1980
agreement
clause 6
What rights
were created
in Bahrs as
a result?
Bahr
What was the effect of this
acknowledgement and
subsequent conduct both prior
to and after obtaining
registration
Bahr v Nicolay
•Indefeasibility of title doesn’t protect the RP from the
consequences of their own actions where those actions have given
rise to a personal equity in another: Breskvar, Frazer
•Vulnerability of RP to claims in personam is not inconsistent with
concept of indefeasibility of title
•Equity binding RP arising out of transaction after registration may
bind the RP- Barry v Heider
•Equity created by conduct of RP before registration can be
enforced
•Here in personam exception where RP purchases having
acknowledged existence of prior unregistered interest binding on
vendor and having expressly (or by implication) agreed to take
subject to his rights
•Different characterisations of the nature of the interest
Mason CJ Dawson J
• What was the nature of the Bahr’s in personam right
against Thompsons?
• Consider matrix of circumstances in which agreement (T
and N) made
• Registration of T would expose N to action for breach of contract
• Effect of [ss 42, 43] in absence of fraud Thompson’s registration would
defeat prior equitable right of Bahrs
• Prior to registration, Bahrs prior equitable right prevails over
Thompsons
• N would not have sold unless T promised to respect the Bahr’s rights
• More than a mere acknowledgement of Bahr’s rightspurpose was to provide that the transfer was subject to
Bahrs rights
• was an intention to create an express trust (of Bahr’s
rights)
Wilson, Toohey JJ
• What rights created by agreement between Bahr and
Nicolay?
• Specifically enforceable agreement gave rise to equitable
interest in Bahrs- commensurate with terms in which specific
performance would be granted
• Acceptance of indefeasibility does not prevent an action in
personam
• Actions of Thompsons in taking transfer knowing of rights of
Bahrs, accepting the obligation (to retransfer) and
communicating it to Bahrs- as basis of the transfer – became
constructive trustees for the rights of the Bahrs
• If interest of Bahrs (under agreement with Nicolay) fell short
of an equitable interest, they had a personal equityenforceable against Thompson
Brennan J
• What interest did the Bahr’s have?
• Equitable interest in land created by specifically
enforceable agreement between Bahr and Nicolay
• Effect of clause 4?
• More than mere acknowledgement, notice
• was also acknowledging that Thompson’s interest acquired
subject to, limited by rights of Bahrs, intention to be bound
• If acquire registration subject to right of unregistered
interest then repudiate it- acting fraudulently in
equity, equity will prevent fraud by imposing a
constructive trust
• Apply this reasoning to Silovi v Barbero
• What would the outcome of that case be?
• Would it have made a difference if Silovi had
become registered?
What actions will give rise to an in
personam exception?
• To succeed need to show the claim is
•
•
•
•
Against the RP or agent/employee
Based on a known cause of action in law or equity
Proprietary interest or
Satisfied by subjecting the RP interest to that of the
person bringing the action
• Not sufficient
• Forging signature on the transfer or the mortgage
Mercantile Mutual Life Insurance v Gosper (
1991) 25 NSWLR 32
• Mrs Gosper RP subject to registered mortgage of
Mercantile Mutual Insurance
• Husband arranged for variation of mortgage to be
taken over by MM Life- forged her signature
• Variation registered
• Husband took money, spent it and died
Mercantile Mutual Life Insurance v
Gosper
• Mahoney JA
• MM Life no authority to produce or use CT to obtain
registration of forged variation of mortgage
• Used CT in breach of obligation to Mrs Gosper in respect of
custody and possession of CT- is a personal equity
enforceable against RP of mortgage
• Kirby JA• Mrs Gosper right akin to equity of redemption,
• possession of CT for limited purposes
• Meagher JA (dissent)
Vassos v State Bank SA [1993] 2 VR
316
• Did conduct of bank give rise to rights in personam
allowing mortgage to be set aside?
• Vulnerability of RP to rights in personam not inconsistent with
principles of indefeasibility of title
• Mere fact of forgery of the instrument (that P and A did not
assent to the document) does not give rise to personal equity
and so not sufficient for an in personam claim
• In personam claim only arises from acts of RP
• bank not without neglect but did not act unconscionably, no
misuse of power, no knowledge of wrongdoing no improper
attempt to rely on legal rights
Eade v Vogiazopoulos
• Husband forged wife’s signature on mortgage
• Fraud? None by RP
• In personam?
• Can point to no more than forging of her signature
and must show something more to found claim in
personam
• Claim against solicitor? Yes
• Claim against assurance fund TLA s 110(3)?
Yes
Grgic v ANZ (1994) 33 NSWLR 202
• In personam
• Argued
• Exception should not be confined to known causes of
action, should include situations where reliance on
registration is unconscientious
• Alternatively if must show known cause of action
•
•
•
•
Deceit
False and misleading conduct TPA ss 52, 87
Breach of statutory duty
Common law negligence
Grgic v ANZ
• Held
• must be a known cause of action
• No in personam remedy for general unconscientious
behaviour
• Mere fact of forgery of signature is not enough
• Caused by RP or persons for whose conduct RP is
responsible
Pyramid v Scorpion Hotels
• Did Pyramid’s solicitor’s conduct give rise to a
claim in personam?
• Held- no
• Must be a known legal or equitable cause of action
• Acts/ omissions of solicitor insufficient to ground a
cause of action
• Negligent but no duty of care to Scorpion (had their
own solicitors)
• Conduct is that of RP or those for whose conduct the
RP is responsible
Policy questions
• Dividing line between fraud, in personam, negligence,
notice?
• What effect does the scope of exceptions affect concept
of indefeasibility of title?
• On what basis should the borderlines be drawn- whose
interests to be preferred
• Commercial certainty
• Whose interests are served by broad exceptions?
• Do they have recourse to other means of compensationAssurance fund?
• Distinction between wrongdoing by RP or by another?
13.6 Volunteers
• Is there any distinction between
consequences of registration for
volunteers and purchasers for value?
•
•
•
•
•
TLA
TLA
TLA
TLA
TLA
s.
s.
s.
s.
s.
42
43
44(2)
52
110(3)
King v Smail [1958] VR 273
• Husband transferred share of family home to
wife before entering deed of arrangement
with creditors,
• Smail as trustee in bankruptcy acquired
equitable interest in husband’s property
• wife registered
• Does wife’s registration give her indefeasible
title against the trustee – defeat his equitable
interest?
King v Smail
• Adam J
• Interpretation of whole of statute- some
provisions draw distinction between volunteer
and purchaser, others do not distinguish
• Registered volunteer does not acquire
indefeasible title free from prior unregistered
interests
King v Smail
• TLA s 43• Protects person getting registered from notice
• Protection against notice irrelevant to a volunteer
(refer to general law operation of test)
• s 43 does not protect a registered volunteer from
notice
• “By parity of reasoning” if volunteers do not obtain
the protection of s 43 they also fall outside the
indefeasibility provisions of s 42
Bogdanovic v Koteff (1988) 12
NSWLR 472
• Son registered without notice of Mrs B’s claim
• Held
• Bound by reasoning in subsequent cases: Frazer v
Walker, Breskvar v Wall,
• emphasis s 42 indefeasibility on registration
• Title by registration, then consider whether any
exceptions to indefeasibility
• Volunteers are not included in list of exceptions
• Contrast fact situation in Ogilvie v Ryan
Rasmussen v Rasmussen
• Ernest equitable fee simple by way of common
intention constructive trust
• Harold then registered
• Effect of registration?
• Coldrey J followed King v Smail
• Distinguish Bogdanovic
• Breskvar and Frazer are cases about purchasers
• No discussion of rationale for distinguishing between
indefeasibility of purchaser and volunteer
• Bahr reasoning does not destroy principles in
King v Smail
13.7 Inconsistent Legislation
• Any subsequent inconsistent legislation
may overrule or repeal Torrens
• Issue with legislation that creates
unregistered interests in land
13.7 Inconsistent Legislation
• Pratten v Warringah Shire Council [1969] 2
NSWLR 161
• council drainage reserve created pursuant to Local
Government Act
• RP is inherently subject to the rights crated by
overriding statutes
• Indefeasibility that flows from registration doesn’t help
where the fee simple has in effect been removed from
the registration system
Trieste Investments v Watson (1963) 64
SR NSW 98
• Were the losses of RP in a similar situation
compensable under the Assurance fund?
• Majority- no because compensation only payable
where there was something missing or lacking from
the register book that would expect to be there
• There was no default by the Registrar as he was
under no duty to note the resumption so there was
no error or misdescription
• Fergusson J dissent- no need to show fault of
Registrar just that RP suffered loss by relying on the
CT
Inconsistent Legislation
• Also Horvath v CBA [1998] VSCA 51
• Spheres of operation of different statutes
13.8 Registrar’s power to correct the
Register
• TLA s 103(2) slip provisions
(a)…upon such evidence as appears to him to be sufficient
correct errors in the Register or in any instrument
or….but in any case he shall not erase, delete or render
illegible the original entry or recording
(b) Every correction recording or entry … shall have the like
validity and effect as if the error or omission had not
occurred but without prejudicing any rights accrued from
any recording made in the register prior to the actual
time of correcting the error
13.9 Compensation Scheme
• Entitlement to indemnity listed in s 110
• For loss or damage (whether by deprivation of
land or otherwise) s 110(1)
• Note in Victoria no specific category for those losing
interest as the result of fraud- need to fit within another
head such as
• 110(1)(c) any error of misdescription in the Register or the
registration of any other person as proprietor
• s 111 Registrar may compensate without a claim
being made
• Amount – limited in s 110(4)
Compensation Scheme
• s 110(3) no indemnity available where:
•
RP or agent/ solicitor caused or substantially
contributed to the loss by fraud, neglect or wilful
default
• Vassos v State Bank of SA
• Eade v Vogiazopoulos
• Derive title from a person who (or whose
solicitor/agent) has been guilty of fraud neglect or
wilful default (unless valuable consideration given)..
etc
• 109(2) no indemnity where:
• Loss or damage or deprivation occasioned by any
breach of trust whether express implied or
constructive… etc
Compensation Scheme
• Relevance of title insurance?