Land Law

Front 1

s 42 RPA: The Paramountcy Principle

What interest does it create?

Back 1

s 42 gives a registered proprietor an indefeasible title to land and applies to all registered proprietors of any interest in land.

eg. mortgage, easement, lease

A registered proprietor is only subject to the interests registered on the register.

Front 2

s 43 RPA: The Notice Provision

What interest does it destroy?

Back 2

S 43 destroys the bona fide purchaser for value rule:

no transferee will be affected by unregistered interests even if they had notice of the interest before they (the transferee) registered their interest

Front 3

s 43 RPA:

What three operations does this provision have?

Back 3

Provision has three fold operation:

1. States that fraud will vitiate a registered title

2. The estate/interest of the RP is subject only to those encumbrances actually noted on the register, with two exceptions; and

(a) interests under prior crown grant or CoT

(b) land included in the Crown Grant or CoT by wrong description

3. There are certain unregistered interests that are enforceable against the RP.

Front 4

s 45 RPA: Bona fide purchasers and mortgagees protected in relation to fraudulent and other transactions (protection of purchasers provision)

What does this provision prohibit?

Back 4

(2) Prohibits recovery of land/damages from a registered purchaser (bona fide purchaser for valuable consideration) merely because their vendor may have been registered through fraud or have derived title from/through a person registered as proprietor through fraud/error

Front 5

Frazer v Walker:

Fraudulent Mortgage

Mrs Frazer forged husband's signature for a loan, giving R mortgage. Mrs F failed to repay the loan to R, who sold the property to Walker. Both R and W were acting in good faith with no knowledge of the forgery.

Back 5

Immediate indefeasibility – confers agood title on P1 immediately on registration of the forged document, thus P1’sregistered interest cannot be set aside even though it was procured byregistration of a forged document (provided P1 has acted without fraud)

Mr Frazer denied recovery as his wife forged his signature on mortgage (which she later defaulted on) and Walker registered the transfer without knowledge of fraud. Title vested with Walker.

Front 6

Breskvar v Wall:

Earlier Equitable Interest v Later Equitable Interest

Breskvars were the registeredproprietors of certain land in Queensland. As a means of securing a loan of$1,200 they executed a blank transfer (ie. Hadn’t filled in box saying who thetransferee was) and handed the duplicate certificate of title to therespondent, Petrie. The transfer was void under the provisions of the Stamp Act1894 (Qld) b/c it hadn’t been completely filled in. ·

Petrie inserted Wall’s name astransferee and registered the transfer. Wall, who was a party to Petrie’sfraud, then sold the land to Alban Pty Ltd (the third respondent) which boughtin good faith and without notice of the fraud.

Back 6

Earlier equitable interest prevails unless there has been some postponing conduct on their behalf

Principles:

Registration creates title even if the situation is within the exceptions listed in the act (such as fraud).The difference is that the title is subject to the rights on the defrauded vendor (ie, the title is defeasible).·

The fraud creates an equitable interest on the part of the defrauded vendor, which is not barred by the legislation because there is an exception made for fraud. The vendor can thus cancel the registration of the purchaser.·

However, once the purchaser transfers his title to a third party (bona fide and good consideration), it becomes a question of priorities.

If the third party completes registration entirely, then he obtains indefeasible title.

If the third party doesn't complete registration before the original vendor bring a claim, the vendor's earlier equitable interest would prevail over the third party's later equitable interest unless the vendor's conduct helped encourage the third party's false assumption (that the title vested with the fraudulent purchaser).

Front 7

Indefeasibility of the terms in a registered instrument

Mercantile Credits Ltd v Shell co of Australia Ltd

Celtic granted a lease for 5 years toShell, which included an option to renew the lease for a further 5 years. Thelease was registered. C then mortgaged the land to Mercantile. Shellsubsequently exercised the option to renew, and a new lease in registrable formwas executed, but was not yet registered. ·

One month later, Mercantilegave notice of default by C and intention to exercise the power of sale underthe mortgage. Shell then lodged a caveat claiming to be entitled to theregistration of the latest lease and forbidding any dealing by the mortgageeunless expressed to be subject to the unregistered lease.

Back 7

Indefeasibility under the Torrens system does not extend to personal rights unrelated to the land, even if the covenant granting that right is contained in a registered instrument. It does, however,extend to any covenant in a registered lease which is so closely connected to the lease that it should be regarded as part of the interest obtained by the lessee.

An option to renew: indefeasible

BUT they expire if the time for their exercise expires

An option to purchase: defeasible because it is not acovenant concerning the tenancy or its terms, or a provision for thecontinuance of the term.

Front 8

Indefeasibility in a void Mortgage

Is the covenant to repay a mortgage an indefeasible interest?

Back 8

A Covenant to repay mortgage debtis not an estate/interest in the land, it is a personal obligation/contractual obligation./

Therefore, it is defeasible.

BUT the mortgagee's security interest over the land is indefeasible (so they can sell it)

Front 9

What consequences does the distinction between a mortgage as an interest in land and the covenant to pay as a contractual obligation have?

Back 9

1. a registered mortgage can subsist as a charge on land after debt is fully repaid, until mortgagor exercises their right to call for a discharge of the mortgage.

A mortgage can also be discharged without discharging the covenant to pay. Effect of the mortgage on covenant to pay depends upon the wording of discharge instrument