Indefeasible Title and the Torrens System: The Exceptions

Essay by elephant-auUniversity, Bachelor'sA-, August 2009

download word file, 6 pages 4.0

Downloaded 28 times

The principle of indefeasibilityis fundamental to the aims of the Torrens system: security of title and the elimination of lengthy searches before purchase. However, rigid application of the principle can sometimes produce troubling results. Discuss with reference to a range of relevant cases.

Criteria: Assignment should be written similar to an article in a law journal.

----------------------------------------------------------------------------------------------------------------The troubling results which might be caused by the rigid application of the principle of indefeasibility can best be illustrated by the attitude of the Law Reform Commission of NSW as to when compensation needs to take place:5.2 The Commission is of the view that compensation should be available for losses resulting not only from mistakes in the Land Titles Office and forgery, but also from fraud generally and the negligence of third parties, such as solicitors and surveyors, where neither a mistake in the Land Titles Office nor forgery is involved. ...

Currently the Real Property Act. 1900 permits an exception to the principle of indefeasibility only in cases of actual fraud.

43 Purchaser from registered proprietor not to be affected by notice(1)Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any registered estate or interest shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such registered owner … of the estate or interest in question is or was registered, [or]… shall be affected by notice direct or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud.

As will be discussed below, this has been restricted...