#7153 - The Torrens System And The Principle Of Indefeasibility Policy - Property B

[5.12-14] Robert Torrens was assisted in creating the system and it was not a radically new system as is sometimes claimed.

Adopted under Real Prop Act, now under TLA. All States have the system although the basic features are the same. The legislation does go by different names in each State.

[5.25] In the old system one weak link in the chain of title, unless cured by adverse possession, was sufficient to destroy or impair the title of the last person in the chain. The Torrens system was intended to authoritatively establish title by guaranteeing that the person named as proprietor had a perfect title subject only to encumbrances specifically noted on the register. Dealings, not documents, were registered. A dealing was not to be completed until registration (though an unregistered dealing is not without effect). The purchaser therefore has no need to investigate the history of the vendor’s title.

This principle ideally requires the register to reflect all facts bearing on the title of the proprietor, thereby reliving anyone searching title from the need to go beyond the register. The conclusiveness of the register is generally what is meant by the principle of indefeasibility.

[5.26] Objects of the system include

• providing a register from which persons who propose to dela with land can discover all the facts relative to the title

• to ensure that a person dealing with land subject to the system is not adversely affected by any infirmities in the vendor’s title that do not appear on the register (thus avoiding the necessity of going behind the register to investigate)

• to provide a guarantee by the State that the picture presented by the register book is true and complete

  • if this is not true, compensation is to be paid to any person who suffers loss either through the land being made subject to the system or else through the register not disclosing all the facts relevant to the title

• security of title and security of transaction

Mere fact of deed registration previously did not give priority over unregistered rights. The TS purports to overcome problems of notice.

The TS is different in concept, form and operation: is a system of title by registration

Registration under DRS did not change the nature of the interest (eq to legal etc) or cure title. On TSL registration confers legal title; it creates a central register containing individual interests. The State guarantees the accuracy of the register. TS does not change the types of interest available (eg CTs, life estates) – what changes is the method by which they pass.

• Legal interest: source is registration in most cases; it creates the right

• TS replaces the chain of title of the documents by a single certificate of title with all registered interests that exist. This remains at the land titles office and the duplicate is held by the registered fee simple owner or by the first registered mortgagee.

• Much of the system has been computerised and the aim is the register will be solely computer entries

• The cert of title ordinarily must be produced when an instrument relating to that land is being registered; the registrar must ensure the information on the original and duplicate certs match.

  • Vol and folio number: folio = pages, vol = the book volume in which the certificate is located. The last/newest owners name is on there at the end of the list.

  • Certificate = now referred to as a folio, duplicate = now referred to as the Certificate of Title

[RG] How does land come under the operation of the Torrens legislation?

For many years, Part II of the TLA provided a means by which unregistered (‘general law’) land could be brought under the Torrens System. The conversion schemes laid down in Part II were under-utilised. The Transfer of Land (Single Register) Act 1998 (Vic) amended the TLA to streamline and accelerate the conversion (ie registration) of general law land. It did so by substituting a new Part II in the TLA. Under the new s 8, all unalienated Crown land is deemed to be under the operation of the Torrens system and a new s 9 imposes a duty on the Registrar of Titles ‘with all reasonable speed to bring under the operation’ of the TLA all land already alienated by the Crown which is not under the operation of the Act.

Other significant amendments include the closure of the deeds register established under various sections (4, 6 and 7) of the PLA; the repeal of all previously existing conversion schemes under the TLA; and introduction of additional means of conversion and the consequential introduction of two additional forms of title to Torrens land: provisional and identified folios.

[5.15] Earliest legislation provided that land alienated or granted by the Crown after the date of commencement was automatically to be under the Torrens system. This has been continued under current legislation (TLA s 8(1)).

[5.16] TLA s 108 requires an applicant to contribute to the assurance fund as a condition of the certificate being issued. This has the purpose of covering the risk of compensation of a person deprived of an interest by registration of the applicant’s title.

[5.17] the Registrar processes the application and is entrusted with discretion to issue a title or not. An unsuccessful applicant may call on the Registrar to state the grounds on which the application has been rejected and may require that the grounds be substantiated before the court (TLA s 116).

[5.18] Certain persons (fee simple owner at law or equity; trustees for sale of land; person having the power to appoint or dispose of the fee simple estate) may apply to bring land under the TLA: TLA s 10. A mortgagor (holder of equity of redemption under the general law) cannot apoly without the consent of the mgee. The application must list all relevant docs in the applicant’s possession or control, all known encumbrances/interests in the land, the occupant of the land and nature of occupancy, the names and addresses of the owners and occupants of all adjoining land (TLA Sch 2). The Registrar must give notice of the application by publication in a newspaper in the area and personally or by post to the occupier of the land and those of the surrounding land. The Registrar has power to and does give notice to persons identified in the application as having an interest in the land: TLA s 26U.

[5.19] Once these procedures have been complied with, the Registrar decides whether to issue a certificate of title to the applicant. Legislation appears to give the R a broad discretion: TLA s 26S. The applicant may appeal the decision or seek an order for mandamus to compel registration of title. The Registrar must investigate the title, but where the application is made on behalf of the application by a solicitor the Registrar may regard himself/herself as relieved from the obligatiom of verifying the matters that might otherwise require independent official investigation.

A person claiming an interest in the land may lodge a caveat forbidding registration: TLA s 26R. They then have a certain period of days to institute proceedings in to establish the interest. If not instituted, the caveat lapses and a certificate of title may be issued to the applicant.

This involves a risk whereby those who claim interests but do not lodge caveats (by ignorance or otherwise) will lose their interest and have to claim against the assurance fund (unless the failure to object results from the fraudulent actions of the applicant).

[5.20]s 108(3) allows the R to grant an application where evidence of title is incomplete or there is some imperfection, conditional upon a contribution to the assurance fund. An ordinary or provisional (where the interest is subject to subsisting interests for the 15-year limitation period) folio may be issued: TLA s 18.

[5.22] State legislatures have required the conversion of old system land to Torrens due to the slow rate of voluntary conversion.

[5.23] Land to be used for strata titles scheme must be brought under the Torrens system, as must land to be subdivided.

To bring land under TS: since 1862 any land alienated by Crown in Vic is TSL. Schemes enabling GLL conversion to TSL were often under utilised as there was a high standard of proof required at the time. In 1998 the Transfer of Land Single Register Act inserted a new Part 2 into the TLA that was meant to simplify this and eliminate GLL eventually. Provides that all GLL on alienation becomes TSL and any transaction of GLL after 1 Jan 1999 must be converted to the...