Griggs, Lyunden --- "In Personam, Garcia v NAB and the Torrens System - Are They Reconcilable?" [2001] QUTLawJJl 6; (2001) 1(1) Queensland University of Technology Law and Justice Journal 76
[*] Senior Lecturer in Law,
University of Tasmania. Thanks to the comments of anonymous referee. The usual
caveat applies.
[1] J Moore,
‘Equity, restitution and in personam claims under the Torrens system: Part
Two’ (1999) 73 ALJ 712 at 715. This article followed an earlier
piece by the same author, J Moore, ‘Equity, restitution and in personam
claims under
the Torrens system’ (1998) 72 ALJ
258.
[2] [1998] HCA 48; (1998) 72 ALJR 1243.
It is unclear from the case whether the land in question was Torrens
land.
[3] See R Chambers,
‘Indefeasible Title as a Bar to a Claim for Restitution’ [1998]
Restitution Law Review 126 where he examines the technical issues
associated with the relationship between indefeasibility and the concept of
unjust enrichment.
This paper concentrates more on the policy issue as
outlined.
[4] See Whalan,
‘Immediate Success of Registration of Title to Land in Australasia and
Early Failures in England’ (1967) 2 NZULR
416.
[5] (1991) 25 NSWLR
32.
[6] There is considerable
controversy as to whom the authorship of the Torrens system should actually be
attributed. For a discussion
of this see P Moerlin Fox, ‘The Story behind
the Torrens system’ (1950) 23 ALJ 489; Robinson, Transfer of
Land in Victoria, Law Book Co Melbourne 1979 at ch
1.
[7] Opening Statement in the
Report of the Real Property Law Commission in November 1861 (SA): Parl Paper No
192 (1861). Sir Robert
Torrens was one of the Commissioners. For a discussion of
the history behind the legislation, see D Pike, ‘Introduction of
the Real
Property Act in South Australia’ [1961] AdelLawRw 4; (1960) 1 Adel LR
169.
[8] (1971) 46 ALJR
68.
[9] Breskvar v Wall
(1971) 46 ALJR 68 at 70 per Barwick CJ.
[10] R R Torrens, The South
Australian System of Conveyancing by Registration of Title, Adelaide
Register and General Observer Printing Offices 1859 at
9.
[11] In most States the
period of prior searching required for General Law or old system title land is
30 years: Conveyancing Ordinance 1951 (ACT); Conveyancing Act 1919
(NSW) s 53; Property Law Act 1974 (Qld) s 237; Conveyancing and Law of
Property Act 1884 (Tas) s 35 (20 years); Property Law Act 1958 (Vic)
s 44; Property Law Act 1969 (WA) s
22.
[12] Land Title Act
1994 (Qld) ss 38, 169, 170; Real Property Act 1886 (SA) ss 10,
69; Land Titles Act 1980 (Tas) s 40.
[13] See L McCrimmon,
‘Protection of Equitable Interests under the Torrens System: Polishing the
Mirror of Title’ [1994] MonashULawRw 12; (1994) 20 Mon LR 300.
[14] Transfer of Land Act
1958 (Vic) ss 109-111; Real Property Act 1900 (NSW) ss
126-127; Land Title Act (1994) (Qld) s 189; Real Property Act
(1886) (SA) ss 203-211; Transfer of Land Act 1983 (WA)
ss 201, 205; Land Titles Act 1980 (Tas); ss 152-153; Land Titles Act
1925 (ACT) ss 145-6.
[15] See the following
provisions: Transfer of Land Act 1958 (Vic) s 43; Real Property Act
1900 (NSW) s 43; Land Title Act (1994) (Qld) s 184;
Real Property Act (1886) (SA) s 186-7; Transfer of Land Act
1983 (WA) s 134; Land Titles Act 1980 (Tas); s 41; Real
Property Act (NT) s 71A/71B; Land Titles Act 1925 (ACT) s 59.
[16] See the discussion by S
Robinson, ‘Claims in Personam in the Torrens System: Some General
Principles’ (1993) 67 ALJ 355 at 355.
[17] R Torrens, A Handy Book
on the Real Property Act of South Australia, (1862) at 8.
[18] See the comments by M
Hughson, M Neave & P O’Connor, ‘Reflections on the Mirror of
Title: Resolving the Conflict
between Purchasers and Prior Interest
Holders’ [1997] MelbULawRw 16; (1997) 21 MULR 460 at
462.
[19] The High Court in
Barry v Heider [1914] HCA 79; (1914 19 CLR 197; 21 ALR 93 accepting that interests prior
to registration do operate in equity. The caveat system provides for the
necessary protection of unregistered
interests. See the following provisions:
Transfer of Land Act 1958 (Vic) ss 89-91; Real Property Act
1900 (NSW) ss 74F-74R; Land Title Act (1994) (Qld) s
121-131; Real Property Act (1886) (SA) s 191; Transfer of Land
Act 1983 (WA) ss 136K-142; Land Titles Act 1980 (Tas); ss
133-138; Land Titles Act 1925 (ACT) ss
104-108.
[20] See for example
Maddison v McCarthy (1865) 2 WW and aB(Eq) 151; Robinson v Keith
(1870) 1 VR(Eq) 11; and recently Mercantile Mutual Life Insurance Co Ltd
v Gosper (1991) 25 NSWLR 32 – though of course, strictly speaking,
“Implementation of this goal [the idea that transactions giving rise to
equitable
interests only resulted in a contractual interests, rather than
proprietory interests] would have required abandonment of the principle
that a
specifically enforceable contract passes an equitable interest in land” M
Hughson, supra n 18 at
461.
[21] Frazer v Walker
[1967] NZLR 1069 (PC) at 1078. This principle can be seen as early as 1927
in Tataurangi Tairuakena v Mua Carr [1927] NZLR 688.
[22] Chambers, supra n
3 at 134 considers not: “A primary
objective of the Torrens system is the avoidance of the expense, difficulty, and
delay of
investigating and proving the validity of a vendor’s title. The
inclusion of claims for restitution of unjust enrichment in
the category of
‘in personam exceptions’ does not conflict with this
objective.”
[23] As
described by J Moore (1999) supra n 1
at 714.
[24] Bahr v Nicolay
(No. 2) [1988] HCA 16; (1988) 164 CLR 604 at 653.
[25] C McDonald, L McCrimmon, A
Wallace & M Stephenson, Real Property Law in Queensland, LBC
Information Services Sydney 1998 at 335: “In 1969 one commentator noted
that, ‘it is evident that the limits of the
registered proprietor from
adverse claims in personam have not been clearly defined.’ This
observation applies with equal force today.”
[26] As described by D
Skapinker, ‘Equitable interests, mere equities, ‘personal’
equities and ‘personal equities’
– distinctions with a
difference’ (1994) 68 ALJ 593 at
596.
[27] (1991) 25 NSWLR
32.
[28] Mercantile Mutual
Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32 at 48.
[29] Ibid.
[30] Ibid at
46.
[31] P Butt,
‘Indefeasibility and Sleights of Hand’ (1992) 66 ALJ 596 at
597.
[32] To borrow the wording
of Hayne J of the Supreme Court of Victoria in Vassos v State Bank of South
Australia [1993] VicRp 74; (1992) V ConvR 54-443 at
65,180-65,181.
[33] [1998] HCA 48; (1998) 72
ALJR 1243.
[34] Garcia v
National Australia Bank Ltd (1993) 5 BPR
11,996.
[35] [1939] HCA 3; (1939) 63 CLR 649.
[36] [1983] HCA 14; (1983) 151 CLR
447.
[37] (1996) 39 NSWLR
577.
[38] Ibid at
598.
[39] [1998] HCA 48; (1998) 72 ALJR 1243 at
para 33.
[40] See T Cockburn,
‘Yerkey v. Jones: The Phoenix’s New Clothes’ (1998) 9
Journal of Banking and Finance Law and Practice 308; A Hanak, ‘The
wife’s special equity survives the High Court’ (1998) 6
Insolvency Law Journal 202; S Hii, ‘From Yerkey to Garcia: 60 years
on and Still as Confused as Ever!’ (1999) APLJ Lexis 3.
[41] Interestingly the majority
of the High Court in Garcia refused to follow the English House of Lords
decision in Barclays Bank v O’Brien (a decision which was accepted
and modified by Kirby J in Garcia). As raised by P Milne, ‘Lenders,
co-owners and solicitors’ (1999) 149 New Law Journal 168 at 168,
“It is not apparent from the reports whether O’Brien involved
registered or unregistered land. In any event,
the approach set out in the case
was clearly intended for general application. But the doctrine of notice does
not operate in the
context of registered
land.”
[42] Wicks v
Bennett [1921] HCA 57; (1921) 30 CLR 80 at
91.
[43] Assets Co v Mere
Roihi [1905] AC 176 at
210.
[44] [1998] HCA 12; (1998) 151 ALR 729 at
732.
[45] Land Titles Act
1925 (ACT) s 59; Real Property Act (NT) ss 72, 186, 187;
Land Title Act 1994 (Qld) s 184; Real Property Act 1886
(SA) ss 72, 186, 187; Land Titles Act 1980 (Tas) s 41; Transfer of
Land Act 1958 (Vic) s 43; Transfer of Land Act 1893 (WA) s 134;
Real Property Act 1900 (NSW) ss 43,
43A.
[46] Remembering of course
that the trial judge had decided that there was no unconscionability: Garcia
v National Australia Bank Ltd (1993) 5 BPR
11,996.
[47] Moore (1998),
supra n 1 at 260: though of course
that it should be noted that he reconsidered some aspects of his view in a later
piece: Moore (1999), supra n
1.
[48]
P Birks, ‘The Law of Restitution at the End of an Epoch’ (1999) 28
UWA Law Review 13 at
27.
[49] Ibid at
28.
[50] Ibid at
29.
[51] [1985] HCA 78; (1985) 160 CLR
583.
[52] [1987] HCA 59; (1987) 164 CLR
137.
[53] [1988] HCA 16; (1988) 164 CLR
604.
[54] See the comments by
Moore (1998), supra n 1 at
265.
[55]
Ibid.
[56] [1998] 1 VR
188.
[57] [1998] 3 VR
133.
[58] (1996) 136 ALR 166
(TJ); [1998] 1 VR 188 (CA).
[59]
[1998] 1 VR 188 at 196.
[60]
Supra n
3.
[61]
Ibid at 132.
[62]
Ibid.
[63] [1998] 3 VR
133 at 152.
[64] As to whether
wilful blindness would constitute a finding of fraud, Tadgell J didn’t
decide. At [1998] 1 VR 133 at 146 his
Honour had this to say: “I
understand the expression to connote more than a failure to see or look: the
adjective is to be
given its due value. The compound expression connotes a
concealment deliberately and by pretence, from oneself – a dissembling
or
dissimulation. In other words wilful blindness connotes a form of designed or
calculated ignorance, of which none on the part
of the appellant or its agents
is proved.”
[65] (1994) 33
NSWLR 202.
[66] (1992) NSW ConvR
55-640.
[67] As described by
Moore (1999) supra n 1 at
714.
[68] Birks, supra n
48 at 29 recognises that in many cases, the
resolution of a dispute between a domestic borrower and a business lender
involves a case
of policy-motivated
restitution.
[69] [1999] NSWSC 478; (1999) NSW
ConvR 55-908.
[70] See the
brief note on this case: P Butt, ‘Rectification thwarted by
indefeasibility’ (2000) 74 ALJ 280 where he notes that the
different wording of the Victorian legislation may have led to a different
result: Section 42 of the Transfer of Land Act 1958 excluding from the
doctrine of indefeasibility, the “interest of a tenant in possession of
the land.”
[71] [1997] 3
NZLR 705 (CA).
[72] E Toomey,
‘Certainty of title in the Torrens System – Shifting Sands as the
Millennium Approaches’ Paper delivered
to 1999 Real Property Law Teachers
Conference – The Flinders University Law School, 30 September 1999 –
2 October 1999.
[73] [1997] 3
NZLR 705 at 714-715 per Thomas J.
[74] Haji Abdul Rahman v.
Mahomed Hassan [1917] AC 209 at 216 per Lord Dunedin (Privy Council). S
Hepburn, ‘Concepts of Equity and Indefeasibility in the Torrens System of
Land Registration’
(1995) APLJ Lexis 8 at 1 also states: “The
ambiguous and pejorative nature of equity does not fit easily into a statutory
structure centred around
the guarantee of land title upon registration.
Indefeasibility of title upon registration necessitates a level of certainty and
determination
which is, in many ways, directly oppositional to the approach
taken by equitable principles of
fairness.”
[75] [1988] HCA 16; (1988) 164
CLR 604.
[76] See for example P
Butt, ‘Indefeasibility and Sleights of Hand’ (1992) 66 ALJ
596.
[77] (1991) 25 NSWLR
32.
[78] [1998] HCA 48; (1998) 72 ALJR
1243.
[79] Ibid at
para 35.
[80] Ibid
at para 37.
[81] Ibid
at para 36.
[82] Moore
(1999), supra n 1 at 714 quoting from
Gardner, ‘Wives Guarantees of their Husbands’ Debts’ (1999)
115 LQR 1 at 3-4.
[83]
See R Baxendale [1999] SydLawRw 13; [1999] 21 Sydney Law Review 313 at 319-320.
[84] See S Hepburn, supra
n 74 at
8.
[85] [1997] All ER Rev 385 at
394.
[86] Whalan, supra n
4.
[87] M A Neave, C J Rossiter
& M A Stone, Sackville and Neave Property Law Cases and Materials,
6th edn Butterworths 1999 at
418.
[88] As noted by J G
Tooher, ‘Muddying the Torrens Waters with the Chancellor’s Foot?
Bahr v Nicolay’ (1993) 1 APLJ at 1.
[89] Muschinkski v Dodds
[1985] HCA 78; (1985) 160 CLR 583 at
616.
[90] Birks supra n
48 at 30 describes the problems encountered
in Garcia as “incredibly difficult” and there is a need to
avoid “pseudo-solutions and, in particular, not to go in for distorting
or
denaturing particular unjust factors.”