Breskvar v Wall

126 CLR 376
(1971) 46 ALJR 68
[1972] ALR 205

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(Judgment by: McTiernan J)

Breskvar
v.Wall

Court:

Judges: Barwick CJ
McTiernan J
Menzies J
Windeyer J
Owen J
Walsh J
Gibbs J

Subject References:
Real Property (Q.)
Torrens System
Indefeasibility of title
Exceptions
Fraud
Protection of purchasers from registered proprietor
Dealing with registered proprietor
Void instrument of transfer
Equities and unregistered interests
Priorities
Statutory invalidity of instrument executed without insertion of name of purchaser or transferee
The Real Property Act, 1861 to 1963 (Q.), ss. 33, 43, 44
The Real Property Act of 1877 (Q.), s. 48
The Stamp Act of 1894 (Q.), s. 53 (5)
The Real Property Act, 1861 to 1963 (Q.), ss. 33, 43, 44
The Real Property Act of 1877 (Q.), s. 48
The Stamp Act of 1894 (Q.), s. 53 (5).
Equity
Priority and notice
Priority generally

Legislative References:
Section 85 of the Land Transfer Act 1952 (N.Z.) - 44 (2); 183
Transfer of Land Act 1915 (Vict.) - 179

Case References:
Assets Co. Ltd. v. Mere Roihi - [1905] AC 176
Frazer v. Walker - [1967] 1 AC 569
Boyd v. Mayor, & c., of Wellington - (1924) NZLR 1174
Clements v. Ellis - [1934] HCA 18; 51 CLR 217
Mayer v. Coe - (1968) 88 WN (Pt 1) (NSW) 549
Ratcliffe v. Watters - (1969) 2 NSWR 146
Barry v. Heider - [1914] HCA 79; 19 CLR 197
Great West Permanent Loan Co. v. Friesen - (1925) AC 208
Rice v. Rice - (1854) 2 Drew 73 (61 ER 646)
Shropshire Union Railways & Canal Co. v. The Queen - (1875) LR 7 HL 496
Lapin v. Abigail - [1930] HCA 6; 44 CLR 166
Abigail v. Lapin - [1934] HCA 20; (1934) AC 491; 51 CLR 58
J. & H. Just (Holdings) Pty. Ltd. v. Bank of New South Wales - [1971] HCA 57; 125 CLR 546
Barry v. Heider - [1914] HCA 79; 19 CLR 197
Shaw v. Foster per Lord Cairns - (1872) LR 5 HL 321
Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. - [1965] HCA 17; 113 CLR 265
Caldwell v. Rural Bank of New South Wales - (1951) 53 SR (NSW) 415
Davies v. Ryan - (1951) VLR 283
Gibbs v. Messer - (1891) AC 248
Butler v. Fairclough - [1917] HCA 9; 23 CLR 78

Hearing date: 7, 8 June 1971
Judgment date: 13 December 1971

Sydney

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Judgment by:
McTiernan J

This is an appeal from a decision of the Supreme Court of Queensland (Hart J.) (1972) Qd R 28 . The evidence establishes the facts of the case to be as follows. On 5th March 1968 the appellants, Mr. and Mrs. Breskvar, both signed a memorandum of transfer which purported to transfer, for a consideration of $1,200, the relevant piece of land, of which they had been the owner for some time. At the time of signing, however, the memorandum of transfer did not bear the name of any purchaser. Present at the signing was the first respondent, Petrie, who took possession of this document. The learned trial judge found that this transaction was not in fact a sale of the land but a loan of $1,200 by Petrie to the appellants. Notwithstanding the fact that there had been no sale of the land as a result of these actions the name of the second respondent, the first respondent's grandson, Wall, was inserted on the memorandum of transfer as purchaser sometime in September 1968 and the transfer was registered on 15th October 1968. On 31st October 1968 Wall sold the land to the third respondent, Alban Pty. Ltd. ("Alban") for $3,500 which was later paid. This transfer was dated 7th November 1968 but was not lodged for registration until 8th January 1969 by which time a caveat had been lodged on behalf of the appellants. The caveat had been lodged on 13th December 1968 and was entered on 6th March 1969. (at p390)

2. The learned trial judge made the following findings about these transactions (1972) Qd R, at pp 30-31 :

"I find that in transferring the land to Wall and in selling it in the way he did Petrie acted fraudulently in that he was attempting to cheat the plaintiffs out of the major part of their interest in the land. He was guilty of moral turpitude. His fraud was of the relevant kind under The Real Property Acts. . . I find that throughout he was acting as the agent of Wall and of his wife and that Wall is affected by his fraud. I further find that the third defendant was a bona fide purchaser for value without notice." (at p390)

3. It was submitted for the appellants that they always retained their estate in the land in question as registered proprietor on the ground that Wall, though at one stage on the register, had nevertheless no title and therefore no title which he could pass to Alban. It was argued that this was a consequence of the fact that Wall got on to the register by means of a transaction that was void and of no effect either because it was tainted with fraud or, alternatively, invalidated by a provision of The Stamp Act, 1894, as amended (Q.). (at p390)

4. As regards the argument that the transaction was vitiated by fraud, counsel for the appellants relied on s. 44 of the Acts. Section 44, so far as it is material, provides that :

"Notwithstanding the existence in any other person of any estate or interest whether derived by grant from the Crown or otherwise which but for this Act might be held to be paramount or to have priority the registered proprietor of land or of any estate or interest in land shall except in the case of fraud hold the same subject to such encumbrances liens estates or interests as may be notified by entry or memorial on the folium of the register book constituted by the land grant or certificate of title of such land but absolutely free from all other encumbrances liens estates or interests whatsoever . . . " (at p390)

5. There is no doubt that, had Wall, as the registered proprietor, attempted to eject the Breskvars, they could have set up the element of fraud and the exception made therefor in s. 44 in answer to Wall's reliance on his certificate of title and s. 33 of the Acts which states, inter alia:

". . . and every certificate of title duly authenticated under the hand and seal of the Registrar-General shall be received in all Courts of Justice as evidence of the particulars therein set forth and of their being entered in the register book and shall be conclusive evidence that the person named in such certificate of title or in any entry thereon as seised of or as taking estate or interest in the land therein described is seised or possessed of such land for the estate or interest therein specified and that the property comprised in such certificate of title has been duly brought under the provisions of this Act . . . "

But I do not think this element of fraud is relevant to the question of whether Wall obtained an indefeasible title to the land in question, not as against the Breskvars, which he clearly did not, but as regards a third party dealing with him on the faith of the register. In my judgment the decision of the Privy Council in Frazer v. Walker (1967) 1 AC 569 requires the conclusion that Wall's certificate of title was good against all the world, except of course the defrauded Breskvars. Their Lordships said (1967) 1 AC, at p 584 while discussing certain sections of the Land Transfer Act 1952 (N.Z.) which approximate to ss. 33 and 44 of the Acts here in question:

"The decision in Boyd v. Mayor, & c., of Wellington (1924) NZLR 1174, related to a very special situation, namely, that of a registered proprietor who acquired his title under a void proclamation, but with certain reservations as to the case of forgery it has been generally accepted and followed in New Zealand as establishing, with the supporting authority of the Assets Co. Case (1905) AC 176 , the indefeasibility of the title of registered proprietors derived from void instruments generally. Their Lordships are of opinion that this conclusion is in accordance with the interpretation to be placed on those sections of the Land Transfer Act, 1952, which they have examined. They consider that Boyd's Case (1924) NZLR 1174, was rightly decided and that the ratio of the decision applies as regards titles derived from registration of void instruments generally. As regards all such instruments it established that registration is effective to vest and to divest title and to protect the registered proprietor against adverse claims."

Reference was made in the course of argument to a decision of this Court on the equivalent sections of the Victorial Transfer of Land Act in the case of Clements v. Ellis [1934] HCA 18; (1934) 51 CLR 217 , . In that case, where the facts were that a forged discharge of mortgage and a transfer of the unencumbered land were lodged for registration at the same time on the same day, Rich and Evatt JJ. took the view that the bona fide purchaser for value gained an indefeasible title on the basis that prior to the registration of the transfer the mortgage was removed from the register by the registration of the forged discharge. Dixon J. was of a contrary opinion, to the effect that the mortgage would not have been destroyed until a person who, according to the then condition of the register, was entitled to do so, gave a transfer which was taken bona fide for value and registered. I was of the opinion that the discharge and the transfer had been lodged simultaneously with a result that at no time during the course of the transaction could the purchaser point to the register and indicate an estate unencumbered with a mortgage. In my estimation only the view of Dixon J. gives any support to the appellants' claim. It must be remembered however that in Clements v. Ellis [1934] HCA 18; (1934) 51 CLR 217 the mortgage was always apparent on the face of the register, notwithstanding one party's promise that he would have it removed. In this case the register, as relied upon by Alban, showed Wall as the registered proprietor of an unencumbered estate at all material times. (at p392)

6. The alternative submission made for the appellants as to the invalidity of the original transfer was based on s. 53 (5) of The Stamp Act of 1894, as amended (Q.). The material part of s. 53 (5) reads as follows:

"No instrument of conveyance or transfer executed on or after the first day of November, one thousand nine hundred and eighteen of any estate or interest in any property whatsoever . . . shall be valid either at law or in equity unless the name of the purchaser or transferee is written therein in ink at the time of the execution thereof. Any such instrument so made shall be absolutely void and inoperative, and shall in no case be made available by the insertion of a name or any other particulars afterwards."

I consider however that the principles enunciated by the Privy Council in Frazer v. Walker (1967) 1 AC 569 with respect to the indefeasibility of the title of registered proprietors derived from void instruments are equally applicable to this defect as to that of fraud. (at p392)

7. My conclusion that registration vested title in Wall leads to the result that Wall passed an interest in the land to the bona fide purchaser Alban by means of the memorandum of transfer which he gave to the company. Section 43 of the Acts, which was referred to in argument, does not, in my opinion, alter this result. Section 43 states, inter alia:

"No instrument shall be effectual to pass any estate or interest in any lands under the provisions of this Act or to render such land liable as security for the payment of money until such instrument shall have been registered in accordance with the provisions of this Act . . ."

Section 48 of The Real Property Act of 1877 however, which was also raised in argument, provides, so far as material, that:

"Every instrument signed by a proprietor or by others claiming through or under him purporting to pass an estate or interest in or security upon land for the registration of which provision is made by this Act shall until registered be deemed to confer upon the person intended to take under such instrument or other person claiming through or under him a right or claim to the registration of such estate interest or security."

In my opinion this section constitutes a recognition of equitable interests in land: see Barry v. Heider per Griffith C.J. [1914] HCA 79; (1914) 19 CLR 197 , at pp 207-208 . Being prior to registration Alban's interest must of course be an equitable one : Shaw v. Foster per Lord Cairns (1872) LR 5 HL 321, at p 338 . The case then resolves itself into a conflict between the competing equities of the appellants and Alban. (at p393)

8. In my opinion the appellants are estopped from relying on their prior equity. When the transfer which the appellants had given to Petrie was completed with the name of Wall as purchaser it operated, in my judgment, as a representation, addressed to any person who might take it without notice of the appellants' rights, that Wall had an estate in the land which he was entitled to transfer in his turn. The principles to be employed in deciding such a question were laid down in Abigail v. Lapin (1934) AC 491, at p 504; [1934] HCA 20; (1934) 51 CLR 58 , at p 68 where Lord Wright, who delivered the judgment of their Lordships, said : ". . . the conduct of the parties having the equitable interests and all the circumstances must be taken into consideration in order to determine which has the better equity" and later (1934) AC, at p 504; (1934) 51 CLR, at pp 68-69 :

"Apart from priority in time, the test for ascertaining which incumbrancer has the better equity must be whether either has been guilty of some act or default which prejudices his claim ; in the present case the respondents on the one hand enabled the Heaveners to represent themselves as legal owners in fee simple, while on the other hand it cannot be said that Abigail did or omitted to do anything which he should have done in lending the money on the security . . . "

In my judgment it follows from these principles that the interest of Alban should be accorded paramountcy. (at p394)

9. I would therefore dismiss the appeal. (at p394)