Breskvar v Wall

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

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(Judgment by: Gibbs J)

Breskvar
vWall

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:
Gibbs J

I have had the advantage of reading and considering the judgments of my brethren and can state very briefly my reasons for agreeing with their conclusion that this appeal should be dismissed. (at p411)

2. Before 15th October 1968 the appellants were the registered proprietors of the land in question. On that date the respondent Wall became registered as the proprietor of the land. His registration was procured by the fraud of his agent, the second respondent Petrie, who had made a loan of money to the appellants, and had obtained as security for the loan a signed memorandum of transfer of their estate and interest in the land, together with the certificate of title. The memorandum of transfer, in which the name of the transferee had been left blank at the time of its execution, was void by reason of the provisions of s. 53 (5) of The Stamp Act, 1894 (Q.), as amended. On 31st October 1968 Wall sold the land to the third respondent, Alban Pty. Ltd., which bought in good faith and for value and without notice of the fraud, and on 7th November 1968 Wall executed a memorandum of transfer in favour of Alban Pty. Ltd. However Alban Pty. Ltd. did not lodge its transfer for registration until 8th January 1969 and, in the meantime, the appellants had lodged a caveat. (at p411)

3. The first and second respondents have not appeared on this appeal, and the question for decision is whether the appellants are entitled to a declaration that they are and have at all material times been seised of a legal estate in fee simple in the subject land, and a consequential alteration of the register, or whether, as the learned trial judge has held, the appellants' caveat should be removed, thus opening the way to registration of the transfer to Alban Pty. Ltd. (at p412)

4. There is no doubt on any view of the law that Wall did not obtain an indefeasible title upon the registration of the transfer to him. He became registered as a result of the actual fraud of his agent and the case was accordingly within one of the exceptions expressly made by s. 44 of The Real Property Act of 1861 (Q.), as amended, to the paramountcy of the title of the registered proprietor. The present case therefore does not directly give rise to the question whether a person who without fraud but by virtue of a void document becomes registered as proprietor of land under The Real Property Acts obtains on registration an indefeasible title. But the claim of the appellants that they still have a legal estate does raise the question whether their registered estate was destroyed when Wall was placed on the register. Their claim can only succeed if it is possible to agree with the following dictum of Salmond J. in his dissenting judgment in Boyd v. Mayor, & c., of Wellington (1924) NZLR 1174, at p 1205 , which was cited with approval by Dixon J., as he then was, in Clements v. Ellis [1934] HCA 18; (1934) 51 CLR 217 , at p 258 :

"The registered title of A cannot pass to B except by the registration against A's title of a valid and operative instrument of transfer. It cannot pass by registration alone without a valid instrument, any more than it can pass by a valid instrument alone without registration."

This dictum, and the further remarks of Dixon J. in Clements v. Ellis (1934) 51 CLR, at p 237 , were relied on as supporting the view that the registration of a void instrument is completely inoperative, so that the person previously registered remains in law the registered proprietor. However this view cannot be successfully maintained since the decision of the Judicial Committee in Frazer v. Walker (1967) 1 AC 569 . In that case (1967) 1 AC, at p 584 the Board expressly approved the decision of the majority in Boyd v. Mayor, & c., of Wellington (1924) NZLR 1174 and, although Clements v. Ellis [1934] HCA 18; (1934) 51 CLR 217 is not mentioned, the reasoning of the Board is clearly inconsistent with the passages in the judgment of Dixon J. to which I have referred. As was said in Frazer v. Walker (1967) 1 AC 569, at p 580 , "registration once effected must attract the consequences which the Act attaches to registration whether that was regular or otherwise . . . It is in fact the registration and not its antecedents which vests and divests title". (See also (1967) 1 AC, at p 585 .) (at p413)

5. When Wall became registered in fact he became vested with the legal title to the land although his title was not immune from the adverse claim of the appellants, who had the right as against him to be restored as registered proprietors. I am prepared to assume in favour of the appellants that after Wall's registration they continued to have an equitable interest in the land, rather than a mere equity to set the transfer aside (cf. Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. [1965] HCA 17; (1965) 113 CLR 265 , at pp 277-278, 280-284, 289-291 ). However Alban Pty. Ltd., which purchased the land from Wall in good faith and for value, and was given a memorandum of transfer in registrable form signed by Wall, also acquired an equitable interest in the land and the right to the registration of that interest (see s. 48 of The Real Property Act of 1877 (Q.) and Barry v. Heider [1914] HCA 79; (1914) 19 CLR 197 , at pp 206-208 ). The decision of the case then depends on which of the competing equitable interests takes priority. The interest of the appellants was created first in point of time but the appellants have lost their priority by their conduct which had the effect of inducing Alban Pty. Ltd. to act to its prejudice. The appellants had armed Petrie with the power to deal with the land as owner, by entrusting him with a certificate of title and a signed memorandum of transfer in blank, and thus had enabled him to register Wall as proprietor, and had enabled Wall to sell to Alban Pty. Ltd. as owner of the land. In these circumstances Abigail v. Lapin [1934] HCA 20; (1934) AC 491; (1934) 51 CLR 58 is sufficient authority for the conclusion that the equitable interest of the appellants is postponed to that of Alban Pty. Ltd. (at p413)

6. The learned trial judge was therefore correct in holding that the claim of the appellants to be regarded as the registered proprietors must fail and that their caveat should be removed. (at p413)