Fraud

Immediate indefeasibility (s 42; Breskvar)

Exception = fraud - defeasible against person defrauded (s 42(1); 44(1))

Fraud not defined in TLA

False attestation

Notice of a prior interest does not equal fraud (s 43) - mere knowledge = not fraud

Actual fraud = requires personal dishonest OR moral turpitude (Assets Co)

Not constructive or equitable fraud (if you had notice - conscience would be bound) BUT wider than CL fraud - reqrd deceit

Must bring it home to person asserting title (RP) or his agent (Assets Co)

Wilful disregard of the rights of others (Russo - clerk thought mere formality, didn't realise effect)

Suspicions aroused + failed to make inquiries

Not enought that might of found out if more vigilant

Fraudulent exercise of power of sale

Remedy

Fail

Misrepresentation / Acknowledgement / Repudiation of right

When?

Change mind later (Bahr - T intended to honour at time of sale)

Colourable sale (Latec - bogus auction)

Fraud of 3P (Assets Co)

NO

YES

Honest belief

Acting with good conscience - still indefeasible

Know about the fraud prior to registration

Subjective knowledge of fraud

Want of due care

Negligence does not = fraud

Reckless

No knowledge of fraud but could have made more enquiries (lack of vigilance) (Pyramid - suspicions not aroused even though would have found out if checked company register)

Presents a fraudulent doc but honestly believe it is genuine (Grgic - thought was father)

Min = Y if not preserving the prior interest underlying the transfer (Mason CJ, Dawson J)

Maj = N - confined to acts acquiring title

Acknowledgment is more than mere notice (Bahr)

Acknowledgment is more than mere notice (Bahr)

Operative (Ferguson)

Induce decision (detrimental reliance)

Affect legal obligations (Ferguson - Internal doc-altered valuation but still same mortgage amount)

Mortgages (Fraud of 3P not brought home)

Use to be the case that Mor liable under mortgage obtained by fraud of 3P (Frazer - not brought home to bank) See also Russo

Identity requirements exception (87A TLA)

At time M(or variation) executed Mee must take reasonable steps to verify identity the Mor is same person who is RP (87A(1))

Reasonable steps (2)

Consistent with 106A (Paper conveyancing req)

Participation rules (eConveyancing) (s 87A(2))

100 pt check (Passport etc)

If not satisfied Mee took reasonable steps registrar discretion to not register M/variation OR remove from register M/variation (3) / (4)

Removal of mortgage/variation = void and no longer indefeasible (5) / (6)

Fraud by agents & employees

Agent commits fraud and principal now RP

Agent knows of fraud

Can fraud be brought home (impute) to RP on ordinary agency principles if X was acting within actual OR apparent scope of authority (from principal) (Shultz)

Not if on frolic of own (Schultz - done on his own behalf)

in circs where duty to communicate to principal will be brought home (Schultz)

Irrebutable presumption

Exception - agent's own fraud / party to fraud (Schultz)

Identify the RP

Appointed as agent

Dollars broader application to whether A acting in course of agency

What has the principal authorised?

Was fraud so connected with the authorised acts they can be treated as mode of performing them

Just because they didn't authorise forgery - doesn't mean beyond scope (Dollars)

Even if done for exclusively for benefit of agent (Dollars)

Even if of a criminal character (Dollars)

Shouldn't be applied if agent commits fraud - only relevant for 3P (Dollars)

Not if principal passive recipient (Cassegrain)

False attestation not always fraud (Russo)

Strict requirement

Not a mere formality (De Jager)

(De Jager - knew F had not attested and put on path; cf Russo - clerk not guilty of fraud)

Need dishonesty (subjective) - rely on Crt finding

Intention to disregard others rights (cf Russo - clerk didn't understand ramifications)

Remoteness? (Russo)

Majority - no issue

Batt J - can't have 2 step process of agency

Refer to mortgages

Prior to reg. in order to secure transaction (Loke Yew - never intended to honour undertaking)

Must bring it home to person asserting title (RP) or his agent (Assets Co)

Or anything else = reasonable steps in circs

Suspicions aroused + didn't make enquiries for fear of finding out the truth (Assets)

N (Pyramid - suspicions not aroused even though would have found out if checked company register)

Less than meticulous (Grgic - Didn't verify identity of "father")

Success

Face to face interviews

Sighting originals

X authorised [A,B]

Broad

Can affect legal obligations btw principal and 3P

Schultz test is the correct test (Cassegrain)

Never appointed (Cassegrain)

Fraud upon the Registrar

Example Cases

Employees knew F had not attested and put on path (De Jager)

Claim Compensation from Assurance Fund (s 111)

As a person sustaining loss or damage can apply to recover from fund (s 110(1))

(d) Payment or consideration given on faith of the register

(c) registration of any other person as proprietor

Not entitled if:

Claimant or agent caused or substantially contributed to loss by fraud, neglect or wilful default (s 110(3)(a))

N (Fairless - Deceipt substantial cause, although negligent, trusted D soo much he would sign anything)

Judged in light of the circs of fraud (Fairless)

Was not agent (Fairless - not in scope, scope to construct)

Measure

Loss of house = value of prop (110(4)(a)&(b))

Didn't give mortgage but registered = principal + market rates 110(4)(c)

Mee limited to claiming same amount from Mor (87D)

6yrs to make claim (LAA)

Defrauded previous RP

(b) any amendment to register

if defrauded unregistered interest holder

RP take subject to prior interest

Registrar give effect to Crt/VCATT order to have register rectified (s 103(1)/(1AA))

Order rectification of register

Likely a trust (Bahr)

Refer to in personam

Act of putting on path to registration when no doc not genuine (De Jager)

Lodging for registration with the knowledge it is false (De Jager per Tadgell J)

Deprives the lodging party of honest belief it is a genuine doc

Not false attestation if honest belief it is genuine (Grgic - bank employee thought was Mr G Senior)

Even if no actual knowledge but deliberately closed eyes to fraud (De Jager)