Week 4 Torrens System of Land Registration - Part 3 - Equitable Interests, unregistered interests, and compensation for loss

Land Title Act 1994 s 184

'‘An instrument does not transfer or create an interest in a lot at law until it is registered.’

EQUITABLE INTERESTS AND UNREGISTERED INSTRUMENTS

Courts have consistently recognized unregistered interests in Torrens land.

Barry v Heider (1914) 19 CLR 197 High Court

CAVEAT PROVISIONS
(protection of unregistered interests)

Caveats


primary avenue for protecting an unregistered interest in land

The holder of an equitable interest in land is clearly vulnerable to registered interests in Torrens land. The caveat provisions provide a mechanism of protection to holders on such interests.

Land Title Act 1994 (Qld) ss 122, 124

s 124 LTA, the lodgement of the caveat has the effect of forbidding the registration of a person as a transferee, or proprietor, or an instrument which may affect the estate or interest

s 122 lodged in accordance with s 122 by the holder of the unregistered interests, by the Registrar, or by a registered owner.

Nature of a caveatable interest

Caveats can be lodged in relation to estates or interests in land

It is not necessary for a caveatable interest to be a ‘registrable’ interest.

What is required is that the caveatable interest in one for which equity will give specific relief.

Land Title Act 1994 (Qld) 122(1)(c) and 126(1)(a) LTA

Requirements for caveats

Land Title Act 1994 (Qld) 121

Caveats must be lodged in a particular form and manner.

Kerabee Park Pty Ltd v Daley (1914) 19 CLR 197 High Court

This was a NSW case however in Queensland Part 7 Division 2 LTA are the governing provisions

Under the LTA, when the caveator (the person who assets a caveatable interest-described above) has lodged a caveat, the caveator must take legal action to establish the validity of the claim under the caveat. This must be done pursuant to s 126 LTA

Removing Caveats

Land Title Act 1994 (Qld) 127

Kerabee Park Pty Ltd v Daley


where Holland J made comments on the discretion of the court in relation to the removal of caveats.

Caveats lodged without reasonable cause

COMPETING EQUITABLE INTERESTS

The test and its theoretical basis

Abigail v Lapin [1934] AC 491

the case was one in which the equitable interest of the appellant was derived from a RP who had come to that place on the register by the misuse of his authority from the respondents and possession of the duplicate CT. That interest was in competition with the equitable interest of the respondents, as mortgagors.

Abigail had been misled by the representations of Heavener to the effect that there was no outstanding equitable interest over the land. To that extent failure to lodge a caveat was superfluous to the question of postponement for the Privy Council in this instance

Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326 High Court

a more general and flexible principle that preference should be given to what is the better equity in an examination of the relevant circumstances. It will always be necessary to characterize the conduct of the holder of the earlier interest in order to determine whether, in all the circumstances, that conduct is such that, in fairness and in justice, the earlier interest should be postponed to the later interest.”[33]

AG (CQ) Pty Ltd v A&T Promotions Pty Ltd [2010] QCC 83 Supreme Court of Queensland, Court of Appeal

Retaining the title deeds

J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546

The arming conduct scenario

Failure to lodge a caveat may be an important factor in determining priority. This will still be the case even where the second interest holder searches the title.

The importance of caveating

Black v Garnock (2007) 230 CLR 438

The relevance of notice in equitable priorities

Platzer v Commonwealth Bank of Australia [1997] 1 Qd RCLR 266 Court of Appeal

Application of the test

The courts have focused attention on the conduct of the first equitable interest holder

The competition between unregistered interests can be groups as follows

a) Where the RP arms a 3rd party with the means to become the RP and another purchases an interest in the lot from the new RP: Abigail; Breskvar; Heid; and

b) Where the RP creates 2 inconsistent unregistered interests: J & H Just; and Platzer v CBA [Qd R]

Priority Notices in Queensland under the LTA

See Part 7A (Ss 138-152) Land Title Act 1994 (Qld)

Intended to be a cheap alternative to caveating. The provisions largely mirror the caveating provisions in the LTA discussed above but with some differences. The Settlement Notice is NOT a registrable instrument but operates as an administrative advice under s 34 of the LTA.

Lodging the relevant documents for registration: IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550

COMPENSATION FOR LOSS

Land Title Act 1994 (Qld) Ss 188-190

general working rule for torrens land a registered interest is a legal interest and unregistered interest is an equitable interest

Caveator person whose in favor of the caveat being lodged


Caveatee someone who has an interest in the lot over which the caveat has been lodged whether they are registered proprietor or not

must be a interest in the land a mere personal or contractual right will not support a caveat

Examples where a caveatable interest exists

see text page 431 - 432

Examples where an interest claimed is not a caveatable interest

see text page 432 - 433

Conditional Contract

Re Henderson's Caveat

Mere equity

competing views

Re Henderson's Caveat

the nature of mere equity is sufficient to support a caveat

Mijo Developments Pty Ltd v Royal Agnes Water Pty Ltd [2007] NSWSC

mere characterization of an interest as a mere equity does not assist in determining whether a claim is a cavetable interest

Four ways can be removed from indefeasible title - see text pg 411

Compensation for improper caveat

Land Title Act 1994 (Qld) 130

Beca Development Test

see text 454