The Threat to Torrens System Posed by Exceptions to Indefeasibility and 'Overriding Statutes'

The effect of registration of an interest in Torrens land is to obtain the registered proprietor an indefeasible cognomen to that interest. The Real Property performance 1900 (NSW) (hereby referred to as RP) in s 42(1) confirms that upon registration the registered proprietor acquires his or her interest free of unregistered interests. This is so even if the registered proprietor, anterior to registration, has notice of such unregistered interests.

However, the concept of indefeasible statute title of respect is not as absolute as it may appear. Exceptions to indefeasibility exist. Where thither is an exception to indefeasibility the effect is that the registered proprietor acquires his or her interest reconcile to the unregistered interest that arises pursuant to the relevant exception. The effect of the exceptions to indefeasibility is to bring priority to holders of unregistered interests over the holders of registered interests in Torrens title land.

The legal age of exceptions to indefeasibility are created by s 42(1) of the RP Act, along with the power of reverse statutes.

Fraud

        By s 42 RP an exception to the indefeasible title of a registered proprietor is created in cases of fake. The ruse must occupy to the current state of the title. Fraud by predecessors in title will not affect the current registered proprietor.



The essence of the hoax exception is that the fraud must relate to the circumstances in which the registered proprietor obtained his or her registered interest.

The RP does not however set unwrap a comprehensive definition of fraud, although it does stipulate that fraud includes fraud involving a fictitious person.

In Assets Co Ltd v Mere Roihi (1905) AC 176, at 210, the Privy Council defined fraud as follows:

[B]y fraud in [the Act] is meant actual fraud, that is dishonesty of some sort, not what is called shaping or...

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