Beardsley v Registrar of Titles

[1992] QCA 347

IN THE COURT OF APPEAL

[1992] QCA 347

QUEENSLAND

Appeal No. 97 of 1992

BETWEEN:

MARIE BEARDSLEY (otherwise

known as MARY BEARDSLEY)

(Plaintiff) Appellant

- and -

REGISTRAR OF TITLES

(First Defendant)

Respondent

- and -

THE REGISTRAR-GENERAL

(Second Defendant)

The President
Mr Justice McPherson

Mr Justice Davies

Judgment of the Court delivered the twelfth day

of October, 1992

APPEAL DISMISSED WITH COSTS TO BE TAXED

IN THE COURT OF APPEAL

QUEENSLAND

Appeal No. 97 of 1992

Before the Court of Appeal
The President
Mr. Justice McPherson

Mr. Justice Davies

BETWEEN:

MARIE BEARDSLEY (otherwise

known as MARY BEARDSLEY)

(Plaintiff) Appellant

- and -

REGISTRAR OF TITLES

(First Defendant)

Respondent

- and -

THE REGISTRAR-GENERAL

(Second Defendant)

REASONS FOR JUDGMENT OF THE COURT

Delivered the twelfth day of October 1992

MINUTE OF ORDER:	Appeal dismissed with costs to be taxed
CATCHWORDS:	Mortgages. Rights and liabilities of parties. Appellant's property sold by mortgagee under power of sale after appellant's husband forged her signature on mortgage - whether deprived of estate - whether recoverable loss sustained - whether person who derived benefits adjudged insolvent - whether cause of action arose on bankruptcy.
Counsel:	Mr L. Harrison Q.C. with him Mr H. Linacre for the appellant
Mr P.A. Keane Q.C. with him Mr B.J. Clarke for the respondent
Solicitors:	Messrs. Cooper, Grace and Ward as t/a for Messrs. McDonald, Balanda and Chesters for the appellant
Crown Solicitors Office for the respondent

Hearing date: 7th August 1992
IN THE COURT OF APPEAL

QUEENSLAND

Appeal No. 97 of 1992

BETWEEN:

MARIE BEARDSLEY (otherwise

known as MARY BEARDSLEY)

(Plaintiff) Appellant

- and -

REGISTRAR OF TITLES

(First Defendant)

Respondent

- and -

THE REGISTRAR-GENERAL

(Second Defendant)

REASONS FOR JUDGMENT OF THE COURT

Delivered the twelfth day of October 1992

This is an appeal from a judgment dated 30 April 1992

dismissing the appellant's action for damages with costs,

including reserved costs, to be taxed.

The appellant and her husband were registered

proprietors as joint tenants of a home unit on the Gold
Coast. On 23 February 1984, a mortgage over the property in
favour of National Westminster Finance Australia Limited was
registered, number H202302. On 8 June 1984, a further
mortgage over the property in favour of Gold Coast Credit
Union was registered number H297131 The appellant's husband
had forged the appellant's signature to both mortgages.

Both parties accepted that the mortgages were valid and

binding on the appellant. On 12 February 1988, the first
mortgagee obtained an order for possession of the property,
which it sold on 30 June that year. When the sale was
completed on 26 July 1988, the proceeds were insufficient to
pay the second mortgagee in full and the appellant received
nothing. The appellant's husband became bankrupt on 17
October 1988. The purchasers from the first mortgagee were
registered on 9 December 1988. The appellant commenced the
present action on 14 December, 1990.

According to her notice of appeal, the judgment sought

by the appellant against the respondent, the Registrar of
Titles, is for the value of the appellant's half interest in
the property "as at the date on which she was deprived of
that interest", which is stated alternatively as 12
February, 30 June, 26 July or 9 December 1988. However,
without objection from the respondent, the appeal was argued
on a wider basis which included as a further possibility
that the appellant had earlier been deprived of an interest

in the property when the mortgages were registered in 1984.

The respondent accepted and himself contended that a

deprivation had occurred at that time in support of the
submission that, throughout the relevant part of 1988, the
appellant had no interest in the property of which she could
be deprived or at least that her interest then was
valueless. The parties agreed that the amounts owed to the
mortgagees exceeded the value of the property at all

material times.

The appellant's claim is based upon either s.127 or

s.128 of the Real Property Act 1861. Ss. 126, 127 and 128

relevantly provide:

"126. Persons defrauded may bring action against

fraudulent proprietor for damages. Any person deprived
of any land or of any estate or interest in land in
consequence of fraud or in consequence of the issue of
a certificate of title to any other person or in
consequence of any recording in the register or of any
error or omission in any certificate of title or in any
recording in the register may bring and prosecute an
action at law in the Supreme Court for the recovery of
damages against the person who derived benefit by such
fraud or in consequence of the issue of such
certificate of title or by such certificate of title or
by such recording or in consequence of such error or
omission.

Provided always that no such action shall lie or be sustained unless the same shall be commenced within six years from the date of such deprivation except nevertheless that any person being under the disability of infancy or mental sickness may bring such action within six years from the date on which such disability shall have ceased.

Saving the case of a purchaser or mortgagee for
valuable consideration. Provided also that nothing in
this Act contained shall be interpreted to subject to
any action of ejectment or for recovery of damages any
purchaser or mortgagee bona fide for valuable
consideration of any land under the provisions of this
Act although his vendor or mortgagor may have been
registered as proprietor through fraud or error or may
have derived from or through a person registered as
proprietor through fraud or error whether by wrong

description of land or of its boundaries or otherwise.

127. If registered proprietor be dead action to be
against Registrar-General as nominal defendant. In
case the person against whom such action for damages is
directed to be brought shall be dead or shall have been
adjudged insolvent or shall have absconded out of the
jurisdiction of the Supreme Court then in such case it
shall be lawful to bring an action for damages against
the Registrar-General as nominal defendant for the
purposes of recovering the amount of the said damages
and costs against the assurance fund hereinbefore
described and in any such case and also in any case in
which damages may be awarded in any action against the
person deriving benefit by any fraud or in consequence
of the issue of any certificate of title or otherwise
as aforesaid and the Sheriff shall make a return of
nulla bona or shall certify that the full amount with
costs awarded cannot be recovered from such person the
Treasurer of the Colony upon receipt of a certificate
of a Judge of the Supreme Court and of a warrant under
the hand of the Governor as hereinafter provided shall
pay the amount of such damages and costs or the
unrecovered balance thereof as the case may be and
shall charge the same to the account of the assurance
fund.

Provided always that the assurance fund shall not be liable for payment of any damages after the expiration of six years from the time when the cause of action arose.

Provided also that any person so absconding beyond the
jurisdiction if subsequently found within the
jurisdiction shall be liable to be sued in the name of
the Registrar-General for the amount of the damages and

costs so recovered from the assurance fund.

128. Actions for recovery of damages may in certain
cases be brought against the Registrar-General as
nominal defendant. Every action which shall be brought
by any person to recover damages for or by reason of
any loss or damage occasioned by any omission mistake
or misfeasance of the Registrar-General or any of his
officers or clerks in the execution of their duties
under the provisions of this Act shall be brought
against the Registrar-General as nominal defendant and
in case in any such action the plaintiff recover final
judgment against such nominal defendant then upon the
application or motion of such plaintiff any Judge of
the Supreme Court shall and he is hereby directed to
certify to the Treasurer the fact of such judgment
having been recovered and the amount of damages and
costs recovered.

Treasurer on receipt of warrant from Governor to pay amount of award. and thereupon or before the expiration of two calendar months after such judgment is so certified the said Treasurer upon the receipt of a warrant under the hand of the Governor shall pay the amount of such damages and costs to the person recovering the same his executors or administrators and shall charge the same to the account of the assurance fund hereinbefore described.

Process and notice to be served on Attorney-General.
Provided also that the Registrar-General shall not be
personally chargeable upon any judgment recovered as
aforesaid nor shall any process or notice in or
relating to any such action be served upon the
Registrar-General but all such processes and notices
shall be served upon the Attorney-General for the time

being."

The appellant's alternative arguments in relation to

her claim based on s.127 may be summarised as follows:

(a) The appellant was deprived of land or an estate or
interest in land within the meaning of s.126 when:

(i) the mortgages were registered in 1984;

(ii) she was ejected from possession in 1988;

(iii) the property was sold in 1988.

(It is unnecessary for present purposes to consider
whether the deprivation referred to in paragraph
(a)(iii) occurred upon registration of the transfer to
the purchaser or earlier, upon the execution or
completion of the contract for the sale of the unit by
the mortgagee).

(b) Each deprivation was "in consequence of" the fraud

of her husband within the meaning of s.126.

(c) Her husband was "the person who derived benefit by
such fraud" within the meaning of that section.
(d) Her husband was "the person against whom such
action for damages is directed to be brought" and had
been "judged insolvent" within the meaning of s.127.
(e) Accordingly, s.127 entitled the appellant to bring
an action for damages against the respondent "for the
purposes of recovering the amount of the said damages
and costs".
(f) That the "cause of action arose" within the
meaning of s.127 only when the appellant's husband
became bankrupt on 17 October 1988 and, therefore, her
action against the respondent was not instituted
outside the period permitted by the proviso to s.127.

Although the appellant based an alternative submission

upon the proposition that she had been deprived of an estate
or interest in land when the mortgages were registered in
1984, (paragraph (a)(i)), her primary case was that there
was no relevant deprivation of land, or of an estate or
interest in land, until the property was sold by the first
mortgagee in 1988, or alternatively earlier that year when
she was evicted from possession. The premise upon which
this case was grounded appeared to be that, despite the
mortgages, ownership and rights of possession and present
enjoyment were retained by the registered proprietors, who
might have been able to obtain a release of the mortgages.
This proposition was associated with the further assertion
that any deprivation of an estate or interest in the land by
reason of the mortgages was contingent only since the
appellant, might not have been required to pay the mortgage
debts, her fraudulent husband having had the intention of
doing so.

Plainly, the circumstance that the mortgages did not

wholly and irrevocably deprive the appellant of her entire
estate or interest in the land does not mean that they did
not deprive her of any estate or interest at all. Logic
and authority support the conclusion that they did. After
the mortgages were registered, although the appellant
retained the fee simple she had been pro tanto deprived of
the land which was encumbered by the mortgages; the estate
or interest of which she had been deprived corresponded with
the estate or interest of the mortgagees. See Messer. v.
Gibbs (1887) 13 VLR 854, 872; affirmed on appeal 13 VLR 876
and on this point by the Privy Council (1891) A.C. 248 at
p.253; Registrar of Titles (W.A.) v. Franzon (1975) WAR 107,
110; (1975) 132 CLR 611, 168; Northside Developments Pty.
Ltd. v. Registrar-General (N.S.W.) (1989) 170 CLR 146, 209-
210; Parker v. Registrar-General (1976) 1 NSWLR 342, 356;
(1977) 1 NSWLR 22, 28; Queensland Trustees Ltd. v. Registrar
of Titles (1893) 5 QLJ 46, 49; Hayes v. Bourne (1897) 7 QLJ
146, 148; Cox v. Bourne (1896) 7 QLJ 53; Cox v.
Bourne(No.2) (1897) 8 QLJ 66; Finucane v. Registrar of

Titles (1902) St. R.Qd. 75, 94.

It is clear that the appellant was also deprived of an

interest in the property when it was sold by the first
mortgagee in 1988, and perhaps earlier in the same year when
she was evicted from possession. However, it was not argued
for the appellant that the possession which she had enjoyed
prior to eviction was more valuable than the fee simple of
which it was an incident, and the parties' agreement as to
the value of the property at material times demonstrated
that the fee simple encumbered by the mortgages was
valueless.

S.126 does not entitle a person deprived of an interest

in land by fraud to recover all loss attributable to the
fraud, including any loss caused by an earlier deprivation
of another interest in the land. The section provides a
right to recover the loss caused by the deprivation relied
on, which is ordinarily measured by reference to the value
of the land, or interest, of which the person seeking
damages was relevantly deprived. Accordingly, if all else
is assumed in her favour, the appellant sustained no loss
recoverable under s.126 when she was dispossessed and the
property was sold in 1988.

The appellant's claim based on s.127 therefore falls to be determined by reference to the deprivation of an interest in the land which the respondent suffered when the mortgages were registered in 1984.

The respondent acknowledged that the appellant suffered

that deprivation "in consequence of" the fraud of her
husband, that he had been "judged insolvent" and that "the
person who derived benefit by" her husband's fraud within
the meaning of s.126 was "the person against whom such
action for damages is directed to be brought" within the
meaning of s.127. However, it was submitted for the
respondent that the appellant's husband was not "the person
who derived benefit by" his fraud and that, accordingly, he
was not "the person against whom such action was directed to
be brought" for the purposes of s.127, so that, when he
became bankrupt, that section did not entitle the appellant
to bring an action against the respondent "for the purposes
of recovering the amount of the said damages and costs". The
respondent further submitted that, in any event, the "cause
of action" referred to in the first proviso to s.127 was not
the action against the respondent created by s.127 but the
"action for damages" first referred to in that section; that
is, the action for damages created by s.126 "against the
person who derived benefit by" the fraud. The respondent
also relied upon sub-s.10(1) of the Limitation of Action Act
1974 but, other considerations aside, we do not think that
that general provision can have any relevant operation which
is inconsistent with the specific provision made in the
first proviso to s.127.

In Breskvar v. White (1978) Qd.R. 187, Connolly J. held

that the first proviso to s.127 operated to exempt the
assurance fund from liability for payment of a judgment for
damages which had been recovered under s.126 but which was
unsatisfied and in respect of which the sheriff had made a
return of nulla bona. His Honour held that the liability of
the fund ceased six years from the time when the cause of
action which had led to the judgment under s.126 had arisen.
While that conclusion seems clear enough, it is necessary to
understand statements made in that case in the context of
the argument which was addressed by the unsuccessful
applicant for payment out of the fund, namely, "that the
first proviso to s.127 has nothing to say in relation to
judgments recovered under s.126.": at p.191B.

Both parties in that case accepted that the first limb

of s.127 created a separate cause of action against the
present respondent as nominal defendant. The issue there
was whether, as the applicant contended, the first proviso
to s.127 was limited "to the newly created statutory cause
of action which is the subject of the earlier part of the
section itself" (p.191A-B), or whether, as was contended by
the respondent in that case, the "first proviso to s.127 ...
applies whenever payment of any damages is sought from the
assurance fund." (p.191B-C). In concluding that the latter
view was correct, Connolly J. expressed views which are
relied upon by the present appellant.

At p.191C-E, his Honour said:

"I should say first that in my opinion the first limb
of s.127 creates a fresh statutory cause of action
which is related to, but not the same as, that which is
created by s.126. The arising of the cause of action
under the first limb of s.127 requires a concurrence of
the existence of a cause of action under s.126 and
either the death, insolvency or absconding of the
person benefited. When the Court said in Finucane's
case (supra.) at p.95 that the cause of action in s.127
is the same thing which is described in s.126 as the
deprivation it was in a context in which the insolvency
of the person benefited had already occurred but the
deprivation ... was held to lie in the future. The
Crown contends that the cause of action under the first
limb of s.127 is alternative to that which is created
by s.126 and I incline to think this is correct
although it is unnecessary to express a concluded

opinion on the point."

Later, at p.191G to p.192D, his Honour said:

"... . The second limb of s.127 deals with all of the
situations in which judgments fall to be satisfied out
of the fund. The causes of action upon which these
judgments are recovered are those created by ss.126 and
127. The first proviso to s.127 does not in truth
limit the time within which actions may be brought and
to treat it as confining payment out of the fund to
cases in which the judgment is brought on the cause of
action created by the first limb of s.127 is to give it
a restricted application for which, as it seems to me,
there is no warrant in the language. If it had been
intended to provide a limitation period in respect of
actions under the first limb it would I think have been
more natural to have used the form of words employed in
the first proviso to s.126 and to provide that no such
action should lie or be sustained after the chosen

period.

The conclusion to which I have come accepts the
anomalous situation to which I have referred above in
relation to causes of action under s.126. But the
situation under the first limb of s.127 is really not
very different. The claimant must still not merely
initiate his proceedings but carry them to the point at
which he can perfect a judgment which entitles him to
present payment from the fund and obtain the
Governor's warrant within six years of the death,
insolvency or absconding of the person benefited. The
provision is stringent but in my view no other reading
is open."
Contrary to what is stated in the paragraph last

quoted, the situation under the first limb of s.127 as
interpreted by his Honour is quite different from what he
referred to as "the anomalous situation ... in relation to
causes of action under s.126." In discussing that anomalous

situation at p.191E-G, his Honour had concluded that,
although the first proviso to s.126 provides six years from
the date of deprivation of the land or an estate or interest
in land for the commencement of an action for damages under
that section, the first proviso to s.127 makes that period
of limitation illusory in that it requires that, within six
years of the deprivation, not merely that the action under
s.126 has been instituted but that judgment has been
obtained together with a certificate and a warrant as
provided by s.127. On the other hand, according to his
Honour, a person deprived of land or an estate or interest
in land who relies upon the first limb of s.127 does not
have six years from deprivation to institute proceedings and
obtain judgment and a certificate and warrant but six years
from the deprivation or from the death, insolvency or
absconding of the person benefited, whichever is the later.

The sole basis for this view of the first limb of s.127

was the notion that the cause of action provided by s.126
against a person who derived benefit by the fraud is
different from the cause of action provided by the first
limb of s.127 against the present respondent, and that the
latter is only complete when the person who derived benefit
by the fraud is dead or has been adjudged insolvent or
absconded. While it is correct that action may not be
brought against the present respondent unless the person who
derived benefit by fraud is dead or has been adjudged
insolvent or absconded, and that that circumstance must be
proved in an action under the first limb of s.127, it does
not necessarily follow that the cause of action against the
present respondent under the first limb of s.127 is a
different cause of action from that provided against the
person who derived benefit by the fraud under s.126. The
better view is that it is the same cause of action which, by
the first limb of s.127, is able to be brought against a
different person in the event that the person otherwise
liable under s.126 is dead or has been adjudged insolvent or
absconded.

There are aspects of the language of s.127 which may be

urged against such a construction. For example, the
position would be clearer if the second reference to "action
for damages" in s.127 were preceded by the article "the"
rather than the article "an", and if the first proviso to
s.127 did not limit the material period "from the time when
the cause of action arose" but repeated the language of the
first proviso to s.126 and limited the period "from the date
of such deprivation".

On the other hand, the construction preferred by this

Court provides a greater symmetry and logic to ss.126 and
127 and is consistent with the purpose of the assurance fund
according to s.42. The construction adopted also avoids the
consequence that the first proviso to s.126 would otherwise
be deprived of practical effect. Since every person must
eventually die, every person deprived of any land or of any
estate or interest in land whose action against a person who
derived benefit by such fraud had become barred by the first
proviso to s.126 would otherwise be provided with a fresh
cause of action against the present respondent by the first
limb of s.127 upon the death of the person who had derived
benefit by the fraud, even if that did not occur for
decades. See also Finucane v. Registrar of Titles at p.95
and Cox v. Bourne (8 QLJ) at p.69.
In these circumstances, it is unnecessary to consider
whether the appellant's husband was the person who derived
benefit by his fraud within the meaning of s.126, and
whether she therefore had an action under s.126 against him
or has an action against the present respondent under s.127.
If so, any entitlement which she had to obtain payment of
her damages from the assurance fund expired after the
expiration of six years from, at the latest, 8 June 1984,
when the second of the mortgages was registered; that is, a
little more than six months prior to the commencement of the

current action.

The appellant's other claim was based upon s.128. It

was accepted for the appellant that she did not have a cause
of action "to recover damages for or by reason of any loss
or damage occasioned by any omission, mistake or misfeasance
"of the respondent" or any of his officers or clerks in the
execution of their duties under the provisions of this Act"
unless such an action was created by s.128. On this
footing, it would be a sufficient answer to the appellant's
claim that s.128 does not seem to create a fresh cause of
action but to prescribe how a cause of action which
otherwise exists is to be enforced and any judgment

recovered is to be satisfied. The language of s.128 is

materially different from analogous sections elsewhere which
have been held to give rise to a new cause of action: see,
eg., Papworth v. Williams (1900) AC 563 and the cases cited
in Registrar-General v. Behn (1980) 1 NSWLR 589, 594.

Further, the authorities suggest other obstacles to the

success of this claim. For example, the only "omission,
mistake or misfeasance" which the appellant was able to
suggest had caused her "any loss or damage" was mistaken
registration of the mortgages which had not been duly signed
and attested. The proposition that loss or damage caused by
mistaken registration in such circumstances is recoverable
cannot be reconciled with Registry of Titles (W.A.) v.
Franzon (132 CLR) at p.610. See also Finucane at p.97;
Messer v. Gibbs; Davies v. Ryan (1951) VLR 283; and Mayer v.
Coe (1968) 88 WN (Pt.1) (NSW) 549.

The appellant has failed to establish either basis for her claim. Accordingly, the appeal is dismissed, with costs to be taxed.