Custodian of Expropriated Property v Tedep

[1964] HCA 75

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Kitto, Taylor and Menzies JJ.

CUSTODIAN OF EXPROPRIATED PROPERTY v. TEDEP

(1964) 113 CLR 318

30 November 1964

Torrens System

Torrens System—Territory of Papua and New Guinea—Title—Registration as proprietor of an estate in fee simple—Indefeasibility—Elaborate procedure for safeguarding native rights observed prior to registration—Destruction of register during Japanese occupation—Procedure for entry on new register—Claim to ownership by group of natives—Based on events occurring prior to original registration—Whether destruction of register affected title of registered proprietor—System or custom of land tenure or of succession to land or transmission of land in use amongst natives—Effect of registration thereon—Lands Registration Ordinance 1924 (Papua and New Guinea), 55, 40, 41, 57, 68—Lands Registration Ordinance 1924 as amended, s. 40—National Security (External Territories) Regulations 1944, reg. 21A—Lost Registers Ordinance 1950 (Papua and New Guinea), ss. 5, 7—New Guinea Land Titles Restoration Ordinance 1951 (Papua and New Guinea), ss. 9, 10, 31, 34-37, 39, 40, 45.

Decision

THE COURT delivered the following written judgment:-
On 15th May 1928 the Custodian of Expropriated Property (hereinafter referred to as the appellant) became registered as the proprietor of an estate in fee simple in approximately 466 hectares of land situated in the Gazelle Peninsula. The registration was effected pursuant to the Lands Registration Ordinance 1924 as amended to that date and the only encumbrance noted on the register or upon the duplicate certificate of title was one, in favour of the Administration of the Territory, relating to certain minerals and precious stones and other matters not material to this appeal. Such registration took place after observance of the elaborate procedure, designed to safe-guard native rights, to which we will refer in detail later. This was the state of the register when in 1942 it was destroyed during the Japanese occupation. Also destroyed was the duplicate certificate of title which had been lodged at the Registry by the appellant for the purpose of effecting registration of a dealing relating to a small portion of the land. The balance of the land, comprising between 465 and 466 hectares, we shall hereafter refer to as the subject land. (at p325)

2. After the termination of the war the appellant made an application pursuant to the New Guinea Land Titles Restoration Ordinance (hereinafter referred to as the Land Titles Restoration Ordinance) and upon that application the Commissioner of Titles appointed under that Ordinance made a provisional order declaring that it had been established that on the appointed date - 10th January 1952 - the appellant was the owner of an estate in fee simple in the subject land subject to the encumbrance abovementioned. There was no difficulty in establishing the state the register would have been in on the appointed day had it not been destroyed for the appellant held an examined copy of the certificate of title and there had been no dealing with the subject land since the preparation of the examined copy. Following the making of the provisional order the procedure prescribed by Pt III of the lastmentioned Ordinance was followed and it resulted in the Director of District Services and Native Affairs referring to the Commissioner "the question of native customary rights in which the respective natives and native communities listed hereunder asserr that, on the appointed day, they were entitled, in relation to the parcels of land described hereunder". The actual claim which was made asserted ownership of the subject land by a group of community of Tolai natives. The ground of the claim was that the subject land had never been legally alienated by them or by their ancestors, that one portion of the land had been illegally sold by one Tokitane and that the remainder of the land had been illegally confiscated by the Imperial German Government about 1902 or 1903. The group of natives specified in the claim, and who are respondents to this appeal, were represented before the Commissioner who, however, rejected their claim and made a final order confirming his provisional order, declaring "that no native customary rights were retained on the appointed date by a native or native community in respect of the land" and directing the Registrar of Titles to bind up an appropriate certificate of title in the register and to issue a duplicate thereof to the appellant. The final order was made on 26th August 1960 and on 20th December 1960 the registration of a new certificate of title was effected and a duplicate issued to the appellant, the certificate of title declaring that the appellant "is now seised for an estate in fee simple" in the subject land subject only to the encumbrance already mentioned. Subsequently, on 18th April 1961, the whole of the subject land was transferred by the appellant to the respondent Mrs. Norah Ellen Richards, the sole beneficiary of her late husband, one Tom Vernon Garrett, who on 9th July 1926 had entered into a contract to purchase the subject land from the appellant for the sum of 12,500 pounds. Of this sum five per centum was payable by way of deposit and the balance "in the manner, at the times and with the interest" prescribed by the Treaty of Peace Regulations made under the Treaty of Peace (Germany) Act 1919-1920 (Cth). The full amount of the purchase money had been paid to the appellant by 1948. (at p326)

3. However, on 2nd February 1962 the group of Tolai natives who were named in the Director's reference previously mentioned and who, as already appears, are respondents to this appeal, on behalf of themselves and their vunatarai, instituted an appeal to the Supreme Court of the Territory of Papua and New Guinea by which they sought an order discharging the Commissioner's final order and a declaration that under the Land Titles Restoration Ordinance they were on the appointed date the lawful owners of the subject land under and by virtue of rights recognized by native custom and preserved by s. 9 of the Laws Repeal and Adopting Ordinance 1921-1952. In the result the appeal succeeded in part and they obtained an order declaring that the ownership of a substantial portion of the subject land "was at the said appointed date vested by law and by virtue of native customary rights recognized by law in a group of native vunatarai communities represented by and including the appellants". The order further directed that the certificate of title already issued should "bear . . . an endorsement appropriate to the practice of the Registrar of Titles to signify that an encumbrance created by the operation of the New Guinea Land Titles Restoration Ordinance has arisen by virtue of this final order in favour of the native community in question and constitutes unrestricted ownership and right to use and enjoy" that parcel of land and that this "be followed by a dealing appropriate to the practice of the Registrar of Titles recording that this portion of the land has by operation of law and by the direction of the Court become vested in the Director of Native Affairs as a Native Reserve on behalf of the said communities entitled to the land by law and by native custom". The form of order is open to a number of objections but it is sufficient, at least for the moment, to indicate its substantial content. The appeal to the Supreme Court was taken pursuant to s. 54 of the Land Titles Restoration Ordinance which provides that a person aggrieved by a final order of the Commissioner may "within thirty days after service on him of the copy of the notice specified in Section 45 of this Ordinance, appeal to the Supreme Court against that order". In fact, the final order had, in conformity with s. 45, been served upon the Director of Native Affairs on 1st September 1960 so that a period of some seventeen months elapsed after that date before the appeal was instituted. But it was contended for the appellants before the Supreme Court that they fell within the description contained in s. 45 - "any other persons whom he (i.e. the Director) knows to be affected by the final order" - and that, since the Commissioner had not caused copies of his final order to be forwarded by registered post to the members of the native community, they were still at liberty to launch an appeal to the Supreme Court. Whether this was so or not is in our view open to considerable doubt, particularly when a comparison is made between the provisions of s. 45 and s. 34, to which the former section refers, and when it is borne in mind that s. 38 provides that at any hearing or proceedings under the Ordinance involving questions as to the ownership by natives or a native community of any native customary rights, the Director shall present the case for the native community, and shall arrange any such legal or other representation of the native or native community as he considers necessary. However, it is neither necessary nor desirable for us to attempt to resolve the problem for it seems that no objection to the competency of the appeal was really raised at the appropriate time and the question is unlikely to arise again in view of the form of the new s. 45, inserted by s. 36 of the New Guinea Land Titles Restoration Ordinance 1962, and the provisions of s. 51 of the Land Titles Commission Ordinance 1962. Nevertheless the fact remains that prior to the institution of the appeal a new certificate of title issued and the transfer to Mrs. Richards was registered and this is one difficulty which lay in the way of the learned Chief Justice making the order which he did. This is a matter to which we will again refer but, before leaving it, mention may be made of the fact that there was evidence that the established practice as between the Commissioner and the Registrar was that no final orders should be delivered to the latter until service in accordance with s. 45 had been completed and that, thereafter, the Registrar would take no further action for a period of thirty days so that, in the instant case, the Registrar assumed, upon receipt of the final order, that all necessary parties had been served and, having ascertained after the expiration of thirty days, that no appeal had been lodged he proceeded to implement the order by effecting the necessary registration and by issuing a duplicate certificate of title to the appellant. We further mention that although service was not effected on each member of the native community by forwarding a copy of the order by registered post the Director caused the copy of the order which had been served upon him to be sent to Rabaul where a meeting took place at which the native respondents to this appeal and others of the same group were informed that the order had been made and were, apparently, informed of its substance. Yet for what it is worth nothing was done in the way of instituting an appeal until 2nd February 1962 and, in the meantime, the transfer to Mrs. Richards was duly registered. (at p328)

4. The title to which the appellant succeeded was that of one Wolff, a German national, who was in possession of the land at least from 1904 until the displacement of the former German Administration. His name appears in the Land Register kept by that Administration in the colony of New Guinea under the laws in force prior to 9th May 1921, as the owner of the subject land and from this register it appears that this entry was made on 29th February 1904 "in pursuance of the contracts of purchase and sale of 4th July 1901 and 21st July 1903". It was this title which the appellant held at the time of the sale to Garrett and which was subsequently converted into an estate in fee simple when the subject land was brought under the provisions of the Lands Registration Ordinance 1924. Under s. 16 of that Ordinance it became the duty of the Registrar of Titles, in cases where any land or estate or interest in land was registered in the Land Register, to proceed to bring the land under the Ordinance in accordance with the provisions thereof. The first step in this process was the preparation of a draft certificate of title (s. 19) which it was permissible to base upon the entry in the Land Register (s. 20) except in cases where it appeared to the Registrar that any person registered in the Land Register as the owner of any land was no longer entitled to registration, in which event he was to enter in the draft certificate the name of the person who, in his opinion, had become entitled to registration instead of the person so registered. After preparation of the draft certificate the Registrar was required to serve the same together with a notice in a prescribed form upon the persons specified in s. 21. One of the persons specified in s. 21 was the Commissioner of Native Affairs and by s. 26 (4) it was provided that the fact that no native rights were registered in the Land Register, or that the registration of any such rights therein had been cancelled, was not of itself to be taken to be any evidence that those rights did not exist. The form of notice was to the effect that it was proposed to register the land described in the draft certificate under the provisions of the Ordinance and it afforded to the recipient the opportunity of lodging objections within a specified time. Upon recept of the notice the Commissioner of Native Affairs was bound by s. 22, as it stood at the relevant time, forthwith, to cause a notice to be published in the New Guinea Gazette and to be posted at the office of the District Officer in the district in which the land was situated specifying that he had been so served and that claims by natives or native communities to rights over the land might be lodged with him within three months after the date of the publication of the notice. He was also bound to cause to be made upon and in the locality of the land any inquiries which he should think necessary and, at the expiration of the period specified in the notice, to certify to the Registrar by writing under his hand - "(1) that there are no natives dwelling on the land to be registered, other than natives employed by the person in possession of the land, and (2) that, after careful inquiry, he is satisfied that there are no natives or native communities who had any rights over the land other than such as might appear in the Land Register" or, forthwith, refer the question of native rights in connexion with the land to the Central Court for determination unless he had already made that reference in pursuance of s. 24 of the Ordinance. By s. 24 the Commissioner of Native Affairs was bound, whether he had been served with the notice and draft certificate or not, to refer the question of possible native rights in relation to any land to the Court for inquiry and determination in any case where "any natives (other than natives employed by the person in possession of the land) dwell upon any land owned, occupied or used by or for any person other than a native" and, by s. 26, the Court was given jurisdiction to hear and determine any question of the customary or other rights of any natives to or affecting the land in question. There was thus thrown open for examination at this time the whole question of native rights to land in the Territory and it is of importance to notice that the relevant provisions of the Ordinance, to a number of which we have referred, were designed as elaborate safe-guards to ensure that a clean certificate of title should not issue in respect of any land theretofore subject to any form of native rights. It is also of importance to observe that it is not suggested that these elaborate provisions were not observed. On the contrary it was admitted before the learned Chief Justice that the appellants before him, despite a specific search therefor, had no evidence that "the statutory conditions of bringing the land under the operation of the Lands Registration Ordinance were not satisfied"; rather, it was said there was every indication that these conditions were complied with. Indeed there was evidence that a copy of a notice signed by the Commissioner of Native Affairs appeared in the Gazette of 16th June 1927 which, after reciting that the Commissioner had been served by the Registrar with a draft certificate of title and a notice that it was proposed to register the subject land under the provisions of the Ordinance, announced that claims by natives or native communities to rights over any part of the land might be lodged at the office of the Commissioner within three months after the date of the publication of the notice. This notice succeeded an earlier notice published in the Gazette by the Registrar of Titles on 15th January 1926 announcing his intention of registering the appellant as the owner of the subject land and calling for objections. From this evidence it is only proper to assume that in proceeding to bring the land under the provisions of the Ordinance all of the relevant provisions were observed and that no claim was made by or on behalf of any native or native community. We should add that Garrett was in possession of the land at this time and remained so until the Japanese invasion, that after the war his widow resumed possession, that no claim of native rights was made until comparatively recently and that in the interval between 1926 and 1948 Garrett, and after his death, his widow, continued without question, to pay instalments of purchase money to the Custodian. Nevertheless the learned Chief Justice considered himself free at this late stage to embark upon an inquiry as to the validity of the claim now made. (at p330)

5. In our view this conclusion was demonstrably erroneous and again we leave aside the fact that pursuant to the Land Titles Restoration Ordinance a new certificate of title was issued in 1960. The appellant had, as early as 1928, become the registered proprietor of an estate in fee simple in the subject land and, in the language of the Ordinance, he held and continued to hold that estate absolutely free from all prior estates, interests, rights, claims and demands which could or might have been had, made or set up in, to, upon or in respect of the subject land (s. 68). But the learned Chief Justice considered that the destruction of the registers and the provisions of the Land Titles Restoration Ordinance produced a result which left him free to give effect to the claim that the subject land, or part of it, was owned by the native community or communities represented by the native respondents. His Honour seems to have arrived at this conclusion by, first of all, holding that upon the destruction of the registers the title of the appellant as the registered proprietor of the land was destroyed. He took the view that registration under provisions such as those contained in the Ordinance dealt with the subject of ownership only "at an evidentiary and procedural level". "It arms the registered proprietor" he said "with conclusive evidence that he has a clear title, and production of this evidence excludes the possibility of a contrary case being made out by anybody". And "on the assumption that the titles will forever remain on the register, this has the practical effect of conferring a permanent paramount title, but it does not otherwise expressly destroy competing interests; it merely renders them harmless". Further, he added "the whole foundation of the statutory concept of title is destroyed by the destruction of the register itself" and he observed that the legislature had "acted upon the view that the statutory legal title is itself destroyed, and that the process of restoration of titles is no mere matter calling for secondary evidence of what was recorded on that piece of statutory paper, but was regarded as recreating a new statutory right to replace the former right and to owe its validity to the Restoration Ordinance". "On no other view" he said "could the machinery provisions of the New Guinea Land Titles Restoration Ordinance be explained". (at p331)

6. In our view these conceptions are plainly erroneous. The indefeasibility of the title of a registered proprietor under systems of title such as that erected by the Lands Registration Ordinance does not depend upon ability to produce the register or duplicate certificate of title; it depends, in the present case, upon the provisions of the Ordinance itself, and particularly upon s. 68, which, at all relevant times, has remained in force and, by virtue of which, at the moment of and by the act of registration, the estate of the registered proprietor became absolutely free from any prior asserted legal interest not noted on the register. Accordingly the destruction or loss of a register book, accidentally or otherwise, does not destroy the title thus accorded to the registered proprietor. Further there are no grounds for the assumption that in enacting the Land Titles Restoration Ordinance the legislature had acted on the view entertained by his Honour; on the contrary, there is every indication that the machinery provisions of that Ordinance were enacted on the basis of the view which we have expressed. (at p332)

7. It may, and should at this stage be observed, that his Honour's conclusions cannot be supported by any reference to any supposed "policy of protection of native land interests" for if those conclusions are correct one consequence would be the destruction of native rights created by registration since, in any case where native rights had been the subject of registration pursuant either to s. 26 (3) or ss. 38 or 39, upon the destruction of the register it would be necessary to re-assert and re-establish, independently, the existence of native rights in the land. Again, if those conclusions be correct, all titles to land subject to the provisions of the Ordinance would be thrown open leaving every individual, native or not, free to assert a claim not founded on registration or upon a right to registration. (at p332)

8. With these observations in mind we proceed to deal with the Land Titles Restoration Ordinance. Its long title is "An Ordinance to provide for the compilation of new Registers and Official Records relating to Land, Mining and Forestry in the Territory of New Guinea in the place of those lost or destroyed during the Japanese Invasion of that Territory", and it is about as clear as it could be that what the Ordinance proceeds to do is to provide machinery for the restoration and replacement of the destroyed registers. The registers were destroyed in 1942 and the Ordinance, enacted in 1951, makes provision for the fixing of a critical time - "the appointed date" - for the examination of a claimant's right to registration. The appointed date was, as already appears, specified as 10th January 1952 and the persons who were permitted to make a claim under the Ordinance were those who claimed to have been entitled as at 10th January 1952 - "(a) to an interest in land; and (b) to be registered or entered in a lost register as the owner of or the person entitled to that interest (whether or not he was, before the loss or destruction of that register, so registered or entered)." This description embraces those who had, in fact, been registered in the destroyed register and who had not dealt with the land in the period of ten years between the destruction of the registers and the appointed date. It also included persons who had not been so registered but who would have been entitled to registration but for the destruction of the register, the informal nature of, or a misdescription in, a document or the failure of some other person to execute a document which the claimant was entitled in equity to have executed (s. 10). Claims were thus limited to those persons who could show that on the appointed day they would have had a right to be registered if the register had not been destroyed. There are, therefore, excluded as claimants those persons who although they might claim an interest in land, were not registered in respect thereof and were unable to establish that as at the appointed date, they would have been entitled to be registered in the "lost register". This is a clear indication that what was intended was the replacement of the lost registers in the condition in which it was presumed they would have been had they not been destroyed, and, not the preparation of new and different registers giving effect to claims by persons who were unable to establish a right to registration accruing before the appointed date. In this connexion it is important to notice that as early as 1944 temporary provision was made to record dealings with land in the Territory. In the first place, provision was made by reg. 21A of the National Security (External Territories) Regulations. That regulation was in the following form:

"(1) Where any register kept in pursuance of any law of the Territory of Papua or the Territory of New Guinea has been lost or destroyed or is not accessible by reason of circumstances arising out of the present war, the Minister, or a person authorized by the Minister to act under this regulation, may open and keep a register in lieu of that register, and make entries therein as if it were the original register, with such variations of the manner of making any entry as he considers necessary. (2) Where evidence is produced to the satisfaction of the Minister or a person so authorized that any matter or thing may reasonably be presumed to have been entered in any such register so lost, destroyed, or inaccessible, he may, in his discretion - (a) enter in the appropriate register kept in pursuance of this regulation such particulars of that matter or thing as it is established to his satisfaction may reasonably be presumed to have been entered in the register so lost, destroyed or inaccessible, and such other particulars as he considers expedient; and

(b) issue any copy of, or extract from, any register kept in pursuance of this section, or any certificate or other document based on any entry in any such register.

(3) Every entry in a register, and every copy, extract, certificate, or other document, made or issued in pursuance of this regulation shall, in all courts and before all persons, have the same force and effect as if the entry were an entry duly made in the register so lost, destroyed or inaccessible or as if the copy, extract, certificate or other document was based on the register which is lost, destroyed or inaccessible and was duly issued by a person authorized to issue such documents under the law of the Territory of Papua or the Territory of New Guinea, as the case may be. (4) There shall be payable in respect of the issue of any document in pursuance of this regulation the same fee as would be payable in respect of the issue of a similar document under the law of the Territory of Papua or the Territory of New Guinea, as the case may be.

Later, in 1950, the Lost Registers Ordinance was enacted and this had the effect of enabling the register opened and kept pursuant to reg. 21A to be transferred to and kept by an officer appointed by the Administrator. Section 5 of this Ordinance provided that where evidence was produced to the satisfaction of the officer to whom the register had been transferred that any matter or thing might reasonably be presumed to have been entered in the lost register which that register replaced he might, in his discretion, enter in the register such particulars of that matter or thing as it was established to his satisfaction might reasonably be presumed to have been entered in the lost register whilst s. 7 provided that an entry in the replacement register should have the same force and effect as if the entry were an entry duly made in the lost register. No such provision as this could have been enacted on the assumption or in the belief that the destruction of the registers had operated to destroy the effect of entries made therein previously to their destruction. (at p334)

9. It is reasonable to suppose that before the appointed date dealings took place and were recorded in the register set up by these provisions and it is, further, of considerable importance that the Land Titles Restoration Ordinance, in effect, recognized, as we shall see, the validity and effect of the entries made therein. (at p334)

10. Upon a claim being made under the Land Titles Restoration Ordinance the Commissioner is bound to publish extensively the fact that it has been made (s. 31) and after the date specified in the notice he may make a provisional order. He may do so without a hearing where the claim relates only to one parcel of land but he must be satisfied that the interest the subject of the claim was claimed to have been, on 11th February 1942, - the last day the Registry was open before the destruction of the registers - "registered, notified or entered in a lost register", that the claim is fully supported by evidence of the prescribed character showing that the claimant continued to be entitled to registration on the appointed date, that the claim is not in conflict with or inconsistent with any other claim and is not open to doubt. In other cases a provisional order may be made by the Commissioner "after considering the claims, documents, information received from the Registrar in respect of any land, and any other evidence which may be available to him". It is apparent from these provisions that in order to succeed a claimant must establish, in effect, a right to registration originating either in actual registration in the destroyed registers or in some relevant dealing. This, again is quite inconsistent with the suggestion that the legislature intended that a new set of registers should be compiled without regard to the state, or notional state, of the registers at the appointed date and upon the assumption that the destruction of the registers had destroyed the statutory title of every registered proprietor. (at p335)

11. Publication in the Gazette of a notice of all provisional orders is required (s. 34) and within fourteen days thereafter the Commissioner is required to send a copy of the relevant portion of the notice to a number of specified persons including the Director of Native Affairs. His duties upon receipt of the notice vary according to whether or not the claim is based upon the production of a duplicate certificate of title. If it is not he is bound to cause to be posted up, at the office of the District Commissioner in the district in which the land the subject of the provisional order is situated, a notice stating that he has been so served, and that any native or native community asserting that he or it was, at the appointed date, entitled to native customary rights in respect of that land may, within two months after the date on which the notice is posted up, lodge with him particulars of those customary rights. In addition, he is bound to cause to be made any inquiries which he thinks necessary (s. 35). But if the claim is supported by the production of a duplicate certificate of title the Director is not bound to take these steps and the Commissioner may issue a final order without any certificate such as that mentioned in s. 36 (s. 37). This again, it seems to us, is the clearest indication that production of a clean duplicate certificate of title is to be accepted as conclusive of the question of the existence of native rights, a question which had, of course, been the subject of elaborate inquiries pursuant to the Lands Registration Ordinance before the issue of the certificate of title. (at p336)

12. Objection to the making of a final order may be lodged by any person including those specified in s. 34 of the Ordinance (s. 39). Such an objection might, of course, be supported by a denial of the truth of the evidence produced by the claimant in support of his claim but where an objection is based upon an adverse claim to some interest in the land it is, we think, abundantly clear from the provisions of s. 40 that the claim must be of the character defined by ss. 9 and 10. That is to say, the objector must establish a right to an interest in the land and further that he was entitled, in the language of those sections, to be registered or entered in a lost register as the owner or the person entitled to that interest. The inquiry in such a case is, therefore, necessarily one directed to ascertaining the state in which the register should have appeared and in which, presumably, it would have appeared, had it not been destroyed. This again is the clearest indication that the Ordinance was enacted, not in the belief or upon the assumption that the destruction of the registers had destroyed all registered land titles in New Guinea, but merely for the purpose of restoring and replacing the destroyed registers. (at p336)

13. We have already referred to the effect of the Ordinance in relation to native rights where the claimant is able to support his claim by production of a clean duplicate certificate of title. In such a case the Director of Native Affairs is not required to follow the procedure laid down in s. 35 and a final order may be made by the Commissioner without a certificate of the Director under s. 36. However, the procedure prescribed by those sections must be followed where the claimant has sought to support his claim by evidence other than the production of such a certificate. But, again, it is, we think, clear that in any such case the procedure laid down by those sections is provided for the purpose of ensuring that no new certificate of title will issue which does not take notice of native rights which were noted on the destroyed registers. What the provisions of the Ordinance, and particularly ss. 35 and 36, are concerned with is the existence of native rights "at the appointed date" and, it follows from what has already been said that, if a claimant can produce a clean certificate of title or establish by other evidence an entitlement to a clean certificate, no native rights can be said to exist in the land, unless, after becoming entitled to such a certificate, and before the appointed date, the claimant has dealt with the land in such a way as to enable it to be said that such interests have been created. Further it should be noted that s. 13 of the Ordinance provides that where the Director is entitled to make a claim in respect of an interest in land vested in him for the benefit or on behalf of, or as trustee for, a native or native community, he shall take all proper steps to establish, in accordance with the procedure provided by the Ordinance, that the interest was so vested in him. But the Director could not succeed in any such claim unless he could bring it within ss. 9 and 10, that is to say, unless he could show that he was entitled to an interest in the land and that he was entitled to be registered or entered in a lost register, within the meaning of those sections, as the owner of or the person entitled to that interest. Clearly enough, the Director could not have succeeded upon any such claim in the present case and it is idle to suppose that the Ordinance so operates as to allow the claim of a registered proprietor to be defeated or affected by an adverse claim to the land, or to an interest in the land, the owner of which could not succeed in establishing that he is entitled to registration as the owner thereof under the Ordinance. (at p337)

14. For these reasons, which we have fully set out, we are of the opinion that his Honour was in error with respect to the matters which we have discussed and it is therefore unnecessary to consider the further argument, advanced on behalf of Mrs. Richards, that as the present registered proprietor and the holder of the certificate of title issued in December 1960, she is entitled to hold the land free from the interest claimed by the native respondents. It is, however, necessary to notice another argument, based upon s. 41 of the Lands Registration Ordinance, which was advanced on their behalf. Section 41 of the Lands Registration Ordinance is in the following terms: "(1) Nothing contained in this Ordinance and no registration made thereunder shall affect any system or custom of land tenure or of succession to land or transmission of land in use amongst natives. (2) Notwithstanding anything contained in this Ordinance, no certificate of title or entry in the Register Book shall be of any force or validity as evidence in any dispute between native and native as to the ownership of land or of any interest in or right affecting land." It is the contention of the native respondents that because of the provisions of this section a claim to native rights may be asserted and established against a registered proprietor even though the register is clear. It is pointed out that s. 57 is, expressly, subject to s. 41 though s. 68, it may be observed, contains no such qualification. The latter section provides that notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Administration or otherwise, which, but for the Ordinance, might be held to be paramount or to have priority, the registered owner of land or of any estate or interest in land shall, except in case of fraud, hold it free from all encumbrances whatsoever except in certain cases not material to be mentioned. Section 57 is an evidentiary section and provides that every certificate of title duly authenticated under the hand and seal of the Registrar shall, subject to s. 41 of the Ordinance, be received in all courts of justice as evidence of the particulars therein set forth and of their being entered into the Register Book, and shall be conclusive evidence that the person named in the certificate of title or in any entry thereon as seised of or taking any estate or interest in, or as being entitled to any encumbrances on the land therein described, is seised or possessed of the land for the estate or interest therein specified or is entitled to the encumbrance and that the property comprised in the certificate of title is under the provisions of the Ordinance. But the section does not, as does s. 68, preclude the assertion of some unregistered interest in the land. This is the function of s. 68 which is in a form invariably found in legislation enacted for the purposes of erecting the Torrens system of land titles and the effect of such a provision is not in doubt. Nevertheless, the learned Chief Justice considered that the provisions of s. 41 so operated as to make the title of a registered proprietor subject to any claim of native customary rights that might be adversely asserted and established. In our view this conclusion is erroneous. It is quite easy to see why s. 57 was expressed to be subject to s. 41 while s. 68 was not. By sub-s. (2) of s. 41 no certificate of title or entry in the register is to be of any force or validity as evidence in any dispute between native and native as to the ownership of land or of any interest in or right affecting land. This provision was to take effect "notwithstanding anything contained in this Ordinance" and it is obvious that when s. 57 came to deal with the evidentiary value of a certificate of title it was necessary that the situation with which s. 41 (2) dealt should be made the subject of an exception. That situation did not, of course, take any account of the case where there was no entry on the register concerning native rights; on the contrary, it contemplated the case where such an entry appeared and the exception in s. 57 appears merely as complementary to s. 41 (2) and so that there should be no doubt that in any dispute between native and native as to the ownership of land a certificate of title or entry in the register should not be conclusive of the matter in dispute. (at p339)

15. However, the contention is primarily based upon sub-s. (1) of s. 41. This section has remained in the same form since 1924 and it may be observed that, at this time not only was it permissible for native rights to be made the subject of appropriate entries in the register (s. 26) but also that natives might be registered as the owner or part owner of any land or as the owner, beneficiary or obligee of any encumbrance affecting any registered land (s. 40). But the present s. 40 (introduced in 1925) provides that a native or group or community of natives shall not be registered in the Register Book as owner or part owner of any land or as an encumbrancee. Yet under the existing s. 26, upon any inquiry under that section in relation to applications to bring land under the provisions of the Ordinance, it is the duty of the Court, if it finds that native rights in the land exist, to define the nature and extent of those rights and direct that those rights shall be protected by the necessary entries in the Register Book and on the certificate of title. Further ss. 38 and 39 make extensive provision, applicable in the circumstances specified in those sections, for registration of the Director of Native Affairs as the registered proprietor of land or of an interest in land which is owned by a native or native community. It is, we think, provisions such as these to which s. 41 (1) is directed for registration of such interests might produce a situation which could be said to affect a "system or custom of land tenure or of succession to land or transmission of land in use amongst natives". Such an effect might be produced, if it were not for the provision made by the sub-section, by the terms in which the entry purported to define the native rights in question or by the manner in which the owner or owners are described. Moreover, even in the case where no exception is taken on the score of either of these matters, native rights of succession might be affected by, for instance, the provisions of the Ordinance relating to the transmission of interests. Again, it may be said that s. 41 (1) contemplates and deals with the case where there appears on the register an entry or registration concerning native rights and that it has nothing to say in the case where no such entry or registration exists. It is true, of course, that on this view a clean certificate of title is conclusive of the question whether native rights exist in relation to the subject land but this proposition provides no justification for saying that the relevant registration affects any "system or custom of land tenure or of succession to land or transmission of land in use amongst natives". (at p339)

16. These reasons are enough to dispose of the matter and render it unnecessary for us to express any concluded opinion upon those portions of his Honour's judgments which decide that there was such irregularity in the actions of the German Administration in the year 1903 as prevented Wolff having a good title to part of the subject land. However, as the matter was argued before us by the parties we would wish to say that we have the gravest doubts as to the validity of his Honour's conclusions and as to the reasoning on which they are founded. (at p340)

17. In the result the appeal should be allowed, the order of the learned Chief Justice set aside and, in lieu thereof, there should be an order that the appeal to the Supreme Court from the final order of the Commissioner should be dismissed. (at p340)

Orders

Appeal allowed. Order of the Supreme Court of the Territory of Papua and New Guinea of 17th June 1963, discharged. In lieu thereof order that the appeal to that Court from the final order of the Commissioner of Titles be dismissed.