Goodman Court Pty Ltd v Registrar General of New South Wales
[2014] NSWSC 1828
•19 December 2014
Supreme Court
New South Wales
Medium Neutral Citation: Goodman Court Pty Ltd v Registrar General of New South Wales [2014] NSWSC 1828 Hearing dates: 12 December 2014 Decision date: 19 December 2014 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Order that the Registrar-General issue a s 12A notice to Mr Sutherland and thereafter act in accordance with that notice
Catchwords: REAL PROPERTY - Torrens title - trusts - vesting of trust property in new trustee - whether Registrar General has duty or discretion to record vesting upon application by new trustee
REAL PROPERTY - Torrens title - instruments generally - when Registrar General may refuse to register an instrument
REAL PROPERTY - Torrens title - legal proceedings generally - review of decisions of Registrar General - nature of review - function of court on review - parties to review proceedings - joinder of partiesLegislation Cited: (CTH) Bankruptcy Act 1966, s 58
(NSW) Real Property Act 1900, s 12A, s 39, s 90, s 121, s 122, s 139Cases Cited: Ex parte Australian Sporting Club Ltd; Re Dash (1947) 47 SR(NSW) 283
Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616
Castle Constructions Pty Limited v Sahab Holdings Pty Ltd [2013] HCA 11; (2013) 247 CLR 149
Re Coldham; ex parte Brideson (No 2) (1990) 170 CLR 267
Ex parte Gallagher (1908) 8 SR(NSW) 230
Gibb v Registrar of Titles (Vic) (1940) 63 CLR 503
R v Registrar of Titles for Victoria; Ex parte Commonwealth (1915) 20 CLR 379
Mahony v Hosken (1912) 14 CLR 379
Sydney Municipal Council v Registrar-General (NSW) (1945) 71 CLR 125
Perpetual Executors & Trustees Association of Australia Ltd v Hosken (Registrar of Titles) (1912) 14 CLR 286
Pirie v Registrar-General (1962) 109 CLR 619
Ex parte Smart (1867) 6 SCR 188
Strange-Muir v Corrective Services Commission of NSW (1986) 5 NSWLR 234
Templeton v Leviathan Pty Ltd (1921) 30 CLR 34
Veghelyi v Council of Law Society of New South Wales (1989) 17 NSWLR 669Texts Cited: R A Woodman and P J Grimes, Baalman - The Torrens System in New South Wales, (2nd ed 1974, The Law Book Company) Category: Principal judgment Parties: Goodman Court Pty Ltd (plaintiff)
Registrar General of New South Wales (defendant)Representation: Counsel:
D Allen (plaintiff)
H Sonmez (defendant)
Solicitors:
J.P. Leong & Co (plaintiff)
Gavin Bartier, Solicitor for Registrar General (defendant)
File Number(s): 2014/356341
Judgment
Pursuant to a summons filed on 3 December 2014 the plaintiff Goodman Court Pty Limited seeks an order, pursuant to (NSW) Real Property Act 1900, s 122, that the defendant Registrar General of New South Wales record the plaintiff as the new registered proprietor of the land comprised in folio identifier 700/880063 situate at and known as 38 Dowling Street, Bardwell Valley, consequent upon its appointment as the new trustee of the 38 Dowling Street Trust on 16 June 2014.
Background
The land was transferred into the name of Orlando Fonseca, who remains the registered proprietor, on 10 February 2003. Mr Fonseca became a bankrupt on his own petition on 7 March 2011, and though he is now discharged, his property as at the date of his bankruptcy remains vested in his trustee in bankruptcy Roderick Mackay Sutherland of Jirsch Sutherland. On 11 April 2011, Mr Sutherland lodged a caveat in respect of the land, claiming an estate in fee simple as the trustee in bankruptcy of the registered proprietor pursuant to (CTH) Bankruptcy Act 1966, s 58(1). However, Mr Sutherland has not applied to be registered as proprietor, although he is prima facie entitled to be registered pursuant to Real Property Act, s 90, which provides as follows:
90 Transmission on bankruptcy
(1) In this Part:
the Commonwealth Act means the Bankruptcy Act 1966 of the Parliament of the Commonwealth and any Act of that Parliament amending or replacing that Act.
The Official Receiver in Bankruptcy means the body corporate constituted by section 18 of the Commonwealth Act.
(2) The Official Receiver in Bankruptcy, a trustee, or any other person claiming to be entitled to land under the provisions of this Act by virtue of the operation of the Commonwealth Act, or of anything done thereunder, may apply in the approved form to the Registrar-General to be registered as proprietor of that land.
(3) On being satisfied that an applicant under subsection (2) is entitled to be registered as proprietor of the land to which the application relates, the Registrar-General may record the applicant in the Register as proprietor.
(4) Where an official receiver, having claimed to be entitled to land under the provisions of this Act by virtue of the operation of the Acts repealed by the Commonwealth Act is registered as the proprietor of that land, the Registrar-General may register a dealing affecting that land and executed by The Official Receiver in Bankruptcy.
Orlando Fonseca was the original trustee of a discretionary trust, called "The 38 Dowling Street Trust", which was settled by a trust deed bearing the date 21 January 2003, and a duty stamp dated 11 June 2009. A minute of resolution of Mr Fonseca as such trustee, bearing the date 21 January 2003, purports to record a resolution of that date in the following terms:
RESOLVED: Orlando Fonseca, in his capacity as trustee of the 38 Dowling Street Trust ("Trust"), resolves to acquire/take transfer on behalf of the Trust the property at 38 Dowling Street, Bardwell Valley NSW, being the property described by certificate of title folio identifier 700/8800063 ("Property").
Upon registration of Orlando Fonseca as proprietor of the Property, he will hold his legal title subject to the terms and conditions of the deed establishing the Trust dated today.
I have used the word "purports", because it is unnecessary for the purposes of this judgment that I reach any concluded view as to the authenticity of that document, and I wish to make clear that I am not doing so. It may be assumed, for present purposes, that Mr Sutherland would dispute its authenticity (at least as to its date), pointing to what appear to be significant differences between the signature of Mr Fonseca that appears on it, and his ostensibly contemporaneous signatures on the trust deed and the transfer; as well as to the fact that in his statement of affairs, Mr Fonseca included the property as an asset of his without reference to any trust. Against that, the authenticity of the trust deed is supported by the duty stamp (which confirms that it was in existence at least in June 2009), and its name (which strongly suggests that it was established for the purpose of holding the subject property, from which it takes its name).
On or about 16 June 2014, Orlando Fonseca as retiring trustee, Mr Jeffrey Alexius Fonseca as appointor, and Goodman Court as new trustee, executed a deed of appointment and retirement of trustee, which recites the trust deed and provides that Orlando Fonseca thereby retires as trustee, and the appointor appoints Goodman Court as trustee of the trust. This deed was registered on 21 July 2014, Bk 4671 No 571, pursuant to (NSW) Trustee Act 1925, s 12(1), which relevantly provides as follows:
12 Registration
(1) Any instrument by which a new trustee is appointed, or by which a trustee retires or disclaims, or by which an executor declares that the executor holds as trustee or as beneficiary, as the case may be, may be registered in the office of the Registrar-General in the manner and on payment of the fees prescribed by regulation under the Conveyancing Act 1919.
(2) This section extends to an appointment or retirement, whether under this Part or under the provisions of the instrument creating the trust or otherwise, and to a consent to an appointment or retirement.
(3) This section applies whether the trust does or does not relate to land subject to the provisions of the Real Property Act 1900.
(4) In the case of land subject to the provisions of the Real Property Act 1900, where an appointment or retirement or an instrument by which an executor declares that the executor holds as trustee or as beneficiary, as the case may be, is registered, the Registrar-General is hereby authorised and directed to make an entry of the vesting of the trust property or to enter vary and withdraw caveats as may be proper in the circumstances:
Provided that the Registrar-General shall not be bound so to do until a written request is made to the Registrar-General by the persons in whom the property is to be vested, such evidence is given as the Registrar-General may reasonably require, and such notice, if any, is given to any other person as the Registrar-General may direct.
On 3 November 2014, Goodman Court lodged with the Registrar-General an "Application to Record New Registered Proprietor" under Trustee Act, s 12(4) - which had been signed on its behalf by David Salvatore Cassaniti on a date prior to 1 September 2014, when it was stamped, while he was a director, although he was no longer a director on 3 November 2011, having been replaced by his wife Mariolina - by which it requested the Registrar General to record it as the new registered proprietor on the relevant folio "consequent on its appointment as the new trustee of the 38 Dowling Street Trust on 16 June 2014 registered as Book 4671 No. 571".
By letter to the lodging party dated 11 November 2014, the Registrar General requisitioned:
Please provide a certified copy of the establishing Deed (Trust Deed, dated 21 January 2003) and a copy of any amendments to that Deed.
In response, a certified copy of the trust deed and of the deed of appointment and retirement was provided to the Registrar General under cover of a letter dated 12 November.
On 17 November, the Registrar General issued a notice under Real Property Act, s 12A, to Mr Sutherland (by his solicitors, Sally Nash & Co), relevantly in the following terms:
An Application to record new registered proprietor pursuant to section 12(4) of the Trustee Act 1925 (AJ16019, "Application") has been received at this Registry by Goodman Court Pty Ltd ("Applicant") and when registered will have the effect of recording the Applicant as the new registered proprietor of Register Folio 700/880063 ("Land") replacing Orlando Fonseca.
The Land is currently subject to a Caveat (AD166432, "Caveat") by your client (Roderick Mackay Sutherland), claiming an interest in the Land pursuant to a Debtor's petition. The Caveat will not act to prohibit the Application, which is pursuant to section 12(4) of the Trustee Act 1925 (section 74H(5)(b)).
Copies of the Application and the Caveat are enclosed for your reference.
Pursuant to section 12A of the Real Property Act 1900 I hereby give you notice that I will register the Application 28 days from the date of this letter unless before that time I am served with, or with written notice of an order of the Supreme Court restraining me from taking that action.
Real Property Act, s 12A, provides as follows:
12A Power of Registrar-General to serve notice of proposed action
(1) The Registrar-General may, before taking any action that alters the Register, give notice of the proposed action to any person that the Registrar-General considers should be notified of it.
(2) Where the Registrar-General has given notice pursuant to the powers conferred upon the Registrar-General by subsection (1), the Registrar-General may refuse to take the action until after the expiration of a period specified in the notice and the Registrar-General may proceed to take the action at or after the expiration of the period so specified unless the Registrar-General is first served with, or with written notice of, an order of the Supreme Court restraining the Registrar-General from so doing.
(3) Where a person given notice under subsection (1) does not within the time limited by the notice serve upon the Registrar-General or give the Registrar-General written notice of an order made by the Supreme Court restraining the Registrar-General from taking the action, no action by that person or by any person claiming through or under that person shall lie against the Registrar-General in respect of the taking of the action specified in the notice.
(4) No action shall lie against the Registrar-General for failure to give a notice under subsection (1).
Sally Nash & Co responded by letter dated 19 November, to the effect that they were obtaining instructions but their preliminary view was that the trustee in bankruptcy objected to the registration by reason that the property was disclosed in the statement of affairs as being property "owned" by the former bankrupt and not held on trust; a copy of the statement of affairs was enclosed.
On 20 November, the Registrar General wrote to Goodman Court's agent, with a copy to Sally Nash & Co, advising that following the service of the s 12A notice "information has been provided by the legal representative of the caveator" which "indicates that it would be inappropriate for the Registrar-General to register the application to record new registered proprietor ... in the absence of the express written consent of the caveator or in the absence of an order of court":
Therefore in the circumstances I will hold the dealings for a period of 2 months from the date of this letter to allow for you to contact the legal representative of the Caveator or to seek an order of court directing me to register the abovementioned dealing.
On 25 November, solicitors for Goodman Court wrote to the Registrar General, setting out the background, objecting to the new position adopted by the Registrar General (but not to the original s 12A procedure) for reasons that were elaborated, requesting a copy of "the information ... provided by the legal representative of the caveator", and requiring that the application be registered at the expiration of 28 days from 23 November unless Mr Sutherland obtained a court order.
The Registrar General responded on 27 November, to the effect that since the issue of the s 12A notice, "information was received by the Registrar General which, in the view of the Registrar General, means that the dealing is no longer in registrable form"; that the Registrar General therefore considered that registration of the application would be inappropriate in the absence of consent or a court order; that the power under s 12(4) was "clearly discretionary" (for which purpose reliance was placed on the words "as may be proper in the circumstances"); that "It is ... not [the Registrar General's] role to supervise the conduct of parties involved in an ongoing dispute regarding any estate or interest in land, nor to make any determination in relation to the parties competing interests. ... The issue of whether the Land is a Trust asset, or whether it forms part of the estate of the Bankrupt registered proprietor, and is therefore more properly in the control of the Trustee in Bankruptcy, are matters for resolution between the parties, or for determination by a court of competent jurisdiction". An extract from the material that had been provided by Sally Nash & Co - namely the bankrupt's statement of affairs - was enclosed.
Goodman Court's solicitors responded on 28 November, requesting particulars of the respect in which it was considered that the dealing was no longer in registrable form, of the "information" that the Registrar General had received, and why it was "inappropriate" for the dealing to be registered. Issue was also taken with the Registrar General's construction of s 12(4) as discretionary.
On 1 December, the Registrar General replied, relevantly:
Notwithstanding that the Application complies prima facie with the requirements of the Real Property Act 1900 and concomitant Regulations, the Registrar General considers that the information which has been provided makes the registration of the application at this time, inappropriate.
Further explanation included that it was inappropriate "as the matter is clearly in dispute between the parties", and that "The Registrar General considers this to be a matter of Policy, and part of his role in maintaining the integrity of the Torrens Title Register". This time, a full copy of the correspondence from Sally Nash & Co was provided.
On 1 December 2014, the Registrar General wrote to Sally Nash & Co, saying that he was "unable to hold this matter in abeyance indefinitely having regard to the competing claims of the Parties" and requesting urgent return advice as to how and when they proposed to act. There was a telephone conversation between Sally Nash & Co and the Registrar General's office on 2 December, following which the Registrar General again wrote, advising that the caveat would not prohibit registration of the application (citing s 74H(5)), noting that the trustee in bankruptcy was overseas, and requesting urgent advice as to when he would return. On 8 December, the Registrar General wrote to Sally Nash & Co yet again, this time drawing attention to s 90, observing that Mr Sutherland had made no application under that section, and requesting advice as to why he had not done so. Sally Nash & Co responded on 9 December, that Mr Sutherland lodged a caveat to protect the vesting in him and had conducted public examinations, but had not yet determined to transmit the property "as it appears to be over encumbered".
Meanwhile, on 3 December, Goodman Court instituted these proceedings for review of the Registrar General's decision to hold the documents pending receipt of a consent or court order. No complaint was made in respect of the decision to issue a notice under s 12A.
Application for review of decision of Registrar General
Provision is made for judicial review of certain decisions of the Registrar General by Real Property Act, ss 121 and 122, which are as follows:
121 Registrar-General to supply reasons for certain decisions
(1) A person who is dissatisfied with the Registrar-General's decision:
(a) to have land brought under the provisions of this Act, or to have any dealing registered or recorded, or
(b) to have any certificate of title, order for foreclosure or other instrument issued in relation to land, or
(c) to have exercised or performed in relation to land any function or duty which, by this Act, is required to be exercised or performed by the Registrar-General,
may apply to the Registrar-General for a copy of the Registrar-General's reasons for the decision.
(2) It is the Registrar-General's duty to provide the person with those reasons.
122 Review of decisions by Supreme Court
(1) A person who is dissatisfied with a decision referred to in section 121 (1) may apply to the Supreme Court for a review of the decision.
(2) For the purpose of conducting such a review, the Supreme Court may reconsider and determine any question of fact involved in the decision.
(3) If the Registrar-General has provided reasons for the decision, the Registrar-General may not rely on any grounds that are not set out in those reasons except by leave of the Supreme Court.
(4) After reviewing the Registrar-General's decision on an application under this section, the Supreme Court:
(a) may uphold the decision, or
(b) may order that the Registrar-General take such action in relation to the matters raised by the application as the Supreme Court considers appropriate, being action that the Registrar-General could, but for the order, have taken,
and may make such further or other orders as the Supreme Court considers appropriate.
(5) This section does not apply to the determination of the position of a boundary under Part 14A.
The Registrar General abandoned, rightly, a submission originally advanced that the application under s 122 was incompetent in the absence of a prior request for reasons under s 121. First, not only is there nothing to suggest that a request for reasons under s 121 is a pre-condition to an application under s 122, but the term of s 122(3) make clear that such an application may or may not be in the context of reasons having been provided. Secondly, although the correspondence had not formally referred to s 121, nor requested "reasons" in so many words, in substance it sought the Registrar General's reasons for taking the course he did, and in substance the Registrar General provided those reasons.
Although R A Woodman and P J Grimes, Baalman - The Torrens System in New South Wales (p 394) cites the decision of the Full Court in Ex parte Gallagher (1908) 8 SR(NSW) 230, as authority for the proposition that s 122 cannot be invoked to compel the Registrar General to exercise a discretion, but only where he refuses to perform a duty, that case involved an application for a writ of mandamus, and not the alternative statutory remedy now provided by s 122 (which was formerly contained in s 121). In Ex parte Smart (1867) 6 SCR 188, Hargrave J said (at 192) of a predecessor section (s 107 of the then (NSW) Real Property Act, 26 Vic No 9) that it applied where the proprietor was dissatisfied with the direction given by the Lands Title commissioners upon an application, and was intended to give proprietors an opportunity of open enquiry in the Supreme Court; and Faucett J said that the legislature clearly intended to treat the Supreme Court as an appellate revising tribunal (at 193); although Stephen CJ took a narrower view. Hargrave J's view is reflected in the decision of the High Court in Pirie v Registrar-General (1962) 109 CLR 619, which holds that the existence of a demonstrable right to have something done or a duty performed is not a condition precedent to an application under the section; it sufficient that the applicant and the Registrar General are in disagreement as to whether the course the applicant requests the Registrar General to follow is one which, on a correct view of the facts and the law, it is incumbent upon him to follow [esp at 624 (Kitto J), see also 644 (Windeyer J)]. And that was under the pre-1970 version of s 121, which referred to a refusal by the Registrar General "to have any act or duty done or performed which, by this Act is prescribed to be done or performed" by him; as distinct from the current s 121(1)(c), which refers to the Registrar-General's decision "to have exercised or performed in relation to land any function or duty which, by this Act, is required to be exercised or performed by the Registrar-General". Moreover, the earlier versions did not refer to a "review" of the Registrar General's decision; the version considered in Pirie v Registrar-General authorized a summons calling on the Registrar General "to substantiate and uphold the grounds of his refusal", while the 1970 version spoke of "proceedings in the Supreme Court for relief under this section" - which (by s 121(7)) directed the Court either to uphold the Registrar General's refusal or direction, or to order the Registrar General to take action to give effect wholly or partly to the application, or substitute such direction as it thought fit for the direction of the Registrar General.
Before me, the plaintiff contended, and I did not understand the defendant to dispute, that a review under s 122 was a de novo review, on the merits. In my view, that contention is significantly supported by the terms of s 122(2), which indicates that a review under s 122 extends to the facts and is not confined limited to legal error. It is also supported by the principle that a statutory appeal to a court from an administrative decision (as distinct from common law judicial review) is not an appeal in the strict sense but an exercise by the Court of its original jurisdiction, and in that context such terms as "rehearing" (cf "reconsider" in s 122(2)) are interpreted liberally so as to provide a rehearing de novo [Ex parte Australian Sporting Club Ltd; Re Dash (1947) 47 SR(NSW) 283 (Jordan CJ); Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616, 621-2; Strange-Muir v Corrective Services Commission of NSW (1986) 5 NSWLR 234, 249-50; Veghelyi v Council of Law Society of New South Wales (1989) 17 NSWLR 669, 674; Re Coldham; ex parte Brideson (No 2) (1990) 170 CLR 267, 273]. The expression "review" is similarly liberally interpreted: in the words of McHugh JA, as he then was, in Strange-Muir v Corrective Services Commission (at 249E) (in a passage cited with approval by the High Court in Re Coldham, (at 273)):
When the legislature gives to a court the power to review or hear an "appeal" against the decision of an administrative body, a presumption arises that the court is to exercise original and not appellate jurisdiction: Ex parte Australian Sporting Club Ltd; Re dash (1947) 47 SR(NSW) 283; 64 WN 63. The court hears fresh evidence and determines the case as at the date of hearing on the materials and the law then applicable. The rule is not an absolute one and gives way to any contrary indication in the terms of the statute conferring jurisdiction: Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616 at 621.
Application of the presumption to a "review" under s 122 is supported by at least one of the typical considerations referred to in Builders Licensing Board v Sperway Constructions, namely that there is no provision for a "hearing" before the Registrar General; and also by the fact that the section was evidently intended to provide a beneficial alternative to mandamus not constrained by the strictures that apply to proceedings for prerogative relief.
Accordingly, on an application under s 122, the function of the Court is to give the direction which it considers the Registrar General ought to have given, having regard to the evidence adduced before the Court (which is not limited to that considered by the Registrar General), and to the law applicable at the date of the hearing, subject only to the limitation that, where the Registrar General has given reasons pursuant to s 121, he may not rely on additional grounds of opposition without leave.
Mr Sutherland was not joined as a party. At least before 1970, the section contemplated that the only parties would be the applicant and the Registrar-General, as it authorized only a summons to the Registrar General, and in Pirie v Registrar-General Kitto J noted that there was no provision for joining as parties to the proceedings other persons who may have an interest in the question - although his Honour observed that, as the Court's jurisdiction under the section was to make such order as the circumstances of the case may require, there seemed to be "no reason why the Court should not, if it thought the interests of justice would best be served by so doing, adjourn the case until rights as against third parties should have been determined in other proceedings" [at 624]. The (NSW) Supreme Court (Amendment) Act 1972 inserted, as (then) s 121(1)(b), express power to make orders adding parties and in respect of advertisement and service. That provision is not replicated in the current form of s 122, but the Court's general procedural powers under Uniform Civil Procedure Rules, which are made applicable to proceedings under the Real Property Act by s 139, would authorize such orders in proceedings under s 122.
The plaintiff took the view that all that was in issue was how the Registrar General should proceed on his application, and that Mr Sutherland was not entitled to be heard on that question. But the relief sought by the plaintiff's summons included an order directing that Goodman Court be registered as proprietor in place of Orlando Fonseca, potentially defeating any claim of his trustee in bankruptcy, and in that context it was in my view necessary, as a matter of procedural fairness, at least to give Mr Sutherland notice of the application. Accordingly, although he was not joined as a party, notice of the application and of the hearing was given to his solicitors. He did not respond or appear. In any event, the orders I propose to make will ensure that he retains a further opportunity to oppose registration of Goodman Court, as would initially have been the case pursuant to the s 12A notice.
When can the Registrar General refuse to register?
It may be accepted that the Registrar General is not bound to register every apparently conforming document lodged for registration. First, such provision is made by Real Property Act, s 39:
39 Treatment of dealings that do not comply with requirements
(1) The Registrar-General shall not register any dealing purporting to transfer or otherwise to deal with or affect any estate or interest in land under the provisions of this Act, except in the manner herein provided, and the Registrar-General may reject any dealing which the Registrar-General is satisfied should not be registered.
(1A) The Registrar-General:
(a) may refuse to register, or may reject, any dealing lodged for registration, and
(b) may reject any memorandum or caveat lodged with the Registrar-General,
that does not comply with any requirement made, with respect to the dealing, memorandum or caveat, as the case may be, by or under this or any other Act.
Subsection 39(1A) confers a discretion to refuse to register, or to reject, non-compliant dealings; it is concerned with matters of registrable form, rather than substance. However, s 39(1) directs the Registrar general not to register a dealing, where the Registrar General is satisfied that the dealing should not be registered, and extends to the substance and lawfulness of dealings, but only where the Registrar General is affirmatively satisfied that the dealing should not be registered; it is not engaged where the Registrar General is merely in doubt or uncertain (without a court order or a consent) whether the instrument is one that should be registered.
Secondly, apart from s 39(1), as Mr Sonmez, for the Registrar General, submitted, it has been recognised that the Registrar General may decline to register dealings which are apparently in breach of trust [Templeton v Leviathan Pty Ltd (1921) 30 CLR 34], or in excess of statutory power [R v Registrar of Titles for Victoria; Ex parte Commonwealth (1915) 20 CLR 379; Sydney Municipal Council v Registrar-General (NSW) (1945) 71 CLR 125]. In addition, the Registrar-General may be entitled to decline to register dealings which would if registered cause inconvenience for his office or the public [Perpetual Executors & Trustees Association of Australia Ltd v Hosken (Registrar of Titles) (1912) 14 CLR 286, 295; Mahony v Hosken (1912) 14 CLR 379, 386; Gibb v Registrar of Titles (Vic) (1940) 63 CLR 503, 510] - although in all three cases just mentioned, reliance on that ground was unsuccessful. And analysis of the three cases referred to by Mr Sonmez reveals that while they indeed upheld refusals to register dealings, they did so on the basis that the Registrar was affirmatively satisfied that the transactions they purported to effect were unlawful.
In R v Registrar of Titles for Victoria, the Court (by majority) upheld the Registrar's refusal to register a dealing on the basis that the transferor was not authorised by statute to make the relevant dealing. Griffiths CJ (albeit in dissent) said (at 385):
While the Registrar of Titles may be justified in refusing to register an instrument which is on its face a breach of trust, or is forbidden Stllby positive law, it is not, in my opinion, competent for him to examine the propriety of the bargain or the sufficiency of the consideration for an instrument presented for registration, unless he has independent reasons for suspecting fraud, in which case he would, I think, be justified in holding his hand. In the present case it is impossible, in my opinion, having regard to the lessee's covenants, to affirm that the lease was given without consideration. The adequacy of the consideration or propriety of the bargain is no concern of his or ours.
Higgins J said (at 402):
The position of the Registrar, then, is that the document presented for registration does not show on its face a valid disposition of the land. I take it that the Registrar's duty is confined to seeing that the instrument is in accord with the prescribed practice, and that it is signed by a registered proprietor competent to effect a transaction of the sort disclosed by the instrument. He is not concerned to inquire into the circumstances, or even to verify the facts stated. In this case the Registrar sees what purports to be a lease for 500 years from a municipal corporation, and there is nothing on the face of the instrument to take it out of the general rule forbidding such leases on the part of the corporation.
Powers J said (at 404-5):
I have read the judgment of my brother Higgins, and I agree with him ... (6) that it is the Registrar's duty generally to register documents correctly executed by a registered proprietor without inquiring into the consideration, yet it is his duty to refuse to register a document if it is clear that it purports to effect a transaction which the registered proprietor is not by law justified in effecting
In Templeton v Leviathan Pty Ltd, the High Court upheld the refusal of the Registrar to register an instrument where he knew facts which showed that it was a breach of trust. Knox CJ said (at 53-54):
2. On the facts and documents within the knowledge of the Registrar of Titles in his official capacity, the dealing sought to be registered was a breach of trust on the part of the trustees. What is his duty in such a case? Must he register the dealing, or is he entitled to refuse to register? In my opinion, where it has come to the knowledge of the Registrar that a dealing lodged for registration is a breach of trust, or that for any other reason the person dealing with the land as registered proprietor is not competent at law or in equity to deal with it in the manner proposed, it is his duty to refuse to register. I do not suggest, nor was it contended, that where the Registrar merely suspects that the dealing may be a breach of trust or otherwise improper, but knows no facts to justify him in concluding that it is so, it is any part of his duty or that he has any right to ask for information or make inquiries in order to ascertain the true facts. I desire to limit my opinion with regard to his power to refuse registration to those cases in which the facts within his knowledge appear to him to show that the proposed dealing is improper. The line of demarcation is indicated by the remarks of A'Beckett, J, in the British Bank to Evans, 5 ALR at pp 293-4, where he distinguishes the decisions in Ex parte Wisewould, 16 VLR 149; and Ex parte Campbell, 9 A.L.T. 183; and by the observations of Hodges, J, in Ex parte Briggs, 19 ALR 501.
Under ss 55 and 233 (iii) of the Act the duty is cast on the Registrar in certain cases to protect the rights of persons whose interests are not shown on the register, and I can see nothing in the Act to support the contention that in every other case the Registrar is bound to register a dealing, although he knows that the effect of his doing so may be to exclude or destroy the interests of persons having equitable rights against the registered proprietor
Higgins J (at 59-60):
It is of great importance to fix clearly what were the documents presented to the Registrar in order to find what he would see in them, and whether he was justified in hesitating as to registration. Primá facie, it is the duty of the Registrar to register any instrument presented in proper form and signed by a person competent in law, and according to the title as appearing on the register, to effect the dealing represented by the instrument.
And (at 63-4):
I propose to consider presently the effect of the order on originating summons; but, apart from the effect of that order, I am clearly of opinion that the Registrar was right in refusing to register these three instruments tendered, inasmuch as, on the face of the documents submitted, they constituted a breach of trust, an improper dealing within the meaning of s 233 (III). It is true that no King's caveat or other caveat had been lodged under that section, and that no copy of the will and codicil had been deposited under s 55; but these devices are treated as merely means to the end of preventing improper dealings, and it has been repeatedly held that the Registrar may simply refuse to register - British Bank to Evans, 5 ALR 292; Ex parte Briggs, 19 ALR 501; Ex parte Equity Trustees Company, 17 ALR 154, at p 159. The Registrar has to discharge, not merely ministerial, but also judicial, duties; and it is his duty to "prevent instruments from being registered which in law as well as fact ought not to be placed on the register" - Registrar of Titles v Paterson, 2 App Cas. 110; Ex parte Bond, 6 VLR (L.) 458, 463; R v Registrar, Ex parte Briggs, 19 ALR 501; Ex parte National Trustees Company, 4 ALR 76. It is not his duty to require proofs negativing any fraud or improper dealing, where there is nothing on the face of the documents submitted to suggest it - Ex parte Wisewould, 16 VLR 149; Ex parte Equity Trustees Company, 17 ALR 154; Ex parte Campbell, 9 A.L.T. 183; Ex parte Danaher, 17 ALR 160; or to inquire into unregistered interests as to which the purchaser or person dealing with the registered proprietor is relieved from inquiry under s 179. But in this case the proposed transaction on its face is a breach of trust, and improper; and the burden of showing that the instruments ought to be registered falls on the applicant for the mandamus.
Starke J said (at 72-3):
My brother Higgins has examined the function and duty of the Registrar in relation to the registration of instruments under the "Transfer of Land Act," and I am in complete agreement with him. Nothing more is therefore required than to express my concurrence in his opinion on the subject.
The judgments in Sydney Municipal Council, take the question of principle no further.
Those passages demonstrate that it is the Registrar General's duty generally to register an instrument correctly executed by an applicant without inquiring into the circumstances, and that registration should be refused only if the Registrar General is affirmatively satisfied that the instrument purports to effect an unlawful transaction or is otherwise not entitled to be registered; mere suspicion or doubt in that respect is insufficient to warrant refusal. In that way, this line of authority is entirely consistent with the requirements of s 39(1).
Moreover, since the introduction into the Real Property Act, s 12A, the Registrar General is given the procedural facility to delay registration temporarily while giving a person who it is thought may contest the dealing notice and an opportunity to approach the court for relief. This was recently explained in the High Court, in Castle Constructions Pty Limited v Sahab Holdings Pty Ltd [2013] HCA 11; (2013) 247 CLR 149, by Gageler J (at 166 [46]-[47]):
46 In the form in which s 12A was inserted into the RPA in 1970 [Real property (Amendment) Act 1970 (NSW), s 4(b)], the only action of the Registrar-General that could be covered by a notice under s 12A(1) was the registration of a "dealing" as defined in s 3. The object of the section was identified at the time of insertion as being [New South Wales, Real Property (Amendment) Bill 1970, Explanatory Note, para (e)]:
"to authorise the Registrar-General temporarily to delay registration of a dealing while he notifies a person whom he considers may contest the dealing that he proposes to register the dealing after the expiration of a specified period and to absolve him from liability for registering the dealing if he is not, before the expiration of that period, restrained by the Court from so doing".
The section was explained as [New South Wales, Legislative Council, Parliamentary Debates (Hansard), 11 March 1970, p 4106]:
"designed to put a contest where it properly belongs - that is, between the interested parties - and to absolve the Registrar-General and the assurance fund from liability if a person deprived of an interest in land has been afforded, and ignored, an opportunity to safeguard that interest."
The reference in that explanation to the "assurance fund" was to the Torrens Assurance Fund established under s 134 of the RPA. Under s 132 of the RPA, proceedings before a court for the payment of compensation are taken against the Registrar-General as nominal defendant.
47 Section 12A was amended in 1996 [Real property Amendment Act 1996 (NSW), Sch 1 [4] - [7].] to take its current form, in which it covers the taking by the Registrar-General of any action that alters the Register. The amendment was described at that time as "thereby extend[ing] this fast and simple process for clarifying rights to all cases, not just those in which a dealing is to be registered" [New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 15 October 1996, p 4798].
Thus, where the Registrar General is on notice of a dispute, but is not affirmatively satisfied that the dealing is not entitled to be registered, s 12A provides the means for him to "put the dispute where it belongs" without risking incurring any liability.
What ought the Registrar General have done?
In my view, Trustee Act, s 12(4), does not confer a discretion to register a new trustee on application under that section, but a duty to do so, once the requirements of the proviso have been satisfied. This is apparent from the words in subsection (4) "is hereby authorised and directed', and the terms of the proviso which are to the effect that the Registrar General is bound to do so once its requirements are satisfied. The contrary argument, which depends on the words "as may be proper in the circumstances" as conferring a discretion, misconceives the function of those words; they qualify and describe the "entry" required to give effect to the vesting, so as to require the Registrar General to make the "proper" entry to give effect to it; not to require him to be satisfied of the propriety of the dealing - once such evidence as he reasonably requires has been provided.
In this case, a written request in the prescribed form was made. The Registrar General requisitioned certain evidence, and that evidence was provided. He did not direct that notice be given, as he could have under the proviso to Trustee Act, s 12(4), but instead himself gave notice to Mr Sutherland under Real Property Act, s 12A. The Registrar General has expressed himself to be satisfied "that the Application complies prima facie with the requirements of the Real Property Act 1900 and concomitant Regulations". No requirement under s 12(4) remained outstanding. In those circumstances it was, at least prima facie, the duty of the Registrar General "to make an entry of the vesting of the trust property" as directed by s 12(4).
Assuming that s 39(1) and/or the case law that considers when the Registrar General is entitled not to register an instrument applies notwithstanding s 12(4), the circumstances of this case would not justify refusal of the registration or rejection of the dealing. As to s 39(1A), the Registrar General was satisfied that prima facie the application was compliant. The mysterious suggestion raised at one point in the correspondence that the dealing was "no longer in registrable form" was without substance and was not pressed. As to s 39(1), there was no affirmative satisfaction on the part of the Registrar General that the dealing should not be registered, but only a view that registration should be deferred pending receipt of consent or a court order because there was a dispute.
The Registrar General's position was that he was in receipt of information which indicated that there may be a competing claim, by Mr Sutherland. The Registrar General did not form the view that Mr Sutherland's claim would succeed, or that Goodman Court's was unlawful. The application was not on its face a fraud or a breach of trust. The Registrar General was, rightly, in doubt, in light of the information he had received from Mr Sutherland's solicitors, as am I. But in my view, possession of information that a dealing may be disputed, falling short of satisfaction that the dealing is one that is not entitled to registration, does not justify the Registrar General in refusing to register a dealing. That is all the more so in the light of the facility provided by s 12A for the resolution of such situations. In my view, giving notice to Mr Sutherland under s 12A was the obviously appropriate course.
The departure from that course, in the face only of a tentative preliminary expression of opposition, particularly where Mr Sutherland had shown little inclination to pursue a claim to be registered, is difficult to understand. The Registrar General submitted (rightly) that the issue whether the land was a trust asset or formed part of the bankrupt estate was one for resolution between the parties and not by the Registrar General. However, s 12A provided the means by which the Registrar General could "put [the] contest where it properly belongs ... between the interested parties". The Registrar General invoked the dicta of Isaacs J in Perpetual Executors & Trustees Association of Australia Ltd (at 295), that the Registrar "has in certain cases a necessary discretion, though forms are complied with, to act so as not by undue haste or too facile compliance with any application to do what appears to him may be a wrong to another person, or bring a claim upon the assurance fund". However, it is not possible to see how, by giving a 28-day notice under s 12A, it could be said that the Registrar General would be acting with undue haste or too facile compliance; to the contrary, he would be giving Mr Sutherland every opportunity to raise and put his case before the Court. Nor would it risk incurring liability for the Registrar General or the assurance fund, since s 12A(3) expressly protects from liability where a notice has been given, as Gageler J observed in Castle Constructions v Sahab Holdings, above.
Accordingly, the Registrar General was right to invoke, and wrong to revoke, the s 12A procedure. The Registrar General should have pursued to s 12A process.
The communication to Mr Sutherland's solicitors, on 20 November, of the decision to revoke the s 12A notice and instead hold the documents for two months pending receipt of Mr Sutherland's consent or a court order, may have induced Mr Sutherland not to seek relief from the Court. Although he was given notice of these proceedings, and thus an opportunity to participate, he was not joined as a party and it would not be appropriate to make orders that affect or may affect his substantive rights. In my view, the appropriate course is for the s 12A procedure to be reinstated.
Conclusion
My conclusions may be summarised as follows.
On an application under Real Property Act, s 122, the function of the Court is to give the direction which it considers the Registrar General ought to have given having regard to the evidence adduced before the Court (which is not limited to that considered by the Registrar General), and to the law applicable at the date of the hearing, subject only to the limitation that, where the Registrar General has given reasons pursuant to s 121, he may not rely on additional grounds of opposition without leave.
It is the Registrar General's duty generally to register an instrument correctly executed by an applicant, without inquiring into the circumstances. Registration should be refused only if the Registrar General is affirmatively satisfied that the instrument purports to effect an unlawful transaction or is otherwise not entitled to registration; mere suspicion or doubt in that respect is insufficient to warrant refusal. Where there is doubt, Real Property Act, s 12A, gives the Registrar General the procedural facility to delay registration temporarily while giving a person who it is thought may contest the dealing notice and an opportunity to approach the court for relief.
Trustee Act, s 12(4), does not confer a discretion to register a new trustee on application under that section, but a duty to do so, once the requirements of the proviso have been satisfied. In the circumstances that the Registrar General was satisfied that the application was prima facie compliant and no requirement under s 12(4) remained outstanding, it was, at least prima facie, the duty of the Registrar General "to make an entry of the vesting of the trust property" as directed by s 12(4).
The circumstances of this case would not justify refusal of the registration or rejection of the dealing, whether under s 39(1) or any other power or discretion of the Registrar General. Possession of information that a dealing may be disputed, falling short of satisfaction that the dealing is one that is not entitled to registration, does not justify the Registrar General in declining to register a dealing, all the more so in the light of the facility provided by s 12A for the resolution of such situations.
The Registrar General was right to invoke, and wrong to revoke, the s 12A procedure. As the decision to revoke the s 12A notice was communicated to Mr Sutherland's solicitors and may have induced Mr Sutherland not to seek relief from the Court, and although given notice of these proceedings he was not joined as a party, it would not be appropriate to make orders that affect or may affect his substantive rights. The appropriate course is for the s 12A procedure to be reinstated.
The Court orders that:
(1) The defendant give notice to Mr Sutherland pursuant to Real Property Act, s 12A, that he will register the plaintiff's application to record new registered proprietor pursuant to section 12(4) of the Trustee Act 1925 AJ16019 ("the application") 28 days from the date of the notice unless before that time the defendant is served with, or with written notice of, an order of the Supreme Court restraining him from taking that action;
(2) The defendant register the application upon the expiration of the said period of 28 days unless before that time he has been served with, or with written notice of, such an order;
(3) The defendant pay the plaintiff's costs.
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Decision last updated: 19 December 2014
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