Perpetual Ltd v Barghachoun

The appeal before the Full Court of the Federal Court of Australia involved Perpetual Limited and Barghachoun, a Lebanese-born elderly woman who speaks no English. The dispute centred around the enforceability of a default judgment obtained by Perpetual Limited against Barghachoun in the New South Wales Supreme Court, which resulted in the transfer of her property to Perpetual. Barghachoun alleged that the default judgment was obtained through unfair conduct by Perpetual's agent, which undermined the indefeasibility of title under the Torrens System. The Full Court was required to determine whether the alleged conduct was sufficient to defeat indefeasibility and whether the default judgment should be set aside.

The court examined whether the alleged conduct of Perpetual's agent constituted fraud of the kind that would defeat indefeasibility under the Torrens System. The Full Court noted that while there were allegations of unfair conduct, they did not amount to fraud that would undermine the principle of indefeasibility. The court found that the agent's conduct, while arguably unethical, did not meet the high threshold of fraud required to defeat the registered title. Furthermore, the court considered the circumstances of Barghachoun, who was an elderly non-English-speaking immigrant, but concluded that this did not, in itself, render the default judgment unfair. The Full Court held that the alleged conduct did not rise to the level of fraud necessary to set aside the default judgment.

Consequently, the Full Court dismissed the appeal and upheld the default judgment. The court found that the alleged conduct by Perpetual's agent, while possibly unethical, did not constitute fraud of the kind to defeat indefeasibility. As such, the transfer of Barghachoun's property to Perpetual Limited was upheld, and the default judgment was not set aside. This decision reinforces the principle that indefeasibility under the Torrens System is a strong protection for property titles, and only clear instances of fraud will undermine this protection.