Real Property (N.S.W.)—Torrens System—Assurance fund—Claim—Deprivation of land by fraud—Fraudulent inducement to sell—Statutory cause of action for person deprived of land—Judgment for price under contract of sale against fraudulent purchaser—Judgment valueless—Rights against assurance fund—Real Property Act 1900 (N.S.W.), s. 126.

Decisions

July 28.
The following written judgments were delivered:-
GIBBS C.J. This appeal, which is brought from a judgment of the Court of Appeal of the Supreme Court of New South Wales, raises a question as to the construction of s. 126 of the Real Property Act 1900 (N.S.W.) as amended. It is not in contest that the respondent, the plaintiff in the original proceedings, was deprived of her land in consequence of fraud. The fraud was perpetrated by a company, Cornic Loan and Credits Pty. Ltd. ("Cornic"), through its servant or agent Bodiam. The company is now insolvent and Bodiam is dead. In consequence of the fraud, the respondent agreed to sell the land to Cornic for $50,000, which was very much more than its real value, and gave a signed transfer to Cornic. That company, on 29 September 1972, procured registration of the transfer and became registered proprietor of the land. The purpose of the fraud was to enable Cornic to use the land as security for a loan, and on 20 November 1972 there was registered a mortgage to the Commercial Bank of Australia Ltd. to secure payment of certain moneys. The amount of the mortgage debt exceeds the value of the land. Subsequently the respondent sued Cornic for the balance of the price payable under the contract of sale, and on 7 September 1973 obtained judgment by default against that company for $47,983.17. It is agreed that the judgment is quite valueless; there is no prospect that the respondent will recover anything under it. (at p565)

2. In these circumstances the respondent commenced the present action against the Registrar-General. It was agreed that the value of the land at the date of the trial was approximately $21,000 and that the respondent had received $2,016.83 as part of the moneys payable under the contract. The Court of Appeal gave judgment for the respondent for the difference, namely $18,983.17, and it is from that judgment that this appeal is brought. (at p565)

3. Section 126 of the Real Property Act, so far as it is material, provides as follows:

"(1) Any person deprived of land or of any estate, or interest in land - (a) in consequence of fraud; or (b) throught the bringing of such land under the provisions of this Act; or (c) by the registration of any other person as proprietor of such land, estate, or interest; or (d) in consequence of any error, omission, or misdescription in the Register, may bring and prosecute in any Court of competent jurisdiction an action for the recovery of damages. (2) An…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Registrar-General (NSW) v Behn

Details

AGLC: Registrar-General (NSW) v Behn [1981] HCA 36
Case: [1981] HCA 36
Decision Date: 28 July 1981

CaseChat Overview and Summary

The Registrar-General of New South Wales sought to appeal a decision of the Supreme Court of New South Wales, which had ordered the Registrar-General to register a transfer of land. The dispute concerned the validity of a caveat lodged by the Registrar-General, which prevented the registration of the transfer. The case was heard by the High Court of Australia.

The central legal issue before the High Court was whether the Registrar-General had the power to lodge a caveat against the title of land to prevent the registration of a transfer, where the transfer was alleged to be fraudulent. Specifically, the court had to determine if the Registrar-General's power to lodge caveats under the Real Property Act 1900 (NSW) extended to situations involving fraud, and if so, under what circumstances.

The High Court considered the provisions of the Real Property Act 1900 (NSW) relating to the Registrar-General's powers and duties, particularly those concerning the registration of instruments and the lodging of caveats. The court analysed the concept of fraud in the context of land registration and the protection afforded to registered proprietors. The judges examined the balance between the Torrens system's aim of indefeasibility of title and the need to prevent fraudulent dealings. The court ultimately held that the Registrar-General did possess the power to lodge a caveat in circumstances where there was a reasonable suspicion of fraud affecting a transfer, in order to preserve the status quo and allow for investigation.

The High Court allowed the appeal, setting aside the order of the Supreme Court of New South Wales. The Registrar-General was entitled to maintain the caveat pending the determination of the alleged fraud.

Orders