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Torren’s System 11

Torren’s System

Torren’s System is a land registration system, invented by Sir Robert Torrens, the 19th century reformer of Australian land laws, in which the government is the keeper of all land and title records, and a land title serves as a certificate of full, indefeasible, and valid ownership. It was introduced to resolve the deficiencies of the common law and deeds registration system in Australia, and has been adopted by several US counties and Canadian provinces. According to the system title registration is an efficient bookkeeping system that facilitates conveyancing. It is a system of record, not of land tenure, and is readily adaptable to any form of land tenure”1.

In the development of the system, various factors about the registration using the title system were identified. To begin with, the registration of land gave details about nature and the rights of the legally identified proprietor as well as the persons who are involved in the interests and title estate. Thus under the Victorian Legislation, the Torren’s Title land is that which has been registered by the titles registrar as per the Transfer of land Act 1958. The registration of an instrument was a high dependant factor for the title. At this point the land is under the Land Act 19582. The record system had and is to be kept up to date which includes the changes in ownership that may occur over time3. The system had to be controlled by a central government and had to stand the taste of time distinct from the political changes that may occur within the government system. The running of the system had to be kept separate from the administrative processes. The country employing this has to ensure that the registration process is kept up to date and without any political interference4.

The system is credited to have overcome the perceived deficiencies of the old system

The Torrens System considered several principles that were fundamental to its effectiveness. The system sums up three principles that are to be observed to this effect. To begin with, properties are to have a document i.e. a title certificate that is used to identify on as the sole owner of the property. Secondly, all the property interests are to be registered on the identified certificate and this certificate had to be guaranteed and identified buy the government in authority5. The Torrens system is viewed to have solutions to these as the adherence to the system meant the observations of rules and regulations that had to stand the taste of time. The system proposes that no trusts are to be registered under the identified certificate and the registration process had the audacity to correct any defect identified in the title to the benefit of the bona fide purchasers. Any interests that affect the property are to be identified in the certificate of title. All this imply that the title of land is legally shown through its registration6.

Under the legislation, seven features are identified in the system. To begin with, the system does not require investigation that is retrospective in nature. For the government guarantee to be provided, the system suggests for the commencement of an assurance fund. A charge on the land and not a transfer of the fee is obtained by mortgages. Procedures in the system are simplified through the introduction of prescribed forms. The Act provides for the land brokers that are not solicitors but rather are trained in the conveyance of land. The Real Property Act protects all the property that has all its transactions registered and the title is created using all the certificates and documents that were used in the clearly procured property7.

Although the Torrens System is indefeasible, there are exceptions such as fraud a bona fide registered owner having a considerable degree of security of the title, and the in personam exception which means that a registered owner cannot avoid contracts or trust relationships that party has entered into.

The in personam exception is not restrictively interpreted, and hence it is capable of undermining the principle of indefeasibility. This is clearly revealed by Lynden Griggs (2003), and Barry Crown’s work8. A restrictive view of the in personam exception is found in the case law and academic literature in Singapore. Crown’s argument is that the notion of an “in personam claim” or “a personal equity” is vague, and, its general adoption would pose a threat to one of the central planks of the Torrens System. This has been approved by the judiciary in the Singapore Court of Appeal in the Overseas Bank Ltd v Bebe bte Mohammad (‘Bebe’). Chan Sek Keong CJ studied the legislative history and provisions of the Torrens system in Singapore and realized that courts should not be quick to adopt the concept of personal equities on the Singapore Torrens system9. He argued that various statutory exceptions to indefeasibility found in the Singapore Torrens statute, such as fraud, contract and forgery, could deal in most in personam actions in common law and equity10.

It is however noted that the in personam exception perception does not attract any contradiction between concept of indefeasibility and the pursuit of personal claims against the registered proprietors. A good example is in the New Zealand Court of Appeal’s decision of CN & NA Davies Ltd Laughton (“Laughton)11. Thomas J, writing for the Court in that case, was for the opinion that the in personam exception sits comfortably with the concept of indefeasibility, and that it is essentially non-proprietary in nature. He also claims that the key element is the involvement in or knowledge of the registered proprietor in the unconscionable or illegal act or omission in issue. Professor Robert Chambers claims that when the in personam exception include unjust enrichment claims, such as undue influence and claims in duress, it does not contradict objectives of the Torrens system12.He draw a line between a two-party case and a three-party case whereby he argues that in three-party case, the defendant obtains indefeasible title, whereas in a two-party case, the property is given automatically to the defendant. Chambers go on to argue that the Torrens system is meant to simplify an investigation into the title of a person and not into the process of transaction though which the title was obtained13.

Restricting the in personam exception is not effective as it limits development of the law in various areas. For instance, under narrow approach, a defendant who becomes a registered owner would use an indefeasible title to win over a request for a constructive trust, in case of abuse of confidence while in many Commonwealth cases, the declaration of a constructive trust due to abuse of confidence, what is called Pallant v Morgan equity is an issue that is still argued about14. This means that a restrictive approach to in personam exception would complicate development of remedies for pre-existing and new causes of action15. The narrow approach to the in personam exception limits law’s ability to improve the existing situations, so that they can suit the evolving social circumstances16. It is however very important to consider whether the remedies undermine the principle of indefeasibility, or whether they are justifiable in line with the situation at hand. With regard to the fraud exception to indefeasibility, Bryan, observed that it could be impossible to decide cases within this exception without making adjustments that would result to severe distortion17.

The wide approach to the in personam exception is more advantageous than the narrow view. According to Thomas J, knowledge of an unconscionable or illegal act forms the basis of in personam exception. He further notices that mere knowledge on the registered proprietor’s part cannot be efficiently used as a guide into the in personam exception. Chamber latter agreed with the wide approach and now makes a distinction between rights that are in line with indefeasibility and rights that are not in line with the indefeasibility18. Unfortunately, he did not develop his argument concerning this fully, and also, he did not explain why some rights that are not in line with the principle of indefeasibility could be used to set aside a registered title. He however noted that in some cases, the right to restitution appears to be a direct assault on the principle of indefeasibility. He noted that the courts had not yet resolved this conflict satisfactorily19.

Though Chamber’s agreement gave much hope, the greatest challenge was to identify which claims which detract the principle of indefeasibility and which do not. For in personam exception to be practical, the prima facie position in personal claims must first and foremost be brought against the registered proprietor unless such claims undermine the principle of indefeasibility of title. Also, claims against a registered proprietor must be a known claim either in law or equity20. Another requirement to be met is that personal claims brought against the registered proprietor must arise from personal conduct of the registered proprietor21. Again, to found any in personam action, however, evidence beyond bare forgery must be shown. The personal claim, in most cases should not affect the title of the registered proprietor. However, if the claim succeeds, the proprietor has to give the complaint money equivalent to the claim.

The system has benefits as if offers ownership certainty to the owner of the property by the security of tenure that it provides. This has lead to the reduction of disputes over land that had been witnessed under the old title system. The system has further witnessed the improvement of conveyancing and the high level of land market stimulation as many persons are willing to invest in land through following the relevant procedures22. The owners of the registered properties are able use it and obtain financial assistance by using the registered land as collateral. In addition, the proper registration which includes surveying has made it possible for effective physical planning. Registration of land has benefits as it possible for the government authorities to effectively monitor on taxation and managing of the state owned land23.

Despite all these benefits, the Torrens system attracts criticism most of which are as a result of the experiences of the southern Australians. The system has been criticized in its failure to address the issue of multiple ownership mainly in the land shares. The system has also failed in addressing the existence of multiple titles and its straight ignorance of the customary tenure. Its provisions are not clear in the exact mode to identify the sole owners of apartments and high rise buildings/flats. Through a further analysis the ownership of the land that is not registered cannot be easily solved using the system. Relevant data on for example the zoning status that is a requirement for an interest transfer is not contained in all the aspects of the system24. Further, the system has in a large proportion failed in addressing and coping with rapid expansion that is witnessed in the urban centers. According to Dale (1922), the system provides heavily for the support of management of land and for the purposes of taxation. In addition, the system has been identified to be in support of the of the conveyance process25.

In conclusion, the case of the Torren’s title system has increased the confidence of the public as the registration and ownership of land is guaranteed by the government. Anyone dealing with land ownership is certain that the effective adherence to the system entails the utilization of the basic principles pertaining to land ownership. The process is effective as a centralized registering system is adhered to manage the registration and managing of land. The providence of market values gives foundation and reason for the increase in revenue as the all the ownership details are available and up to date26.

References

Barry C Crown, ‘Equity Trumps the Torrens System: Ho Kon Kim v Lim Gek Kim Betsy’ [2002] Singapore Journal of Legal Studies 409.

Butt Peter., «Introduction to Land Law», Law Book Co. Ltd., 1980

Cribbett & Johnson., «Principles of the Law of Property», 3rd Ed. Foundation Press, 1989

Holstein, L.C., and Williamson, I.P., «Conversion of Deeds Registration Titles to Torrens Title — A Review of the Situation in N.S.W», Aust.J.Geod.Photo.Surv., No.40, June 1984, pp 1 — 28.

Miceli, Thomas J., Sirmans, C.F., «Torrens vs Title Insurance: An Economic Analysis of Land Title Systems» , Illinois Real Estate Letter, Office of Real Estate Research, University of Illinois at Urbana-Champaign, 1997

Mills.T.F., «The Development and Effect of the Torren’s System of Land Titles in South Australia», Fourth European Real Estate Society Conference, Berlin, June 25 — 27 1997

Robert Chambers, ‘Indefeasible Title as a Bar to a Claim for Restitution’ [1998] Restitution Law Review 126.

Shick., Blair C; Plotkin., Irving H., «Torrens in the United States», Lexington Books `1978.

Sook Yee Tan, Principles of Singapore Land Law (2nd ed, 2001) 189-99.

South Australian Government., The Real Property Act 1886 , Government Printer

Torrens, Robert R., «The S.A System of Conveyancing by Registration of Title», 1859 ., S.A Facsimile Edition No.33, Public Library of S.A., Adelaide 1962.

Torrens, Sir Robert K.C.M.G ., «An Essay on the Transfer of Land by Registration.», c1881., Cassell & Company Limited.

Torrens, Sir Robert K.C.M.G ., «An Essay on the Transfer of Land by Registration.», c1881., Cassell & Company Limited.

White, R.J., Jessup’s Land Titles Office Forms and Practice, Seventh Ed., Law Book Society

Williamson I.P, «Cadastral Systems in the Asia-Pacific Region — Experience and Lessons», FIG Land Records Conference, Fredericton, Canada 1994

Williamson I.P., «Cadastral and Land Information Systems in Developing Countries», The Australian Surveyor, vol.33 (1986). No.1, pp 27 – 43.

Victorian legislation, Accessed on the 12th of September 2011 from; http://www.vgso.vic.gov.au/resource-centre/publications/dealing-land-victoria-what-government-agencies-need-know#Categories

1
Williamson I.P, «Cadastral Systems in the Asia-Pacific Region — Experience and Lessons», FIG Land Records Conference, Fredericton, Canada 1994

2 Victorian Legislation

3
Williamson I.P., «Cadastral and Land Information Systems in Developing Countries», The Australian Surveyor, vol.33 (1986). No.1, pp 27 — 43

4
Mills.T.F., «The Development and Effect of the Torren’s System of Land Titles in South Australia»., Fourth European Real Estate Society Conference, Berlin, June 25 — 27 1997

5 Victorian Legislation

6
White, R.J., Jessup’s Land Titles Office Forms and Practice., Seventh Ed., Law Book Society

7
Miceli, Thomas J., Sirmans, C.F., «Torrens vs Title Insurance: An Economic Analysis of Land Title Systems» , Illinois Real Estate Letter, Office of Real Estate Research, University of Illinois at Urbana-Champaign, 1997

8
Barry C Crown, ‘Equity Trumps the Torrens System: Ho Kon Kim v Lim Gek Kim Betsy’ [2002] Singapore Journal of Legal Studies 409.

9
Sook Yee Tan, Principles of Singapore Land Law (2nd ed, 2001) 189-99.

10
Bebe [2006] 4 SLR 884, 920.

11
[1997] 3 NZLR 705.

12
Robert Chambers, ‘Indefeasible Title as a Bar to a Claim for Restitution’ [1998] Restitution Law Review 126.

13
Holstein, L.C., and Williamson, I.P., «Conversion of Deeds Registration Titles to Torrens Title — A Review of the Situation in N.S.W»., Aust.J.Geod.Photo.Surv., No.40, June 1984, pp 1 — 28.

14Cribbett & Johnson., «Principles of the Law of Property», 3rd Ed. Foundation Press, 1989

15
Butt Peter., «Introduction to Land Law», Law Book Co. Ltd., 1980

16
Shick., Blair C; Plotkin., Irving H., «Torrens in the United States», Lexington Books `1978.

17
Torrens, Sir Robert K.C.M.G ., «An Essay on the Transfer of Land by Registration.», c1881., Cassell & Company Limited.

18
Torrens, Sir Robert K.C.M.G ., «An Essay on the Transfer of Land by Registration.», c1881., Cassell & Company Limited.

19
White, R.J., Jessup’s Land Titles Office Forms and Practice., Seventh Ed., Law Book Society

20
White, R.J., Jessup’s Land Titles Office Forms and Practice., Seventh Ed., Law Book Society

21 Victorian Legislation

22
Torrens, Robert R., «The S.A System of Conveyancing by Registration of Title»., 1859 ., S.A Facsimile Edition No.33, Public Library of S.A., Adelaide 1962.

23
Torrens, Sir Robert K.C.M.G ., «An Essay on the Transfer of Land by Registration.», c1881., Cassell & Company Limited.

24
South Australian Government., The Real Property Act 1886 , Government Printer

25
South Australian Government., The Real Property Act 1886 , Government Printer

26
Land owners have an incentive to develop their land to maintain the value of their asset either to pass on to their families or for investment purposes.