What Is Indefeasibility of Title Under The Torrens System in Australia?

Indefeasibility of title under the Torrens system is the guaranteed title of a registered proprietor. The law provides that the Torrens system is not a historical title or derivative title but in fact re-registers the title as new each time the title is registered. As per Barwick CJ who succinctly said in Breskvar v Wall:

"The Torrens system... is not a system of registration of title, but a system of title by registration."

Once an interest in Torrens title land has been registered, that registered title can not be revoked for reason's relating to the previous Torrens title, thus conveying to the registered owner an indefeasible title. The term "indefeasibility of title" though not expressly referred to in the Torrens legislation is conferred by paramountcy provisions defined by s42 of the Real Property Act (NSW). This section gives the registered owner of a title a statutory guarantee of ownership against almost all others not recorded in the folio and most others recorded in the folio with some statutory exceptions;

1. Fraud; giving rise to deferred indefeasibility;

2. Another proprietor claims same land from a prior folio;

3. An omission or mis-description of land (easements);

4. The right of persons to share in the land; profit a prendre;

5. The wrong description of parcels or boundaries included in the folio;

6. A tenant, in possession, with a contract, not exceeding three years; and

7. Non-statutoryexceptions such as in personam duties and personal equity.

Until the advent of the Torrens system, the main problem under the old English system was the complexities and subsequent cost associated with same. One such complex matter was the doctrine of notice and the obligation of an investigation by the buyer into proof of title.

Essentially what the Torrens system did was, upon each registration, surrender the land back to the Crown and from there the Crown would grant the land to the registered holder, thus abolishing the need for notice. This created what has become known as indefeasibility of title; any breaks in the chain of documents and claim therein became irrelevant as each registration created a new chain.

There is no mention of the terms "indefeasible" or "indefeasibility" in the Real Property Act, but instead it originated from Robert Torrens himself and subsequently case law. The Privy Council make mention of "indefeasible" in Gibbs v Messer in 1891. Gibbs v Messer also set a precedent with regards to the first of the statutory exceptions; that of fraud.

The exception of fraud derives from Gibbs v Messer in which the concept of deferred indefeasibility was expounded. It was held that because the fraudulent title document was in the name of a fictitious person; that in fact good title did not pass to the third party. However, if the non-fictitious third party had passed the title to a fourth party, then that would in fact constitute a good title, deferring the indefeasibility. This idea was further elaborated on in Frazer v Walker which differentiated the idea of deferred indefeasibility from the idea of immediate indefeasibility. The title holder forged the signature of a non-fictitious person and therefore passed a good title, even though there was a fraud. It was held that as long as the third party was an innocent bona fide purchaser and in no way party to the fraud, that this would enable immediate indefeasibility of title. In Australia this was given authority by the High Court case of Breskvar v Wallnwhich is still the authority on indefeasibility of title. The decision has been upheld in subsequent and more recent cases such as Westfield Management Limited v Perpetual Trustee Company Limited, Halloran v Minister Administering National Parks and Wildlife Act 1974, Farah Constructions Pty Ltd v Say-Dee Pty Ltd, and Black v Garnock.

For an exception of statutory fraud, there has to be an actual fraud as opposed to equitable fraud, and actual personal dishonesty ormoral turpitude by the registered proprietor, sometimes coupled with willful blindness or voluntary ignorance. There must also be the mens rea or knowledge of misleading conduct and an actual loss or detriment to a registered title holder.

The title to a whole parcel or part parcel of land that has been registered on a prior folio can take precedence over a part parcel or whole parcel registered on a later folio. This is outlined in s42(1)(a). Persuasive, not binding case law for this is National Trustees Co v Hassett in which a fence was constructed five inches to the south of the northern boundary and existed there for some years. Cousins J says at 414;

... [t]hese findings of fact are of no importance, because the land is included in plaintiff's certificate of title, which, like his Crown grant, is prior in date to that of the defendant.

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