Problem of asymmetry of information has been fixed

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Problem of asymmetry of information – has been fixed now that land is registered. PRIORITY RULES AND TRANSACTION COSTS 1. If there was a forgery, and nobody knew of it, then their title, by way of convergence, is a fiction/worth jack, as title ended at the forgery. Same would occur if house was wiped out, and thus couldn’t prove chains of title deed. 2. The priority rules imposed costs and residual risks on purchasers 3. They may be affected by undiscovered prior legal interests, or equitable interests of which they are deemed to have constructive notice 18
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19 4. They may also be affected by the nemo dat quod non habet rule if there is a void instrument in the chain of title. CONFLICT OF POLICY OBJECTIVES 1. Security of title protects the existing owner from losing her title to a purchaser by a non- consensual transaction 2. Security of transaction protects the reasonable expectation of the bona fide purchaser 3. Historical priority rules promoted security of title 4. To promote development of the market economy, the market demanded more security of transaction. LAND REGISTRATION 1. 2 kinds of land registration system: Registration of deeds – basically a place where these deeds are housed. BUT, there is no security on them, as they could be forgeries! Can be quite messy! They’re merely used as evidence, NOT authority. Registration of titles eg Torrens system 2. Deeds register evidence of claims to interests – purchasers draw own conclusions 3. Deeds registration statutes alter the priority rules Registration gives priority over unregistered interests and those registered after (even if they were created earlier) TITLE REGISTRATION 1. It is not deeds that are registered but titles 2. Registration vests title 3. Registrar checks instruments before registering them 4. The State guarantees the title information shown in the register, subject to specified exceptions (paramount interests) STRENGTHS OF THE TWO SYSTEMS 1. Both can be effective in reducing the incidence of conflicts by alerting purchasers to the existence of prior interests 2. Registration of title reduces purchasers’ inquiry costs by providing better title information 3. Only registration of title can establish a fresh root of title where documentary title is in disarray. TOPIC 4 – THE TORRENS SYSTEM (TS) & THE PRINCIPLE OF INDEFEASIBILITY SIR ROBERT TORRENS 1. Introduction of the Torrens system (TS) First TS introduced by Real Property Acts 1858-61 (South Australia) by Robert Torrens Sources of ideas Merchant Shipping Act (Imp) UK Real Property commissioners’ report 1857 Hanseatic system of title registration (Dr Hübbe) 19
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20 TORRENS SYSTEM IN VICTORIA 1. Victoria had a system of deeds registration from the 1840s to the 1990s 2. Torrens system introduced in Vic from 1862 and applied to all land granted from Crown after 2.10.1862, and all other land parcels voluntarily registered by their owners OBJECTS OF TORRENS SYSTEM 1.
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