Brennan j relied on inpersonum exception on the basis

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Brennan J: Relied on inpersonum exception – on the basis of a contractual undertaking or --- agreement. A RP who repudiates an unregistered interest (having given an undertaking) – you are acting fraudulently. Even though fraud is not the primary basis for the decision. The undertaking was given by the Thompson’s honestly but later repudiated. (Mason and Dawson JJ) Registered proprietor’s conduct can lead to an equity. Statutory fraud is narrower than equitable fraud. But these comments do not mean that all types of equitable fraud stand outside the statutory fraud context under the TLA. Latec – a collusive sale by a company to its own subsidiary is fraud under the TLA. Locu – fraudulent undertaking/ misrepresentation. Pyramid v Scorpion Hotels Facts: Mortgage was executed by Scorpion. But the company’s article’s of association required that a director witness the affixing of the seal. The person who witnessed the seal being administered was a director’s wife. The mortgage was not properly authorised by the company. It was argued that Pyramid was wilfully blind to the mortgage. Held: Hayne J Vic Supreme Ct: Even if the mortgage was not executed by Scorpion which would make it void. It would not alone affect the mortgagee’s title to the mortgage after registration. There is no fraud if the mortgagee was not privy to fraud. Fraud in S 42 – fraud is “actual dishonesty” or “moral turpitude”. You must prove dishonesty – you must bring that dishonesty home to the RP. Pyramid requested a copy of the directors’ meeting – suggesting that they knew. The definition is not constructive or equitable fraud with some exceptions. The first example is collusion ( Latec ). “The fraud must be brought home to the registered proprietor” – What about an agent/ employee? 28
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Schultz v Calwell Facts: C was the RP. S was the mortgagee. G was the solicitor acting for both parties in relation to the mortgage. G forged a mortgage in favour of S. Then he fraudulently induced S to discharge the mortgage. S argued that her mortgage was indefeasible because it was registered. C argued that the discharge was indefeasible. Issue: Did the fraud exception apply? NSWSC: Street J: Fraud must be brought home to the RP or his agents. Because G acted for both sides he could be an agent for both parties. There are 2 situations. (1) where they commit it (2) where they did not commit it but do have knowledge of it. When the agent commits the fraud it comes down to whether the principle is liable for the fraud. Worked out by the guiding principles of ordinary agency law. If the agent is acting within the scope within the sphere of either 1 or 2 it will bind the principal. S did not know about or authorise the forgery. What about where it is the RPs agent who knows of the fraud? Under the law of agency there is presumption of communication.
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