2 s 41 conclusive evidence provision 3 s 42

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2. S 41 ‘conclusive evidence’ provision 3. S 42 ‘paramountcy or ‘indefeasibility’ provision 4. S 43 ‘notice’ provision The nemo-dat rule does NOT apply Courts have read it broadly, thus buyers who even know of a trust on the land are considered NOT to know this, as it isn’t the buyers concern. Is this fair on a prior interest holder? Well, if purchaser acts fraudulently, then s. 43 won’t apply. Protected from prior interests. 5. S 44 ‘protection of purchasers’ provision S. 44(1) – so, if A gets registered through fraud, it can be set aside. S. 44(2) FACTUAL SCENARIO 1. V is the regd pter of Torrens land 2. F forges a transfer from V to A (a bona fide purchaser) 3. A register the transfer without fraud 4. V discovers the forgery and wants to get the register rectified to remove A’s interest and have herself restored as RP 5. What if, in the meantime, A sells to B, a bona fide purchaser, who registers without fraud? TWO ALTERNATIVE RULES 1. A gets only a defeasible title (ie the register can be rectified to remove A’s title on the application of V), but B gets an indefeasible title. This is called deferred indefeasibility 2. A gets an indefeasible title. As soon as he registers without fraud, V’s title is irretrievably lost. V may get compensation from the assurance fund. This is immediate indefeasibilty 3. Note that under both rules, B gets indefeasible title on registration. IMMEDIATE INDEFEASIBILITY 1. Purchasers get high security of transaction, because protected against defeasibility for Invalidity in vendor’s (grantor’s) title, AND Invalidity in the instrument by which they themselves obtain registered title 2. Owners are at risk of losing their titles through a forgery or other invalid instrument. 21
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22 THE RULE CHANGE 1. For decades, deferred indefeasibility was assumed to be the rule Gibbs v Messer [1891] 1 AC 248 (PC) 2. PC preferred immediate indefeasibility in Frazer v Walker [1967] 1 AC 569 Gibbs v Messer was distinguished, not overruled 3. High Court follows Frazer v Walker in Breskvar v Wall (1971) 126 CLR 376 FRAZER V WALKER 1967 1. Mr and Mrs F were RPs of land. Mrs F arranged mortgage to the Radomskis. She forged his signature on the mortgage. Rs registered the mortgage without knowledge of the forgery. On default, Rs sold to Walker, who registered transfer without fraud. W sought possession of the land from Mr F. F counterclaimed for rectification of register to remove the mortgage and transfer. FRAZER V WALKER – PC DECISION 1. Once a void instrument is registered without fraud, RP (including a registered mortgagee) obtains an immediately indefeasible title. 2. This in no way denies the power of a court of equity to make an order against the RP in personam (see topic 5.2) 3. Distinguished Gibbs v Messer, effectively confining it to its facts.
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