LAWS2386 LAND LAW SEMESTER 2 2014 UNSW LAW
Fundamental Concepts in Land Law The numerus clausus principle for recognising land interests Unlike contract law which allows parties to create almost any rights they please, (freedom of contract), there are only a small number of interests in land that are recognised as 'property'. We will do all of these in more detail during the course, but you need basic initial explanations so you have some idea what the text means when they are mentioned: Fee simple = the largest interest that anyone can have in land. When you buy a house in Burwood, Bowral or Bilgola, this will be what you are buying. It entitles the owner to possession of the land for an indefinite period, subject only to government acquisition and regulation by planning and other laws. Lease = a time-limited interest in land. As a lessee/tenant, you will be entitled to possession of the land, to the exclusion of everyone else, including the landlord. The landlord still owns the fee simple, but they have carved out a smaller interest in land and given it to the lessee. While the lease is running, the landlord's interest is referred to as 'the reversion'. It is important to grasp that while the terms of the lease will regulate how the lessee uses the land, the lease is still an interest in land that belongs to the lessee. It can be sold or given away, (assigned), by the lessee not the landlord. A lessee can also carve out a shorter interest from their lease and grant it to another. This is called a sublease. For example, a head landlord might grant a 10 year lease to a tenant who then grants a 5 year sublease to a subtenant. Mortgage = a small interest in land that the owner of a fee simple (or lease) gives to another in return for money. The owner of the land is the mortgagor and the person who gives the money is the mortgagee. (Although we talk about banks and other lenders giving us mortgages, they don't. We give them mortgages over our land.) The significance of the mortgage interest is that it entitles the mortgagee to sell the land if they are not paid back the money. The mortgagee takes whatever money they are owed from the sale price, and gives whatever is left over to the mortgagor. A mortgage includes a contractual promise to repay all of the money borrowed, but it is better and more secure than a mere contractual promise to repay, because the mortgagee can access a specific piece of land to satisfy the debt. That is why we talk about mortgagees being 'secured creditors'. Again, like leases, remember that a mortgage is an interest in land and can be sold by the person who owns it, the mortgagee, (that's how the GFC started...but that's another story). Easement = a right to do something on someone else's land, for example walk or drive across it or run a pipe or wires across it. Outside statute, easements always affect two pieces of land - the land benefited (the 'dominant tenement') and the land burdened, (the 'servient tenement'). As property interests, easements 'run with the land', that is, whoever owns the benefited land can use the easement, and whoever owns the burdened land has to put up with their land being used. Restrictive (or freehold) covenants = a right to stop someone doing something on their land e.g. a right to prevent a neighbour building above two storeys and blocking our harbour view. Like easements, restrictive covenants affect more than one piece of land; they affect land that is benefited (i.e. doesn't have its view blocked) and land that is burdened (land that cannot have a building of more than two storeys). However, as restrictive covenants are typically used to plan residential subdivisions, covenants usually burden multiple parcels of land, e.g. a covenant not to subdivide land into smaller lots (which is designed to maintain the 1
area as one with freestanding houses in large gardens), will benefit and burden every parcel of land in the subdivision, so that a single land owner can prevent any other land owner in the area from subdividing their land, not just the land next door. profit a prendre = the right to gather naturally occurring materials from another's land e.g. the right to quarry, to cut timber or even to shoot rabbits. Lien or charge = this is a little interest in land equivalent to an amount of money owed to the owner of the lien. It is like a mortgage, but does not include the right to sell the land. However, if the land is sold for any reason, the owner of the lien has a right to be paid directly out of the proceeds of sale. This is useful if the debtor is bankrupt or insolvent and owes more money to people than they can pay. Edgeworth extract on numerus clausus principle Landowners are not at liberty to customise land rights, they must fit firmly within the established types of property rights, regardless of the terms of the contract creating the interest. Property law is not concerned so much with the rights between parties to agreements as with those rights that are capable of being binding of third parties. To rank as an interest in land, a right must come within one item on the menu of numerus clausus interests. If not, then it will fail to be enforceable as property; and that means it will be impotent against successors in title, even if they have full knowledge of its existence at the time they acquire their interest. There are three reasons for the restrictive nature of property rights: 1. The concern for maximising the uses of land if parties were free to restrict the usages of land by agreements capable of binding successors in title indefinitely, land use could be shackled 2. Any proliferation of the number and range of rights tends to make conveyancing more complex, time-consuming and hazardous 3. If property owners were able to create, at whim any kind of property right the process of measured categorisation of interests by law-makers would be frustrated. Enforceability of contractual and property rights Recall that contractual rights are in personum due to the doctrine of privity of contract. However property rights act in rem; that is, they are rights against the entire world except for those with a greater property interest. Example: If A would like to be able to take a shortcut to the main road across their neighbour B's land, they could form a contract with B to this effect and it would be enforceable. However, if B sold the land to C, A could not enforce the contract against C, as C is not a party to the contract. However, if A had acquired an 'easement of carriageway' from B - a property right - that would be enforceable against C. The easement relates to the land itself and is enforceable by whoever owns the benefited land against whoever owns the burdened land. So, although the easement was originally created by A and B, it will still be enforceable even when the land has changed hands many times. That is the advantage of property over contract. 2
Facts Held King v David Allen - A right to post bills on the wall of a theatre is a contractual right, not a property right. There are a limited number of property rights that exist. In order to be called property, a right must fit the little box of property interests. Property rights can be enforced against anyone (in rem), but contractual rights can only be enforced against parties to the contract (in persona). King owned the building that a theatre wall was a part of, and agreed with Allen that he could post on it. King leased the building to the company, and they would ratify the agreement later. The company told Allen that he could no longer post, and Allen sued King for breach of contract. King wanted to bring the company in as a right to litigation, but was not allowed to because the court held the right to post bills was a contractual right. There is a distinct difference between real property (realty) and personal property (personalty). Pure personalty can be classed as: 1. Choses in possession a. These are tangible pieces of property other than land b. E.g. jewellery, televisions 2. Choses in action a. These are intangible pieces of property which are enforced by legal action b. E.g. shares, debts, copyrights Realty Real Property Personalty Personal Property Corporeal (land, buildings, fixtures) Incorporeal (easements and profits) Chattels Personal Choses in possession (tangibles) Choses in action (intangibles) Chattels Real Leases 3
Fixtures the boundary between chattels and land When we talk about 'land', we actually mean land and everything that is permanently attached to it. The most obvious example is a house. When we buy a house, we are actually buying the land; the house, being permanently attached to the land, comes along with the land. Property can start out life as a chattel and end up part of land. For example, bricks, mortar, wood and tiles start out as chattels bought by a builder and then brought on to land. When they are assembled as a house, they become permanently attached to the land, becoming part of it. This is the doctrine of fixtures. Understanding the doctrine of fixtures is important when valuing land. For example, if you are buying land that has a factory on it, the building is obviously a fixture, but what about the machinery inside? Is it a chattel which the vendor is entitled to remove or is it a fixture and part of the land you are buying? If the machinery is worth $500,000, you will want to be able to answer that question in order to know how much to offer for the land. To avoid confusion in relation to common items that are not clearly chattels or fixtures, (eg dishwashers, swimming pool equipment), the standard contract of sale for residential land in NSW allows vendors to tick boxes to make it clear whether these items are included in the sale of the land. Contract v Deed Recall that a contract is a promise to do something in the context of land, a promise to convey legal title. Thus, under s54a, if someone wanted to sell their land, they would start with the written contract promising to sell the land to the purchaser on a particular date, and then on that date, on payment of the full purchase price, they would execute a deed to convey the legal title to the purchaser. Thus a contract does not convey legal title; however it does create an equitable interest, since remember equity considers done what ought to be done. In a similar way, if a donor wanted to make a gift of land in their lifetime, they would not execute a contract, they would only need to execute a deed to convey the legal title to the recipient of the gift (the done) 4
Torrens System and Indefeasibility The Torrens system is the registration regime for ownership and transfer of title to land. It was created to deal with the complexity and cost of the old system (chains of title through deeds). Old System It s like a chain of deeds and the original Crown grant when conveyancing occurs, the original Crown grant as well as a copy of the conveyancing document (the indenture) were given to the purchaser, and the vendor retained a copy of the indenture which could be put together as proof of authenticity. As the land was continually sold, the pile of deeds would grow and become more complicated. An issue was if the documents were destroyed. Now, only a small number of properties are still under old system. You don t need the title deeds all the way back now, only about 30 years, since even if there was an invalid deed conveyance, statute of limitations meant that adverse possession to acquire the property could be argued. Torrens system There are two documents required for the Torrens system: 1. Certificate of title 2. Transfer of title form There are two main principles in the Torrens system: 1. All parcels of land (or lots as they are called) have had their boundaries by a professional, accurate survey 2. There is a publicly accessible government register that definitively records who owns that parcel of land and who else may have rights to it It also encapsulates the following notions: a) Mirror: The Torrens register is a mirror of all the interests in land. All of the interests are contained on the certificate of title and nowhere else. If it is not on that certificate, then you have no good title. b) Curtain: You don t need to go behind the current transaction. You don t need to know the history of the land and transactions around it. All you need to do is look at the current certificate of title document. c) Insurance: Since it is a State-guaranteed system, if you lose out because of some invalidity (fraud or mistake), you are entitled to compensation from the state under an insurance scheme Legislation The relevant legislation is: 1. Real Property Act 1900 a. Section 40 evidentiary provision the exclusive evidence of title is the Certificate of Title b. Section 41 only instruments executed and registered under this act will be effective in determining rights 5
c. Section 42 the registered proprietor of the land at the time will take absolutely all interests in the land (an indefeasible title) d. Section 43 notice doesn t matter under the Torrens system. If they have an interest, but it isn t registered, you can override it by registering. It s their own fault. A person who deals with a registered proprietor will not be affected by notice, actual or constructive, of an interest in land. What constitutes the register? Facts Held Bursill Enterprises v Berger Bros Trading (1971) 1. Argues that the while the easement to the block for right of way for the truck applied, the airspace one did not apply because it was not registered. 2. It was held that as long as there is some indication of another interest on the certificate, it is sufficient to make you inquire into the interests. The register is not just the certificate title, it is also all other documents referred to by the certificate. 3. If there is a reference to an easement, you need to look at the other document to figure out how extensive the right registered on that other document is. 4. Anybody whose interest is noted on the certificate of title has rights. The owner of the airspace was registered, even though it was mis-described. While the owner was not directly on it, the certificate of title referred to another document which did describe the right, thus it is a valid right to the airspace. Registrar General 12(1)(d) Registrar General can correct errors and omission on the Register but can t affect a right accrued from a recording made in the Register before correction: s 12(3)(b). The Register is a record of land details and must contain folios, dealings and instruments of a prescribed class. The Register 31B(2) (2)(a) Folio the Registrar General creates a folio by recording a description of the land, description of the proprietor, particulars the Registrar-General thinks fit and any other estates or interests that affect the land (s32(1)). The folio of the register is the computerised version (used to be called certificate of title). The hard copy is called a certificate of title (used to be called duplicate certificate of title) and is effectively a hard copy of the folio of the Register Conclusive Evidence (2)(b) Dealing consists of the instrument or instruments (other than Crown Grant or caveat) which are registrable under the Act. Must be executed by prescribed regulations. Production of certificate of title or folio of register is conclusive evidence of its contents i.e. that the named person is the proprietor. 6
s40 Dealings not completed until registration s41 Indefeasibility s42(1) Notice s43 A dealing to pass an estate or interest in land will not be effectual until registered in accordance with the Act. Interests that are unregistered or not subject to a dealing can still create equitable interest in land under the Torrens system. The registered proprietor holds free of all other competing estates or interests which are not recorded on the folio unless: In the case of fraud (s42(1)) There is an estate or interest created in a prior folio (s42(1)(a)) There is an omission or misdescription of an easement (s 42(1)(a1)) or a profit à prendre (s 42(1)(b)) There is a short term lease of less than three years (s42(1)(d) applies where the new proprietor had notice of an option to commence a further term at the end of the tenancy) Negates entirely the effect of notice that would have been fatal under the general law or common law. No person purporting to transfer from the registered proprietor is required to ascertain the circumstances in which such registered owner was registered, or will be affected by notice of any unregistered interest. Specific performance s44 Innocent proprietor s45 Adverse possession S45C 45G Also, knowledge of an unregistered interest will not of itself amount to fraud In proceedings for specific performance brought by a registered proprietor against a person who may have contracted to purchase (without notice of any fraud or other circumstances which would affect the right of the vendor) the production of the certificate of title entitles the proprietor to an order for specific performance. Title is not derivative: Nothing is to deprive any purchase bona fide for valuable consideration of any estate or interest in land of which the person is the registered proprietor. This is the case whether the vendor or mortgagor Is registered through fraud or error, or by means of void or voidable instrument: s 45(2)(a) Procured registration of the purchaser or mortgagee through fraud or error, or by means of void or voidable instrument: s 45(2)(b) Derived his or her right to registration as proprietor through a person who was registered as proprietor by fraud or error, or by means of void or voidable instrument: s 45(2)(c). Where a person is in possession of land and the land is a whole parcel of land and the title of the registered proprietor of the land would have been extinguished due to an adverse possession claim (12 years) that person may apply to the Registrar- General to be recorded in the Register as the proprietor of that estate or interest in the land. 7
(1) Land to be leased for more than three years must be registered. Tenancy provision s53 (3) A right the lessee to purchase the land may be stipulated in such instrument, and should the lessee wish to exercise this right the lessor shall be bound to execute a transfer of the land to such lessee. (4) A lease of land which is subject to a mortgage is not valid or binding on the mortgagee unless the mortgagee has consented to the lease before it is registered. Ejectment is absolutely barred against the registered proprietor unless you come under one of the listed exceptions, which are: (a) proceedings brought by a mortgagee against a mortgagor in default, (c) proceedings brought by a lessor against a lessee in default, Ejectment section S118(1) (d)(i) proceedings brought by a person deprived of land by fraud against a person who has been registered as proprietor of the land through fraud (e) A person deprived of or claiming land included in another person s folio (by reason of misdescription of other land or its boundaries) (except bona fide purchaser of valuable consideration): s 118(1)(e) (f) proceedings brought by a registered proprietor under an earlier folio of the Register against a registered proprietor under a later folio of the Register where the two folios have been created for the same land. The production of a folio (manual: (a) or computer (b)) is an absolute bar and estoppel to any such proceedings: s 118(2) Cancelling registration ss 136, 138 Registrar General (s136) or Court (s138) may cancel registration (court may also amend the folio) in circumstances provided such as mistake on the register, fraud, etc. 8
Indefeasibility The new priority rule for land Section 42(1) Real Property Act 1900 (RPA) gives a registered proprietor an "indefeasible" title to land. Indefeasibility is the central concept in the Torrens system, (although the word is not used in the RPA at all). Indefeasibility simply means that the registered owner of an interest in land has an "undefeatable" interest. It is important to remember that s42 RPA does not refer to fee simple interests. It refers to the registered proprietor of "any estate or interest in land recorded in a folio of the Register". Thus, a mortgage, easement or lease etc. can be indefeasible, not just fee simple interests. In combination with section 43, these two sections create a new priority rule. Section 42 (RPA) Estate of registered proprietor paramount (1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except: (a) the estate or interest recorded in a prior folio of the Register by reason of which another proprietor claims the same land, (a1) in the case of the omission or mis-description of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act, (c) as to any portion of land that may by wrong description of parcels or of boundaries be included in the folio of the Register or registered dealing evidencing the title of such registered proprietor, not being a purchaser or mortgagee thereof for value, or deriving from or through a purchaser or mortgagee thereof for value, and (d) a tenancy where-under the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected: Provided that: (i) The term for which the tenancy was created does not exceed three years, and (ii) in the case of such an agreement or option, the additional term for which it provides would not, when added to the original term, exceed three years. Essentially these sub-parts describe (a) interests under a prior registered Crown grant or certificate of title and (b) land included in the Crown grant or certificate of title by wrong description (2) In subsection (1), a reference to an estate or interest in land recorded in a folio of the Register includes a reference to an estate or interest recorded in a registered mortgage, charge or lease that may be directly or indirectly identified from a distinctive reference in that folio. (3) This section prevails over any inconsistent provision of any other Act or law unless the inconsistent provision expressly provides that it is to have effect despite anything contained in this section. 9
43 Purchaser from registered proprietor not to be affected by notice (1) Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any registered estate or interest shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such registered owner or any previous registered owner of the estate or interest in question is or was registered, or to see to the application of the purchase money or any part thereof, or shall be affected by notice direct or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud. (2) Subsection (1) does not operate to defeat any claim based on a subsisting interest, within the meaning of Part 4A, affecting land comprised in a qualified folio of the Register. Recall that the old priority rule was: a) Nemo dat to adjudicate between earlier legal interests and later legal interests b) Bona fide purchaser for value and without notice (BFPFVWN) rule to adjudicate between earlier equitable interests and later legal interests. These rules never apply in the Torrens system because section 42 eradicates the nemo dat rule by creating a system of title by registration, not registration OF title. That is, title to land in the Torrens system comes from the State act of registration, not from the vendor/donor. Thus there is no place for the concept that a vendor cannot give what he or she does not have. This provision has a threefold operation: a) It states that fraud will vitiate a registered title b) The estate or interest of the registered proprietor is subject only to those encumbrances actually noted on the register, with two exceptions; and c) That nevertheless there are certain unregistered interests which are enforceable against the registered proprietor Section 43 eradicates the bona fide purchaser for value and without notice rule by explicitly stating that no transferee will be affected by notice, direct or constructive, of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust of unregistered interest is in existence shall not of itself be imputed as fraud. That is, it doesn t matter if the new owner knew about an unregistered (almost always equitable) interest in land; they will not be bound by it essentially, they can just be a total dick and register despite knowing someone else has a good equitable interest and the land will be theirs anyway. The main purpose of the notice provision is to prevent the BFPFVWN principle from applying to registered land and to narrow accordingly the definition of fraud, which is otherwise undefined in the legislation (Templeton v Leviathan (1921) 30 CLR 34 at 69-70). 10
Deferred v immediate indefeasibility An issue is where there are transactions which otherwise in common law would be considered void. For example: A is registered proprietor, then X comes along and forges A s signature and gets hold of the certificate of title (CT) and forges in favour of B with a compliant witness. B is innocent and buys the property from X and thus becomes registered. Does B get the benefit of s42? Old system: In common law the nemo dat rule would apply (you cannot give what you never had), which is why the old system wouldn t allow it. Now if B non-fraudulently sells to C, assuming C is a bona fide purchaser, do they have any benefit? o Again under the common law, NO because B now has the nemo dat rule because the transaction to B was void, any further transfers will be invalid. All-in-all, the rights to the land remain with A unless it is extinguished by the adverse possession rule. However under contract, the forger X can be sued with personal remedies by the parties. Torrens: So B hasn t dealt with the registered proprietor, so they do not have indefeasibility they have not checked the identity of the forger. Since you have two innocent people (A and B), but policy says that the already incumbent owner should be protected. However C, since B was registered, has dealt with the registered proprietor and therefore does have indefeasibility. What is the difference between deferred and immediate indefeasibility? The difference is as follows: a) Under the doctrine of deferred indefeasibility, the title of an innocent purchaser P1 who registers a forged instrument is defeasible (it can be set aside by the court in favour of the registered owner A). However if, before P1 s title is set aside, P1 passes an instrument to purchaser P2 who registers in good faith, P2 s title is indefeasible that is defeasibility is deferred until the next purchaser registers without fraud b) Under the doctrine of immediate indefeasibility, good title is conferred to the innocent P1 immediately upon registration of the forged instrument, so it is indefeasible, even though it was procured via a forged instrument (as long as P1 is bona fide). The courts have adopted immediate indefeasibility. Example A was the registered proprietor of land. B, a rogue, sold the land to C and forged A s signature for a transfer from A to C, who had no knowledge of the forgery. C then registered the transfer under the RPA. Here, by the idea of immediate indefeasibility, C will have an indefeasible title against the world, including A. 11
The difference between immediate and deferred indefeasibility is like the difference between a voidable contract and a contract that is void (ab initio) respectively. The middle person in a deferred indefeasibility rule is that effectively that person has no rights whatsoever because the transaction is void. However in immediate indefeasibility, a void transaction itself will still give rise to good title B W A (Breskvar) Immediate indefeasibility and the effect of curing void instruments via registration Facts F were registered, then the wife forged signature and mortgaged, so the bank (Rodonski) become registered, then the mortgagee exercised power of sale, to P1 who became registered. Held Frazer v Walker Here the court opted for earlier decisions in NZ which dealt with immediate indefeasibility, rather than earlier Australian cases which were on deferred indefeasibility. Thus here, the Privy Council said that the meaning of s42 is that there are no qualifications about void transactions, so a plain reading of the statute is that it confers indefeasibility on the first person to be registered after the void transaction. This is the notion of immediate indefeasibility. The husband can get insurance under s43 because: 1. He had an interest in the land and was innocent 2. He lost out because of the operation of the system Would W have succeeded if the court had gone with deferred indefeasibility? Yes, because W had registered in good faith. Why immediate indefeasibility over deferred indefeasibility? Under deferred indefeasibility, the mortgagee would have lost out, but the person who lost (Frazer) out doesn t get compensation he could sue, but it s probably not worth suing his wife. However under immediate indefeasibility, there is a chance that no one loses out, because the bank gets the money, Walker gets the house, and Frazer can claim insurance 12
Facts Breskvars were registered proprietors and executed a memorandum of transfer omitting the name of the transferee as security for a loan from Petrie. Petrie inserted the name of their grandson (Wall) and registered the transfer. Wall sold the land to Alban in good faith. In December the Breskvars lodged a caveat and in January Alban lodged a transfer for registration which was blocked by the caveat. Held Breskvar v Wall 1. The grandfather is effectively acting as the grandson s agent. It is an implied agency agreement (ostensible agency). The principle is that W is tainted by the fraud of the agent because the agent is acting in ostensible authority. W has represented P as his agent to the world, and thus will take liability for the actions of the agent. 1. Here there are two equitable interests between B+B and A. Usually the firstin-time rule applies, except where there is fraud 2. Albans interest prevailed on account of the better equity 3. In applying the doctrine of immediate indefeasibility: a. Wall s registration did not give indeafesible title because it was subject to fraud b. If the Albans had registered, they would have obtained indefeasible title. Since they did not due to the operation of the caveat, the dispute was resolved by competition between equitable interests. c. Alban had a better equity because Breskvar s conduct allowed the fraud to be instigated. So in land law there are: a. The registered interests which take priority b. If the legal title is overridden (therefore defeasible) by fraud, equitable doctrines will apply. NB: This differs from a mere equity priority rule from Latec (a mere equity is a right to set aside a transaction). Thus a BFPFVWN who has a later equitable interest will beat a mere equity. If A gets registered, then that is the end of the story, but if A is NOT registered, then it comes down to priority. 4. Wall has a legal stake but he is party to the fraud. Grandfather acted as agent for Wall by registering Wall 5. Therefore there is a contest between A and the Breskvars 6. Albans had a better equitable interest. General rule- cab rank rule- first interest wins. BUT Breskvars were contributing to the inducement of A. Therefore the equities aren t equal. What of a question of indefeasibility? The RPA and Torrens system are silent on the nature of indefeasibility. If immediate indefeasibility is used in this case (which it was) there are three rights in play: 1. B has an equitable interest 2. A has an equitable interest as a result of the constructive trust from vendor and purchaser 13
3. W was fraudulent If B had intervened before W transferred to A even though immediate indefeasibility applied, B could have won because W was fraudulent. Here A is entitled to the land, but there is a caveat on the title. Thus the caveat must be removed since the claim for the caveat is no longer valid. Now A must be the registered proprietor for immediate indefeasibility, so that A becomes the priority, and then B and then W, for fairness. Summary Breskvars have equitable interest Albans- constructive trust Wall- registered proprietor- defeasible/voidable Thus if breskvars didn t proceed to get him off the register then his title would continue unhampered. Protection of innocent parties under Torrens Section 45 of the RPA extends the protection accorded to a bona fide purchaser by providing that nothing in the Act is to be interpreted so as to leave a bond fide purchaser for valuable consideration open to an action for recovery of damages or to an action of ejectment or to deprivation of his or her estate or interest, on the ground that the vendor may have been registered through fraud or error, or obtained title from a registered proprietor who was registered through fraud or error. 45 Bona fide purchasers and mortgagees protected in relation to fraudulent and other transactions (1) Except to the extent to which this Act otherwise expressly provides, nothing in this Act is to be construed so as to deprive any purchaser or mortgagee bona fide for valuable consideration of any estate or interest in land under the provisions of this Act in respect of which the person is the registered proprietor. (2) Despite any other provision of this Act, proceedings for the recovery of damages, or for the possession or recovery of land, do not lie against a purchaser or mortgagee bona fide for valuable consideration of land under the provisions of this Act merely because the vendor or mortgagor of the land: (a) may have been registered as proprietor through fraud or error, or by means of a void or voidable instrument, or (b) may have procured the registration of the relevant transfer or mortgage to the purchaser or mortgagee through fraud or error, or by means of a void or voidable instrument, or (c) may have derived his or her right to registration as proprietor from or through a person who has been registered as proprietor through fraud or error, or by means of a void or voidable instrument. (3) Subsection (2) applies whether the fraud or error consists of a misdescription of the land or its boundaries or otherwise. 14