Torrens System & Indefeasibility

Published: 2021-06-29 06:54:57
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Category: Book Reports

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CONTRACTS

PREFACE
The Torrens system was founded on the concept of indefeasibility of title. Indefeasibility makes the interest unable to be defeated by claims of prior defectiveness except in cases of fraud.
In the current case Dependable Bank (hereinafter referred to as "DB") is able to exercise its power of sale as it was not a party to Henry's Fraud and obtained indefeasible title upon registration. Although DB is able to exercise its power of sale it must do so subject to the existing tenancy. Dana may be able to seek relief from the Torrens Assurance Fund for recovery of loss under the system.
Where the DB manager attested Dana's signature, Dana is able to apply to the Court to have her name restored to the register as Henry lost the benefit of indefeasibility by registration by his fraudulent activity. DB is not able to exercise its power of sale as it only gained a defeasible title upon registration of the mortgage and must sue Henry directly for its loss.

IS DB ABLE TO EXERCISE ITS POWER OF SALE

ANALYSIS

TORRENS SYSTEM & INDEFEASIBILITY

The effect of registration of an interest in Torrens land is to give the registered proprietor an indefeasible title to that interest. S42(1) of the Real Property Act (hereinafter referred to as "RP") confirms that upon registration, the registered proprietor acquires their interest free of unregistered interests even if, prior to registration, they had notice of such unregistered interests.




FRAUD


The RP notes fraud as an exception to indefeasibility. As the RP does not define 'fraud', we are dependant on case law, which has found that what is required is 'actual fraud, that is, dishonesty of some sort, not what is called constructive or equitable fraud'.

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