Section 43A

1
Section 43A

• Cameron Stewart

2
Section 43A

• On completion of the contract for sale of
  land and before registration the purchaser has
  less rights than they would have under the old
  system as they only have an equitable interest
  which is subject to any earlier equitable
  interest (even though they may have taken the
  interest for value and without notice) under
  old system they would have had the legal estate
  provided they took that estate without notice of
  earlier interests and for value.

3
Section 43A

• To remedy this defect in the RPA s43A bestows
  upon such a purchaser of Torrens land the same
  rights as they would have under old system that
  is the section declares that they take a legal
  interest after sale but prior to registration.
• Therefore s 43A allows a purchaser of an
  interest in land, who takes for value and without
  notice, to get a legal estate thus protecting
  him or her against earlier equitable interests

4
Section 43A

• The interest purchased must had been effected by
  a dealing registrable that is you must be able
  to lodge the dealing for immediate registration

5
Section 43A

• The instrument cannot be a forgery. Nor can a
  person who obtains an interest by fraud gain the
  protection offered by s 43A
• Diemasters Pty Ltd v Meadowcorp Pty Ltd (2001) 52
  NSWLR 572

6
Section 43A

• In both Jonray (Sydney) Pty Ltd v Partridge Bros
  Pty Ltd (1969) 89 WN (NSW) Pt 1) 568 and Mayer v
  Coe (1968) 88 WN (NSW) (Pt 1) 549 it was
  suggested that if notice of a void instrument was
  received after completion of the transaction but
  before its registration, the true proprietor
  could prevent registration of it by obtaining an
  injunction to prevent registration.

7
Section 43A

• In Diemasters Pty Ltd v Meadowcorp Pty Ltd, at
  581, Windeyer J said
• Section 43A envisages that a dealing will be
  lodged for registration. Its purpose is to assist
  a party who lodges a dealing for registration,
  not to assist one who makes no effort to get
  protection of registration.
• In that case his Honour held that s 43A
  protection was not available to a person who had
  taken no steps to get registered within a period
  of fourteen months after settlement of the
  transaction.

8
Section 43A

• Successive effect recall priority rule earlier
  equitable v later legal bona fide purchaser for
  value without notice and the extension on that
  principle eg Wilkes v Spooner - later
  purchasers who buy the original purchasers
  interest with notice are protected by the
  original purchasers title to allow the
  purchaser the full right to deal with the
  property as he or she wishes

9
Section 43A

• Eg A buys an estate of B, for value and without
  notice of Cs earlier equitable interest in the
  property A takes priority if a then sells to
  D and D knows of Cs interest he can still take
  priority over C
• So too does s 43A have this successive effect

10
Section 43A

• Eg if A buys land from B for value and without
  any knowledge of the prior equitable interest of
  D, under s 43A A will take the legal estate and
  Ds interest will be defeated. If before
  registering his interest, A then executes a
  mortgage to C, Cs interest will still take
  priority over Ds, even if C had notice of Ds
  interest..

11
Section 43A

• IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR
  550
• Courtney bought land off Mrs Austin for 15000
  pounds. 3000 was paid as deposit and the rest was
  secured by a mortgage back to Mrs Austin.
• The documents were not lodged for registration
  until seven months after settlement. Mrs Austin's
  solicitor had retained these documents to allow
  the mortgage to be registered. Later Mrs Austin
  and the Courtney's agree that Mrs Austin would
  buy the land back. The original transfer and
  mortgage had not been registered by this time.

12
Section 43A

• Before the second sale was registered Mrs Austin
  agree to sell the land to Denton Subdivisions Pty
  Ltd. She did this without the Courtney's
  knowledge. Mrs Austin's solicitor uplifted the
  original sale and mortgage documents from the RG.
  When the sale to Denton was being settled a
  question was asked about why these documents had
  been uplifted. Mrs Austin's solicitor lied and
  said it was part of a deal to finalise the resale
  back to Mrs Austin. A copy of the second contract
  for sale was produced as evidence. Denton's
  purchased was financed by IAC as mortgagee. The
  documents were lodged by IAC but before they were
  registered the Courtney's commenced their action

13
Section 43A

• Held the Courtney's were entitled to
  registration.
• Unregistered interests are equitable. The effect
  of s 43A is to confer a legal interest on an
  equitable interest, to put it into the position
  of protected received by a bona fide purchaser
  for value without notice.
• Why did IAC fail?

14
Section 43A

• Kitto - the fact that the solicitor withdrew the
  registration without authority meant that s 43A
  did not give priority to IAC
• Taylor - The ordinary rules of priority apply.
  IAC had notice of the equitable interest of the
  Courtney's hence they could not satisfy the rule.
• Dixon - an unauthorised withdrawal was not a
  withdrawal and was ineffective. Hence the
  conflict was between an early registrable
  interest and a later registrable interest.
  Section 43A meant that two registrable dealings
  would be determined by the first in time rule

15
Section 43A

• Taylor Js interpretation was endorsed by a
  unanimous High Court in Meriton Apartments Pty
  Ltd v McLaurin Tait (Developments) Pty Ltd
  (1976) 133 CLR 671 10 ALR 296.

16
Section 43A

• Jonray (Sydney) Pty Ltd v Partridge Bros Pty Ltd
  (1969) 89 WN (NSW) Pt 1) 568
• M contracts to sell land to J. At the date of the
  contract M was not the registered proprietor but
  was a purchaser of the land in a contract from A.
  The land was subject to a mortgage to B. To
  settle the sale to J M intended to hand over the
  transfer of the land to J, executed by A at the
  direction of M, in conjunction with a discharge
  of mortgage executed by B. J was not happy with
  this arrangement and said that it wanted to
  receive the title from M. J wanted the mortgage
  discharged before the settlement. J sought to
  rescind the contract. However it had not lodged
  its objections within the time period for the
  making of objections to title. The issues were
  whether a purchaser could refuse a transfer by
  direction and whether it could require the title
  free from incumbrances.

17
Section 43A

• The court found that the purchaser could not
  object to the sale by direction as it was still a
  sale from the registered proprietor. A purchaser
  received the same protection as a purchaser
  taking directly from a registered proprietor.
• As for the objection to the discharge of
  mortgage, the court found that the purchaser
  could not object as uon registration it would
  receive indefeasible title. After completion or
  prior to registration the purchaser was protected
  by s 43A against any defects of which it had no
  notice.

18
Section 43A

• The fact that the holder of an unregistered
  instrument has not, at the time of settlement of
  the transaction, paid the relevant stamp duty and
  had the instrument stamped by the Office of State
  Revenue does not mean that such a holder is not
  able to obtain the protection offered by s. 43A
  Diemasters Pty Ltd v Meadowcorp Pty Ltd 2001
  NSWSC 495 at para 22.

19
Section 43A

• Section 43A cannot be relied upon, if the
  instrument is actually registered, and the
  registered proprietor is not a party to any
  fraud, he or she does get an indefeasible title.
• In both Jonray (Sydney) Pty Ltd v Partridge Bros
  Pty Ltd (1969) 89 WN (NSW) Pt 1) 568 and Mayer v
  Coe (1968) 88 WN (NSW) (Pt 1) 549 it was
  suggested that if notice of a void instrument was
  received after completion of the transaction but
  before its registration, the true proprietor
  could prevent registration of it by obtaining an
  injunction to prevent registration.

20
Section 43A

• Finlay Ors v R I Bank of Western Australia
  (1993) NSW ConvR 55-686
• A was a company and was registered proprietor of
  fee simple in a property at Taree
• The Commonwealth Bank was registered on title as
  charge holder and had the CT.
• 1988 A gave a charge over the land to the Bank
  of WA. Bank of WA did not register their charge
  on Torrens but did register it on the register of
  company charges maintained by ASIC.

21
Section 43A

• A gave a charge to Finlay Finlay had no notice
  of the existence of the Bank of WAs charge and
  did not search the ASIC register only the
  Torrens register.
• Finlay reaches settlement and goes to register.
  While Finlay is getting the CT from the
  Commonwealth Bank, the Bank of WA lodges a
  caveat.
• Two competing equitable interests. Finlay argues
  that they are protected by s 43A and therefore
  should be able to proceed to registration. To
  show that Finlay is protected by 43A Finlay had
  to show
• the purchaser has a "legal estate"
• the purchaser has a "registrable dealing"
• the purchaser is dealing with an RP

22
Section 43A

• Does Finlay have a legal estate? Is Finlay
  without notice? WA Bank argued that registration
  of the charge on the company register was
  constructive notice so this denied Finlay the
  protection of 43A Court rejected this argument
  as there is no conveyancing practice of checking
  the company register and this would be inimical
  to the clear meaning of the Torrens system that
  you just have to check the Torrens register
• it is likely that Mr Torrens would turn in his
  grave to think that any such search could
  possibly be thought to be necessary for land
  under the system devised by him (per Windeyer J
  at 59,925).

23
Section 43A

• So, if Finlay got to settlement and had a
  registrable dealing, hed have a legal estate as
  no notice. Does Finlay have a registrable
  dealing? Court held no. At the time the caveat
  was lodged and notice was given, Finlay had not
  yet got the CT from the first mortgagee so was
  not registrable.

24
Section 43A

• Black v Garnock (2007) 230 CLR 438
• Creditors obtained a judgment in the District
  Court of New South Wales for a money sum against
  the judgment debtor
• The judgment debtor was the registered proprietor
  of some farming land comprised in three folios
• Some months after the judgment creditors obtained
  judgment against the judgment debtor, but before
  the issue of any writ of execution, the judgment
  debtor agreed to sell the land to the first to
  fourth-named respondents ("the purchasers").
• The contract of sale was completed at about
  2.00 pm on 24 August 2005. The purchasers paid
  the balance of the purchase price to or at the
  direction of the vendor of the land, the judgment
  debtor. The judgment debtor, as vendor, gave the
  purchasers
• memorandums of transfer,
• discharges of mortgages, and
• Surrender of current lease

25
Section 43A

• At about 9.00 am on settlement day, the
  purchasers' solicitors obtained a title search
  with respect to the land.
• No unexpected encumbrance.
• 30 mins after that search was made, the solicitor
  for the judgment creditors notified the
  purchasers' solicitors that the judgment
  creditors had an unsatisfied judgment against the
• A charging order had been obtained a in respect
  of the deposit that had been paid under the
  contract of sale.

26
Section 43A

• At about 11.53 am on that day (2 hours before the
  settlement) a writ of execution, issued out of
  the District Court of New South Wales was
  recorded in the Register
• Sec 105(2) of the RP Act permitted the
  Registrar-General to "record a writ in the
  Register pursuant to an application in the
  approved form". Section 105(1) provided that "a
  writ, whether or not it is recorded in the
  Register, does not create any interest in land
  under the provisions of this Act".
• Transfers could not be registered

27
Section 43A

• Black v Garnock (2007) 230 CLR 438
• Gummow and Hayne JJ held that s 43A confers upon
  a purchaser who has received a registrable
  instrument and paid the purchase money the same
  protection against notice of an earlier
  unregistered interest as that achieved by a
  purchaser who acquires the legal estate at common
  law.

28
Section 43A

• The effect of the registration of the writ of
  execution overrides the interests held by the
  purchaser. At 33
• Furthermore, to speak of the purchasers' rights
  as having "priority" over the writ or the rights
  of the judgment creditors imposes upon the debate
  an assumption, contrary to the explicit terms of
  the Act, that there is some competition between
  the holders of different interests in land.
  Section 105 of the RP Act makes plain that a
  writ, whether or not recorded in the Register,
  does not create any interest in land. Hence
  counsel placed no reliance upon s 43A of the
  RP Act24. As interpreted in Meriton Apartments
  Pty Ltd v McLaurin Tait (Developments) Pty
  Ltd25, the section confers upon a purchaser who
  has received a registrable instrument and paid
  the purchase money the same protection against
  notice of an earlier unregistered interest as
  that achieved by a purchaser who acquires the
  legal estate at common law. In the present case,
  there is no competition between unregistered
  interests and the unregistered interest of the
  purchasers cannot defeat the statutory
  consequence of the earlier recording of the writ.