Deferred and Immediate Indefeasibility: Bijural Ambiguity in Registered Land Title Systems

Published date01 May 2009
AuthorPamela O'Connor
Date01 May 2009

Most countries now have land registration systems, based either upon deeds registration or, more commonly, on title registration. Since there are many variants of each system, commentators often prefer to employ Norman's distinction between “positive” and “negative” systems of land registration.1

P E Norman, Photogrammetry and the Cadastral Survey (1965) 8-10. The use of Norman's terminology was proposed by S R Simpson, Land Law and Registration (1976) 15-16. The Scottish Law Commission uses “positive” in the narrower sense of a system in which title is always conferred – as opposed merely to guaranteed – by the act of registration; but the conferral of title does not of itself prevent its subsequent loss by the process of rectification, and conferral and rectification are seen as different issues involving different policy considerations. See Scottish Law Commission, Discussion Paper on Land Registration: Void and Voidable Titles (Scot Law Com DP No 125, 2004; available at para 1.9.

On this terminology, a “positive” system is one in which the state warrants that the rights shown on the register are valid and effective according to their terms.2

The warranty is a qualified one, as all registered title statutes allow the register to be rectified to remove an entry in specified circumstances, such as where the entry was procured by the registered owner's own fraud.

This is an authoritative system, a “register of conclusions”,3

J E Hogg, Registration of Title to Land Throughout the Empire (1920) 4; State ex rel Douglas v Westfall 89 NW 175 (Minn, 1902) at 175 per Start CJ. Whalan points out that to describe title registration as a register of conclusions and instrument registration as a register of evidence overstates the benefits of both systems. The conclusiveness of registered title is subject to significant exceptions, and instrument registries do not purport to provide all the evidence relevant to the title: D J Whalan, The Torrens System in Australia (1982) 13.

which allows purchasers to transact safely in reliance on the registered title even if it turns out to have been procured by defective means. In a “negative system”, registration does not confer or guarantee title,4

Deeds registration statutes may accord probative force to registered interests, making them “positive in effect”, but only registered title systems make them conclusive: Simpson, Land Law and Registration (n 1) 21-22; Hogg, Registration of Title (n 3) 96.

with the result that purchasers must examine the deeds and draw their own conclusions.5

Norman, Photogrammetry (n 1) 8-10. Hogg, Registration of Title (n 3) 4 observes that no system of deeds registration warrants that a purchaser obtains a good title by registration, or relieves the purchaser of the need to investigate the seller's title.

The positive system is the most essential feature that distinguishes a system of registered title from one of deeds registration.6

Norman, Photogrammetry (n 1) 8-10; Hogg, Registration of Title (n 3) 4; Simpson, Land Law and Registration (n 1) 19-22.

The Scottish Law Commission has observed that systems of deeds registration are “monojural”, as they operate within the ordinary rules of property law which generally require a valid instrument in order to pass an interest in land.7

Scot Law Com DP No 125 (n 1) paras 1.9-1.11.

Systems of registered title are “bijural”, in the sense that they straddle two bodies of law – the positive system and the ordinary rules of property law.8

Scot Law Com DP No 125 (n 1) paras 1.11-1.12, 5.1, 5.2, 5.15.

The legal rule of the positive system is that registration confers title to the interest shown, irrespective of whether the registered instrument is valid.9

Scot Law Com DP No 125 (n 1) para 1.9.

While title registration statutes provide for register entries to be set aside on specified grounds, they remain authoritative so long as they stand

Bijuralism is unavoidable in a positive system because no registration statute operates as an exhaustive code for the transfer of property rights in land. All are founded upon the ordinary rules, except to the extent they are modified or excluded by the title registration statute. In theory, no instrument should ever be registered unless it is valid under the ordinary rules. In practice, many invalidating defects are not patent on the face of the instrument and can easily pass undetected through the registry's examination.10

For example, forgery, execution by an agent lacking proper authority, execution by a minor or person lacking legal capacity, breach of statutory requirements.

The result is what the Scottish Law Commission calls a “bijural inaccuracy”, where a registered disposition that would be invalid under the ordinary rules is made legally effective by the positive system.11

Scot Law Com DP No 125 (n 1) para 2.11.

The issue for all systems of registered title is how to deal with bijural inaccuracies. Statutes based on the UK or the Australian Torrens models adopt divergent approaches to this problem.12

Statutes on the UK model include the Land Registration (Scotland) Act 1979, Land Registration Act 2002 (England and Wales), Land Registration Act (NI) 1970, and Registration of Titles Act 1964 (Ireland).

The UK model provides a remedy of rectification whereby a court or the registrar may alter the register to correct an entry that was void under the ordinary rules.13

See e.g. Land Registration Act 2002 Sch 4 paras 1-7. Paras 2 and 7 empower the court and the registrar respectively to correct a “mistake”, a term which is intended to include registration of void instruments generally: see E Cooke, The New Law of Land Registration (2003) 124-125.

This may be moulded to protect the rights of certain registered owners, such as proprietors in possession of the land who have not caused or substantially contributed to the mistake by their fraud or carelessness.14

See e.g. Land Registration Act 2002 Sch 4 paras 3, 6; Land Registration (Scotland) Act 1979 s 9(3)(a).

Some statutes, notably those based on the Australian Torrens model, lack a rectification provision of this type.15

The registrar's power to correct errors, although apparently extensive, has been narrowly construed. See n 55.

Many of the Torrens statutes give conflicting indications as to what rule applies where a purchaser or mortgagee, acting without fraud, registers an instrument which turns out to have been forged by a third party. Registration of a forgery results in a bijural inaccuracy, because a forgery is ineffective to pass title under the ordinary rules. On one view, the positive system prevails and the purchaser or mortgagee obtains an “immediately indefeasible” title upon registration, that is, a title which cannot be set aside.16

An “indefeasible” title, for present purposes, is one that cannot be set aside on the ground of any defect in the way that it was acquired.

The opposing view, known as “deferred indefeasibility”, holds that a registered title obtained by a forged instrument can be set aside for inconsistency with the ordinary rules of law; but until rectified it provides a good root of title for a subsequent purchaser. The operation of the positive system is thus “deferred” until the next register entry after the one that was procured by forgery

It seemed for a long time that the debate over deferred and immediate indefeasibility was peculiar to the Torrens statutes of Australia and New Zealand. But since the 1990s, a rising tide of identity fraud affecting registered land systems has seen similar controversies emerge in other jurisdictions. Courts in Ontario, British Columbia, Malaysia and Singapore have discovered that their statutes, although drafted in different terms to the Australian statutes, present a similar ambiguity.17

The experience of each of the jurisdiction is examined in this article, below.

In some of these jurisdictions, statutes which had long been assumed to incorporate either immediate or deferred indefeasibility have been judicially interpreted to embody the opposite rule

The tension between deferred and immediate indefeasibility is more widespread and intractable than has generally been recognised. The persistence of ambiguity cannot be explained solely by inadequate drafting, as the statutes are quite diverse. This article seeks to show that the problem stems from a deeper source, namely the bijural conflict at the heart of registered title systems. Many title registration statutes are ambiguous because they attempt to incorporate two inconsistent propositions. The first is that only instruments which are valid under the ordinary rules are to be registered. The second is that registration confers title irrespective of the validity of the instruments. Ambiguity arises when the statute does not clearly indicate which of these principles prevails in a case of bijural inaccuracy.18

See, for example, the ambiguity in the Land Registration (Scotland) Act 1979 s 3(1). The opening words state the rule of the positive system, while words appearing later in the same subsection seem to indicate that the validity of a registered title depends on its compliance with the ordinary rules of law: see Scot Law Com DP No 125 (n 1) paras 5.5-5.6.

This article examines the ways in which the ambiguity has presented in title registration statutes in jurisdictions where the issue has recently exercised the courts, and evaluates the diverse responses. It will be demonstrated that the problem of bijural ambiguity is an underlying cause of instability and incoherence in the rules of registered title systems in a number of jurisdictions.

AUSTRALIA AND NEW ZEALAND “Dynamic” and “static” security

Our study of bijural ambiguity starts with Australia and New Zealand, where the controversy first emerged, and gave rise to key Privy Council decisions which continue to influence the development of the law in other former British dominions.

The colony...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT