Indefeasibility Case Study

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The issues raised in this question are indefensibility and exceptions. In the Torrens system a registered proprietor’s interest is “indefensible”. Section 42(1) of the Real Property Act provides that the registered proprietor’s title is paramount (indefeasible) except fraud. Therefore upon registration, Ron obtained a prima facie indefeasible title immediately. As an unregistered interest, Stan’s intention to re-purchasing of the property would be defeated unless he can invoke exceptions to indefeasibility, such as fraud or personal equity exceptions. 1. Fraud as an exception to indefeasibility As it is clearly stated in the s 42(1), fraud is an exception to indefeasibility. Although the Act did not provide the definition of a fraud, but …show more content…

RIGHTS IN PERSONAM (PERSONAL EQUITIES) Apart from the fraud exception stipulated in the Act as discussed in the above section, there are exceptions to indefeasibility based on personal equities or rights in personam. The personal equity may arise because of the conduct of the registered proprietor before or after the registration. In Bahr v Nicolay (No 2), Wilson and Toohey JJ stated that indefeasibility does not protect a registered proprietor from the consequences of his own conducts where those conducts give rise to a personal equity in another. Furthermore, as Brennan J pointed out: the purchaser who not only has notice of an antecedent unregistered interest but also purchases on terms that he will be bound by the unregistered interest is subject to that interest. Akin to Bahr v Nicolay, by notice of the Stan’s interest in the property and gave the promise to honour the agreement, Stan’s interest constituted an equitable interest in the land. Ron became subject to a constructive trust in favour of Stan. If Ron repudiates the unregistered interest after registration, he is, in equity’s eye, acting fraudulently and he may be compelled to honour the unregistered …show more content…

Although re-purchase agreement was written in the agreement between Stan and Tom, Ron’s undertaken is oral only to Tom. It could be difficult for the court to prove that Ron’s undertaken was firm and certain. Ron could argue that he was only taking notice of the interest, but merely promise to honour

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