Solak v Registrar of Titles & Ors [2011] VCCA 279

A mortgage was forged and the defrauded owner of the property brought proceedings against BankWest to have its mortgage removed. The owner failed because although the mortgage was a forgery, it was found to be indefeasible.

The owner then instituted proceedings against the Registrar of Titles seeking compensation fromt he Torrens Assurance Fund. The Registrar sought to have the compensation proceedings summarly dismissed based on the principles of Anshun estoppel. The application was successful at the first instance resulting in an appeal to the Court of Appeal.

The Court of Appeal ultimately found that in order to make its determination, it was necessary to consider whether the claim against the Registrar was so relevant to the subject matter of the first proceeding that it was unreasonable for the claim not to be raised in that proceeding. Relevantly, the Court found that joining the Registrar would have increased the complexity and duration of the first proceeding and would have had significant costs repercussions for the victim. Accordingly, they determined that the arguments made by the Registrar in support of its application were unpersuasive and the appeal was allowed.

The Court criticised the Registrar’s conduct of the proceeding, noting:

…the Registrar appears to have forgotten that he is administering a beneficial fund. The purpose of the fund is not to accumulate money but to provide compensation to persons who are deprived of an interest in land by the operation of the indefeasibility provisions. The Registrar’s primary role is to ensure that persons who are entitled to compensation receive it.

The Chief Justice of the Court of Appeal then made comment as to the defects of the TLA and recommendations as to its amendment as follows:

…this case illustrates what appears to be a defect in the current scheme of s 110. The section places a plaintiff who wishes to challenge the enforceability of a registered interest in an unhappy dilemma. If the plaintiff joins the Registrar in the proceeding challenging the enforceability of the interest, he or she will suffer the costs implications described above. If the plaintiff chooses not to join the Registrar, he or she runs the risk that if the registered interest is found to be enforceable in the first proceeding, Anshun estoppel may, in some circumstances, prevent the plaintiff from bringing a subsequent proceeding against the Registrar.

The Real Property Act 1900 (NSW), in its present form, appears to offer a better model for a Torrens compensation scheme. One of the features of the NSW scheme is that it grants the Registrar a right to intervene in proceedings if the Registrar is ‘of the opinion that the court’s decision in the proceedings could result in compensation becoming payable’ out of the assurance fund. That aspect of the scheme could be further improved by requiring that the Registrar be given notice of the relevant proceedings.

Click here to read the full judgment.

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