Equities and the Land Transfer Act 1952

Abstract

The aim of this paper is to examine the relationship between equities and the Land Transfer Act 1952 (i.e. the Torrens System in New Zealand). The writer has limited the scope of discussion to certain common equitable estates and interest in land as well as mere equity. The topics covered are as follows: (1) unregistered transfer, (2) unregistered mortgage, (3) unregistered lease, (4) unregistered easement, (5) unregistered profit, (6) restrictive covenant, (7) fraud, and (8) deserted wife's right to occupy the matrimonial home. In order to examine the relationship between the aforesaid and the Torrens System, the paper gives a brief account of the Torrens System in terms of its historical background and basic concept of registration which prima facie gives an indefeasible title. Another feature peculiar to the Torrens System which is relevant to the discussion is the scheme of caveat, particularly caveats against dealings which prima facie serve as a statutory injunction to prevent subsequent adverse claims from being registered. Having touched on the foregoing matters, the paper proceeds to identify problems resulting from the association of equities (in broad terms) and the Torrens System - a very different system of land registration in comparison to the Deed System. The conceptual difference of the two systems has given rise to the following problems: (1) Whether equities are recognisable interest. (2) If so, how far the equitable rules are applicable to such equities in general and also to each equity in particular. (3) Following from (2), it is observed that the indefeasibility concept cannot be viewed in absolute terms. This gives rise to further problems of how to resolve the coexistence of equities and the concept of indefeasibility of title. (4) The Torrens System has expressly abolished the doctrine of equitable or constructive fraud. However this poses the problem of defining the meaning of fraud within the Torrens System and also the possibility of invoking the concept of fraud ex post facto, peculiar only to the Torrens System. From the abovementioned, it is observed that equities under the Torrens System are treated in certain cases differently than in the Deed System. This paper endeavours to draw a conclusion as to whether equities are more widely protected under Torrens or Deed System. The paper also concludes by making recommendations for resolving differences between equities holders and third parties, as far as possible, without infringing upon the concept of indefeasibility of title.