Equity, Notice and Fraud in the Torrens System

Abstract

The Torrens land system has been adopted in many jurisdictions, including Australia, Canada and New Zealand, as substitute for the old common law and equity system of land transfer. The various Torrens Acts of these juris dictions contain sections purporting to eliminate the equitable doctrine of notice. The author suggests that although these sections are virtually identi cal their application has varied. The courts of Australia, the Supreme Court of Canada and the courts of Saskatchewan have applied the sections literally to allow registration of transfer to defeat an unregistered interest even though at the time of contracting to purchase the transferee knew of the un registered interest and that his registration would defeat or prejudice it. On the other hand, the courts of New Zealand, British Columbia, Manitoba and Alberta have viewed notice, at least when accompanied by an intention to defeat prior unregistered interest, as sufficient in itself in some cases to constitute fraud upon that interest. The author contends that the sections were intended to keep fraud and notice distinct and that the doctrine of notice should be eliminated in order to achieve security of title. Registration under the Torrens system was intended to provide ultimate protection against other interests. Where it is not possible to effect registration immediately upon the acquisition of an interest, as is generally the case, the caveat pro visions of the various Acts are intended to be and should be utilized to pro tect that interest, thus eliminating the need for the protection provided pre vious to the Acts by the doctrine of notice.