The Court of Appeal recently considered a claim that a right to apply for an order to have a decision of a public body set aside on public law grounds, in and of itself, could constitute an in personam right for the purposes of the Transfer of Land Act 1958’s indefeasibility provisions.
In MAPA Pearls Pty Ltd v Haliotis Fisheries Pty Ltd [2023] VSCA 108 the Court of Appeal
rejected the claim and confirmed that the relevant “equity” necessary for an “in personam” claim usually arises out of “conduct, dealings or interactions – including contracts – between the person asserting the equity and the registered proprietor”[1]. The class of persons who would be entitled to assert the equity are “confined and generally known to the registered proprietor”[2].
Sections 40 to 44 of the Transfer of Land Act 1958 (the indefeasibility provisions) embody the Torrens system of land registration under which an unregistered instrument may confer contractual rights and give rise to equitable interests, but no legal title vests in the recipient of the interest util the instrument is registered[3]. Because it is the registration which vests legal title, the registration is effective even if the instrument is void[4]. Subject to some exceptions, the registered proprietor’s title cannot be defeated.
The exception “in the case of fraud” is provided in ss42(1) and 43. This has been interpreted to mean “actual fraud” which requires personal dishonesty or moral turpitude by the registered proprietor[5].
While the indefeasibility provisions do not mention “in personam rights” against the registered proprietor, it is well established that an individual with an “in personam right” can obtain relief against the registered proprietor[6]. Where such a claim is established a court may order that the registered proprietor holds his or her interest subject to the in personam rights.
Legal or equitable causes of action which can give rise to in personam relief include a unilateral or common mistake about the interest to be transferred and equitable fraud. In MAPA Pearls Pty Ltd v Haliotis Fisheries Pty Ltd and others [2023] VSCA 108 the Court of Appeal said:
“Equitable fraud extends beyond actual fraud and does not require intentional or conscious wrongdoing. It includes what is sometimes referred to as “constructive fraud”, which can arise where a person’s conduct falls short of deceit but is regarded by equity as to unconscientious that it should not be allowed to stand.”[7]
And:
“Usually an in personam claim based upon an equitable cause of action must be such as to engage the conscience of the registered proprietor vis-à-vis the claimant. It is based upon some act or omission of the registered proprietor….it cannot be based upon acts or omissions of third parties for which the registered proprietor is not legally responsible.”[8]
In MAPA two leases were granted by the Crown to the appellant (MAPA) over coastal waters and the sea-bed for the purpose of culturing pearls within abalone. The respondents (Haliotis) had pre-existing licences to fish for abalone within the areas covered by the leases. The leases were granted under s.134 of the Land Act 1958 (LA) and registered under the TLA. Haliotis commenced judicial review proceedings contending that the leases were invalid. Notices about the proposed leases had not been published in newspapers or the Victorian Government Gazette as required by s.137 of the LA. The relevant government department (Department) had informed MAPA that it would provide MAPA with any “instructions for publication” but failed to provide instructions. There was also oral evidence that the Department had said that it would undertake the prescribed advertising.
A key issue at trial was whether MAPA’s conduct was such as to give rise to in personam rights enforceable by Haliotis against MAPA such that its registered leases were subject to those rights.
The trial judge held that MAPA’s leases were invalid because of the failure to give notice about the proposed leases in accordance with s.137. But because of the indefeasibility provisions, MAPA’s interest in the leased waters and sea-bed was not extinguished by the mere invalidity of the leases. With respect to indefeasibility, the trial judge held that MAPA’s conduct concerning the leases amounted to equitable fraud which gave rise to in personam rights enforceable by Haliotis against MAPA’s registered lease titles.
The trial judge:
- made an order in the nature of certiorari quashing the decision by the Minister’s delegate to grant the Crown leases;
- declared the leases to be void and of no effect; and
- ordered the Registrar to delete the leases from the Register.
In allowing MAPA’s appeal, the Court of Appeal held that the trial judge had erred in characterising MAPA’s conduct as unconscientious.
Among other things, Halliotis contended that where a person had standing on administrative law grounds to apply to set aside an instrument creating or transferring an interest in land prior to the registration of the instrument, that person had an equity for the purpose of establishing an in personam right; the equity was the right to have the transaction set aside and if the equity was not enforced prior to registration, it could be enforced after registration.
The Court of Appeal rejected Halliotis’s claim holding that:
“The public law ‘equity’ contended for….is far removed from the types of legal and equitable causes of action that have been accepted as giving rise to in personam rights against a registered proprietor.”
The Court of Appeal also said that a public law remedy such as certiorari was not relief “in personam” because it had the effect of setting aside the impugned decision so that it had no legal effect. Also, equitable relief by way of a declaration or injunction in respect of an administrative law decision, vindicated the public interest rather than the private right of a plaintiff. The Court also said that recognition of the public law “equity” as an exception to immediate indefeasibility would be inconsistent with the principle that registration can confer title even if the underlying registered instrument is void for any reason.
Halliotis also contended that an in personam claim can be enforced against a registered proprietor who obtained title by reason of a mistake “in its broadest sense” without the necessity to demonstrate unconscionability or unconscientious conduct. Haliotis argued that an equitable claim for rectification or retransfer can be enforced against a registered proprietor as a personal equity. This argument was rejected on the basis that there was no mistake by MAPA or the Department, being the parties to the leases, and neither of them had sought relief based on mistake.
[1] MAPA, [218(a)].
[2] MAPA, [218(c)].
[3] MAPA, [50]-[51].
[4] Breskvar v Wall (1971) 126 CLR 376, 386 (Barwick CJ).
[5] Butler v Fairclough (1917) 23 CLR 78, 978; Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 13 CLR 265, 273-274.
[6] Frazer v Walker[1967] AC 569, 585; Breskvar, 384-385; Bahr v Nicolay [No 2] (1988) 164 CLR 604, 613, 637-8, 653.
[7] MAPA, [61].
[8] MAPA, [63].
