TORRENS SYSTEM - LAND LAW

TORRENS SYSTEM - LAND LAW

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  INSYIRAH MOHAMAD NOHLAND LAW I 1 TOPIC 1: APPLICATION OF THE TORRENS SYSTEM IN THE PENINSULAR MALAYSIAN STATES CHECKLIST THE DEED SYSTEM DISADVANTAGES OF THE DEED SYSTEM THE TORRENS SYSTEM PRINCIPLES OF TORRENS SYSTEM A. MIRROR PRINCIPLE B. CURTAIN PRINCIPLE CHARACTERISTICS OF THE TORRENS SYSTEM OBJECTIVES OF INTRODUCING THE TORRENS SYSTEM ADVANTAGES OF THE TORRENS SYSTEM DIFFERENCES BETWEEN THE DEED & TORRENS SYSTEM
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  INSYIRAH MOHAMAD NOHLAND LAW I 2 THE DEED SYSTEM  A system of conveyancing by private dealing/agreements  The agreement must be properly signed, sealed and delivered  Involves registration of instruments  Land owners must prove their ownership of a land back to the earliest grant of the said land by the Crown to its 1st owner  Documents related to the transactions of the land: Title deeds/chain of title  The event could have occurred hundred years back  may be intervened by the changes of ownership  A person’s ownership over a land may be challenged  Caused exhaustive search of title  Great legal expense & the purchaser will not be given a complete security  The transfers of land were slow, expensive & uncertain THE DISADVANTAGES OF THE DEED SYSTEM  There is a possibility of encroaching State land - The size of the actual land is not accurately defined  Methods used to replace a lost title & to notify the public:- 1. By placing an advertisement in the daily local newspaper 2. Lodging a police report - Those methods are not safe & may subject to fraud  The true owner that is liable for rent cannot be traced  as a result of multiple dealings  Difficulties in preparing rent roll & report  Consequential loss of revenue to the State  Consequential encroachment of State land  Disparities:- size of actual property in occupation vs. size stated in title  General confusion & absence of competent system
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  INSYIRAH MOHAMAD NOHLAND LAW I 3 THE TORRENS SYSTEM  Was modelled from the system based on the Merchant Shipping Act 1854 and Admiralty Rules by Sir Robert Torrens  Torrens System:- - a system of registration of titles & dealings of a land - reliable, simple, cheap, speedy & suited the needs of the community - a mode of conveyancing - the title & interest to a land depend upon registration NOT instrument inter-parties Case: Teh Bee v Maruthamutu [1977]1 - The appellant claimed possession of a piece of land of which she was the registered proprietor. - The claim was based on trespass. - The respondent resisted the claim, the principal ground being that the qualified title registered in the name of the appellant was null and void. - The trial Magistrate entered judgment in favour of the appellant. - On appeal, Ajaib Singh J. held that when the appellant was registered as proprietor, the approval of alienation of the land to her had already lapsed and therefore it was ultra vires of the State authority to alienate the land to her. - The appellant appealed. - Held, allowing the appeal: a) The fact that the appellant was registered as proprietor necessarily raised the inference that the State Authority on payment of the premium had given fresh approval for the alienation of the land to her; b) The fact that the register document of title was in the name of the appellant was conclusive evidence that the title to the land was vested in the appellant; 1 [1977] 2 MLJ 7
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  INSYIRAH MOHAMAD NOHLAND LAW I 4 c) Under the Torrens System the register is everything and it would be wrong to allow an investigation as to the right of the person to appear upon the register when he holds the certificate of title. Case: Dr Ti Teow Seow & Ors v Pendaftar Geran-geran Tanah Negeri Selangor [1982]2 - A land had been alienated to the first applicant, the title being endorsed with the following endorsement of restriction in interest — "The land hereby leased shall not be transferred or leased for a period of fifteen years without the consent of the Ruler in Council." - The title also contained particulars stating inter alia that the title commenced from August 18, 1964. - The alienation of the land was registered after full payment of premium and other fees on November 9, 1967. - The 1st applicant transferred the land to the 2nd and 3rd applicants on May 5, 1980 and the 2nd and 3rd applicants also executed a charge in favour of the 4th applicant on the same day. - The memorandum of transfer and charge were presented for registration but were rejected by the respondent on the ground that the restriction in interest was still subsisting. - The question was whether the restriction in interest commenced from the date endorsed on the title, that is August 18, 1964 or the date when the alienation was registered that is on November 9, 1967. - The applicants applied to set aside the decision of the respondent in refusing to accept the documents for registration and for a declaration that the restriction in interest endorsed on the document of title expired on August 17, 1979. - Held: the restriction in interest commenced from the date of registration of the register document of title, that is, November 9, 1967, and the respondent was therefore correct in rejecting the documents presented for registration. 2 [1982] 1 MLJ 38
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  INSYIRAH MOHAMAD NOHLAND LAW I 5 - Hashim Yeop Sani J: It is registration that gives and extinguishes title under the National Land Code. Registration is the cornerstone of the Torrens system. PRINCIPLES OF THE TORRENS SYSTEM A. Mirror Principle B. Curtain Principle C. Insurance Principle – Not applicable in Malaysia A. MIRROR PRINCIPLE  The register (Certificate of Title – Register Document of Title & Issue Document of Title) reflects accurately & completely the fact materials about a person’s title to the land  The facts consist of:- - Name of the proprietor - Particulars of the alienated land - Area & location of the land - Survey plan & boundary limits of the land  Helps in assisting the interested Purchaser, Lessee & Chargee to obtain relevant information  If a person wants to sell an estate  the new title has to be identical to the old one (in terms of the descriptions) except for the owner’s name B. CURTAIN PRINCIPLE  The intending purchaser/interest acquirer doesn’t need to look behind/beyond the register  It is sufficient for the purchaser to examine the Register Document of Title in obtaining the information needed  An ownership doesn’t need to be proved by long complicated documents
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  INSYIRAH MOHAMAD NOHLAND LAW I 6 CHARACTERISTICS OF THE TORRENS SYSTEM *Important characteristics:- - Details of all dealings must be officially registered on the title the land - Registration  gives validity to the dealing  creates legal estate/interest to the land - All transactions must be effected by the use of stereotyped forms  The official record - There is an official record situated at a stipulated place  can be consulted by the land purchaser - Provides the recording of certain interests only - Holder of interest: a registered proprietor of interest  The register - Consists of individual grant certificates/folio  there are also documents that may be added during registration - Reflects all the fact materials of the registered owner’s title to the land  fact materials: name of the proprietor, the alienated land, the area & location of the land the survey plan, the boundary limits of the land  Security of the Registered Proprietor - If a person becomes registered as a proprietor of an interest of the land in good faith  the interest will subject only to the interest noted on the register  Effects - The registered proprietor will take the interest free from any trusts & equities that may exist outside the register - The Torrens System abolished the general principle nemo dat quod non habet (no one can give what he has not got)
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  INSYIRAH MOHAMAD NOHLAND LAW I 7  Guaranteed by the State - The proprietor will be given a guarantee that he will hold his title  subject only to those interests noted on the register - A person who suffers loss as a result of a Registrar’s mistake will be entitled to compensation from the State THE OBJECTIVES OF INTRODUCING THE TORRENS SYSTEM  To overcome the defects of the Deeds System  To provide simplicity & certitude  To deter the legal technicalities in land dealings  To provide security of title & facility of transfer Case: Gibbs v Messer (1891)3 - The registered proprietor of land, Mrs Messer, left the certificate of title with her solicitor for safekeeping, together with a power of attorney in favour of her husband, whilst she went off travelling. - The family solicitor, Creswell, forged the signature of the husband (as his attorney) to a transfer of Mrs Messer’s land to a fictitious person. Creswell then managed to secure the registration of this fictitious person. - Creswell executed a mortgage, with the fictitious person as mortgagor, and then misappropriated the funds. - The mortgagees acted in good faith and subsequently registered the mortgage. - When Mrs Messer returned and discovered the fraud, she commenced proceedings, seeking cancellation of the certificate of title in the fictitious person’s name and cancellation of the registered mortgage. - The mortgagees claimed that they had an indefeasible title which could not be set aside by the fraud. 3 (1891) AC 248
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  INSYIRAH MOHAMAD NOHLAND LAW I 8 - The Privy Council ultimately held that the protection which the Torrens System gives to persons transacting on the faith of the register is limited to those who actually deal with, and derive a right from, an actual rather than a fictitious proprietor. A person who deals with somebody who is not the registered proprietor, and who turns out to be fictitious, does not transact on the faith of the register. Where the transaction by which such person acquires title is tainted by fraud, that person cannot acquire a valid and indefeasible title, although such a title may be passed on to a bona fide third party purchaser. - On the facts, as the mortgagee had dealt with a fictitious person and had not passed on the title, Mrs Messer was successful in having the forged certificate and mortgage cancelled. - Lord Watson: The main object of the Act, and the legislative scheme for the attainment of that object, appear to them to be equally plain. The object is to save persons dealing with registered proprietors from the trouble and expense of going behind the register, in order to investigate the history of their author's title, and to satisfy themselves of its validity. That end is accomplished by providing that everyone who purchases, in bonâ fide and for value, from a registered proprietor, and enters his deed of transfer or mortgage on the register, shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author's title.
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  INSYIRAH MOHAMAD NOHLAND LAW I 9 THE ADVANTAGES OF THE TORRENS SYSTEM  Security & certainty of title is official & guaranteed - Once it is officially registered  considered as being guaranteed by the Government  Reduction of delay & expenses - Cutting off of former investigation of titles & simplification of dealings  Delays & expenses were minimised & lessened  Simplification of titles & dealings - By using simple & stereotyped forms  The title is no longer complicated  Accuracy - Clear & precise description of the land - All details will appear on the register - Valid land titles  require accurate description of the boundaries - An exact survey of the land will be conducted  eliminates the possibilities of any boundary disputes - The title becomes indefeasible - The records are reliable  free from error  easy to monitor  Indefeasibility of title - The State gives a warranty of indefeasible title to any person that has been registered as an owner - The register creates conclusive title4 4 Sec. 340(2) of National Land Code 1965
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  INSYIRAH MOHAMAD NOHLAND LAW I 10 DIFFERENCES BETWEEN THE DEED AND TORRENS SYSTEM DETAILS DEED SYSTEM TORRENS SYSTEM Passing of title Passed upon execution, signing, sealing & delivery Passed upon registration Accuracy Filled with uncertainty, complex, expensive & complicated Simple, easy & secured Security Registration is not compulsory Registration is everything & compulsory Guarantee by the State Not guaranteed by the State since transactions were made personally between parties Guaranteed by the State – if there’s any loss due to defects in registration  the State will be responsible