THE topic of title to land is one which has in recent times caught the attention of development theorists the world over, thanks in large part to the works of Hernando de Soto. In essence de Soto argues that too much of our wealth in the third world is tied up in financial assets, specifically real estate, which the poor cannot easily bring into the formal market, hence the creation and expansion of squatter communities and the informal economy.

Underpinning de Soto’s thesis for development is the creation and effective operation of a system of registration of titles for land. With the creation of same the poor can effectively utilise the one asset which they normally have, the land they live on. If only de Soto knew that an Englishman by the name of Sir Robert Torrens had created such a system some century and a half ago during the land speculation boom in New South Wales. This system, which some say traces it origins to the Hanseatic registration system in Hamburg, Germany, has underpinning it at its core the principle of indefeasibility of title. Lord Wilberforce in the Privy Council decision of Frazer v Walker [1967] 1 AC 569 said it is the central principle underpinning the system.

Simply put, the concept of indefeasibility of title is the insulation (Wilberforce uses the term immunity) of the registered proprietor from deprivation of property on which his name appears as the proprietor on the Certificate of Title describing his land. It confers on that individual ownership of that property and he is free to exercise the attendant powers of ownership over land subject only to any interest/encumbrances noted on the title.

The Englishmen of the day who purported to run this country introduced this system of land registration to Jamaica with the passage of the Registration of Titles Act in 1889. The general principle of indefeasibility of title is encompassed in several sections of the Act, and the term defeasible is in fact used in s. 68 but no section is more important to understanding the concept than s. 70 which, in summary, reads as follows:

“Notwithstanding the existence in any other person of any estate or interest… the proprietor of land or of any estate or interest in land under the operation of this Act shall… hold the same as the same may be described or identified in the certificate of title, subject to any qualification that may be specified in the certificate, and to such incumbrances as may be notified on… his certificate of title, but absolutely free from all… incumbrances whatsoever”

The general principle is therefore that, unless noted on the title, the registered proprietor shall be unfettered by any encumbrances of whatever fashion unless noted on title and is the absolute owner of the property described in the title.

This article shall be concerned not so much with this much vaunted principle, but rather with the numerous exceptions prevalent in the law to the rule.

As one may well imagine there are several important exceptions to this rule. A brief list of these exceptions includes:

1. Fraud (s. 70 of the ROTA);

2. Title by adverse possession due to the Limitation of Actions Act (s. 85 of the ROTA);

3. A claim in personam (Frazer v Walker cited above);

4. Public rights of way (s. 70 of the ROTA);

5. Easements (s. 70 of the ROTA);

6. Unpaid water rates (s. 21 of the National Water Commission Act);

7. Property taxes( s. 14 of the Property Tax Act and s. 6 of the Quit Rents Act);

8. Tenancy for a term not exceeding 3 years (s. 70 of the ROTA);

9. The government’s right to acquire title compulsorily (s. 18 of the Jamaica (Constitution) Order in Council 1962).

The relevant section of the ROTA is s 71 which read as follows:

“71. Except in the case of fraud, no person contracting or dealing with, or taking or proposing to take a transfer, from the proprietor of any registered land, lease, mortgage or charge, shall be required or in any manner concerned to enquire or ascertain the circumstances under, or the consideration for, which such proprietor or any previous proprietor thereof was registered, or to see to the application of any purchase or consideration money, or shall be affected by notice, actual or constructive, of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud.”

S. 71 has the effect of abolishing the common-law doctrine of notice, wherein if a purchaser had notice of a party’s interest, though not noted in the document/documents conveying the land to him, the purchaser stood the very real likelihood that the conveyance to him could be held to be void. It was this doctrine of notice which gave rise to the difficulties early conveyancers had with transferring land as it required an investigation of title for many decades in order to find a good root of title. It is this doctrine which poses such a great problem to the practitioner today of bringing land under the ROTA. S. 71 therefore has the effect of bringing certainty in transfers of real estate and gives peace of mind to the bona fide purchaser that in dealing with the vendor he is not required to carry out an exhaustive search for any legal interests as he can be safe in the knowledge that the registered title mirrors all the pertinent interests which may encumber the vendor’s land.

To offer some perspective reference is made to the locus classicus of the definition of fraud under the ROTA, the case of Assets Co. Ltd. V Mere Roihi and others [1905] AC 176. In essence their Lordships held that the fraud not being attributable to the purchaser could not vitiate the purchaser’s title. Indeed their Lordships seem to be of the view that the fraud involved would have to include a high standard of fraud involving moral turpitude such as fraudulent statements to the Registrar of Titles, or some form of bribery, corruption or dishonesty.

This decision was approved locally in the cases of Timoll-Uylett v Timoll SCCA 28/76 (unreported) of December 5, 1980 and the case of Christian Alele v Robert Honiball and George Brown SCCA 111/89 (unreported) of March 14, 1991. In the latter case Carey JA approved as a guideline for what is fraud, the guideline provided by Mr. EA Francis in his celebrated text on the Torrens Title system entitled The Law and Practice relating to Torrens Title in Australasia Volume 1 (1972 edition) where at pages 602-603 he provides this guide:

1. No definition is given, either by statute or by judicial decision of what constitutes fraud, nor, it seems, is any such definition possible.

2. Fraud, for the purposes of these provisions, must be actual and not constructive or equitable fraud.

3. Fraud must involve an element of dishonesty or moral turpitude.

4. Notice of the existence of any trust, or unregistered instrument, does not of itself constitute fraud, but may be an element in the establishment of the existence of fraud.

5. Abstaining from inquiry, when suspicions have been aroused, may constitute fraud.

6. The presentation for registration of a forged or fraudulently obtained instrument does not constitute fraud if the person presenting it honestly believes it to be a genuine document.

7. The fraud to which the sections refer is that of the registered proprietor or his agent.

8. Gross negligence without mala fides will not be regarded as fraud in New Zealand, or, it seems, in Australia.

It is my opinion that this would be a useful guide for practitioners when seeking to test whether they can successfully bring a claim of fraud to vitiate the title of someone registered as proprietor of land.

Before I close this article I would like to touch on the concept of the Assurance Fund and its role in the principle of indefeasibility of title. The Assurance Fund is a creature of the ROTA which provides funds for an aggrieved party who has been deprived of land by the fraudulent registration or transfer of title which by law should have belonged to him. The relevant sections of the Act are s. 162, 164 and 165. Under s. 162 the aggrieved party may launch an action for damages against the party who committed the fraud which may lead to their deprivation of an interest in the land. However the proviso to that section lists three circumstances in which the Registrar of Titles may be sued as nominal defendant with the judgment to be paid out of the Assurance Fund. They are as follows:

1. Where the person against whom the judgment would be due is declared a bankrupt;

2. Where said person dies;

3. Where said person cannot be found within the jurisidiction.

Section 164 deals with the situation where the Registrar herself or those persons to whom she has delegated power in her office, have committed a fraud or mistake in relation to the registration as someone as proprietor on the title. In such a case an action can be maintained against the Registrar as nominal defendant. What is more important in my opinion is section 165 which sets out the procedure for getting relief from the Assurance Fund. Firstly, it puts the onus on the aggrieved party to put in writing his grievance with the Registrar. This is done by way of an application with an affidavit in support to the Registrar herself. The Registrar with the approval of the Attorney-General may then admit the claim or part thereof and get the Minister of Lands to issue a warrant to the Accountant-General for the requisite sums to satisfy the claim. The Registrar herself may then launch proceedings against the offending party for recovery of the sum expended out of the Assurance Fund.

It is this protection, above everything else, which provides for the concept of the indefeasibility of title. In other words, where you are deprived of your land by a registered proprietor either by the action of the person registered on the title or the Registrar of Titles, even though your interest is not registered on the title or cannot be registered on title, you can be assured that you have recourse to being reimbursed out of the Assurance Fund. I am told that the Assurance Fund in Jamaica has rarely, if ever, been used. The reason for this is that the Titles Office, though by no means perfect, takes great care to ensure that on registering title and interests on title, to investigate the evidence so proffered. Any problems that would occur would normally be fraudulent conduct, either by the parties to a transaction or members of the Titles Office. In such circumstances, in addition to a remedy of damages, the aggrieved party has recourse to the cancellation of title and having a fresh title issued to them as can be seen by the above cases.

The assurance fund provides peace of mind to the blameless purchaser and certainty to land transactions. By insuring against the faults of the crown and the impecunious/deceased/dishonest vendors, the state provides for what is hoped to be an efficient and trustworthy real estate market.

Robert Collie is an associate at Myers Flethcer & Gordon and a member of the Firm’s Litigation Department. Robert may be contacted at robert.collie@mfg.com.jm or through www.myersfletcher.com