This paper will divide the question into two portions. Firstly, whether immediate indefeasibility renders landowners extremely susceptible to identity frauds, and secondly, whether deferred indefeasibility is the fairer option that should be preferred in Singapore.
Before diving straight into the meat of the paper, it is important to have an overview of the notion of indefeasibility.
Under common law, fraudulent documents are void; only the real owners can grant an enforceable deed or mortgage. A title ensuing from fraudulent instruments can never form a good title for new transactions, even if the succeeding owners are innocent. Despite registration, the good title of the property is still vested in the real owners.
However, changes were introduced with the institution of the Torrens system of conveyancing. One imperative attribute is the concept of indefeasibility conferred upon the title of the registered proprietor. Lord Wilberforce in Frazer v Walker aptly considered the meaning of indefeasibility of title as “a convenient description of the immunity from attack by adverse claim to the land or interest in respect of which he is registered.” Upon registration, individuals who were able to assert their rights under general law principles are barred from asserting those interests against the holder of an inconsistent title acquired by registration.
In Singapore, this notion is reflected in the statute as s 46 of the Land Titles Act (LTA), which extends indefeasibility to the registered proprietor, subject to various overriding interests and exceptions to indefeasibility expounded in the later segments of that section.
Through the years, there are two differing theories that courts in various jurisdictions have undertaken in their interpretation of this concept – namely deferred and immediate indefeasibility.
B. Birth of deferred indefeasibility.
Proponents of deferred indefeasibility argue that Torrens legislation was not intended to override the fundamental common law rules governing void instruments. The registration of a void instrument cannot cure its defect. Nevertheless, the Torrens system ensures that the void instrument, when registered, can form the root of a good title. A person who registers an instrument executed by the innocent registered proprietor attains indefeasibility on the registration of his own dealing. Thus indefeasibility is 'deferred' to the second purchaser.
This theory was generally accepted in Australia and New Zealand after the Privy Council decision in Gibbs v Messer. Following the proposition of deferred indefeasibility was Clement v Ellis. In that case, Dixon J demonstrated a deeds system interpretation of Torrens legislation and held that “the justification for destroying a legal estate … is only to protect someone who deals on the faith of the register.” In other words, registration pursuant to a void instrument does not confer indefeasibility. Furthermore, Salmond J in Boyd v Mayor of Wellington cited Lord Watson in Gibbs and added that it is not within the object of the statute to validate the title of the immediate purchaser who registers a void disposition.
C. Shift towards immediate indefeasibility.
On the other hand, proponents of immediate indefeasibility hold the view that an innocent purchaser of land who registers an instrument that is void through forgery, shall attain an indefeasible title nevertheless on the basis of registration. It was argued that the policy of a system of title by registration is to protect a bona fide person who registers. The fact that the instrument registered was void is irrelevant.
The Privy Council in the landmark case of Frazer v Walker firmly established the principle of immediate indefeasibility of title. It held that the mortgagee obtained indefeasible title upon the registration of the...