Currey v Federal Building Society
42 CLR 421(Judgment by: KNOX CJ, RICH J, DIXON J)
Between: CURREY
And: FEDERAL BUILDING SOCIETY
Judges:
Knox CJIsaacs J
Rich J
Dixon J
Subject References:
Real property
Transfer of land
Mortgage by absolute transfer
Joinder of parties
Compliance with Stamps Act
Legislative References:
Transfer of Land Act 1915 (Vic) No 2740 - s 248
Transfer of Land Act 1916 (Vic) No 2849 - s 22
Stamps Act 1915 (Vic) No 2728 - s 68(6)
Stamps Act 1918 (Vic) No 2982 - s 3
Judgment date: 28 October 1929
MELBOURNE
Judgment by:
KNOX CJ
RICH J
DIXON J
This is an appeal by special leave from an order made by the Full Court of the Supreme Court of Victoria upon a summons under s. 248 of the Transfer of Land Act 1915 calling upon the appellant, the Registrar of Titles, to substantiate and uphold the grounds of his refusal to register a transfer in which the respondent Building Society was transferor. The Full Court ordered the appellant to register the transfer. This instrument, which was dated 4th December 1928, stated that the respondent Society, being registered as the proprietor of an estate in fee simple in a certain piece of land subject to no encumbrances, in consideration of the sum of PD200 paid to it by one Marianne Vale did thereby transfer to her all its estate and interest in the said piece of land. When it was presented for registration the transfer bore the particular stamp of the Collector of Imposts denoting that it was not chargeable with any duty. (See Stamps Act 1915, s. 32 and s. 36.) Thus it was admissible in evidence and available for all purposes notwithstanding any objection as to duty. (See s. 32 (4).)
The respondent Society had become registered proprietor on 31st January 1918 pursuant to an instrument of transfer by which one Bessie Duggan in consideration of the sum of PD200 paid to her by the Society transferred to it all her estate and interest in the land. This instrument, of course, remained in the Office of Titles. Annexed to it was a document by which the Society's solicitor certified (doubtless for the purpose of ascertaining its liability to stamp duty) that it was not a transfer upon a sale from Bessie Duggan to the Society, but was by way of security only. From this material it appeared to the Registrar that the Society, having taken a transfer from one person by way of security, was retransferring the land to another. He made a requisition that "the vendors of the equitable interest in the land must be made parties to direct transfer" to Marianne Vale. As a result of this requisition the Society produced to him two further instruments. The Registrar required that these should be registered if his requisition was not complied with, and the Society then withdrew the transfer presented for registration. This transfer was, however, again lodged for registration, and on this occasion the Registrar repeated his requisition and again refused to register the transfer unless either his requisition was complied with or the two further instruments were lodged for registration. Each of these documents was in form an instrument of transfer. But each expressed a transfer of an estate in fee simple in the land from the Society, as transferor, to the Society, as transferee. The first, which was dated 19th April 1918, stated that in consideration of the sum of PD200 paid to the Society by Bessie Duggan and in consideration of the sum of PD335 paid to Bessie Duggan by some persons named Clark and in consideration of the sum of PD300 paid to the Clarks by the Society, the Society did thereby transfer to the Society, by the direction of Bessie Duggan and the Clarks, all its estate and interest in the land. This instrument was executed first by the Society, then by Bessie Duggan, then by the Clarks, and then again by the Society. The second of the two documents was dated 8th August 1922, and stated that in consideration of the sum of PD300 paid to the Society by the Clarks and in consideration of the sum of PD400 paid to the Clarks by Marianne Vale and in consideration of the sum of PD200 paid to Marianne Vale by the Society, the Society did thereby transfer to the Society at the request and by the direction of the Clarks and Marianne Vale, testified by their execution thereof, all its estate and interest in the land. This instrument was executed first by the Society, then by the Clarks, then by Marianne Vale, and then again by the Society. Each instrument was stamped with the amount of duty appropriate to a transfer on sale for the consideration expressed to have been paid by one directing party to the other.
The Registrar's requirement that these documents should be presented for registration, as a condition precedent to the registration of the transfer in question, implies that he is satisfied in substance that this transfer has not been made in fraud or derogation of any beneficial interest or equitable rights of Bessie Duggan or any other person. If the intermediate instruments were registered he would feel at liberty to give effect to the evidence which they contain that neither Bessie Duggan nor the Clarks retain any interest in the land; but until they are registered he considers himself unable to do so. The case, therefore, is not one in which the proposed dealing appears to the Registrar to involve some breach of equitable duty, or otherwise to be improper, or in which he considers the instrument lodged for registration ought not in law or in fact to be placed upon the register. (See Templeton v Leviathan Pty Ltd [F1] .) In the first of the grounds which the Registrar assigned for his refusal to register the transfer, he says that unless the intermediate dealings with the land disclosed by the transfers produced to him (and in particular the sale of the land by Bessie Duggan to the Clarks and the sale by the Clarks to Marianne Vale) are completed by registration, he cannot certify to the title of Marianne Vale.
We do not think the Registrar can lawfully require that the intermediate "dealings" should be registered or that the parties to them should execute, as directing parties, the instrument of which registration is sought. This instrument is a transfer of an unencumbered estate in fee simple by the person registered as the proprietor of that estate. It is sufficient in form to transfer the estate. Neither upon the face of the certificate of title, nor upon the face of the instrument presented for registration, does any reason appear for interposing further instruments upon the register, or requiring other persons to execute the instrument. All that appears is that the owner of a legal estate is transferring it by the appropriate means in consideration of a money payment. The fact that the Registrar happens to know, or is able to infer from a previous dealing with the land and a paper produced to and retained by him in connection with it, that a third person at one time had a contractual or equitable right in relation to the land may, or may not, be a sufficient reason for delaying registration until he has ascertained that the dealing will not unlawfully defeat that right. But once it is found that no such violation of right is attempted, nothing remains but to give effect to the registered proprietor's dealing. The Registrar nevertheless says in the fourth of his reasons that
"unless the intermediate sales are completed by registration the title of the said Marianne Vale to be registered as the proprietor and to redeem the land by paying off the money secured thereon and taking a transfer from the said Society will not appear on the register."
One might have supposed that inasmuch as Marianne Vale's right to redeem the land by paying off the money secured upon it was either an equitable interest or a contractual or other personal right, the last thing which the Registrar would desire would be that it should appear upon the register. Moreover, Marianne Vale's right to be registered as proprietor arises from the fact that she is the transferee of the registered proprietor under a proper instrument, and it depends upon nothing else. This right might be intercepted by extrinsic facts if they showed that the transfer was an impropriety, but it is nothing but a confusion to treat facts which negative impropriety as part of the transferee's title to registration.
In the grounds which the Registrar gave under s. 248 for his refusal to register, he relied rather upon the fact that the intermediate dealings were not registered, than upon the failure to comply with his original requisition. But, for the reasons stated, the Registrar was not entitled to require that the "intermediate dealings" should be lodged for registration or that other parties should execute the transfer. Indeed, the nature of the intermediate instruments was such that, even if they were so lodged, he ought not to register them. They are, or profess to be, transfers by a proprietor to itself of the very estate in respect of which it is registered. The transferee is expressed to take the same estate or interest in the same capacity as it holds it. It is hard to see how such an instrument can be a registrable transfer. The fact that the parties are added as directing this operation gives no further efficacy to the operation itself. The equitable interests or the personal rights of the directing parties inter se doubtless are affected by their execution of the document, but, as an instrument of transfer of the registered proprietor's estate, it accomplishes nothing. The estate is left precisely where it was.
The Registrar, however, before this Court endeavoured to justify his refusal to register by relying upon s. 22 of the Transfer of Land Act 1916. It is not an unreasonable interpretation of the legislation to treat the discretion given to the Registrar by this provision as liable to review under s. 248. However this may be, it is difficult to suppose that the provision empowers the Registrar to require that the transferee shall do such an act as presenting for registration instruments which ought not to be registered. But s. 22 of the Act of 1916 was not relied upon by the Registrar in his notice of appeal, and it appeared from the statements of counsel, aided by the report of the case in the Argus Law Reports, [F2] at p. 227, that, in the Supreme Court, the Registrar disclaimed reliance upon its provisions. The point, therefore, ought not to be entertained.
During the argument another question was suggested which, also, was not included in the grounds taken in the notice of appeal or in those argued in the Supreme Court, and was outside the reasons given by the Registrar under s. 248. This question is whether the transfer presented for registration violated s. 68 (6) of the Stamps Act 1915, as amended by the Stamps Act 1918, which requires such an instrument to set forth
"the consideration moving from the original purchaser and also the consideration moving from any sub-purchaser or sub-purchasers who are or who at any time have been interested in the real property the subject matter of"
the instrument. The Registrar did not suggest this point when he applied for special leave, and, although it was then considered to some extent by members of the Court, it is not likely that leave would have been granted for the purpose of raising it. The question has, however, been discussed and considered, and to refrain from answering it might be thought to imply an opinion that the transfer presented for registration does contravene the provisions of s. 68 (6). In fact an examination of the provisions of the section and an analysis of the transactions appear to require the contrary conclusion. The word "conveyance," in this sub-section refers to a "conveyance on sale" or a conveyance described in sub-s. 3 as one "which seeks to give effect whether directly or indirectly to" a sale of real property. This much appears clearly enough from a consideration of s. 68 with s. 17, Div. VI. of the Third Schedule and s. 62; provisions a full discussion of which will be found in the judgments of Cussen J. and of Schutt J. in Roberts v Collector of Imposts. [F3]
The transfer from the Society to Marianne Vale is not a transfer on sale, because the consideration is the payment, not of purchase-money, but of a mortgage debt; the transferor is not a vendor, but a mortgagee, and the transferee takes as mortgagor and not as purchaser. Does it then seek to give effect directly or indirectly to the sale by Bessie Duggan to the Clarks, or the sale by the Clarks to Marianne Vale? The answer appears to depend upon correctly determining the operation and effect of the transactions entered into on the occasion of each sale. On each occasion there were three separate transactions contemplated. One was a sale of an unencumbered estate by a vendor who in fact was entitled only to an equity or right of redemption. Another was the discharge of the mortgage debt by this vendor. The third was a borrowing by the purchaser from the same mortgagee upon the same security, but of a different sum of money. If each of these transactions had been independently carried out, three transfers would have been required: first, a transfer from the Society, the registered proprietor who was in fact the mortgagee, to the vendor; next, a transfer from the vendor to the purchaser; and, third, a transfer from the purchaser, as a borrower, to the Society again to become a registered proprietor who was in fact a mortgagee. The second transfer would give full and final effect to the sale. But the result would simply be that the Society would retain the same estate, subject, however, to a new right to redeem in a new mortgagor, a right which was original and not derivative. It seems evident that if this exact result could be produced without the circuity involved in three independent transfers, the sale would necessarily be carried out, and given as full, complete and ample an effect as if the circuity had been employed.
Under the general law, including in that expression the doctrines of equity, there is nothing to prevent the parties carrying into effect, by an informal instrument, any dealing in relation to land which involves no grant or alteration of the legal estate provided there is a sufficient indication of intention. Inartistic and anomalous as the two instruments are which dealt respectively with these transactions, they sufficed to carry them into final effect in the manner intended by the parties, they avoided circuity, and effectually put them in the situation described. The first resulted in the Society ceasing to hold the land as security for the debt incurred by Bessie Duggan which she repaid, and continuing to hold it as a security for a new debt incurred by the Clarks, and subject to a new right to redeem vested in them alone. The second resulted in the Society ceasing to hold the land as security for this debt of the Clarks which they repaid, and continuing to hold it as security for a new debt incurred by Marianne Vale and subject to a new right vested in her alone. At this stage the whole purpose of these two transactions was accomplished, and it was not possible to give further effect to either sale. In other words, the transfer now under consideration gave effect only to Marianne Vale's right to redeem and correctly stated the consideration.
It follows from these reasons that the objection based upon s. 68 (6) is not well founded. In this view it is unnecessary to consider whether a transfer stamped under s. 32 with the particular stamp denoting that it is not chargeable with any duty can be lawfully refused registration upon the ground that the statement of the consideration does not comply with s. 68 (6). Section 32 (4) renders such an instrument available for all purposes notwithstanding any objection relating to duty, and it may be that a transfer so stamped remains available although s. 68 (6) has not in fact been obeyed and although the parties are punishable under s. 68 (8).
For these reasons the appeal should be dismissed with costs.