This question decides a great many PNG land disputes, and the Act answers it more bluntly than most people expect.
The two provisions
Subject to section 28, and notwithstanding any rule of law or equity to the contrary, a transferee — whether voluntary or not — is not, except in case of fraud, affected by actual or constructive notice of a registrable claim, right, title or interest other than those notified or protected by entry in the Register.
Instruments affecting the same estate, interest or security shall — notwithstanding any express, implied or constructive notice — be entitled to priority according to the dates of production for registration, and not according to the dates of the instruments.
The phrase “notwithstanding any rule of law or equity to the contrary” is deliberate. In unregistered conveyancing, a purchaser with notice of an earlier equitable interest took subject to it. The Torrens system abolishes that doctrine for registered land.
Even a volunteer is protected
Note the words “whether voluntary or not” in section 45(1). The protection is not confined to a purchaser for value. A person who takes land by gift and becomes registered is equally unaffected by notice of an unregistered interest.
Notice is not fraud
Being told about an unregistered interest and registering anyway is not fraud under section 33(1)(a). Fraud requires actual dishonesty brought home to the registered proprietor or their agent.
What can cross the line is active participation in a scheme designed to defeat the known interest — for example procuring the vendor to break a contract you know exists, in order to take free of it, as part of a dishonest arrangement. Knowledge plus dishonest design is a different thing from knowledge alone.
The qualification that matters: section 28
Section 45(1) opens with “Subject to section 28”, and section 33(1)(g) preserves section 28 as an exception to indefeasibility. It is the real limit on the notice rule.
A “tenancy document” is an unregistered lease, an agreement for a lease, or a lease for a term not exceeding three years.
(2) A registered dealing with land is subject to a prior tenancy document where a tenant is in actual occupation under it.
(3) But a right to purchase the freehold or for renewal is not valid against a subsequent interest holder unless registered or protected by caveat.
So the operative fact is not knowledge — it is actual occupation. A tenant physically on the land under a tenancy document binds you whether or not you knew, and whether or not it is registered. That is why physical inspection is an indispensable part of any title search, and why asking the occupier (not just the seller) matters.
And note the asymmetry in subsection (3): occupation protects the tenancy, but not an option to purchase or renew. Those must be registered or caveated.
The wider point
Several interests bind a purchaser regardless of notice or its absence, because section 33(1) says so:
- (b) encumbrances notified on the folio;
- (f) tenancies of three years or less;
- (g) tenancy documents with actual occupation;
- (h) leases, licences and authorities granted by the Head of State or a Minister for which no registration is provided;
- (i) rates, taxes and statutory charges declared by law to be a charge on land.
Conversely, an unregistered, uncaveated, unoccupied interest — a contract of sale, an equitable mortgage, a trust interest — does not bind a registered proprietor merely because they knew of it.
If you hold an unregistered interest, protect it
- Register it if you can. A lease over three years must be registered; a mortgage should be.
- If you cannot register yet, lodge a caveat under section 82 — that is precisely what it is for. Remember it does not bite until the Registrar accepts it, and it lapses after three months unless you commence proceedings and notify the Registrar in writing.
- Do not rely on having told the buyer. Sections 24 and 45 make that worthless.
- Do not delay lodgement. Under section 24, priority runs from production — and under section 24(2), a later dealing produced with the duplicate title overtakes an earlier one produced without it.
- If you are in occupation, make sure there is a written tenancy document, and keep evidence of the occupation.
- Options must be registered or caveated — occupation alone will not save them.
The notice rule produces individual unfairness: a person with a genuine earlier interest can lose to a later registered proprietor who knew about it. The system accepts that cost because the alternative — requiring every buyer to investigate rumours and off-register claims — would destroy the certainty registration exists to provide. The compensating half of the bargain is the Assurance Fund.
Sources
- Land Registration Act (Chapter 191) — ss 24, 25, 28, 33, 45, 49, 82, 91; Parts VIII and XIV
- Mudge v Secretary for Lands [1985] PGSC 13; [1985] PNGLR 387
- Papua Club Inc v Nasaum Holdings Ltd [2004] PGNC 178; N2603
- Raina No.1 Ltd v Elisha [2015] PGNC 158; N6051
Before relying on anything here, read the current text of the Land Act 1996 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.