How Are Instruments Registered, and Who Gets Priority?

Division 4 of Part III of the Land Registration Act answers the question every competing claimant asks: who wins?

Section 23 — the duty to register

Where the Registrar is satisfied that an instrument relating to a transaction is in registrable form, he shall register it in the manner provided by the Act.

“Shall” — once the instrument is in registrable form, registration is a duty, not a discretion. The discretion sits earlier, in section 155, where the Registrar may refuse an instrument that contains matter contrary to law, is incomplete, does not comply with the Act, or contains an error or erasure.

Section 24(1) — the priority rule

Three consequences, and all of them are practical:

• The race is to the registry, not to the signing table. A transfer signed in January and lodged in June loses to one signed in March and lodged in April.
• Notice is irrelevant. The words “notwithstanding any express, implied or constructive notice” put this beyond argument. Knowing that someone else has a competing dealing does not cost you your priority. This is the same principle as section 45, under which a transferee is not affected by notice of an unregistered interest except in case of fraud.
• Fraud remains the exception. Section 24 protects priority, not dishonesty. Actual fraud is the first exception to indefeasibility under section 33(1)(a).

Section 24(2) — the leapfrog rule

This is severe, and it catches people. Lodging first is not enough: you must lodge with the duplicate certificate of title. A later dealing produced with the title overtakes an earlier one produced without it.

The practical rule for a buyer or a lender: get the duplicate certificate of title at settlement. Do not accept an undertaking to send it on.

Where production genuinely cannot be obtained, the answer is section 158 — the Registrar may dispense with production for reasonable cause, on proof of identity, after 14 days’ notice in the National Gazette and a newspaper.

Section 25 — how registration is effected

Subject to section 158:

• an instrument purporting to affect land is registered as soon as a memorial of it is entered on the relevant folio of the Register; and
• an instrument affecting a registered dealing is registered as soon as a memorial is entered on the instrument relating to that dealing.

The day and hour requirement is what makes the section 24 priority rule workable. Priority can be decided to the hour, from the face of the Register.

Under section 25(4), once a memorial is entered in the Register, the Registrar shall record the same memorial on the instrument of title to the estate or interest dealt with or affected — so the owner’s duplicate is brought into line with the folio.

The sequence in practice

1. Instrument executed in the approved form, stating the true consideration.
2. External approvals obtained — for a State lease, Ministerial approval of the controlled dealing, without which the dealing is void.
3. Produced to the Registrar, with the duplicate certificate of title — day and hour recorded.
4. Examined. Registered under section 23 if in registrable form; refused or requisitioned under section 155 if not.
5. Memorial entered on the folio — the moment of registration, and the moment indefeasibility attaches.
6. Memorial recorded on the owner’s duplicate, which is then delivered.

Where the paperwork is defective

Section 159 gives the Registrar a discretion to register an informal document where significant loss or inconvenience would otherwise arise — provided it purports to create a registrable estate or interest and would, in equity apart from the Act, be regarded as vesting that interest. See the Registrar’s powers.