Part XI of the Land Registration Act gives effect to what is usually called the curtain principle of the Torrens system: a person dealing with registered land need not look behind the Register into the trusts affecting it.
Section 104 — no entry of trusts
(1) The Registrar shall not enter in the Register a memorial or entry of a trust — whether express, implied or constructive — except as provided in sections 98 and 166.
(2) Subsection (1) does not prevent the Registrar describing a proprietor as trustee, executor or administrator.
So the Register may show that someone holds as trustee. It will not show the terms on which they hold. That distinction is the whole of the curtain principle.
The two exceptions are worth noting. Section 98 allows a right, privilege or advantage over land to be created, with the consent of the Custodian, in the name of the Custodian as trustee for customary owners — see easements and similar interests. Section 166 provides the other.
Section 105 — the instrument of nomination
Where a registered proprietor intends to make an estate or interest the subject of a trust, he may, by instrument in the approved form:
- (a) nominate a person to be the trustee in whom the estate or interest shall vest; or
- (b) nominate two or more persons to be the trustees in whom it shall vest jointly,
on registration.
Section 103 — who “the trustee” is over time
Section 103 defines “the trustee” according to how the nomination was made, and the definitions matter when a trustee dies:
| Nomination | “The trustee” means |
|---|---|
| One trustee | That trustee, or his legal personal representative |
| Two or more, without the words “no survivorship” | All of them; or the survivors for the time being; or the last remaining survivor; or the legal personal representative of the last survivor |
| Two or more, with the words “no survivorship” | All of them; or all the survivors (if any) and all new trustees appointed from time to time under section 109 |
Without those words, a trust can end up vested in the legal personal representative of the last surviving trustee — a person who may have no connection with the trust and no interest in administering it. With them, the mechanism is replenishment by appointment of new trustees under section 109.
For a long-lived trust — a church, a landowner association, a family holding — the “no survivorship” form is usually the right one.
Section 106 — the terms go in a separate instrument
(1) The trusts intended to be declared relating to an estate or interest vested in trustees under section 105 may be declared by a separate instrument.
(2) That instrument may relate to land under this Act and to land not under this Act.
(3) It shall describe the land so as to distinguish sufficiently the land under this Act from the land not under this Act.
(4) A duplicate or attested copy shall be deposited with the Registrar for the purpose of safe custody and reference.
Subsection (4) is precise: the copy is deposited for safe custody and reference. It is not an entry in the Register, and it does not put a person dealing with the land on notice of the trust terms. The curtain stands.
Subsections (2) and (3) are practically useful: one declaration of trust can cover both registered and unregistered land — which matters where a trust holds a State lease alongside interests that are not on the Register.
What the curtain means in practice
- A buyer need not investigate the trust. Dealing with the registered proprietor is enough, and under section 45 a transferee is not affected by notice of an unregistered interest except in case of fraud.
- A trustee can therefore deal in breach of trust, and the dealing may be effective on the Register.
- The Assurance Fund will not help. Section 142 provides that no indemnity is available out of the Assurance Fund or the Consolidated Revenue Fund for loss occasioned by breach of trust or default.
- So the beneficiary’s protection has to come from elsewhere.
How a beneficiary protects an interest
- Lodge a caveat. A beneficiary claiming an interest in the land may caveat under section 82(a) — and this is the standard protection. Remember it does not bite until accepted, and it lapses after three months unless lodged with the registered proprietor’s written consent, or proceedings are commenced and the Registrar notified in writing.
- Choose trustees carefully, and more than one. Joint trustees are a practical check.
- Use “no survivorship” and provide for appointment of new trustees under section 109.
- Deposit the declaration under section 106(4) — it is evidence of the terms even though it is not on the Register.
- Sue the trustee. Breach of trust remains actionable against the trustee personally; what the Act removes is the ability to unwind the registration against an innocent registered proprietor.
Customary landowner groups
Where a customary group needs a vehicle to hold or deal with land, the ordinary answer is an Incorporated Land Group under the Land Groups Incorporation Act — which has members, a constitution, recognised representatives and accountability to the group — rather than land held by individuals as trustees behind a curtain.
And where continuing customary rights need to be recorded over registered land, section 98 allows them to be created in the name of the Custodian as trustee for customary owners, which is one of the two express exceptions to section 104.
Executors and administrators
Section 104(2) expressly permits the Registrar to describe a proprietor as executor or administrator. That is what happens on transmission on death under Part XII: the personal representative is registered as proprietor in that capacity, holding to administer the estate, without the terms of the will appearing on the folio.
Sources
- Land Registration Act (Chapter 191) — ss 45, 82, 98, 103–109, 142, 166; Parts XI, XII and XIV
- Land Groups Incorporation Act — PacLII 1986 Revised Edition
- Wills, Probate and Administration Act (Chapter 291)
- Mudge v Secretary for Lands [1985] PGSC 13; [1985] PNGLR 387
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.