If every interest greater than a term of years counted as freehold, the restriction in section 56(1)(b) of the Constitution would produce absurd results — an executor could not administer an estate, a trustee in insolvency could not act, and registering an interest you already held would be an acquisition. Division 2 of the Land (Ownership of Freeholds) Act prevents that.
Section 5 — the limited effect of an exception
Where a provision of this Division declares that a particular interest acquired in a certain manner is not to be regarded as a form of freehold ownership —
(a) the declaration does not, of itself, affect the nature of the interest, or of any other interest, for the purposes of a subsequent acquisition or other transaction; or
(b) affect the nature or effect of any subsequent acquisition or other transaction.
Section 5 is easy to skip and important. An exception says that the particular acquisition, in the particular manner, is not treated as acquiring freehold. It does not convert the interest into something else for all time.
So an executor who takes an interest under paragraph 7(b) is not thereby free to deal with it as if section 56(1)(b) did not exist. The next transaction is assessed on its own terms.
Section 6 — life estates
A life estate in an interest is not regarded as a form of freehold ownership for the purposes of section 56(1)(b).
Section 7 — non-beneficial interests
So far as they do not include beneficial interests, the following are not freehold ownership:
- (a) the interest acquired by the Public Curator under section 44 of the Wills, Probate and Administration Act;
- (b) the interest acquired under probate or letters of administration by an executor, administrator or trustee;
- (c) the interest acquired by a trustee in insolvency;
- (d) any other interest acquired by operation of law or by order of a court; and
- (e) any interest analogous to those, or acquired in analogous circumstances.
The words “so far as they do not include beneficial interests” confine the exception to holding in a representative capacity. A personal representative holds to administer, not to enjoy — which is exactly the position on transmission on death and transmission on insolvency.
Paragraph (d) is broad and sensible: interests arising by operation of law or by court order are not voluntary acquisitions at all.
Section 8 — converting an equitable interest
The additional interest acquired by the holder of an equitable interest on its conversion into, or on his acquisition of, the equivalent legal interest is not freehold ownership for these purposes.
The person already had the substance; perfecting it into the legal title adds nothing new to acquire.
Section 9 — the effect of registration
The additional interest (if any) acquired by the registration or recording of an interest in favour of the person entitled to be registered or recorded is not a form of freehold ownership for the purposes of section 56(1)(b).
This one matters a great deal in a Torrens system. Under section 33 of the Land Registration Act, registration is what confers indefeasibility — registration genuinely adds something. Section 9 stops that increment being treated as a fresh acquisition of freehold by a person who was already entitled.
Section 10 — restoration of titles
The interest (if any) acquired by the making or implementation of an order under the New Guinea Land Titles Restoration Act 1951 (adopted) is not freehold ownership for these purposes. Restoring a title lost in the war is recognition of an existing position, not a new acquisition.
Section 11 — reserves
The interest acquired under section 26 of the Land Act by a trustee or beneficiary over land reserved from lease or further lease is not freehold ownership for these purposes.
The equivalent reservation power in the current Act is section 49 of the Land Act 1996; read the current text, since the section numbers referred to are those of the earlier Act.
Section 12 — title by survivorship
The interest (if any) acquired by a joint tenant on the death of another joint tenant is not freehold ownership for these purposes.
Survivorship operates automatically on death. Treating it as an acquisition would mean a surviving joint tenant could breach section 56(1)(b) by outliving a co-owner.
Section 13 — a mere power of sale
A mere right or power of sale or management under a mortgage or charge, or under an order of a court, is not freehold ownership for these purposes.
So a mortgagee’s power of sale, and a mortgagee’s entry into possession to receive rents and profits, do not amount to acquiring freehold. Note the word “mere”: it is the power, not the outcome. A lender that buys in at its own sale is making an acquisition to be assessed on its own terms, consistently with section 5.
Section 14 — pre-Independence contracts
Where a contract for the acquisition of an interest was entered into before Independence Day, an interest acquired in pursuance of that contract is not freehold ownership for the purposes of section 56(1)(b).
A transitional provision, preserving transactions begun under the previous legal order and completed after 16 September 1975.
The exceptions at a glance
| Section | Interest not treated as freehold |
|---|---|
| 6 | A life estate |
| 7 | Non-beneficial interests — Public Curator, executor, administrator, trustee, trustee in insolvency, interests by operation of law or court order, and analogous cases |
| 8 | Conversion of an equitable interest into the equivalent legal interest |
| 9 | The additional interest arising from registration or recording |
| 10 | Interests under the New Guinea Land Titles Restoration Act 1951 |
| 11 | Trustee or beneficiary interests over reserved land |
| 12 | Title by survivorship between joint tenants |
| 13 | A mere power of sale or management under a mortgage, charge or court order |
| 14 | Interests acquired under contracts made before Independence Day |
Sources
- Land (Ownership of Freeholds) Act (Chapter 359) — ss 3–14; Part II Division 2
- Constitution — s 56
- Wills, Probate and Administration Act (Chapter 291)
- Insolvency Act (Chapter 253)
- Land Act 1996 — s 49
Sections 11 and 14 refer to provisions of the earlier Land Act and to the New Guinea Land Titles Restoration Act 1951; read the current Land Act 1996 for the equivalent reservation power.
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.